Budget Definitions
The following provides a summary of the services and costs that are included in the LMD Budgets:
Direct Cost:
Contract Maintenance Costs — Includes all contracted labor, material and equipment required to properly maintain the landscaping, irrigation systems, drainage systems, trail systems, fencing, natural drainage areas, open spaces, and related facilities within the LMD.
Salaries & Benefits — Staff time devoted to ma naging and inspecting Districts. The Public Works LMD reimbursement is proportionally spread amongst twenty-seven (27) Districts based on each District’s budgeted direct and maintenance expense, inspections as a percentage of total costs in these categori es for all Districts. Inspection costs are budgeted directly to the District as Field Inspection based on the historical and projected time spent in the inspection efforts.
Services & Supplies - Vehicles, supplies and services devoted to managing and inspecting Districts.
Landscape Water — Includes the cost of the furnishing of water required for the maintenance of the landscaping.
Utilities — Includes the cost of the furnishing of electricity required for the irrigation systems and hardwire telephone connections at upgraded irrigation controllers, monitored by City Staff.
Landscape Rehabilitation / Vandalism — Includes repairs to the improvements in the LMD that are not normally included in the year ly Landscape Maintenance costs. This may include repairs or replacement of damaged improvements or facilities that may be the result of vandalism, storms, frost, natural occurrences, etc., including graffiti abatement.
Landscape Rehabilitation includes annual f unding for planned landscape projects, which will significantly benefit and upgrade a specific LMD and are considered above normal routine landscape maintenance work.
Capital Projects – This item includes major repairs or capital improvement projects.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Administration Expenses:
Administration & Overhead — The cost allocati on of all particular departments and staff of the City, for providing general support, se rvices and operations related to the various districts, enterprises and accounts of the City.
County Administration Fee — This is the es timated cost to the LMD for the County to collect LMD assessments on the property tax bills . This charge is based on a flat rate per fund number plus a charge per assessment levied.
Professional Fees — This is the estimated cost to the District for the Assessment Engineer to prepare this report and to calculate and submit the assessments to the Solano County Auditor’s office.
Collections/ (Credits) Applied:
Fund Balance Collection — The 1972 Act provides for a LMD to fund an Operating Reserve Fund as well as the collection of funds in installments for specific projects. This budget item identifies funds collected or transferred from these two LMD Fund Balances:
Operating Reserve Fund provides for the collection of funds to operate the LMD from the time period of July 1 (beginning of the Fi scal Year) through December 10 or when the County provides the City with the first inst allment of assessments collected from the property tax bills (typically January or February).
Rehabilitation Funds may be collected to cove r the cost of repairs that are outlined in either a defined project plan or periodic maintenance costs that may be unforeseen and are not normally included in the yearly main tenance contract costs, including the costs associated with upgrades, repairs, replacements or refurbishing of the improvements.
These amounts may be budgeted and spent each fiscal year, or collected in installments and held in the Rehabilitation Reserve Fund for a large improvement projects.
Other Revenues/General Fund (Contributions) — This item includes additional funds designated for the LMD that are not annual assessments. These funds are added to the LMD account to reduce assessments (contributions are shown as a negative amount), and may be from non-LMD or LMD sources including City General Fund Contributions for general benefit costs and/or interest earnings. This item may also include the repayment of funds previously loaned to the LMD from other sources (a positive amount) to be collected as part of the annual assessments.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Balance to Levy:
The Balance to Levy — The total amount to be collected for the current fiscal year through assessments (for special benefits). The Balance to Levy represents the sum of Total Direct Cost Budget, Administration Budget; and Collect ions (Credits) Applied. Only those costs related to the improvements identified as special benefits are levied and collected on the tax roll. This amount divided by the “Total Equivalent Benefit Units” for the LMD determines the proposed assessment rate for the fiscal year.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Method of Apportionment
Method of Apportionment
This section of the Engineer's Report explai ns the special and general benefits to be derived from the installation, maintenance and servicing of Improvements located throughout the LMDs, and the methodology us ed to apportion the total assessment to properties within the LMDs.
The LMDs consists of Assessor Parcels within the boundaries of the City of Vallejo as defined by the County of Solano tax code areas. The parcels include all privately or publicly owned parcels within said boundaries. The method used for apportioning the assessments is based upon the proportional special benefits to be derived by the properties in the LMDs over and above general benefits conferred on real property or to the public at large. The apportionment of spec ial benefit is a two-step process: the first step is to identify the types of special benefit arising from the improvements, and the second step is to allocate the assessments to property based on the estimated relative special benefit for each type of property.
Discussion of Benefit
In summary, the assessments can only be levied based on the special benefit to property.
This benefit is received by property over and above any general benefits. With reference to the requirements for assessments, Sectio n 22573 of the Landscaping and Lighting Act of 1972 states:
"The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements."
Proposition 218, which added Article XIIID of the California Constitution, provides as follows:
"No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel."
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Benefit categories have been established that represent the types of special benefit to residential, commercial, industrial and other lots and parcels resulting from the installation, maintenance and servicing lighting and landscaping improvements to be provided with the assessment proceeds. These categories of special benefit are summarized as follows:
A. Proximity to Improved Landscaped Areas and Other Public Improvements within the Landscape Maintenance Districts.
B. Access to Improved landscaped areas and Other Public Improvements within the Landscape Maintenance Districts.
C. Improved Views within the Landscape Maintenance Districts.
D. Extension of a property’s outdoor areas and green spaces for properties within close proximity to the Improvements.
E. Creation of individual lots for re sidential and commercial use that, in absence of the assessments, would not have been created.
Case law interpreting Proposition 218 provides enhanced clarity to the definitions of special benefits to properties in three distinct areas:
Proximity
Expanded or improved access
Views
This case law also clarifies that a special benefit is a service or improvement that provides a direct advantage to a parcel and that indi rect or derivative advantages resulting from the overall public benefits from a service or improvement are general benefits. The case law also provides specific guidance that pa rk improvements are a direct advantage and special benefit to property that is proximate to a park that is improved by an assessment:
The characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement (e.g. proximity to a park) or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement (e.g. general enhancement of the district’s property values).
Proximity, improved access and views, in addition to the other special benefits listed above further strengthen the basis of these assessments.
Special Benefits from the Original Engineer’s Report
The improvements provided within the various LMDs may include, but is not limited to landscaped medians, parkways, entryways, slopes, parks, open-space City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
areas and appurtenant facilities. The annual assessments outlined in this Report are based on the estimated costs to prov ide all necessary service, operation, administration, and maintenance required each year to keep these improvements in a healthy, vigorous, and satisfactory condition and benefit the properties. The special benefits associated with the la ndscape improvements and facilities are specifically:
Enhanced desirability of properties through association with the improvements.
Improved aesthetic appeal of properties within the LMDs providing a positive representation of the area.
Environmental enhancement through improv ed erosion resistance, and dust and debris control.
Increased sense of pride in ownership of property within the LMD resulting from well-maintained improvements associated with the properties.
Reduced criminal activity and property-r elated crimes (especially vandalism) against properties in the LMD through well-maintained surroundings and amenities including abatement of graffiti and vandalism.
Enhanced environmental quality of the parcels within the LMDs by moderating temperatures, providing oxygenation and attenuating noise.
An enhanced sense of pride within the neighborhoods and communities and increased business opportunities as a result of enhanced surroundings and community pride.
Enhanced adaptation of the urban environment within the natural environment and improved aesthetic value of the neighborhood and properties within the LMDs by establishing green space and re creational areas for increased social opportunities and activities that help to strengthen family value and reduce ethnic and social tensions.
Enhanced quality of life through well- maintained green space and landscaped areas.
In addition to many of the special benef its associated with landscape amenities, local parkland and recreational facilities provide the further benefits of:
Increased neighborhood involvement and interaction.
Health, social and self-improvement benefits derived from utilizing the facilities.
Promotes a positive atmosphere and recreational opportunities for the youth in the neighborhood that encourages physical activity, group participation and character building.
Increased social opportunities and active involvement for senior citizens.
Family and group activities that help to strengthen family value and reduce ethnic and social tensions.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
The esthetic value of green space and recreational areas within the urban environment.
The preceding special benefits contribute to the overall aesthetic value, security and desirability of each of the assessed parcels and thereby provide a special enhancement to those properties. Furthermore, it has been determined that the lack of funding to properly service and maintain the improvements would likely have a direct negative impact on those properties.
General versus Special Benefit
In absence of the assessments, the Improvements in the LMDs would not be provided, so the Improvements are “over and above” what otherwise would be provided. Many of the parcels would not even exist if the assessments were not established because an assessment for the specific Improvements within the LMDs was a condition of development approval.
All of the Assessment proceeds derived from the LMDs will be utilized to fund the cost of providing a level of tangible “special benefits” in the form of landscaped parkways, landscaped medians, landscaped corridors, trail systems, park facilities, other Improvements and costs incidental to prov iding the Improvements and collecting the Assessments.
Although these Improvements may be available to the general public at large, the permanent public Improvements in the LMDs were specifically designed, located and created to provide additional and improved public resources for the direct advantage of property inside the LMDs, and not the public at large. Other properties that are either outside the LMDs or within the LMDs a nd not assessed, do not enjoy the unique proximity, access, views and other special benefit factors described previously.
Moreover, the homes in the LMDs would not have been built if the Assessments were not established because an assessment for the Improvements was a condition of development approval.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Benefit Finding
In summary, real property located within the boundaries of the LMDs distinctly and directly benefits from closer proximity, access and views of Improvements funded by the Assessments, the creation of developable parcels and the extension of usable land area provided by the assessments. The Improvem ents are specifically designed to serve properties in the LMDs, not other properties or the public at large. The LMDs have been narrowly drawn to include those parcels th at receive a direct advantage from the Improvements. The public at large and other properties outside the LMDs receive only limited benefits from the Improvements because they do not have proximity, good access or views of the Improvements. These are special benefits to property in the LMDs in much the same way that sewer and water facilities, sidewalks and paved streets enhance the utility and desirability of property and make them more functional to use, safer and easier to access.
Without the Assessments, the public improv ements within the LMDs would not be maintained and would turn into brown, unmaintained and unusable public improvements and public lands. If this happened, it would create a significant and material negative impact on the desirability, utility and value of property in the LMDs. Most importantly, without the Assessments, the developed properties would not exist, because the subdivisions and development proposals would not have been approved. The Improvements are, therefore, clearly above what otherwise would be provided and the Improvements uniquely and specially benefit parcels in the LMDs in a way that is not enjoyed by the general public or other property. We therefore conclude that all the Improvements funded by the Assessment ar e of special benefit to the identified benefiting properties located within the LMDs and that the value of the special benefits from such Improvements to pr operty in the LMDs reasonably exceeds the cost of the Assessments for every assessed parcel in the LMDs. (In other words, as required by Proposition 218; the reasonable cost of the proportional special benefit conferred on each parcel reasonably exceeds the cost of the assessments.) Any general benefits to surrounding properties outside of the LMDs, if there were any, are collateral and conferred concomitantly.
General benefit is identified as that benefit received by properties outside of the LMD.
General benefit cannot be assessed to property within the LMD boundary.
Prior to the Bordoni Ranch development, there was a 6.74 acre park located on the south side of Regents Park Drive just east of Columbus Parkway. This park had very few amenities and consisted primarily of grass, trees and sidewalks and was maintained by the GVRD. In anticipation of the increased demand to be placed on the park by the new developm ents, the previous park was demolished and is going to be completely reconstructed and enhanced.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Once the enhanced park is completed, the City and the GVRD will continue to provide applicable maintenance services as agreed upon, which will contribute approximately 50% of the cost for the maintenance of the park, in proportion to the estimated general benefit that th e park provides to the neighboring communities at large. It is reasonable to assume that the park maintenance costs above the contribution made by the City and the GVRD approximately represent the special benefit to the properties within the LMD. This assignment of special benefit to the properties within the LMD is reasonable given that the reconstruction and enhancement of the park was desired and needed due to the anticipated development of properties within the LMD.
When the Northeast Quadrant LMD was established, it was determined that a portion of the Columbus Parkway improv ements within the LMD is considered general benefit. The City will contri bute each year to wards the landscape maintenance costs, water costs and associ ated administrative expenses for this particular improvement ar ea. In compliance with the California Constitution Article XIIID the annual budget includes a contribution identified as “Other Revenues/General Fund (Contribution)”, which represents the costs identified as general benefit.
The original determination of benefits to property and the method of special benefit apportionment to property were developed by Willdan Financial Services when the LMDs were originally approved by property owners as noted in the Description of LMDs section of this Report. The description of benefits and the determination and apportionment of benefits to property in this Report are consistent with the original benefit determination and apportionment. The original method of apportionment of assessment and other relevant elements of the original Engineer’s Reports for the LMDs are hereby incorporated by reference.
Quantification of General Benefit
Although the analysis used to support these assessments concludes that the benefits are solely special, as described above, consideration is made for the suggestion that a portion of the benefits are general. General benefits cannot be funded by these assessments - the funding must come from other sources.
The maintenance and servicing of these improvements is also partially funded, directly and indirectly from other sources including the City of Vallejo, Solano County and the State of California. This funding comes in the form of grants, development fees, special programs, and general funds, as well as direct maintenance and servicing of facilities (e.g. curbs, gutters and streets, etc.) This funding from other sources more than compensates for general benefits, if any, received by the properties within the assessments district.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
The General Benefits from these Assessments may be quantified as illustrated in the following table.
Benefit Factor
Relative
Weight
General Benefit
Contribution
Relative General
Benefit
Creation of parcels 90 0% 0
Extension of recreation area 2.5 10% 0.25
Proximity to improved parks and landscaped areas 2.5 10% 0.25 Access to improved parks, open space and landscaped areas 2.5 10% 0.25 Improved views 2.5 10% 0.25
100 1
T ot al C alculate d G e ne ral B e ne fit = 1.0%
As a result, City of Vallejo will contribute at least 1% of the total budget from sources other than the assessment. This contributio n offsets any general benefits from the assessment services.
This general benefit contribution is the sum of the following components:
The City of Vallejo owns, maintains, rehabilit ates and replaces curb and gutter along the border of the Districts improvements. This curb and gutter serves to support, contain, retain, manage irrigation flow and growth, and provide a boundary for the improvements.
The contribution from the City of Vallejo towards general benefit from the maintenance, rehabilitation and replacement of the curb and gutter is conservatively estimated to be 1%.
The City of Vallejo owns and maintains local public streets along the border of the Districts improvements. These public streets provide access to the improvements for its enjoyment as well as efficient maintenance. The contribution from the City of Vallejo towards general benefit from the maintenanc e of local public streets is conservatively estimated to be 1%.
The value of the construction of the improvements can be quantified and monetized as an annuity. Since this construction was performed and paid for by non-assessment funds, this “annuity” can be used to offset general benefit costs, and is conservatively estimated to contribute 25%, with the exception of Glen Cove III 2015 LMD which was calculated to contribute 5%.
Therefore, the total General Benefit is conservatively quantified at 1% which is more than offset by the total non-assessment contribution towards general benefit of 27%, with the exception of Glen Cove III 2015 LMD which is offset by the total non-assessment contribution towards general benefit of 7%.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Method of Assessment
The method of apportionment for the LMDs calculates the receipt of special benefit from the respective improvements based on the actual or proposed land use of the parcels within the LMDs. The net amount to be assessed upon parcels within the LMDs is apportioned by a formula and method that fairly distributes the net amount to be assessed among all assessable parcels in proportion to the special benefits to be received by each parcel from the im provements. Additionally, in compliance with Article XIIID Section 4 of the State Constitution each parcel’s assessment does not exceed the reasonable cost of the proportional special benefit conferred to that parcel. The benefit formula used to determine the assessment obligation is therefore based upon both the improvements that benefit the parcels within the LMDs as well as the proposed land use of each property as compared to other parcels that benefit from those specific improvements.
Equivalent Benefit Units
The special benefits received by each parcel within the LMDs and each parcel’s proportional annual assessment is calculated on the basis of a formula known as Equivalent Benefit Units. The Equivalent Benefit Unit (EBU) method of appo rtionment establishes a proportional benefit relationship between the various parcels within the LMDs and the improvements provided by the LMDs. The EBU assigned to each parcel utilizes a set formula and proportional weighting factors based on the land use, size and development status of each parcel within the LMDs compared to other parcels within the LMDs.
Equivalent Benefit Unit Application by Land Use
Land Use Designation EBU Application
Single Family Residence One (1.0) Benefit Unit per Unit
Vacant Residential Zoned Four-Tenths (0.4) Benefit Unit per Acre
Multi Family Residence Seven-Tenths (0.7) Benefit Unit per Unit
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Equivalent Benefit Unit Application by Land Use (Continued)
Land Use Designation EBU Application
Planned-Residential Development One (1.0 ) Benefit Unit per Planned Single-Family (Has received tentative or final Unit, Seven-Tenths (0.7) Benefit Unit per Multi- map approval) Family Unit
Commercial Use Three (3.0) Benefit Units per Acre
Vacant Commercial Zoned Four-Tenths (0.4) Benefit Unit per Acre
Industrial Use Three (3.0) Benefit Units per Acre
Vacant Industrial Zoned Four-T enths (0.4) Benefit Unit per Acre
Exempt Properties Zero (0.0) Benefit Units per Parcel
While all the land use designations shown above are not necessarily applicable in each LMD, each LMD is comprised of one or more of these la nd uses, and the proportional relationship between those various land uses is still applicable. The benefit formula applied to parcels within each LMD is based on the preceding EBU application. Each parcel's EBU correlates the parcel’s special benefit received as compared to the other parcels benefiting from the improvements within that LMD.
Exceptions
Bordoni Ranch LMD was formed with the following special conditions:
Planned-Residential Development — This land use is defined as any property for which a tentative map has been filed but for which a final tract map has not yet been approved. Properties designated as Planned-Residential Development shall be assessed at 2.0 EBU per acre, but a minimum of 1.00 EBU (parcels less than one acre are assigned 1.0 EBU).
Vacant Residential Zoned — This land use is define d as property that is zoned or planned for residential development, but a development map (tentative or final map) for the property has not yet been approved. Properties designated as Vacant La nd shall be assessed at 1.0 EBU per acre, but a minimum of 1.00 EBU (parcels less than one acre are assigned 1.0 EBU).
The following formula is used to calculate each parcel’s proportional benefit:
Property Type EBU x (Acreage/Units/Parcel) = Parcel’s calculated EBU
An assessment amount per EBU (“Rate”) for the LMD improvements is established by taking the total cost of the improvements and dividing that amount by the total numb er of EBUs for parcels benefiting from such improvements.
Total Balance to Levy / Total EBUs = Levy per EBU (“Rate”)
This amount is then applied back to each par cel’s individual EBU to determine each parcel’s proportionate benefit and assessment obligation.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Rate x Parcel’s EBU = Parcel’s Levy Amount
Glen Cove III 2015 LMD was fo rmed with the following e quivalent benefit units for different property types:
Land Use Designation EBU Application
Single Family Residential 1.0 Benefit Units per Unit
Condominium 0.39 Benefit Units per Unit
Duplex, Triplex, Fourplex 0.45 Benefit Units per Unit
Multi-Family Residential (5+ Units 0.27 Benefit Units per Unit
Mobile Home on Separate Lot 0.22 Benefit Units per Unit
Commercial and Industrial 0.50 Benefit Units per fifth acre for the first 5 acres 0.50 Benefit Units per each additional
acre over 5 acres
Office 1.42 Benefit Units per fifth acre for the first 5 acres 1.42 Benefit Units per each additional
acre over 5 acres
Self-Storage of Parking Lot 0.05 Benefit Units per fifth acre for the first 5 acres 0.05 Benefit Units per each additional
acre over 5 acres
Golf Course 0.063 Benefit Units per fifth acre for the first 5 acres 0.063 Benefit Units per each additional
acre over 5 acres
Vacant / Undeveloped 0.25 Benefit Units per parcel
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Appeals and Interpretation
Any property owner who feels that the assessm ent levied on the subject property is in error as a result of incorrect information be ing used to apply the foregoing method of assessment, may file a written appeal with the Director of Public Works or her or his designee. Any such appeal is limited to correction of an assessment during the then current or, if before July 1, the upcoming fiscal year. Upon the filing of any such appeal, the Director of Public Works or his or her designee will promptly review the appeal and any information provided by the property owner. If the Director of Public Works or her or his designee finds that the assessment sh ould be modified, the appropriate changes shall be made to the assessment roll. If any such changes are approved after the assessment roll has been filed with the County for collection, the Director of Public Works or his or her designee is authorized to refund to the property owner the amount of any approved reduction. Any property owner who disagrees with the decision of the Director of Public Works or her or his designee, may refer their appeal to the City Council of the City of Vallejo and the decision of the City Council of the City of Vallejo shall be final.
Inflationary Adjustment
Bordoni Ranch LMD
As noted previously, the property owners within the Bordoni Ranch LMD approved an inflationary adjustment in fiscal year 2010-2011 through a ballot proceeding when the LMD was formed. The following paragra ph describes the approved inflationary adjustment:
The Maximum Assessment Rate is equal to the (Initial) Zone Maximum Assessment Rate established for fiscal year 2010-2011 adjusted annually by the greater of, three percent (3%) or the annual percentage change in the Consumer Price Index (CPI) of “All Urban Consumers” for the San Francisco-Oakland-San Jose Area.
The change in the CPI from February 2022 to February 2023 was 5.30%. Therefore, the maximum authorized assessment rate for the Bordini Ranch LMD fiscal year 2023-2024 is increased by 5.30% which equates to $731.54 per equivalent benefit unit for Zone 1 and $502.74 per equivalent benefit unit for Zone 2. The estimate of cost and budget in the Engineer’s Report proposes assessments for fiscal year 2023-2024 at the rate of $392.99 per equivalent benefit unit for Zone 1 and $270.33 per equivalent benefit unit for Zone 2, which is the less than the maximum authorized assessment rate.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Glen Cove III 2015 LMD (LMD 2)
As noted previously, the property owners within the Glen Cove III area approved an inflationary adjustment in fiscal year 2015-2016 through a ballot proceeding when the Glen Cove III LMD 2 was established. The authorized maximum assessment rate is subject to an annual adjustment tied to the Consum er Price Index-U for the San Francisco Bay Area as of December of each succeeding year (the “CPI”). As the amount of the annual increase in the CPI from December 2021 to December 2022 is 4.88%, the maximum authorized assessment rates for fiscal year 2023-24 are 4.88% above the maximum authorized assessment rate for fiscal ye ar 2022-23. Including the authorized annual adjustment, the maximum authorized asse ssment rates for fiscal year 2023-24 are $131.25 for properties in Zone A, $128.65 for properties in Zone B, and $123.37 for properties in Zone C.
Highlands – Garthe Ranch LMD (Zone B)
As noted previously, the property owners within the Highlands of Garthe Ranch LMD (Zone B) approved an inflationary adjustme nt in fiscal year 2007-2008 through a ballot proceeding when the LMD / Zone B was estab lished. The following paragraph describes the approved inflationary adjustment:
The Maximum Assessment Rate is equal to the Maximum Assessment Rate established for the previous fiscal year adjusted annually by the greater of, three percent (3%) or the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), as distributed by the Bureau of Labor Statistics for the San Francisco-Oakland-San Jose Area.
The change in the CPI from February 2022 to February 2023 was 5.30%. Therefore, the maximum authorized assessment rate for the Garthe Ranch LMD Zone B fiscal year 2023- 2024 is increased by 5.30% which equates to $2,705.31 per equivalent benefit unit. The estimate of cost and budget in the Engineer’s Report proposes assessments for fiscal year 2023-2024 at the rate of $2,705.31, which is less than the maximum authorized assessment rate.
Northeast Quadrant LMD
As noted previously, the property owners wi thin the Northeast Quadrant LMD approved an inflationary adjustment in fiscal year 1999-2000 thro ugh a ballot proceeding. The following paragraph describes the approved inflationary adjustment:
The maximum assessment for each fiscal year is increased by the percentage increase from April 1 of the prior year to April 1 of the current year by the Consumer Price Index for All Urban Consumers (CPI-U), as distributed by the Bureau of Labor Statistics (BLS) for the Consolidated Metropolitan Statistical Area (CMSA) covering San Francisco-Oakland-San Jose. If the April CPI-U is not available at the time the report is prepared, a similar time period may be used.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
However, the maximum assessment rate in any fiscal year (for the Non-Zone A properties) shall not exceed $400 as adjusted by the CPI-U, unless approved by a majority vote of the property owners in the Northeast Quadrant LMD. The Zone A’s assessment rate shall not be capped at a particular level in any fiscal year.
The change in the CPI from February 2022 to February 2023 was 5.30%. Therefore, the maximum authorized assessment rate for th e Northeast Quadrant LMD fiscal year 2023- 2024 is increased by 5.30% which equates to $570.46 per equivalent benefit unit for Zone A and $368.88 per equivalent benefit unit for No n-Zone A. The estimate of cost and budget in the Engineer’s Report proposes assessments for fiscal year 2023-2024 at the rate of $444.20 per equivalent benefit unit for Zone A and $287.24 per equivalent benefit unit for Non-Zone A, which is less than the maximum authorized assessment rate.
Marine World / Fairgrounds LMD
The Maximum Assessment Rate is equal to the Maximum Assessment Rate established for the previous fiscal year adjusted annually by the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), as distributed by the Bureau of Labor Sta tistics for the San Francisco-Oakland-San Jose Area.
The change in the CPI from February 2022 to February 2023 was 5.30%. Therefore, the maximum authorized assessment rate for the Marine World / Fairgrounds LMD fiscal year 2023-2024 is increased by 5.30% which equates to $160.86 per equivalent benefit unit.
The estimate of cost and budget in the Engineer’s Report proposes assessments for fiscal year 2023-2024 at the rate of $125.26, which is less than the maximum authorized assessment rate.
South Vallejo Business Park LMD
The Maximum Assessment Rate is equal to the Maximum Assessment Rate established for the previous fiscal year adjusted annually by the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), as distributed by the Bureau of Labor Sta tistics for the San Francisco-Oakland-San Jose Area.
The change in the CPI from February 2022 to February 2023 was 5.30%. Therefore, the maximum authorized assessment rate for the South Vallejo Business Park LMD fiscal year 2023-2024 is increased by 5.30% which equates to $4,347.51 per equivalent benefit unit.
The estimate of cost and budget in the Engineer’s Report proposes assessments for fiscal year 2023-2024 at the rate of $3,286.60, which is less than the maximum authorized assessment rate.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Assessment
WHEREAS, the City of Vallejo City Council directed the undersigned Engineer of Work to prepare and file a report presenting an estimate of costs, a diagram for the LMDs and an assessment of the estimated costs of the improvements upon all assessable parcels within the LMDs, to which Resolution and the description of the Improvements therein contained, reference is hereby made for further particulars; NOW, THEREFORE, the undersigned, by virtue of the power vested in me under said Act and the order of the City Council of said City of Vallejo, hereby make the following assessment to cover the portion of the estimated cost of the improvements, and the costs and expenses incidental thereto to be paid by the LMDs.
As required by the Act, an Assessment Diagram is hereto attached and made a part hereof showing the exterior boundaries of said LMDs. The distinctive number of each parcel or lot of land in the LMDs is it s Assessor Parcel Number appearing on the Assessment Roll.
I do hereby assess and apportion the net amount of the cost and expenses of the improvements, including the costs and expenses incident thereto, upon the parcels and lots of land within the LMDs, in accordance with the special benefits to be received by each parcel or lot, from the improvements, and more particularly set forth in the Cost Estimate and Method of Assessment hereto attached and by reference made a part hereof.
The assessment is made upon the parcels or lots of land within the LMDs in proportion to the special benefits to be received by the parcels or lots of land, from the improvements.
Each parcel or lot of land is described in the Assessment Roll by reference to its parcel number as shown on the Assessor's Ma ps of the County of Solano for the fiscal year 2023-2024. For a more particular descript ion of the property, reference is hereby made to the deeds and maps on file and of record in the office of the County Recorder of the County.
I hereby place opposite the Assessor Parcel Number for each parcel or lot within the Assessment Roll, the amount of the assessment for the fiscal year 2023-2024 for each parcel or lot of land within the LMDs.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Dated: April 7, 2023
Engineer of Work
By
.
John W. Bliss, License No. C052091
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Appendix A - 2023-2024 Assessment Roll
An Assessment Roll (a listing of all parcels assessed within the LMDs and the amount of the assessment) will be filed with the City Clerk and is, by reference, made part of this report and is available for public inspection during normal office hours.
Each lot or parcel listed on the Assessment Ro ll is shown and illustrated on the latest County Assessor records and these records are, by reference made part of this report.
These records shall govern for all details concerning the description of the lots or parcels.
City of Vallejo
Landscape Maintenance Districts
Engineer’s Report, FY 2023-2024
Appendix B - Assessment Diagram
Assessment Diagrams for the LMDs have been prepared and are on file with the City.
Reference is hereby made to such Diagrams, and they are incorporated herein by reference.
ACTION ITEM 9.C.
DATE: June 13, 2023
TO: Mayor and Members of the City Council
FROM: Melissa Tigbao, PE, Public Works Director
Jason Lacey, Landscape Maintenance Manager
SUBJECT: HOLD A PUBLIC HEARING AND ADOPT A RESOLUTION APPROVING THE
ENGINEER'S REPORT AND ORDERING THE LEVY AND COLLECTION OF
ASSESSMENTS ON PROPERTIES IN THE HIDDENBROOKE MAINTENANCE DISTRICT FOR FISCAL YEAR 2023-2024
RECOMMENDATION
Hold a Public Hearing, receive public input, and adopt a Resolution approving the Engineer's Report and ordering the levy and collection of assessments on properties in the Hiddenbrooke Maintenance District for Fiscal Year (FY) 2023-2024.
REASONS FOR RECOMMENDATION
The City Council appointed SCI Consulting Group, Inc. as the Engineer of Work and directed it to prepare the Engineer's Report for the District. The Report identifies all assessable parcels within the District and was prepared in accordance with the Landscape and Lighting Act of 1972 and California Constitution Article XIIID (Proposition 218).
BACKGROUND AND DISCUSSION
The City of Vallejo has 27 Landscape Maintenance Districts, thirteen of which were established in accordance with the Landscape and Lighting Act of 1972 (1972 Act), and fourteen of which were established in accordance with the Improvement Act of 1911 (1911 Act). The City Council will be considering the 1911 Act districts and the 1972 Act districts under separate Council actions. Approval of this resolution formally establishes the assessments for the Hiddenbrooke Maintenance District for fiscal year 2023-2024.
An Engineer’s Report (Report) is prepared annually for the Hiddenbrooke Maintenance District. The Report analyzes the District based on “equivalent benefit units” (EBU). One EBU is applied to a single-family residence. Proposed assessments for each parcel are based on the special benefit received by the parcels within the district. The proposed FY 2023-2024 budget for the Hiddenbrooke Maintenance District is included as part of the Report.
The FY 2023-2024 Report for the Hiddenbrooke Maintenance District is included as an attachment to this staff report and is also on file in the City Clerk’s Office (3rd Floor) and in the Department of Public Works (4th Floor), City Hall, 555 Santa Clara Street, Vallejo, California 94590.
FISCAL IMPACT
The proposed Hiddenbrooke Maintenance District annual assessment for FY 2023-2024 is $721,027 or $611.04 per EBU. This assessment rate proposed is the same assessment rate levied for FY 2022-2023.
The General Fund will contribute $2,715 to the District to cover the general benefit received by parcels located outside the District, as described in the Engineer’s Report. These general benefit costs cannot be assessed to
Date: June 13, 2023
Subject: HOLD A PUBLIC HEARING AND ADOPT A RESOLUTION APPROVING THE
ENGINEER'S REPORT AND ORDERING THE LEVY AND COLLECTION OF
ASSESSMENTS ON PROPERTIES IN THE HIDDENBROOKE MAINTENANCE DISTRICT FOR FISCAL YEAR 2023-2024
the District.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines section 15378.
ATTACHMENTS
1. Vallejo HMD ER 23-24
2. Reso - Public Hearing HMD_CAO Stamp
CONTACT
Melissa Tigbao, PE, Public Works Director (707) 648-4433 [email protected]
ENGINEER’S REPORT
City of Vallejo
Hiddenbrooke Maintenance District
Fiscal Year 2023-24
Pursuant to the City of Vallejo Municipal Code
Chapter 14.30 and Article XIIID of the California
Constitution
Page i
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Page ii
Table of Contents
Introduction ................................................................................................................. 1 Overview.................................................................................................................................... 1 Assessment Process .................................................................................................................. 3 Engineer’s Report ...................................................................................................................... 3 Plans & Specifications .................................................................................................. 4 Fiscal Year 2023-2024 Estimate of Cost and Budget .................................................... 10 Cost Estimates ......................................................................................................................... 10 Method of Apportionment ......................................................................................... 18 Method of Apportionment ...................................................................................................... 18 Discussion of Benefit ............................................................................................................... 18 General versus Special Benefit ................................................................................................ 20 Benefit Finding ........................................................................................................................ 20 Method of Assessment ............................................................................................................ 25 Assessment Range Formula .................................................................................................... 27 Duration of Assessment .......................................................................................................... 29 Appeals and Interpretation ..................................................................................................... 30 Assessment ................................................................................................................ 31 Appendix A - 2023-2024 Assessment Roll ................................................................... 33 Appendix B - Assessment Diagram ............................................................................. 34
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Introduction
Overview
On January 28, 1992, the City of Vallejo (the “City”) City Council (the “Council”), adopted Resolution No. 92-46 N.C. approving the Engineer’s Report, confirming diagram and assessment, ordering improvements and formation of the “Sky Valley Maintenance Assessment District.” The City originally formed the Sky Valley Maintenance Assessment District to pay for certain public improvements, including but not limited to, storm water management, street system maintenance, open space maintenance, landscape maintenance, and geotechnical monitoring and maintenance.
On October 6, 1998, the Council by Resolution No. 98-373 approved the Engineer’s Report for the levy and collection of an increased assessment within the District for Fiscal year 1999-2000. Prior to the adoption of the annua l assessments and Engi neer’s Report, the City Council conducted mailed ballot proceedings in accordance with the requirements of the California Constitution Article XIIID. In addition to the property owner balloting for the assessments, the name of the District was changed from the “Sky Valley Maintenance Assessment District” to the “Hiddenbrooke Maintenance District” or “HMD” to reflect the name change of the former Sky Valley develo pment. The approved Report identified the special benefits received by property within the HMD, addressed public and general benefits as required by Article XIIID and established the maximum assessment rate and the application of that rate to the various land uses within the District.
Prior to Fiscal Year 2000-2001, the property owners within the District requested the City maintain additional improvements including a “Welcome Center” and a Passive Park within the development. A second majority protest ballot proceeding for an increased maximum assessment and inflationary formula resulting from the addition of the Welcome Center and Passive Park was conducted. The tabulation of ballots returned indicated 100% approval of the new ma ximum assessment of $509.00 per Equivalent Dwelling Unit (Equivalent Benefit Unit) including an annual inflationary adjustment based on the annual percentage change in the Consumer Price Index (CPI). On February 15, 2000 the Council, by Resolution No. 00-72, approv ed a supplemental Report that added the maintenance of the additional improvements and established the maximum assessment rate and formula for the District.
In Fiscal Year 2002-2003, property owners within the Hiddenbrooke Maintenance District asked the City to reconstruct the District budget and assessment methodology to simplify the budgeting of expenditures and revenues, and to develop a more equitable methodology. The reconstruction resulted in the following changes:
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
1. The assessment methodology was changed to simplify the calculation of the annual levy and to reduce the potential for future errors. The trigger for property development status has changed from building permit issuance to development status according to the County of Solano Secured Roll as of January 1st of the fiscal year prior to the upcoming fiscal year in which the levy will take place. For example, development status according to the County secured roll as of January 1, 2003 would be used for the Fiscal Ye ar 2003-2004 levy. Previously, the trigger date was based on the issuance of a building permit by March 1st of the fiscal year prior to the upcoming fiscal year in which the levy would have taken place.
2. An increased Maximum Assessment of $532.22 per Equivalent Dwelling Unit including an annual inflationary adjustment based on the annual percentage change in the Consumer Price Index (CPI) as calculated by the Bureau of Labor Statistics (BLS).
3. The Hiddenbrooke developer-funded reserv e balance was intended to be spent for improvements. It will now be set aside as a reserve fund based on the original agreement with the City of Vallejo.
4. The Golf Course Property, including the parcel that has the Golf Course Clubhouse situated upon it, is not included within the boundaries of the District and, accordingly, is not subject to assessment by the HMD.
A third majority protest ballot proceeding for the changes described above was conducted. The tabulation of ballots return ed indicated approval, and on July 22, 2003 the Council, by Resolution, approved an Engi neer’s Annual Levy Report that established the maximum assessment rate, formula and boundaries for the District.
In Fiscal Year 2004-2005, the City proposed to annex the Orchards development, at the south end of the original District, in order to provide funding for the operations and maintenance of improvements in this area. A fourth majority protest ballot proceeding for the annexation and maximum assessmen t of $534.88 per Equivalent Dwelling Unit including an annual inflationary adjustment based on the annual percentage change in the CPI. On June 8, 2004 the Council, by Resolution, approved a supplemental Report that annexed the Orchards development and esta blished the maximum assessment rate and formula.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Assessment Process
This Engineer’s Report ("Report") was prepared to establish the budgets for the continued capital improvement and services expenditures that would be funded by the proposed 2023-24 assessments, determine the benefits received from the lighting and landscaping maintenance and improvements by property within the HMD and the method of assessment apportionment to lots and parcel s within the HMD. This Report and the proposed assessments have been made pursuant to the provisions of Chapter 14.30 of the Vallejo Municipal Code, the Landscaping and Lighting Act of 1972, and Article XIIID of the California Constitution (the “Article”).
In each subsequent year for which the asse ssments will be continued, the Council must direct the preparation of an Engineer's Report, budgets and proposed assessments for the upcoming fiscal year. After the Engineer's Report is completed, the Council may preliminarily approve the Engineer's Report and proposed assessments and establish the date for a public hearing on the continuati on of the assessments. This Report was prepared pursuant to the direction of the Council.
If the Council approves this Engineer's Report and the continuation of the assessments by resolution, a notice of assessment levies must be published in a local paper at least 10 days prior to the date of the public hearing. The resolution preliminarily approving the Engineer's Report and establishing the date for a public hearing is used for this notice.
Following the minimum 10-day time period after publishing the notice, a public hearing is held for the purpose of allowing public testimony about the proposed continuation of the assessments. This hearing is currently scheduled for June 13, 2023. At this hearing, the Council will consider approval of a reso lution confirming the continuation of the assessments for fiscal year 2023-2024. If so confirmed and approved, the assessments would be submitted to the County Auditor/Co ntroller for inclusion on the property tax rolls for Fiscal Year 2023-2024.
Engineer’s Report
SCI Consulting Group has been retained by the City as the Assessment Engineer for this Assessment since 2011-2012. Language taken fr om the previous Engi neer's Report is shown in Times New Roman, 10 pt. Font.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Plans & Specifications
The work and improvements (the “Improvements”) are proposed to be undertaken by the City of Vallejo Hiddenbrooke Maintenance District and the cost thereof paid from the levy of the annual assessment provide special benefit to Assessor Parcels within the District as defined in the Method of Assessm ent herein. The improvements that may be provided to properties within or adjacent to the District may include any or all of the improvements described under Section 14.30. 100 of the Vallejo M unicipal Code. These improvements include, but are not limited to, the following services:
Storm water management
Street system maintenance
Open space maintenance
Trail maintenance
Landscape and appurtenant facilities maintenance
Tree maintenance
Geotechnical monitoring and maintenance
Welcome Center operation and maintenance
Waterfall maintenance
Monument maintenance
Passive park maintenance
Installation, maintenance and servicing of public facilities, and incidental expenses, including but not limited to, street lights, pub lic lighting facilities, landscaping, sprinkler systems, statuary, fountains, other ornament al structures and facilities, landscape corridors, ground cover, shrubs and trees, str eet frontages, drainage systems, fencing, entry monuments, graffiti removal and repainting, and labor, materials, supplies, utilities and equipment, as applicable, for property ow ned and maintained by the City of Vallejo.
Any plans and specifications for these improvements will be filed with the Public Works Director of the City of Vallejo and are incorporated herein by reference.
Installation means the construction of lighting and landscaping improvements, including, but not limited to: land preparation, such as grading, leveling, cutting and filling, sod, landscaping, irrigation systems, sidewalks and drainage and lights.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Maintenance means the furnishing of servic es and materials for the ordinary and usual maintenance, operation and servicing of any improvement, including repair, removal or replacement of all or any part of any improvement; providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury; the removal of trimmings, rubbish, debris, and other solid waste, and the cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti.
Servicing means the furnishing of electric current or energy for the operation or lighting of any improvements, and water for irrigation of any landscaping or the maintenance of any other improvements.
Incidental expenses include all of the following: (a) The costs of preparation of the report, including plans, specifications, estimates, diagram, and assessment; (b) the costs of printing, advertising, and the giving of published, posted, and mailed notices; (c) compensation payable to the County for colle ction of assessments; (d) compensation of any engineer or attorney employed to rende r services in proceedings pursuant to this part; (e) any other expenses incidental to th e construction, installation, or maintenance and servicing of the Improvements; (f) any expenses incidental to the issuance of bonds or notes pursuant to Streets & Highways Co de Section 22662.5; and (g) costs associated with any elections held for the approval of a new or increased assessment. (Streets & Highways Code §22526).
The assessment proceeds will be exclusively used for Improvements within the Assessment District plus Incidental expenses.
The improvements provided through the District are essentially monitoring and maintenance services. The plans and specific ations for the work consist of schematic maps, letters, agreements, conditions, cost estimates and related documents which describe the nature and scope of the moni toring and maintenance activities to be performed. These documents include but are not limited to the following:
1. Map entitled Hiddenbrooke Nature Trail by Phillippi Engineering, Inc. dated March 1997 as amended
2. Agreement dated February 2, 1989 concerning mitigation measures relating to Storm Drainage and Water Supply between Sky Valley Company and the City of Benicia
3. Letter from Greater Vallejo Recreation District (GVRD) to the City of Vallejo dated February 24, 1997 regarding Sky Valley Maintenance Assessment District
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
4. HMD summary of budgets with attachments prepared by the City of Vallejo dated May 19, 1997
5. HMD estimated budget for year 0 to 15 (build out) prepared by the City of Vallejo dated June 1997
6. Landscape maintenance specification for public streets in the HMD
7. Portions of the Hiddenbrooke Specific Plan, as amended, which contains maintenance specifications and criteria
8. Hiddenbrooke Parkway Welcome Center Services Agreement
9. Letter in regard to Solicitor’s Opinion that Hiddenbrooke Golf Course will fund its own landslide repair improvements
The foregoing documents are available for review in the office of the City Engineer and are incorporated herein by reference.
General Definitions
The terms hereinafter set forth have the following meanings in this Report and have been maintained, verbatim from the previous Engineer’s Report:
“Acreage” means the gross acreage of any Assessor’s Parcel of real property in the HMD calculated to two (2) decimal places, without any deduction for any intrusions or limitations of usage, including but not limited to, easements , public or private rights of way, utility installment or parking area improvements. The acreage of each Assessor’s Parcel shall be as determined by the City Engineer. The City Engineer may rely upon a certification or certifications of one or more licensed civil engineers (or such other documentation as the City Engineer deems appropriate in the circum stances) in making the determination as to the acreage of any specific Assessor’s Parcel.
“Assessor’s Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number (APN).
“Assessor’s Parcel Map” means an official map of the County Assessor of the County of Solano designating parcels by Assessor’s Parcel Number.
“Commercial Property” or “COM” means Developed Property used for commercial or industrial purposes other than property assigned to Land Use Designations SFR, SFV, MFR, MFV, CMV, SPC or EXE. This land use has improvement value according to the Solano County Secured roll. This land use type is assessed at 1.00 EBU per every 3,000 square feet of building square footage or portion thereof.
“Developed Property” means all Assessors’ parcels within the Hiddenbrooke Maintenance Assessment District for which pa rcel data, from the most current Solano City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
County Secured Roll available as of January 1 of the calendar year in which the Report is being prepared, shows improvement value on that property.
“Equivalent Benefit Unit” or “EBU” means a basic measurement unit of benefit. A parcel with the SFR designation consists of one (1) EBU and is the baseline measure of benefit to which all other land use designations are compared within the HMD. EBUs are rounded to two (2) decimal places.
“Exempt Property” or “EXE” is a land use designation that identifies properties that are not assessed and are assigned 0.00 EBU. This land use classification may include, but is not limited to, lots or parcels identified as public streets and other roadways, dedicated public easements, open space areas and rights-of-way including greenbelts and parkways utility rights-of-way, common areas, sliver parcels and bifurcated lots or any other property that cannot be developed, park properties and other publicly owned properties that are part of the District improvements or that have little or no improvement value. These types of parcels are considered to receive incidental or no benefit from the improvements and are therefore exempted from assessment.
“Fiscal Year” is the City’s fiscal year beginning July 1 and ending June 30.
“Golf Course Property” means any property planned under the Specific Plan to be used as a golf course and related or appurtenant facilities and improvements, including but not limited to a driving range and a clubhouse, which property is not assessed within the HMD.
“HMD” is the abbreviation for Hiddenbrooke Maintenance District.
“Hotel” or “HOT” means a structure or structures including Hotel Rooms and related facilities (including but not limited to restau rants and food service facilities, conference rooms and meeting halls) (i) operated for the accommodation of transient guests and including any hotel as defined in the California Civil Code or (ii) operated as a condominium hotel in accordance with the Specific Area Plan. This land use is assessed
0.15 EBU per Hotel Room on a developed lodging use-related parcel and 0.12 EBU per Hotel Room on an undeveloped, planned lodging use-related parcel.
“Hotel Room” means each individual condominium unit or room within a Hotel designed to provide accommodations for transient guests or other occupants of the Hotel.
“Improvement” means one or any combination of the following: (i) maintenance of regional park land, (ii) maintenance of parks and parkways, (iii) maintenance of open space, (iv) maintenance of streets (v) operation and maintenance of a welcome center (vi) provision of flood control and storm protection services, (vii) related facilities, along with appurtenances and appurtenant work deemed necessary for provision of services and maintenance and (viii) incidental expenses related thereto.
“Multi-Family Residential” or “MFR” means Developed Property and is defined as a fully subdivided and developed residential parcel that has more than one residential unit developed on the property and has improvement value according to the Solano County Secured Roll data. This land use is assessed 0.90 EBU per dwelling unit.
“Parcel” refers to an individual property assigned its own Assessment Number (Assessor’s Parcel Number—APN) by the Solano County Assessor’s Office. The Solano County Auditor/Controller uses Assessment Numbers and specific District Fund Numbers, to identify on the tax roll, properties assessed for special district benefit assessments.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
“Planned Lot” is a land use defined as any property not subdivided with a specific number of proposed residential lots or dwelling units to be developed on the parcel where a final map has been recorded for the parcel.
“Publicly Owned Property” means any land within the Hiddenbrooke Maintenance Assessment District (i) conveyed or irrevocably offered for dedication to a public agency, (ii) which is encumbered by easements for the benefit of public entities or utilities which make impractical utilization of the real property for other than the purpose set forth in the easement.
“Single-Family Residential” or “SFR” means Developed Property and is defined as a fully subdivided and developed attached or detached residential, single-family property site with improvement value according to the Solano County Secured Roll data. This land use is assessed 1.00 EBU per lot or parcel. This is the base value that all other land use types are compared and weighted against (i.e. Equivalent Benefit Unit or EBU.)
“Situs” means the property location address.
“Special Designation Property” or “SPC” is a land use designation factor defining undeveloped property that has more than one type of planned land use associated with it.
A common example of such a property is one in which the property includes planned, unsubdivided single-family residential lots and planned commercial structural development. This land use is assessed at 0.60 EBU per planned SFV lot and 0.60 EBU per 3,000 square feet (or portion thereof) of planned commercial building square footage.
This category also includes undeveloped property that has been subdivided but on which construction has not yet begun.
“Specific Plan” means Hiddenbrooke Specific Plan adopted by the City Council on September 15, 1987 amended September 26, 1995.
“Undeveloped Commercial Property” or “CMV” means Undeveloped Property zoned exclusively for commercial or industrial purposes other than property assigned to Land Use Designations SFR, SFV, MFR, MFV, COM, SPC or EXE. This land use has no improvement value according to the Solano County Secured roll. This land use type is assessed at 1.50 EBU per acre. Parcels less than 1 acre in this category are assigned a minimum of 1.50 EBU. Parcels over 50 acres are assigned a maximum of 75.00 EBU.
“Undeveloped Multi-Family Residential” or “MFV” means Undeveloped Property that is an undeveloped residential, multi-family parcel without improvement value according to the Solano County Secured Roll data an d includes a specific number of proposed dwelling units to be developed on the parcel (defined as a Planned Lot). This land use is assessed 0.60 EBU per proposed dwelling unit.
“Undeveloped Property” means all Assessor’s parcels within the Hiddenbrooke Maintenance Assessment District for which pa rcel data, from the most current Solano County Secured Roll available as of January 1 of the calendar year in which the Report is being prepared, shows no improvement value on that property.
“Undeveloped Single-Family Residential” or “SFV” means Undeveloped Property and is defined as either 1) a fully subdivided yet undeveloped residential, single-family property lot or parcel without improvement value according to the Solano County Secured Roll data or 2) an unsubdivided, undevelope d residential, single-family parcel without improvement value according to the Solano County Secured Roll data which includes a specific number of proposed residential lots or dwelling units to be developed on the parcel City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
(defined as a Planned Lot). This land use is assessed 0.60 EBU per subdivided lot, per proposed residential lot, or per proposed dwelling unit.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Fiscal Year 2023-2024 Estimate of Cost and Budget
Cost Estimates
As defined in the Municipal Code, the cost estimates for the Improvements include the following:
a) The total costs for improvements to be made this fiscal year, being the total cost of constructing or installing all proposed improvements and of maintaining and servicing all existing and proposed improvements, including incidental expenses. This may include an operating reserve, which shall not reasonably exceed the estimated costs of maintenance and servicing to January of the fiscal year, or whenever the City expects to receive its apportionment of special assessments and tax collections from the County, whichever is later. These estimated costs of maintenance and servicing typically include fixed landscape, open space and infrastructure it ems, as well as water, electricity and telephone utility items. The operating reserve fund can also be used to offset any unforeseen expenses during a given fiscal year, including, but not limited to, emergency repairs.
b) The amount of any surplus or deficit in the improvement fund to be carried over from the previous fiscal year
c) The amount of any contributions to be made from sources other than assessments levied pursuant to this part
d) The amount of the annual installment for the fiscal year Specifically, the budget includes, but is not limited to the following items:
Landscape Maintenance Contract – The landsca ping contract is renewed annually and includes Landscape Maintenance, Open Sp ace Management, Trail Maintenance, Tree Maintenance, Irrigation System Repairs, Waterfall Maintenance and Monuments as detailed below. Fiscal Year 2016-2017 the Landscape Maintenance Contract was put out to bid and awarded, as a result the costs for Landscape Maintenance services increased.
Landscape Maintenance - The ornamental landscape of Hiddenbrooke Parkway, Tot-lot on Bennington Drive Park and numerous irrigated landscape areas make up the maintenance component. The park is approximately one acre in size and has a mixture of lawn, paved areas and resting areas. A portion of the park (Parcel I) will remain in a natural state consistent with the mitigation measures for the Hiddenbrooke development.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Open Space Management – Open space mana gement is overseen by the City. Fire prevention is included within the landscape maintenance contract. Adverse soil surface irregularities are repaired and funded by the Developer Deposit Fund. This Fund was a condition of development for any repairs of the open space.
Trail Maintenance – The City manages the trail maintenance service. Trail maintenance is scheduled annually through the maintenance contract.
Tree Maintenance – Tree pruning and care will be performed on a rotating schedule as necessary to keep trees healthy, maintain the urban canopy and avoid unexpected tree limb breakage. An occasional tree replacement is also covered by this budget line but a large number or replacements would be included in the Rehabilitation Reserves budget.
Irrigation Systems Repairs – This budget item provides for the ongoing maintenance and repair of the existing irrigation system to ensure that it is properly functioning at all times.
As the systems age, larger scale preventative replacements and upgrading to systems that provide more efficient use of water may be done.
Waterfall Maintenance Contract - Beginning 2015-16 the waterfall maintenance contract is a part of the landscape maintenance contract.
Monuments – This budget item provides for the ongoing maintenance of monument landscape and irrigation throughout the district.
Salaries and Benefits – Staff time devoted to managing and inspecting Districts. The Public Works LMD reimbursement is proportionally spread amongst twenty-seven (27) Districts based on each District’s budgeted direct and maintenance expense, inspections as a percentage of total costs in these categori es for all Districts. Inspection costs are budgeted directly to the District as Field Inspection based on the historical and projected time spent in the inspection efforts.
Services & Supplies - Vehicles, supplies and services devoted to managing and inspecting Districts.
Capital Projects – This item includes major repairs or capital improvement projects.
Landscape Rehabilitation & Vandalism — Lands cape Rehabilitation includes landscape projects, which significantly benefit and upgrade HMD. These cost reflect only a proportional share of the entire cost of the project and are noted because the amount of design, planning, coordination and execution. This budget item represents a cost which has been identified by the city as ab ove normal routine landscape maintenance inspection.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Vandalism - Includes repairs and rehabilitat ion that are generally unforeseen and not normally included in the yearly maintenance co ntract costs. This may include repair of damaged amenities due to vandalism, storms, frost, etc. These upgrades could include replacing plant materials and/or renovation of irrigation or lighting systems.
Utility – Includes the cost of water, electricity, and telephone. Amounts are budgeted based on historical usage and costs, considering published or projected rate increases for Vallejo Water, Vallejo Sanitation and PG&E. Water costs for the HMD include irrigation, the waterfall and the Welcome Center bathroom. Electricity costs include support for the irrigation systems, lights at the entry, Welcome Center lighting, and holiday tree lighting for the olive grove at the entry.
Utility Corridor Maintenance – All wet utilities come through the utility corridor and it is HMD’s emergency exit in the event Highway 80 closed. The utility corridor is maintained by the HMD and includes road surfacing and roadway improvements.
Welcome Center and Miscellaneous Repairs - The Welcome Center Agreement specifies the required expenses to staff the facility with “Greeters” and Security personnel and provide roving patrols as directed by the Hiddenbrooke Property Owners Association (HPOA), which has been charged with directing the activity/operations of the Welcome Center. The Agreement will be annually renewable, subject to the consent of the service provider and the City. An annual allowance is included in the general budget for touch up painting, security camera systems or other items necessary to operations of the Welcome Center. If for any reason the Welcome Center should no longer be funded or desired in the future, the HMD Developer Deposit Fund may be used to cover the cost of removal.
Napa County Street System Maintenance – Approximately ½ mile of the entrance roadway, Hiddenbrooke Parkway, is situated in Napa County. As a condition of the District development, maintenance of this portion of the road will not be undertaken by Napa County. The District can expect to request and receive a high level of street maintenance services, above what the City normally provides under the General Fund.
Storm Water Management – The District was mandated in the Conditions of Approval for runoff emptying into Lake Herman, the emergency back-up reservoir for the City of Benicia. This condition was initiated by the City of Benicia for water quality monitoring services, which is being provided by the Vallejo Sanitation and Flood Control District.
Professional Services – This is the estima ted cost to the Distri ct for the Assessment Engineer to prepare this report and to calculate and submit the assessments to the Solano County Auditor’s office.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
County Administrative Services – This is the amount charged by the County for the cost of processing and collecting the annual levy on the property tax billings and remitting funds to the City of Vallejo. It is based on the total levy.
Administration & Overhead – The cost allocati on of all particular departments and staff of the City, for providing general support, se rvices and operations related to the various districts, enterprises and accounts of the City.
Number of District Parcels: This is the num ber of assessable parcels within a particular district. This number does not include exempt or non-taxable parcels.
District Direct Cost: This is the sum total of the regularly budgeted direct costs for the District. The total direct costs include the budgeted expenses for: Maintenance, Water, Utilities, Vandalism/Natural Damage, and Sp ecial Maintenance/Services. The amount budgeted for Improvements/Rehabilitation reserve is not included in this dollar amount.
Geotechnical Monitoring/Maintenance – As a Condition of Approval the District is required to monitor slope stability. Funds are reserved to monitor slope movement, remove or repair landslides and any condition for which the District should require the services of a geologist or soil engineer. The Hiddenbrooke project was approved with Resolution 87-613 Tentative Map 88-10 (dated 1-19-1988) and Specific Area Plan (dated 1987). These documents require only a determin ation of the adequacy of the landslide repair but do not state to what degree of effort is needed.
Fund Balances
The HMD has its own improvement fund to be accounted for separately from all other City funds. All moneys representing special assessments, installment payments, contributions and annual interest earned and surplus/deficits from prior years’ expenses and revenues are deposited into this fund. The HMD divides the improvement fund into the following four (4) funds: the HMD Deve loper Deposit Fund, the HMD Rehabilitation Fund, the HMD Operating Reserve Fund, and the HMD Undesignated Reserve Fund.
Annual revenues that exceed the cost of a nnual operations will be deposited into the reserve funds to be used for future City Council approved projects and expenditures. City staff is currently working with the Hidd enbrooke HPOA’s HMD Advisory Committee to update the five (5) year Capital/Rehabilitation plan. The City can draw from the Rehabilitation Fund, as part of the improvement fund, only as necessary to cover the District improvements should the Undesignated Reserve Fund or current year budget be insufficient.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
HMD Developer Deposit Fund
The developers of Hiddenbrooke deposi ted $600,000 into the HMD Developer Deposit Fund during the 1999-2000 Fiscal Year for an y remediation work required within the Hiddenbrooke development or the Utility Corridor (UC) between Columbus Parkway and Hiddenbrooke. The fund will ensure the ability of the HMD to repair adverse land movement or impacts to improvements within the broader HMD areas and the Utility Corridor such as: debris flows, landslides, slope re-grading due to erosion or earth movement, Utility Corridor monitoring/maintenance or slope repair, and maintenance or resurfacing of the a/c village trail due to expansive soil.
The Utility Corridor links Hiddenbrooke with St John’s Mine Road and is the responsibility of the Hiddenbrooke development. The corridor has suffered erosive damage due to the annual discharge of precipitation storm wa ter from the Utility Corridor slopes and roadway. The UC lies within the Solano Land Trust Swett Ranch, formerly the PG & E properties and is entitled with a construction and maintenance easement which encumbers the UC. Approximately $168,000 has been spent since 2007 on engineers and consultants to develop a plan to remediate the corridor, but no actual work has been done.
The HMD Developer Deposit Fund balance can and does grow beyond the original $600,000 deposit. This deposit is subject to interest earnings. The City is allowed to invest this deposit in an interest bearing account and the resulting interest earnings are deposited directly to the HMD Developer Deposit Fund. The approximate interest earnings since the original deposit are represented in the Reserve Fund Information table located on the following pages.
HMD Rehabilitation Fund
The Rehabilitation Fund was originally designated for repairs to the Napa County Road, Debris Flow Cleaning, Slide Re-grading, and maintenance or slope repair of the Utility Corridor Access Road. In FY 2003-2004, the HMD Rehabilitation Fund was designated only for repairs to the Napa County portion of Hiddenbrooke Parkway and the other descriptive items were determined to be available for funding from the HMD Developer Deposit Fund. Beginning with FY 2010-2011, the purpose of the HMD Rehabilitation Fund has been expanded to include the Napa County Road section and all other renovation and rehabilitation to landscape and irrigation sy stems within the HMD; effectively anything that is not in the Open Space areas or Utility Access or Utility Easements in the hillsides.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
The City Public Works Department has established $1 million as the cap for the sum total of the HMD Developer Deposit Fund, adjusted by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U), as distributed by the Bureau of Labor Statistics (BLS) for the Consolidated Me tropolitan Statistical Area (CMSA) covering San Francisco-Oakland-San Jose. The percentage increase will be from February 1 of the prior year to February 1 of the current year, or similar time period.
The adjusted Developer Deposit Fund cap for Fiscal Year 2023-2024 has been adjusted from $1,712,122 to $1,800,981 (5.19 Percent). In February 2023, this figure was adjusted accordingly to reflect the current percentage change in the Local CPI. According to the City Finance Department, the current total of the HMD Developer Deposit Fund has not reached this cap. The estimated FY 2022- 2023 ending balance for both Funds is $2,663,124, including the $860,796 Developer Deposit Fund and $1,802,328 Rehabilitation Fund.
The percentage change in the Local CPI that was applied to the Funds cap for Fiscal Year 2023-2024 is 5.30 Percent. Therefore, the cap for FY 2023-2024 is $1,896,433. The estimated FY 2023-2024 ending ba lance for both Funds, includi ng interest earnings, is $2,674,496. These figures are presented in the Reserve Fund Information table that follows this section.
HMD Operating Reserve Fund
The HMD Operating Reserve Fund provides for operating expenses through January of the fiscal year or until such time as the City receives its apportionment of special assessments from Solano County, whichever is later. It is also a fund that can be accessed should the District experience unforeseen damages or emergencies to improvements.
Based on City data regarding the District fund balance information, the estimated ending Operating Reserve Fund balance as of June 30, 2023 will be $370,137. The target Operating Reserve Fund balanc e for June 30, 2024 is based on 50% of the total costs or $370,137.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Description et 2023-24 Budget
Direct Costs
Landscape, Open Space & Infrastructure
Fixed
Landscape Maintenance Contract $136,475
Salaries & Benefits $116,501
Services & Supplies $14,196
District Upkeep
Capital Improvements $0
Landscape Rehabilitation / Vandalism $55,000
Utility
Water $95,142
Electricity $15,600
Telephone $2,000
Total Lanscape, Open Space & Infrastructure Costs $434,914 Utility Corridor Maintenance
$0
Total Direct Costs $434,914
Indirect Costs
Agreement & Easement Responsibilities
Welcome Center $243,075
Napa County Roadway (Street System) $0
VSFCD Storm Water Management $0
Misc. Repairs to Welcome Center Interior / Exterior $0
Professional Services $4,104
Administration & Overhead $53,687
County Administrative Services $7,210
General Fund Contribution
(Welcome Cntr, Napa Cnty Road, Trail) ($2,715)
Total Indirect Costs $305,361
Total Annual Direct and Indirect Costs $740,275
Reserve Fund Collection
Operating / Rehabilitation Reserve Fund
Annual Collection/(Transfer) ($19,248)
Developer Deposit Fund
Annual Collection/(Transfer) $0
Total Reserve Fund Collection / (Transfer) ($19,248)
Total Balance to Levy $721,027
District Statistics
Total Parcels 1,222
Total Parcels Levied 1,222
Total Equivalent Benefit Units 1,180.00
Proposed Levy per Benefit Unit $611.04
Maximum Levy per Benefit Unit $910.73
Total Assessment $721,027.20
City of Vallejo, Hiddenbrooke Maintenance District
Estimate of Cost
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Description Total
Reserve Funds Information
HMD Developer Deposit Fund
Estimated HMD Developer Deposit Fund Balance as of June 30, 2023 $860,796 Estimated Interest Earnings on Original Developer Deposit (FY23-24) $8,608 Estimated Developer Deposit Fund Collection/(Transfer) (FY23-24) $0 Estimated HMD Developer Deposit Fund Balance as of June 30, 2024 $869,404 HMD Rehabilitation Fund
Estimated HMD Rehabilitation Fund Balance as of June 30, 2023 $1,802,328 Estimated Interest Earnings on Rehabilitation Fund (FY23-24) $21,725 General Fund Contribution (Welcome Center, Trail, Napa County Road) $2,715 Estimated Rehabilitation Fund Collection/(Transfer) (FY 23-24) ($21,903) Estimated HMD Rehabilitation Fund Balance as of June 30, 2024 $1,804,865 Estimated HMD Rehabilitation and Developer Deposit Fund Balance as of June 30, 2023 $2,674,269
HMD Operating Reserve Fund
Estimated HMD Operating Reserve Fund Balance as of July 1, 2023 $370,137 Estimated Operating Reserve Transfer to Developer Deposit Fund (FY 23-24) $0 Estimated Operating Fund Collection/(Transfer) (FY 23-24) $0 Estimated HMD Operating Reserve Fund Balance as of June 30, 2024 $370,137 HMD Undesignated Reserve Fund
Estimated HMD Undesignated Reserve fund Balance as of July 1, 2023 $0 Estimated Undesignated Reserve Collection/(Transfer)
Estimated HMD Undesignated Reserve fund Balance as of June 30, 2024 $0 Estimated Total HMD Reserve Fund Balance as of June 30, 2024 $3,044,406 City of Vallejo
Hiddenbrooke Maintenance District, Reserve Fund Balances FY 2023-24 City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Method of Apportionment
Method of Apportionment
This section of the Engineer's Report explai ns the special and general benefits to be derived from the installation, maintenance and servicing of Improvements located throughout the District, and the methodology used to apportion the total assessment to properties within the District.
The District consists of all Assessor Parcels within the boundaries of Sky Valley Unit I, Sky Valley Unit II and Orchards development. The parcels include all privately or publicly owned parcels within said boundaries. The method used for apportioning the assessment is based upon the proportional special benefits to be derived by the properties in the District over and above general benefits conferred on real property or to the public at large. The apportionment of special benefit is a two-step process: the first step is to identify the types of special benefit arising from the improvements, and the second step is to allocate the assessments to property based on the estimated relative special benefit for each type of property.
Discussion of Benefit
In summary, the assessments can only be levied based on the special benefit to property.
This benefit is received by property over and above any general benefits. With reference to the requirements for assessments, Sectio n 22573 of the Landscaping and Lighting Act of 1972 states:
"The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in prop ortion to the estimated benefits to be received by each such lot or parcel from the improvements."
Proposition 218, which added Article XIIID of the California Constitution, provides as follows:
"No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel."
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Benefit categories have been established that represent the types of special benefit to residential, commercial, industrial and other lots and parcels resulting from the installation, maintenance and servicing lighting and landscaping improvements to be provided with the assessment proceeds. These categories of special benefit are summarized as follows:
A. Proximity to Improved Landscaped Areas and Other Public Improvements within the Assessment Districts.
B. Access to Improved landscaped areas and Other Public Improvements within the Assessment Districts.
C. Improved Views within the Assessment Districts.
D. Extension of a property’s outdoor areas and green spaces for properties within close proximity to the Improvements.
E. Creation of individual lots for re sidential and commercial use that, in absence of the assessments, would not have been created.
F. Drainage of water and runoff from property in the District.
G. Protection from flooding and st anding water due to the improved drainage systems.
Case law interpreting Proposition 218 provides enhanced clarity to the definitions of special benefits to properties in three distinct areas:
Proximity
Expanded or improved access
Views
This case law also clarifies that a special benefit is a service or improvement that provides a direct advantage to a parcel and that indi rect or derivative advantages resulting from the overall public benefits from a service or improvement are general benefits. The case law also provides specific guidance that pa rk improvements are a direct advantage and special benefit to property that is proximate to a park that is improved by an assessment:
The characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement (e.g . proximity to a park) or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement (e.g. general enhancement of the district’s property values).
Proximity, improved access and views, in addition to the other special benefits listed above further strengthen the basis of these assessments.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
General versus Special Benefit
In absence of the assessments, the Improvemen ts in the District would not be provided, so the Improvements are “over and above” what otherwise would be provided. Many of the parcels would not even exist if the a ssessments were not established because an assessment for the specific Improvements within the Districts was a condition of development approval.
All of the Assessment proceeds derived from the District will be utilized to fund the cost of providing a level of tangible “special benefits” in the form of landscaped parkways, landscaped medians, landscaped corridors, tr ail systems, drainage facilities, other Improvements and costs incidental to prov iding the Improvements and collecting the Assessments.
Although these Improvements may be available to the general public at large, the permanent public Improvements in the District were specifically designed, located and created to provide additional and improved public resources for the direct advantage of property inside the District, and not the public at large. Other properties that are either outside the District or within the District and not assessed, do not enjoy the unique proximity, access, views and other special benefit factors described previously.
Moreover, the homes in the District would not have been built if the Assessments were not established because an assessment fo r the Improvements was a condition of development approval.
Benefit Finding
In summary, real property located within the boundaries of the District distinctly and directly benefits from closer proximity, access and views of Improvements funded by the Assessments, the creation of developable parcels and the extension of usable land area provided by the assessments. The Improvem ents are specifically designed to serve properties in the District, not other properties or the public at large. The District has been narrowly drawn to include those parcels th at receive a direct advantage from the Improvements. The public at large and other properties outside the District receive only limited benefits from the Improvements because they do not have proximity, good access or views of the Improvements. These are specia l benefits to property in the District in much the same way that sewer and water facilities, sidewalks and paved streets enhance the utility and desirability of property and make them more functional to use, safer and easier to access.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Without the Assessments, the public improvements within the District would not be maintained and would turn into brown, unmaintained and unusable public improvements and public lands. If this happened, it would create a significant and material negative impact on the desirability, utility and value of property in the District. Most importantly, without the Assessments, the developed properties would not exist, because the subdivisions and development proposals would not have been approved. The Improvements are, therefore, clearly above what otherwise would be provided and the Improvements uniquely and specially benefit parcels in the District in a way that is not enjoyed by the general public or other property. We therefore conclude that all the Improvements funded by the Assessment ar e of special benefit to the identified benefiting properties located within the District and that the value of the special benefits from such Improvements to pr operty in the District reasonably exceeds the cost of the Assessments for every assessed parcel in the District. (In other words, as required by Proposition 218; the reasonable cost of the proportional special benefit conferred on each parcel reasonably exceeds the cost of the assessments.) Any general benefits to surrounding properties outside of the District, if there were any, are collateral and conferred concomitantly.
The Hiddenbrooke development has a single access/egress from Interstate 80. All of the improvements to be maintained within the development (with the exception of regional trail facilities which is 50% special benefit) have been constructed specifically for the benefit of the properties within the development and the maintenance of these improvements is by definition of special benefit to these properties. The location of a property within the District and its relative benefits from District improvements is addressed in the following:
Utility Corridor – With exception of routine maintenance or repair of the water line or forced main sanitary sewer line by the Water Division or Vallejo Sanitation & Flood Control District, all other appu rtenances within th e Slope Grading, Maintenance and Drainage Easement enclosing the Corridor are the responsibility of the HMD. The Corridor is consid ered the emergency access out of the development should a catastrophic event make Hiddenbrooke Parkway impassible. Any slope monitoring, remedial earthwork for slide repairs, concrete ditch cleaning or repair, storm drains or drop inlets, weed control, erosion control, pavement and roadway maintenance or resurfacing, road settlement, gates or fencing, etc, as identified, within the Sky Valley Offsite Utilities Improvement Plans is the responsibility of the HMD. Amounts budgeted but not spent in any fiscal year will be added to the HMD Rehabilitation Fund balance.
Debris Basins – V.M.C. Chapter 12.40.010 fo r Excavating, Grading and Filling required the elimination of hazards such as mudflows, erosion, flooding, etc. The Basins are designated for the safety of the residents residing in prone areas, should a flow event occur. Basins minimize th e loss of life and property to the Hiddenbrooke residents. The four (4) Basins are identified on the Sky Valley Phase 2 Record Drawing Grading Plans and are the responsibility of the HMD.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Storm Water Management - The monitoring of the lakes is of special benefit to all properties within the HMD. This spec ial benefit is independent of parcel location because all of the properties drain to the lakes.
Napa County Street System Maintenance - The maintenance of approximately ½ mile of the Hiddenbrooke Parkway (entrance roadway) is of special benefit to properties within the HM D because it is the sing le access/egress to the development. No gas tax is appropriated to the City of Vallejo for this section of roadway and the agreement with Napa County provides that Napa County will not pay for the maintenance of this street. Th erefore, the burden of maintaining this street falls upon the HMD. The benefit to the properties within the HMD is the satisfaction of this obligation. That po rtion of Hiddenbrooke Parkway that lies outside of the HMD boundaries and in Napa County is considered a general benefit. This general benefit is estimated to be 25% of the total maintenance costs and the City will make a contribution in the amount necessary to offset this general benefit cost. Amounts budgeted but not spent in any fiscal year will be added to the HMD Rehabilitation Fund balance.
Open Space Maintenance - The maintenance services to be performed on open space include fence repairs, fire access road repairs, erosion control, noxious weed control, sign repairs, fire breaks, ditch cleaning and associated staff costs. These services are of special benefit to the properties within the HMD in as much as they provide for property safety, preserve the natural tranquility and beauty of the Hiddenbrooke environment and provide recreational opportunities such as hiking and walking for the benefit of the residents and employees in the community.
Open space literally surround s the Hiddenbrooke development and is equally accessible to all properties within the HM D. Whether a property faces or backs up to open space is a matter of personal preference. The benefits of owning property next to open space (views, sere nity, direct access, etc.) are generally offset by the nuisance factors such as litter and increased foot traffic. Maintenance of firebreaks is of equal benefit to properties across the street as to those who back up to open space. The intense heat of wild fires causes them to jump streets as was seen in the Oakland Hills fire of 1991. Thus, the relative location of parcels within the HMD is seen not to impact the relative benefit received by the various properties.
Trail Maintenance - The trail system and trailhead are open and accessible to the general public as well as to the HMD property owners, but trail systems are predominately used by those who live n ear them and theref ore provide special benefits to local property owners. However, based on discussions with East Bay Regional Parks personnel, it has been determined that these trails may be used by residents of HMD and outsiders in equal numbers. Therefore, at present only 50% of the cost of trail maintenance has be en assessed to the properties within the HMD as special benefit. Cost estimates and allocation of special benefit may vary as the trail system and surrounding properties are developed. The reallocation of special benefit will be based on the locati on and extent of the trail system as it relates to the surrounding properties.
Landscape Maintenance - Parkway and neighborhood entrance maintenance services are of equal benefit to all properties within the HMD because all properties access the community via Hiddenbrooke Parkway. Landscaped areas and street trees are distributed throughout the development and provide equal environmental and aesthetic benefits to similar parcels. Although landscape improvements (by virtue of their location), may be visible to surrounding properties or to the public at large, an y benefit to surrounding properties is City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
incidental and cannot be considered a direct and special benefit to those properties. Therefore, it has been dete rmined that the landscape improvements associated with the District and the on going operation and maintenance of those improvements are clearly a direct and sp ecial benefit to properties within the District and provide no measurable general benefit to properties outside the District or to the public at large.
Geotechnical Monitoring & Maintenance - This service is not related to parcel location because areas subject to slides are within the open space parcels. Funds will be accumulated and applied as needed if and when an event occurs. In this sense, the funds are “insurance” for the benefit of all properties independent of location.
Welcome Center - The location of a property within the HMD relative to the Welcome Center is not considered to be a factor in determining special benefit because the Hiddenbrooke development has a single access and egress to and from Interstate 80. The Welcome Center is strategically located at the entrance to the HMD. The Welcome Center is of equal be nefit to all properties. The operation and maintenance of the Welcome Center will provide for a friendly point of access and departure to the HMD. A well-maintained center with a well-trained staff will be a significant asset to the HMD. The greeters and security personnel will provide directions to visitors and will keep a watch out for the safety of residents, businesses and their respective visitors and guests. A well-trained staff will be available to provide reasonable assistan ce to property owners in times of emergency.
However, it is also recognized that the Welcome Center will be of benefit to those members of the public who use the trail system. No specific data regarding the use of the HMD trails by persons from outside the HMD is currently available, but it is reasonable to gauge the use of the trail system by the general public on the size of the staging area. Based on a staging area that will accommodate 25 vehicles an estimated 50 trips per day will be made by the general public. It is estimated that at build out there will be 1,200 EBUs within the HMD. Assuming an ADT (average daily traffic) of 9.55 trips per day per EBU, the development will generate 9,770 vehicle trips per day. Visitors passing through the Welcome Center will generate 50/9,700 or approximately 0.5% of the total ADT. It is reasonable to say that 0.5% of the overall benefit derived from the additional improvements is “General Be nefit”. This benefit is not special to the owners of the HMD and may not be assessed. A contribution by the City in the amount of
0.5% of the total cost of maintaining the Welcome Center will be allocated as general benefit and not assessed to property owners within the HMD.
Passive Park - The location of property within the HMD is not considered to be of consequence in determining special benefit because the park is centrally located and easily accessible to all properties w ithin the HMD. Moreover, the increased benefit of owning property near to the park is generally offset by the nuisance factors such as litter and increased foot traffic that the park generates. A well maintained park is esthetically pleasing. It approves property appearance and will enhance the HMD community image. If the park is not well maintained it will have the opposite effect. The park will provide passive recreational opportunities such as walking and outdoor reading for the enjoyment and benefit of all residents and employees of the HMD.
Waterfall Maintenance - Waterfall maintenance services are of equal benefit to all properties within the HMD because all properties access the community via City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Hiddenbrooke Parkway and have visible access to the waterfall. The waterfall amenity provides equal environmental and aesthetic benefits to all parcels within the HMD.
Although waterfall improvements may be visible to surrounding properties or to the public at large, any benefit to surrounding properties is incidental and cannot be considered a direct and special benefit to those properties. Therefore, it has been determined that the waterfall improvements associated with the District and the ongoing operation and maintenance of those improvements are clearly a direct and special benefit to properties within the District and provide no measurable general benefit to properties outside the District or to the public at large.
Incidental Expenses - The incidental expenses associated with the various maintenance services provided are distributed in proportion to the foregoing and are therefore unrelated to parcel location.
General benefit is identified as that bene fit received by proper ties outside of the District. General benefit cannot be assessed to property within the District boundary. A summary of the general benefit contributions is illustrated in the following table.
Agency Description % of Budgeted Expenditures
City Street System Maintenance 25.0%
GVRD Trail Sys tem 50.0%
City Welcom e Center Cost 0.5%
The original determination of benefits to property and the method of special benefit apportionment to property were developed by Willdan Financial Services when the HMD was reconstructed in fiscal year 2002-2003. The descript ion of benefits and the determination and apportionment of benefits to property in this Report are consistent with the original benefit determination and apportionment. The original method of apportionment of assessment and other rele vant elements of the fiscal year 2002-2003 Engineer’s Report for the HMD are hereby incorporated by reference.
The maintenance and servicing of these improvements is also partially funded, directly and indirectly from other sources including City of Vallejo, the County of Solano and the State of California. This funding comes in the form of grants, development fees, special programs, and general funds, as well as direct maintenance and servicing of facilities (e.g. transportation facilities, other infrastructure, etc.) Finally, this funding from other sources more than compensates for general benefits, if any, received by the properties within the assessment districts.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Method of Assessment
The method of apportionment for the District calculates the receipt of special benefit from the respective improvements based on the actual or proposed land use of the parcels within the District. The net amount to be assessed upon parcels within the District is apportioned by a formula and method that fairly distributes the net amount to be assessed among all assessable parcels in proportion to the special benefits to be received by each parcel from the im provements. Additionally, in compliance with Article XIIID Section 4 of the State Constitution each parcel’s assessment does not exceed the reasonable cost of the proportional special benefit conferred to that parcel. The benefit formula used to determine the assessment obligation is therefore based upon both the improvements that benefit the parcels within the District as well as the proposed land use of each property as compared to other parcels that benefit from those specific improvements.
Equivalent Benefit Units
The special benefits received by each parcel within the District and each parcel’s proportional annual assessment is calculat ed on the basis of a formula known as Equivalent Benefit Units. The Equivalent Benefit Unit (EBU) method of apportionment establishes a proportional benefit relationship between the various parcels within the District and the improvements provided by th e District. The EBU assigned to each parcel utilizes a set formula and proportional weightin g factors based on the land use, size and development status of each parcel within th e District compared to other parcels within the District.
Equivalent Benefit Unit Application by Land Use
Developed Residential Land
In order to evaluate the special benefits received by the various types of land, it makes sense to look at the benefits received by reside ntial land because this is by far the largest category. The benefit received by residential land does not vary signific antly, if at all, in direct proportion to lot size. There is no di rect correlation or readily available dwelling density data by residential lot size that illustra te that larger lots su pport an increased (or decreased, for that matter) number of persons per dwelling unit. Therefore, all developed single-family residential lots or parcels receive an equal amount of special benefit from the improvements financed through the HMD and are deemed to receive 1.00 EBU.
All developed multi-family residential par cels are deemed to receive 0.90 EBU per dwelling unit. This is because density per dwelling unit figures for multi-family units in the City of Vallejo are approximately ten percent (10%) less than density figures for single- family homes. According to the Census 2000 data for the City of Vallejo obtained from the Association of Bay Area Governments (ABAG), the average household size of an owner- occupied unit in Vallejo is 2.99 persons. Th e average household size of a renter-occupied unit is 2.76. Assuming that most owner-occupied units are single-family residential homes and most renter-occupied units are multi-family dwelling units, there is an eight percent City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
(8%) difference in densities be tween single family and multi-family dwelling units. For ease of levy administration, the City has decided to round the percentage difference to ten percent (10%). Therefore, the EBU count for developed multi-family dwelling units is 0.90 EBU.
Developed Commercial Property
Commercial property, developed or undeveloped, does receive measurable special benefit from the improvements maintained through this District. Well-maintained improvements add aesthetic value to the property and enhance the desirability of the property, which may attract patrons and prospective buyers. For this District, a commercial or industrial parcel that has an improved commercial or industrial use structure receives 1.00 EBU of special benefit for every 3,000 square feet (or fraction thereof) of improved structure. For undeveloped commercial properties, the special benefit is identified as 0.60 EBU per 3,000 square feet (or fraction thereof) of planned improved structure.
Undeveloped Land
Public improvements within the HMD have been constructed throughout. The maintenance of these public improvements is of special benefit to all of the land in this planned community. Some land will be developed immediately, buildings will be constructed and families will move in. Other land may remain undeveloped, i.e. without buildings, for a number of years. There is a difference between special benefit received by developed and undeveloped land. When land is undeveloped or vacant, the special benefit received is less than that received by a developed parcel (one with a building). This is because only a minimum level of service is necessary in order to save the HMD improvements from degradation and destruction. For example, watering and weed control is necessary for plant survival along the Hiddenbrooke Parkway. Trails must be maintained or they will be lost.
There will be geotechnical costs for slope monitoring with or without development. A minimal effort to maintain open space incl uding trails will be necessary for marketing purposes. Firebreaks, on the other hand, are not necessary until structures are built. This minimum level of maintenance activity will be essential to property owners in order to market (sell) lots. The benefit for undeveloped residential land is considered to be 60 percent of developed single-family residential land. Therefore, undeveloped single-family residential land is considered to receive 0. 60 EBU per planned lot. After buildings are constructed and occupied, increased maintenance services will be required, e.g. increased litter removal, fire protection, trail maintenan ce, pruning, watering and weed abatement.
However, for improvements su ch as the Welcome Center, the benefit to developed and undeveloped lots is the same.
Exempt Property
Public property, which is maintained for the benefit of the properties within the HMD, does not benefit from these services. For exampl e, open space does no t benefit from the maintenance of open space. Sanitary and water pumping stations are for the benefit of the HMD properties. These facilities exist only to service the HMD. If the property does not develop then the facilities will be abandoned. In summary, there are no public agency parcels in the HMD which are perceived to benefit from the improvements.
Public open space does not benefit from the services provided by the HMD and is therefore not assessed. Services performed on the land such as fire abatement are for the protection of the developed private parcels. Open space that is held in public trust may not be transferred or sold for profit and as such do es not appreciate in value due to the HMD improvements. Open space maintenance se rvices are performed because of the development. If there were no development, then minimal maintenance of open space would be required. Any revenue or in-kind services afforded to the open space by grazing leases will be credited to future open space budgets.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
The Vallejo Sanitation and Flood Control District’s sanitary sewer and storm drain facilities and the City’s water system facilities are operated and maintained exclusively for the benefit of the Hiddenbrooke development. They exist only for the benefit of the Hiddenbrooke development and receive no special benefit from the HMD improvements.
The Golf Club Property wa s excluded from the HMD beca use they are responsible contractually for lake monitoring and cleaning, and for slide debris removal, resulting from slides within the open space onto the golf cour se. These services are to be performed by and at the sole discretion of the Golf Co urse Owners. The open space Golf Course properties do not benefit from the HMD improvements and consequently are not assessed.
As such, the Golf Course properties and appurtenant facilities cannot benefit from District funds, maintenance and improvements until su ch time as they are brought within the District by assessing the properties for its appropriate share of District costs.
Public streets, public avenues, public utilities, public lanes, public roads, public drives, public courts, public alleys, all public easements and rights of way do not benefit and have not been assessed. Public parks, greenbelts and parkways and all public school property, other public property, and designated open space are assessed only to the extent that they benefit as discussed above. The benefit r eceived by privately owne d common areas is considered as included in the assessment for the various dwelling units. Common areas have therefore been assigned zero EBUs.
Assessment Range Formula
Any new or increase in assessments require certain noticing and meeting requirements by law. Prior to the passage of Proposition 218, legislative changes in the Brown Act defined the definition of “new or increased assessment” to exclude certain conditions. These conditions included “any assessment that does not exceed an assessment formula or range of assessments previously adopted by the agency or approved by the voters in the area where the assessment is imposed.” This defi nition and conditions were later confirmed through SB919 (Proposition 218 implementing legislation).
The purpose of establishing an assessment range formula is to provide for reasonable increases and inflationary adjustment to annual assessments without requiring costly noticing and mailing procedures, which could add to the District costs and assessments.
Property owner balloting for the proposed District assessment in Fiscal Year 2003-2004 and 2004-2005 for Annexation 1 included the approval of an assessment range formula.
The assessment range formula shall be applied to all future assessments within the District.
Generally, if the proposed annual assessment (levy per unit or rate) for the current fiscal year is less than or equals the “Maximum Assessment” (“Adjusted Maximum Assessment”), then the proposed annual assessment is not considered an increased assessment. The Maximum Assessment is equa l to the initial Assessment approved by property owners adjusted annually by the following criteria:
1. In the Report prepared for ballot proceedings conducted in July 2003, the maximum amount of assessment levied per EBU for Fiscal Year 2003-04 was established at $532.22, with the exact amount to be levied in any gi ven year to be determined by the budget for that year. Beginning in the second fiscal year (Fiscal Year 2004-2005) and each fiscal year thereafter, the Maximum Asse ssment will be recalculated a nnually to adjust for the property owner approved inflation adjustment factor.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
2. The new adjusted Maximum Assessment fo r the year represents the prior year’s Maximum Assessment adjusted by the percenta ge increase in the Consumer Price Index for All Urban Consumers (CPI-U), as distributed by the Bureau of Labor Statistics (BLS) for the Consolidated Metropolitan Statisti cal Area (CMSA) covering San Francisco- Oakland-San Jose. The percentage increase will be from Feb 1 of the prior year to Feb 1 of the current year, or similar time period that is available when the Report is prepared.
3. The Maximum Assessment is adjusted each year independently from the annual assessment. While the actual amount assessed may fluctuate each year, the maximum will continue to be increased by CPI-U each year to establish the adjusted Maximum Assessment.
The Maximum Assessment is adjusted annually and is calculated independently of the District’s annual budget and proposed annual assessment. Any proposed annual assessment (rate per equivalent benefit unit) less than or equal to this Maximum Assessment is not considered an increased assessm ent, even if the proposed a ssessment is greater than the assessment applied in the prior fiscal year . The City Council may reduce or freeze the Maximum Assessment at any time by amending the Engineer’s Annual Report.
The Maximum Assessment adjustment is designed to establish a reasonable limit on District assessments. The Maximum Assessment calculated each year does not require or facilitate an increase to the annual assessment and neither does it restrict assessments to the adjustment maximum amount. If the budget and assessments for the fiscal year does not require an increase, or the increase is less than the adjusted Maximum Assessment, then the required budget and assessment may be applied without additional property owner balloting. If the budget and a ssessments calculated requires an increase greater than the adjusted Maximum Assessment then the assessment is considered an increased assessment.
To impose an increased assessment, the City Council must comply with the provisions of Article XIIID Section 4(c) of the California Constitution, which requires a public hearing and certain protest procedures including mailed notice of the public hearing and property owner protest balloting. Property owners through the balloting process must approve the proposed assessment increase. If the propos ed assessment is approved, then a new Maximum Assessment is established for the Di strict. If the proposed assessment is not approved, the City Council may not levy an assessment greater than the adjusted Maximum Assessment previously established for the District.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Estimated Benefit Units for Fiscal Year 2023-24
The following table summarizes the Equival ent Benefit Units for the various Land Use designations within HMD for Fiscal Year 2023-24.
EBUs per LAND USE DESIGNATION
Land Use Category
Land Use
Designation
Number of
Parcels
Dwelling Units
(Current &
Proposed)
Building
Sq Ft EBU Factor Total EBU
Single Family Residential SFR 1,113 1,113 N/A 1.00 1,113.00 Undeveloped Single Family
Residential SFV 108 108 N/A 0.60 64.80 Multi Family Residential MFR 0.00 0.00 N/A 0.90 0.00 Undeveloped Multi Family
Residential MFV 0.00 0.00 N/A 0.60 0.00 Commercial Property COM 0.00 0.00 0.00
1.00 EBU per 3,000
building sq ft 0.00
Undeveloped Commercial
Property CMV 0.00 0.00 0.00 0.50 EBU per acre 0.00
Developed Hotel Property HOT 0.00 0.00 N/A
0.15 EBU per
developed room and
0.12 EBU per
undeveloped room 0.00
Special Designation Property SPC 1 1 11,000
0.60 EBU per
proposed lot plus 0.60
EBU per 3,000
building sq ft 2.20
Duration of Assessment
It is proposed that the Assessment be levi ed for fiscal year 1992-93 and continued every year thereafter, so long as the Improvements need to be improved and maintained and the City of Vallejo requires funding from the Assessments for its Improvements in the HMD. As noted previously, the Assessment ca n continue to be levied annually after the City of Vallejo City Council approves an annually updated Engineer’s Report, budget for the Assessment, Improvements to be provided, and other specifics of the Assessment. In addition, the City Council must hold an annual public hearing to continue the Assessment.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Appeals and Interpretation
Any property owner who feels that the assessm ent levied on the subject property is in error as a result of incorrect information be ing used to apply the foregoing method of assessment, may file a written appeal with the Director of Public Works or her or his designee. Any such appeal is limited to correction of an assessment during the then current or, if before July 1, the upcoming fiscal year. Upon the filing of any such appeal, the Director of Public Works or his or her designee will promptly review the appeal and any information provided by the property owner. If the Director of Public Works or her or his designee finds that the assessment sh ould be modified, the appropriate changes shall be made to the assessment roll. If any such changes are approved after the assessment roll has been filed with the County for collection, the Director of Public Works or his or her designee is authorized to refund to the property owner the amount of any approved reduction. Any property owner who disagrees with the decision of the Director of Public Works or her or his designee, may refer their appeal to the City Council of the City of Vallejo and the decision of the City Council of the City of Vallejo shall be final.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Assessment
WHEREAS, the City of Vallejo City Council direct ed the undersigned Engineer of Work to prepare and file a report presenting an estima te of costs, a diagram for the District and an assessment of the estimated costs of the improvements upon all assessable parcels within the District, to which Resolution and the description of the Improvements therein contained, reference is hereby made for further particulars; NOW, THEREFORE, the undersigned, by virtue of the power vested in me under the Act and the order of the City Council of said City of Vallejo, hereby make the following assessment to cover the portion of the estimated cost of the improvements, and the costs and expenses incidental thereto to be paid by the District.
As required by the Act, an Assessment Diagram is hereto attached and made a part hereof showing the exterior boundaries of said District. The distinctive number of each parcel or lot of land in the District is its Assessor Parcel Number appearing on the Assessment Roll.
I do hereby assess and apportion the net amount of the cost and expenses of the improvements, including the costs and expenses incident thereto, upon the parcels and lots of land within the District, in accordance with the special benefits to be received by each parcel or lot, from the improvements, and more particularly set forth in the Cost Estimate and Method of Assessment hereto attached and by reference made a part hereof.
The assessment is subject to an annual adju stment tied to the Consumer Price Index-U for the San Francisco Bay Area as of February 1 of each succeeding year (the “CPI”). The maximum authorized assessment rate is equal to the maximum assessment rate approved by property owners fiscal year 2003-2004 adjusted annually by the change in the CPI.
The change in the CPI from February 2022 to February 2023 was 5.30%. Therefore, the maximum authorized assessment rate for fi scal year 2023-2024 is increased by 5.30% which equates to $910.73 per equivalent benefit unit. The estimate of cost and budget in the Engineer’s Report proposes assessmen ts for fiscal year 2023-2024 at the rate of $611.04, which is less than the maximum authorized assessment rate.
The assessment is made upon the parcels or lots of land within the District in proportion to the special benefits to be received by the parcels or lots of land, from the improvements.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Each parcel or lot of land is described in the Assessment Roll by reference to its parcel number as shown on the Assessor's Maps of the County of Solano for the fiscal year 2023- 2024. For a more particular description of the property, reference is hereby made to the deeds and maps on file and of record in the office of the County Recorder of the County.
I hereby place opposite the Assessor Parcel Number for each parcel or lot within the Assessment Roll, the amount of the assessm ent for the fiscal year 2023-2024 for each parcel or lot of land within the District.
Dated: April 7, 2023
Engineer of Work
By
John W. Bliss, License No. C052091
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Appendix A - 2023-2024 Assessment Roll
An Assessment Roll (a listing of all parcels assessed within the District and the amount of the assessment) will be filed with the City Clerk and is, by reference, made part of this report and is available for public inspection during normal office hours.
Each lot or parcel listed on the Assessment Ro ll is shown and illustrated on the latest County Assessor records and these records are, by reference made part of this report.
These records shall govern for all details concerning the description of the lots or parcels.
City of Vallejo
Hiddenbrooke Maintenance District
Engineer’s Report, FY 2023-2024
Appendix B - Assessment Diagram
The original Assessment Diagram and Annexation map of the Orchards development is on f i l e w i t h t h e C i t y C l e r k a n d , b y r e f e r e n c e , m a d e p a r t o f t h i s R e p o r t . T h e A s s e s s m e n t Diagrams are available for inspection at the Office of the City Clerk, during normal business hours. Reference is hereby made to such Diagrams, and they are incorporated herein by reference.
RESOLUTION NO. 23-___ N.C.
A RESOLUTION APPROVING THE ENGINEER’S REPORT AND ORDERING
THE LEVY AND COLLECTION OF ASSESSMENTS IN THE
HIDDENBROOKE MAINTENANCE DISTRICT
FOR FISCAL YEAR 2023- 2024
WHEREAS, the City Council of the City of Vallejo, by previous Resolution, ordered the preparation of the Engineer’s Report for the Hiddenbrooke Maintenance District (the “District”) pursuant to the provisions of the Landscape and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code of California, beginning with Section 22500 (the “Act”). The Act provides for the levy and collection of assessments by the County of Solano on behalf of the City of Vallejo to pay the costs and expenses of operating, maintaining and servicing the landscaping and all appurtenant facilities and operations related thereto located within the District; and WHEREAS, the Engineer’s Report for the District was duly made and filed with the City Clerk and duly considered by this Council and found to be sufficient in every particular, and that June 13, 2023 at the hour of 7:00 p.m. at the City Council Chambers located at 555 Santa Clara Street, Vallejo, California, were appointed as the time and place for a hearing by this Council on the question of the levy of the assessment, notice of which hearing was given as required by law; and WHEREAS, at the appointed time and place the hearing was duly and regularly held, and all persons interested and desiring to be heard were given an opportunity to be heard, and all matters and things pertaining to the levy were fully heard and considered by this Council, and all oral statements and all written protests or communications were duly heard, considered and overruled, and this Council thereby acquired jurisdiction to order the levy and the confirmation of the diagram and assessment prepared by and made a part of the Engineer's Report to pay the costs and expenses thereof; and
WHEREAS, the City Council and its legal counsel have found that these assessments comply with applicable provisions of Article XIIID of the California State Constitution.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE CITY COUNCIL AS FOLLOWS:
Section 1The public interest, convenience and necessity require that the levy be made to pay for the costs and expenses of operating, maintaining, and servicing the landscaping and appurtenant facilities and operations.
Section 2The District benefited by the improvements and assessed to pay the costs and expenses thereof, and the exterior boundaries thereof, are as shown by a map thereof filed in the office of the City Clerk, which map is made a part hereof by reference.
Section 3The Engineer's Report as a whole and each part thereof, to wit:
i) the Engineer's estimate of the itemized and total costs and expenses of maintaining the improvements including the incidental expenses in connection therewith; and
ii) the diagram showing the District, plans and specifications for the improvements to be maintained and the boundaries and dimensions of the respective lots and parcels of land within the District; and
iii) the assessment of the total amount of the costs and expenses of the proposed maintenance of the improvements upon the several lots and parcels of land in the District in proportion to the estimated special benefits to be received by such lots and parcels, including the expenses incidental thereto; are hereby approved and confirmed.
Section 4Final adoption and approval of the Engineer's Report as a whole, and of the plans and specifications, the estimates of the costs and expenses, the diagram, and the assessment, as contained in the Report as hereinabove determined and ordered, is intended to and shall refer and apply to the Report, or any portion thereof as amended, modified, revised or corrected by or, pursuant to and in accordance with, any resolution or order, if any, heretofore duly adopted or made by this Council.
Section 5The assessment to pay the costs and expenses of the maintenance of the improvements for fiscal year 2023-24 is hereby ordered to be levied.
For further particulars pursuant to the provisions of the Landscaping and Lighting Act of 1972, reference is hereby made to the Resolution Directing Preparation of the Engineer's Report.
Section 6Based on the oral and documentary evidence, including the Engineer's Report, offered and received at the hearing, that each of the several lots and parcels of land will be specially benefited by the maintenance of the improvements at least in the amount if not more than the amount, of the assessment apportioned against the lots and parcels of land, respectively, and there is substantial evidence to support, and the weight of the evidence preponderates in favor of, the aforesaid finding and determination as to special benefits.
Section 7The Engineer’s Report as presented to the City Council and on file in the Office of the City Clerk is hereby confirmed as filed. The City Council hereby levies against and upon all of the real property within the District a special assessment per equivalent benefit unit of $611.04 for the Fiscal Year commencing on July 1, 2023 and ending June 30, 2024.
Section 8The following improvements within the District shall be made: the maintenance and operation of, and the furnishing of services and materials for: turf, ground cover, shrubs and trees, irrigation systems, drainage systems, open space areas, public pedestrian paths, entry monuments, fencing, lighting systems and all appurtenant facilities related thereto.
Section 9Immediately upon the adoption of this Resolution, but in no event later than the third Monday in August following such adoption, the City Clerk shall file a certified copy of the assessments and a certified copy of this Resolution with the Auditor of the County of Solano. Upon such filing, the County Auditor shall enter on the County assessment roll opposite each lot or parcel of land the amount of assessment thereupon as shown in the assessment. The assessments shall be collected at the same time and in the same manner as County taxes are collected and all laws providing for the collection and enforcement of County taxes shall apply to the collection and enforcement of the assessments. After collection by the County, the net amount of the assessments, after deduction of any compensation due the County for collection, shall be paid to the City of Vallejo, City Treasurer.
Section 10The Finance Director shall deposit all money representing assessments collected by the County for the District to the credit of a fund for the Hiddenbrooke Maintenance District and such money shall be expended only for the maintenance, operation and servicing of each of the landscaping, lighting and appurtenant facilities as described in Section 8, above.
Adopted by the City Council of the City of Vallejo at a regular meeting held on June 13, 2023 with the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
____________________________________
DAWN G. ABRAHAMSON, CITY CLERK
ACTION ITEM 9.D.
DATE: June 13, 2023
TO: Mayor and Members of the City Council
FROM: Melissa Tigbao, Public Works Director
Rekha Nayar, Finance Director
Oscar Alcantar, Assistant Public Works Director/Maintenance SUBJECT: ADOPT RESOLUTIONS: (1) APPROVING MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA PUBLIC CAPITAL CORP.; (2) AUTHORIZE
THE CITY MANAGER TO PURCHASE FLEET APPARATUS FOR THE FIRE AND PUBLIC WORKS DEPARTMENT IN AN AMOUNT NOT TO EXCEED $5,000,000, AND PROVIDE NOTICE OF INTENT TO AMEND FISCAL YEAR 2022-23 BUDGET IN THE AMOUNT OF $5,000,000
RECOMMENDATION
1. Adopt a resolution authorizing the City Manager to (1) execute a Master Equipment Lease/Purchase Agreement in an amount not to exceed $5 million and (2) approve, authorize, and direct the execution of related documents and all acts and things necessary or proper for carrying out the transaction by the City Manager, Finance Director, or their respective delegates, and actions with respect thereto.
2. Adopt a resolution authorizing the City Manager to purchase fleet apparatus for the Fire Department in Fiscal Year 2022-23, in an amount not to exceed $5,000,000.
3. As the first in a two-step process, accept notice of intent to amend the Fiscal Year 2022-23 Fleet Replacement Budget for the purchase of the Fleet apparatus to recognize revenue and appropriate expenditure in the amount of $5,000,000.
REASONS FOR RECOMMENDATION
The Fire Department's ladder truck is failing, and additional apparatus are needed to ensure continued reliable and efficient emergency response operations. Due to the high cost of the apparatus, lease financing the purchase of these units is recommended so sufficient budget will remain available for the replacement of other needed General Fund fleet units.
BACKGROUND AND DISCUSSION
The City has identified a need to purchase a total of five new/replacement vehicles for the current fiscal year, with a total cost of approximately $5 million. Given the significant cost, staff have evaluated options for financing these purchases. The City proposes to enter into a lease financing with Banc of America Public Capital Corp, a wholly-owned subsidiary of Bank of America N.A., at a rate of 3.96%
This item, if approved, will authorize the execution of the agreements required by Banc of America Public Capital Corp to provide the required lease funding. The Master Equipment Lease/Purchase Agreement is structured as an appropriation lease, meaning the City Council must appropriate sufficient funds each fiscal year to make lease payments, or elect to have the Banc of America Public Capital Corp funding and/or equipment being financed returned. Lease payments are expected to be paid in equal semiannual installments over a 7-year term, with payments estimated at $831,000 annually from fiscal year 2023-2024 through fiscal
Date: June 13, 2023
Subject: ADOPT RESOLUTIONS: (1) APPROVING MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA PUBLIC CAPITAL CORP.; (2)
AUTHORIZE THE CITY MANAGER TO PURCHASE FLEET APPARATUS FOR THE
FIRE AND PUBLIC WORKS DEPARTMENT IN AN AMOUNT NOT TO EXCEED $5,000,000, AND PROVIDE NOTICE OF INTENT TO AMEND FISCAL YEAR 2022-23 BUDGET IN THE AMOUNT OF $5,000,000
year 2029-2030, totaling approximately $5,766,000 over the life of the lease. The interest rate (and true interest cost) of the financing is 3.96%. This rate is locked through June 27th, 2023. The total borrowing amount will not exceed $5,000,000. Interest received by Banc of America Public Capital Corp is estimated at $766,000 with other transaction costs estimated at $64,500 (leaving $4,935,500 of proceeds received by the City). All transaction costs will be paid from the proceeds of the financing. If approved, the financing is anticipated to close during the week of June 19th, 2023. The documentation contemplates additional City equipment may be financed through Banc of America Public Capital Corp in the future, should the need arise, subject to future approval by the City Council.
The Public Works Department is responsible for maintaining a comprehensive Vehicle and Equipment Replacement Program designed to manage all City vehicles. The Public Works Maintenance Division Fleet section is responsible for ordering, modifying, and delivering fully equipped and operational vehicles to City departments. Assessments of City fleet units are conducted annually and recommendations for replacements are made each year during budget preparation cycles. Replacement recommendations are based on various criteria such as mileage, safety, fuel consumption, parts availability and overall cost to maintain.
The replacement of Fire's 1993 Seagrave Ladder Truck (Unit 232) has been deferred for many years, mainly due to its approximate $2,268,000 purchase price. As a result of the age and failing condition of the apparatus, the need to place it out of service for repairs has become more and more frequent. City staff are able to complete some repairs in-house, but most often the unit must be sent offsite to a company that specializes in large apparatus. These repairs are costly, and can take months to complete. The City currently does not have a backup unit for when the Seagrave Ladder Truck is out for repairs. The excessive cost of maintenance, increasing unreliability, and lack of backup apparatus make it imperative to replace the Seagrave Ladder Truck. It can take 18-24 months to build the apparatus once an order is placed, which makes immediate action necessary.
The replacement of Fire's 2002 Ford F-550 SD brush truck (Unit 244) has been deferred for many years as well because of the costly purchase price. This unit has major engine damage, excessive wear and tear, and it has far exceeded its useful lifespan. The increasing cost of maintenance and diminishing reliability make it imperative to replace this unit. It is estimated the approximately $306,000 apparatus will take 8-12 months to build once the order is placed.
The Fire Department would also like to add two new Type I apparatus to the fleet. A Type I unit is the most common type of fire truck used today. These versatile vehicles are often the first on scene because they support both structural firefighting and initial Emergency Medical Service (EMS) response. They are designed to support urban, rural and suburban departments as they carry all required firefighting equipment. A Type I unit currently costs approximately $1,016,000, and it takes 15-18 months to build the apparatus.
As of 2020, the California Department of Motor Vehicles (DMV) ensures the compliance of vehicles subject to the California Air Resources Board's (CARB) Truck and Bus Regulation which requires heavy-duty diesel vehicles that operate in California to reduce toxic air contaminant emissions from their exhaust. As of January 1, 2023, nearly all trucks and buses are required to have 2010 or newer model year engines to reduce particulate matter and toxic air emissions. The Public Works Department has identified a 2008 model 10- wheeler (unit 338) that should be replaced to maintain compliance with the regulations. The replacement cost is estimated at approximately $250,000.
Date: June 13, 2023
Subject: ADOPT RESOLUTIONS: (1) APPROVING MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA PUBLIC CAPITAL CORP.; (2)
AUTHORIZE THE CITY MANAGER TO PURCHASE FLEET APPARATUS FOR THE
FIRE AND PUBLIC WORKS DEPARTMENT IN AN AMOUNT NOT TO EXCEED $5,000,000, AND PROVIDE NOTICE OF INTENT TO AMEND FISCAL YEAR 2022-23 BUDGET IN THE AMOUNT OF $5,000,000
Upon approval and execution of the lease agreements, the apparatus will be ordered from manufacturers that have cooperative agreements through cooperative purchasing programs such as Sourcewell and National Purchasing Partners.
If approved, funding would be provided by Banc of America Public Capital Corp by the end of June, with the proceeds deposited pursuant to an Escrow and Account Control Agreement between the City, Banc of America Public Capital Corp, and TMI Trust Company, a Florida trust company, as escrow agent. The City could requisition funds from the escrow agent when needed to pay apparatus costs when due.
Staff recommend authorizing the execution of the finance lease with the Banc of America Public Capital Corp to purchase four Fire Department fleet vehicles.
FISCAL IMPACT
Lease payments are estimated to total approximately $831,000 annually over seven years. Total payments over the life of the agreement, including interest, are estimated to be approximately $5,766,000.
During the term of the lease, annual payments will be made through the Fleet Replacement Fund (#502), with the first payment expected to be due in FY 2023-2024. Funding for the first annual payment is included in the General Fund allocation to the Fleet Replacement Fund (#502) in the proposed FY 2023-2024 budget.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
ATTACHMENTS
1. Resolution - Authorize Execution of Master Equipment Lease CAO Stamp
2. Resolution - Authorize City Manager to Purchase City Vehicles and Equipment
3. Master Equipment Lease Purchase Agreement CAO STAMP
4. Escrow and Account Control Agreement CAO STAMP
CONTACT
Rekha Nayar, Finance Director, (707) 648-5433
[email protected]
Melissa Tigbao, Public Works Director, (707) 648-4433
[email protected]
Approved as to form:
By: for
Veronica Nebb, City Attorney
RESOLUTION NO. 23-_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO
AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT AND SEPARATE EQUIPMENT SCHEDULES
THERETO FOR THE ACQUISITION, FINANCING AND LEASING OF CERTAIN
EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE TERMS HEREIN PROVIDED; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND AUTHORIZING
THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION
WHEREAS, the City of Vallejo (the “City” or “Lessee”), a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, is authorized to acquire, finance and lease personal property (tangible and intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the City Council of the City (the “Council”) has determined that a need exists for the acquisition, financing and leasing of certain equipment consisting of a ladder truck, F550 SD, two type-1 apparatuses and related equipment and potentially other equipment in the future, all of which constitutes personal property necessary for the Lessee to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided; and WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that certain Master Equipment Lease/Purchase Agreement (the “Agreement”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Council at this meeting, and separate Equipment Schedules thereto substantially in the form attached to the Agreement; and
WHEREAS, the City is authorized to enter into such Agreement and Equipment Schedules under applicable law, including California Government Code Section 37350; and WHEREAS, the information required to be obtained and disclosed by the Council pursuant to Section 5852.1 of the California Government Code with respect to the financing of the Equipment is set forth in the staff report accompanying this Resolution; and WHEREAS, the Council deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Agreement and separate Equipment Schedules thereunder and the other documentation relating thereto from time to time as provided in the Agreement for the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Vallejo as follows:
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Agreement (including the form of Equipment Schedule and the form of Payment Schedule, both attached thereto), in the form presented to the Council at this meeting, are in the best interests of the Lessee for the acquisition financing and leasing of the Equipment.
Section 2. Approval of Documents. The form, terms and provisions of the Agreement (including the form of Equipment Schedule and the form of Payment Schedule, both attached thereto) are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by the City Manager or his or her designee (the “Authorized Officials”), the execution of such documents by an Authorized Official being conclusive evidence of such approval; and the Authorized Officials are hereby authorized and directed to execute, and the Authorized Officials are hereby authorized and directed to attest, the Agreement and any related Exhibits attached thereto and to deliver the Agreement (including such Exhibits) to the respective parties thereto. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the Lessee the Agreement, each Equipment Schedule thereto under which a separate Lease (as defined in the Agreement) is created, each Payment Schedule attached thereto, any related Escrow Agreement and any related exhibits attached thereto if and when required; provided, however, that, without further authorization from the governing body of the Lessee, (a) the aggregate principal component of Rental Payments under all Leases entered into pursuant to the Agreement shall not exceed $5,000,000; (b) the maximum term under any Lease entered into pursuant to the Agreement shall not exceed 7 years; and (c) the maximum tax-exempt interest rate used to determine the interest component of Rental Payments under each Lease shall not exceed 3.96% per annum (although such maximum is subject to increase pursuant to the terms of the Agreement). The Authorized Officials may sign and deliver Leases to the Lessor on behalf of the Lessee pursuant to the Agreement on such terms and conditions as they shall determine are in the best interests of the Lessee up to the maximum aggregate principal component, maximum term and maximum interest rate provided above. The foregoing authorization shall remain in effect for a period of two years from the date hereof during which the Authorized Officials are authorized to sign and deliver Leases pursuant to the Agreement on the terms and conditions herein provided and to be provided in each such Lease.
Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of Final Acceptance Certificates, Escrow Agreements, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Agreement and each Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Agreement, any Lease, any Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Agreement, any Lease, any Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under each Lease entered into pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.
Section 5. Appointment of Authorized Lessee Representatives. The Authorized Officials and the Finance Director of the City are each hereby designated to act as authorized representatives of the Lessee for purposes of each Lease and related Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Agreement and any Lease or Escrow Agreement.
Section 6. Appointment of Financing Team. In connection with the transactions described in this Resolution, the City Council hereby authorizes, ratifies, and confirms the appointment of PFM Financial Advisors LLC to serve as municipal advisor and Jones Hall, A Professional Law Corporation to serve as special legal counsel, with the fees and expenses of each such firm payable from the proceeds of the financing or other legally available funds. The Authorized Officials and the City Attorney, as applicable, are authorized to execute professional services agreements, as applicable, with each such firm.
Section 7. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.
Section 8. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.
Section 9. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.
Adopted by the City Council of the City of Vallejo at a regular meeting held on ________, 2023 with the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
______________________________________
DAWN G. ABRAHAMSON, CITY CLERK
The undersigned, a duly elected or appointed and acting City Clerk of the City of Vallejo identified in the above Resolution No. ___ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the City Council of the City of Vallejo on ____________, 2023. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.
DATED this ____ day of ____________, 20__.
_______________________________________
Name:_________________________________
Title:__________________________________
Approved as to form:
By: for
Veronica Nebb, City Attorney
RESOLUTION NO. 23-_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO
AUTHORIZING THE CITY MANAGER TO CITY VEHICLES AND EQUIPMENT IN FISCAL YEAR 2022-23
WHEREAS, the Public Works Maintenance Division is responsible for maintaining a comprehensive Fleet Equipment Replacement Program designed to manage the fleet for all City departments; and WHEREAS, the Maintenance Division Fleet branch is responsible for ordering vehicles, modifying vehicles with specialized equipment, and delivering fully equipped and operational vehicles to City departments; and
WHEREAS, fleet units will be purchased through either cooperative purchasing programs (such as Sourcewell and National Purchasing Partners), State of California Department of General Services contracts, piggy-back contracts, or resulting contracts from a City of Vallejo Requests for Quotes (RFQ), all of which meet City of Vallejo competitive purchasing process requirements; and WHEREAS, it has been determined the following units will be replaced/purchased in Fiscal Year 2022-23:
General Fund: Budget Expected
Appropriated Purchase
Department/Division Unit Description in FY 22-23 Contract FD-FIRE SUPP 232 LADDER TRUCK $ 2,268,000 Cooperative FD-FIRE SUPP 244 F550 SD $ 305,900 Cooperative FD-FIRE SUPP TBD-FD3 TYPE I APPARATUS $ 1,016,025 Cooperative FD-FIRE SUPP TBD-FD4 TYPE I APPARATUS $ 1,016,025 Cooperative PUBLIC WORKS 338 10-WHEELER $ 250,000 Cooperative ACCESSORIES & FEES $ 144,050
Total General Fund $ 5,000,000
NOW, THEREFORE BE IT RESOLVED that the City Council hereby authorizes the City Manager to purchase fleet apparatus for the Fire Department in Fiscal Year 2022-23 in an amount not to exceed $5,000,000.
Adopted by the City Council of the City of Vallejo at a regular meeting held on June 13, 2023 with the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
______________________________________
DAWN G. ABRAHAMSON, CITY CLERK
Jones Hall Draft of May 30, 2023
1 Approved as to form:
By: for
Veronica Nebb, City Attorney
MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
This Master Equipment Lease/Purchase Agreement (the “Agreement”) dated as of June 23, 2023, and entered into by and between Banc of America Public Capital Corp, a Kansas corporation (together with its successors, assigns and transferees, and as more particularly defined herein, “Lessor”), and the City of Vallejo, a municipal corporation and charter city existing under the laws of the State of California (“Lessee”).
WITNESSETH:
WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Equipment Schedule (as each such term is defined herein), subject to the terms and conditions of and for the purposes set forth in each Lease; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment and other personal property may be financed pursuant to one or more Leases entered into from time to time in accordance with this Agreement by execution and delivery of additional Equipment Schedules by the parties hereto, subject to the terms and conditions provided herein; and
WHEREAS, Lessee is authorized under the constitution and laws of the State (as such term is defined herein) to enter into this Agreement and each Equipment Schedule for the purposes set forth herein and therein;
NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows:
ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
“Acquisition Amount” means, with respect to each Lease, the amount specified in the related Equipment Schedule and represented by Lessee to be sufficient for the purpose of acquiring and installing the Equipment listed in such Lease. “Acquisition Period” means, with respect to each Lease for which an Escrow Account is established, that period identified in the related Equipment Schedule during which the 2 Acquisition Amount attributable to such Lease may be expended on Equipment Costs pursuant to the related Escrow Agreement.
“Agreement” means this Master Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to this Agreement pursuant to Section 13.04.
“Casualty Value” means, with respect to each Lease, the amount that is shown on the Payment Schedule for each Rental Payment Date under the column titled either (i) the Prepayment Price or (ii) the “Casualty Value”, if any.
“Code” means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code in this Agreement and a Lease shall be deemed to include the relevant United States Treasury Regulations proposed or in effect thereunder. “Commencement Date” means, for each Lease, the date when Lessee’s obligation to pay rent commences under such Lease, which date shall be the earlier of (a) the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, or (b) the date on which the Acquisition Amount is deposited in an Escrow Account for the purpose of acquiring and installing the Equipment listed in such Lease. “Contract Rate” means, with respect to each Lease, the rate identified as such in the related Payment Schedule.
“Disbursement Request” means, with respect to each Lease for which an Escrow Account is established, the disbursement request attached to the applicable Escrow Agreement as Schedule 1 and made a part thereof.
“Equipment” means, with respect to each Lease, the property listed in the related Equipment Schedule and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Article V or Section 8.01. Whenever reference is made in this Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment.
“Equipment Costs” means, with respect to each Lease, the total cost of the Equipment listed in the related Equipment Schedule, including related soft costs such as freight, installation and taxes and other capitalizable costs, legal fees, financing costs and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set forth in each Lease, and other costs incurred in connection with the acquisition, installation and/or financing of the Equipment as provided in the related Lease; provided that (a) any such soft costs on a cumulative basis shall not exceed a percentage approved by Lessor of the total cost of the Equipment subject to such Lease and (b) in no event shall capitalizable delivery costs, installation charges, taxes and similar capitalizable soft costs relating to such Equipment be included without Lessor’s prior consent. 3 “Equipment Schedule” means each separately numbered Equipment Schedule, substantially in the form of either Exhibit A-1 (general Equipment) or Exhibit A-2 (energy services Equipment) hereto, together with the related Payment Schedule. “Escrow Account” means, with respect to any Lease, the account established and held by the Escrow Agent pursuant to the related Escrow Agreement. “Escrow Agent” means, with respect to each Lease for which an Escrow Account is established, the Escrow Agent identified in the related Escrow Agreement, and its successors and assigns.
“Escrow Agreement” means, with respect to each Lease for which an Escrow Account is established, an Escrow and Account Control Agreement in form and substance acceptable to and executed by Lessee, Lessor and the Escrow Agent, pursuant to which an Escrow Account is established and administered.
“Event of Default” means an Event of Default described in Section 12.01. “Event of Non-appropriation” means, with respect to a Lease, the failure of Lessee’s governing body to appropriate or otherwise make available funds to pay Rental Payments under such Lease following the Original Term or then current Renewal Term sufficient for the continued performance of such Lease by Lessee.
“Lease” means an Equipment Schedule and the terms and provisions of this Agreement which are incorporated by reference into such Equipment Schedule. “Lease Term” means, with respect to each Lease, the Original Term and all Renewal Terms provided in the related Equipment Schedule.
“Lessee” means the entity referred to as Lessee in the first paragraph of this Agreement. “Lessor” means (a) the entity referred to as Lessor in the first paragraph of this Agreement and its successors or (b) any assignee or transferee pursuant to Section 11.01 of any right, title or interest of Lessor in and to the Equipment under the applicable Lease (including the Rental Payments and other amounts due thereunder), any related Escrow Agreement and Escrow Account, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform hereunder or under such Lease. “Material Adverse Change” means (a) any change in Lessee’s creditworthiness that could have a material adverse effect on (i) the financial condition or operations of Lessee, or (ii) Lessee’s ability to perform its obligations under this Agreement or any Lease or (b) a downgrade in Lessee’s external debt rating from the date of this Agreement of two or more subgrades by either Moody’s Investors Service, Inc. or S&P Global Ratings or any equivalent successor credit rating agency, or any downgrade by either such agency that would cause Lessee’s credit rating to be below investment grade, or, if any such rating agency no longer 4 publishes such ratings at the date of determination, any other nationally recognized statistical rating organization that is selected by Lessee for purposes of such long-term general obligation bond ratings and long-term general fund related bond ratings. “Original Term” means, with respect to each Lease, the period from the Commencement Date identified in the related Equipment Schedule until the end of the fiscal year of Lessee in effect at such Commencement Date.
“Outstanding Balance” means, with respect to each Lease, the amount that is shown for each Rental Payment Date under the column titled “Outstanding Balance” on the Payment Schedule.
“Payment Schedule” means, with respect to each Lease, the Payment Schedule attached to and made a part of the related Equipment Schedule and substantially in the form of Exhibit B attached to this Agreement.
“Prepayment Price” means, with respect to each Lease, the amount that is shown for each Rental Payment Date under the column titled “Prepayment Price” on the Payment Schedule. “Principal Portion” means, with respect to each Lease, the amount that is shown for each Rental Payment Date under the column titled “Principal Portion” on the Payment Schedule. “Related Documents” means, with respect to each Lease, the Lease, this Agreement and, if applicable, the related Escrow Agreement, each as may be amended and supplemented. “Renewal Terms” means, with respect to each Lease, the consecutive renewal terms of such Lease as specified in the related Equipment Schedule, the first of which commences immediately after the end of the Original Term and each having a duration and a term coextensive with each successive fiscal year of Lessee; provided that the final such Renewal Term shall commence on the first day of the last such fiscal year and end on the first business day after the last scheduled Rental Payment Date.
“Rental Payment Date” means, with respect to each Lease, each date on which Lessee is required to make a Rental Payment under such Lease as specified in the related Payment Schedule.
“Rental Payments” means, with respect to each Lease, the basic rental payments payable by Lessee on the Rental Payment Dates and in the amounts as specified in the related Payment Schedule, consisting of a principal component and an interest component, and in all cases sufficient to repay the principal component under such Lease and interest thereon at the applicable Contract Rate (or Taxable Rate if then in effect). “SEC” means the U.S. Securities and Exchange Commission. “State” means the State of California.
5 “Taxable Rate” means, with respect to each Lease, for each day that the interest component of Rental Payments is taxable for Federal income tax purposes, an interest rate equal to the Contract Rate plus a rate sufficient such that the total interest to be paid on any Rental Payment Date would, after such interest was reduced by the amount of any Federal, state or local income tax (including any interest, penalties or additions to tax) actually imposed thereon, equal the amount of interest otherwise due to Lessor.
“Vendor” means the manufacturer, installer or supplier of the Equipment listed in an Equipment Schedule or any other person as well as the agents or dealers of the manufacturer, installer or supplier with whom Lessee arranged Lessee’s acquisition, installation, maintenance and/or servicing of the Equipment pursuant to the applicable Lease. “Vendor Agreement” means any contract entered into by Lessee and any Vendor for the acquisition, installation, maintenance and/or servicing of the Equipment under a Lease.
ARTICLE II
Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each Lease as follows:
(a) Lessee is a charter city and political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State, with full power and authority to enter into the Related Documents and the transactions contemplated thereby and to perform all of its obligations thereunder.
(b) Lessee has duly authorized the execution and delivery of the Related Documents by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of the Related Documents.
(c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to any Lease. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a municipal corporation and charter city organized and existing under the Constitution and laws of the State. (e) Lessee has complied with such procurement and public bidding requirements as may be applicable to the Related Documents and the acquisition and installation by Lessee of the Equipment as provided in each Lease. 6 (f) During the Lease Term under each Lease, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee’s authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under the related Lease.
(g) Lessee has kept, and throughout the Lease Term of each Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows, and (4) footnotes, schedules and attachments to the financial statements) within two hundred seventy (270) days after the end of its fiscal year, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) upon Lessor’s request, its annual budget for any prior or current fiscal year or for the following fiscal year when approved but not later than thirty (30) days prior to the end of its current fiscal year. The financial statements described in this subsection (g)(i) shall be accompanied by an unqualified opinion of Lessee’s independent auditor. Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assigns.
(h) Lessee has an immediate need for the Equipment listed on each Equipment Schedule and expects to make immediate use of the Equipment listed on each Equipment Schedule. Lessee’s need for the Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the related Lease Term.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Acquisition Amount relating to any Lease will be used, directly or indirectly, to make or finance loans to any person other than Lessee.
Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment.
(j) There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee’s financial condition or impairs its ability to perform its obligations under the Related Documents. Lessee will, at its expense, maintain its legal existence and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor’s 7 first priority security interest in the Equipment and the Escrow Account and Lessor’s rights and benefits under each Lease and related Escrow Agreement. (k) Lessee is the fee owner or lessee of the real estate where the Equipment under each Lease is and will be located (the “Real Property”) and has good and marketable title thereto, and there exists no mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to such Real Property.
(l) No lease, rental agreement, lease-purchase agreement, payment agreement or contract for purchase to which Lessee has been a party at any time has been terminated by Lessee as a result of insufficient funds being appropriated in any fiscal year. No event has occurred which would constitute an event of default under any debt, revenue bond or obligation which Lessee has issued during the past ten (10) years. (m) In connection with the Lessee’s compliance with any continuing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by the Lessee pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), the Lessee may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its successor (“EMMA”), notice of its incurrence of its obligations under the Related Documents and notice of any accommodation, waiver, amendment, modification of terms or other similar events reflecting financial difficulties in connection with the Related Documents, in each case including posting a full copy thereof or a description of the material terms thereof (each such posting, an “EMMA Posting”). Except to the extent required by applicable law, including the Rule, the Lessee shall not file or submit or permit the filing or submission of any EMMA Posting that includes the following unredacted confidential information about the Lessor or its affiliates and any Escrow Agent in any portion of such EMMA Posting: address and account information of the Lessor or its affiliates and any Escrow Agent; e-mail addresses telephone numbers, fax numbers, names and signatures of officers, employees and signatories of the Lessor or its affiliates and any Escrow Agent; and the form of Disbursement Request that is attached to the Escrow Agreement.
The Lessee acknowledges and agrees that the Lessor and its affiliates are not responsible for the Lessee’s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any Continuing Disclosure Agreement or any applicable securities or other laws, including but not limited to those relating to the Rule. (n) Tax Covenants.
(A) Private Activity Bond Limitation. Lessee will assure that the proceeds of each Lease are not so used as to cause the obligations of Lessee under each Lease to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. 8 (B) Federal Guarantee Prohibition. Lessee will not take any action or permit or suffer any action to be taken if the result of such action would be to cause any of the obligations of Lessee under each Lease to be “federally guaranteed” within the meaning of section 149(b) of the Code. (C) Rebate Requirement. Lessee will take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to each Lease.
(D) No Arbitrage. Lessee will not take, or permit or suffer to be taken, any action with respect to the proceeds of each Lease which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of delivery of each Lease would have caused any of the obligations of Lessee under each Lease to be “arbitrage bonds” within the meaning of section 148 of the Code.
(E) Maintenance of Tax-Exemption. Lessee will take all actions necessary to assure the exclusion of interest with respect to each Lease from the gross income of the owner of each Lease to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of delivery of each Lease.
(F) Record Retention. Lessee will retain its records of all accounting and monitoring it carries out with respect to each Lease for at least 3 years after each Lease matures or is prepaid (whichever is earlier); provided, that if Lessee’s Rental Payments under a Lease are prepaid and refunded, Lessee will retain its records of accounting and monitoring at least 3 years after the earlier of the maturity or prepayment of the obligations that refunded such Lease. (G) Compliance with Tax Documents. Lessee will comply with the provisions of the tax certificate and use of proceeds certificate with respect to each Lease, which are incorporated herein as if fully set forth herein.
The representations, warranties and covenants of this clause (n) will survive payment in full of each Lease.
ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms and conditions of this Agreement, Lessor agrees to provide the funds specified in each Lease to be provided by it for Lessee to acquire the Equipment described in the related Equipment Schedule. Upon the execution and delivery of each Lease, Lessor thereby demises, leases and transfers to Lessee, and Lessee thereby acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next 9 succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01 of this Agreement. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease. Each Equipment Schedule signed and delivered by Lessor and Lessee pursuant to this Agreement shall constitute a separate and independent lease and installment purchase of the Equipment therein described.
Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03 hereof, to continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to pay the Rental Payments due thereunder. Lessee affirms that sufficient funds are legally available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due under each Lease, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law. Notwithstanding the foregoing, the decision whether or not to budget and appropriate funds or to extend the Lease Term for any Renewal Term for each Lease is within the sole discretion of the governing body of Lessee.
Section 3.03. Non-appropriation. Lessee is obligated only to pay such Rental Payments under each Lease as may lawfully be made during Lessee’s then current fiscal year from funds budgeted and appropriated for that purpose. Should Lessee fail to budget, appropriate or otherwise make available funds to pay Rental Payments under any Lease following the then current Original Term or Renewal Term, such Lease or Leases shall be deemed terminated at the end of the then current Original Term or Renewal Term thereunder. Lessee agrees to deliver notice to Lessor of such termination promptly after any decision to non-appropriate is made, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term. If any Lease is terminated in accordance with this Section 3.03, Lessee agrees to cease use of the Equipment thereunder and peaceably remove and deliver to Lessor, at Lessee’s sole expense (from legally available funds), such Equipment to Lessor at the location(s) to be specified by Lessor on or before the end of the applicable Original Term or Renewal Term for which Rental Payments have been appropriated for the applicable Lease (each, a “Non- Appropriation Return Date”). Lessor may take whatever action at law or in equity as may be necessary or desirable to enforce Lessee’s obligations in the immediately preceding sentence.
Without limiting or reducing in any way Lessee’s obligations in the second preceding sentence or Lessor’s rights in the immediately preceding sentence, if the Lessee fails to return the Equipment to Lessor on or before the applicable Non-Appropriation Return Date pursuant to this Section 3.03, Lessee shall pay, to the extent permitted under the Constitution and laws of the State, month-to-month rent at the Contract Rate (or the Taxable Rate if then in effect) set forth in the affected Lease for each month or part thereof that Lessee fails to return the Equipment thereunder pursuant to this Section 3.03.
10 Section 3.04. Conditions to Lessor’s Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations pursuant to any Lease, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, the following:
(i) A fully completed Equipment Schedule, executed by Lessee; (ii) If an Escrow Account is to be established with respect to such Lease, an Escrow Agreement substantially in the form attached hereto as Exhibit I, satisfactory to Lessor and executed by Lessee and the Escrow Agent;
(iii) A certified copy of a resolution, ordinance or other official action of Lessee’s governing body, substantially in the form attached hereto as Exhibit C-1A or Exhibit C-1B, as applicable, authorizing the execution and delivery of this Agreement and the applicable Lease and related Escrow Agreement, if any, entered into pursuant hereto and performance by Lessee of its obligations under this Agreement and the applicable Lease and related Escrow Agreement, if any, entered into pursuant hereto; (iv) A Certificate completed and executed by the Clerk or Secretary or other comparable officer of Lessee, substantially in the form attached hereto as Exhibit C-2A or Exhibit C-2B, as applicable, completed to the satisfaction of Lessor; (v) An opinion of counsel to Lessee, substantially in the form attached hereto as Exhibit D, and otherwise satisfactory to Lessor;
(vi) Evidence of insurance as required by Section 7.02 hereof; (vii) All documents, including financing statements, affidavits, notices and similar instruments, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02 hereof;
(viii) A waiver or waivers of interest in the Equipment from any mortgagee or any other party having an interest in the real estate on which the Equipment will be located and/or landlord of the real estate on which the Equipment will be located; (ix) Reserved;
(x) A copy of the Form 8038-G with respect to the Lease then being entered into, fully completed and executed by Lessee;
(xi) In the event that Lessee is to be reimbursed for expenditures that it has paid more than sixty (60) days prior to the Commencement Date for the Lease then being entered into, evidence of the adoption of a reimbursement resolution or other official action covering the reimbursement from tax exempt proceeds of expenditures incurred not more than sixty (60) days prior to the date of such resolution; 11 (xii) If any items of Equipment are motor vehicles, properly completed certificates of title or certificates of origin (or applications therefor) for such vehicles with Lessor’s interest noted thereon in accordance with the instructions of Lessor; (xiii) Copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale (if title to Equipment has passed to Lessee), to the extent required by Section 5.01(b) hereof;
(xiv) Wire instructions for payments to be made to Vendors and Form W-9 from each such Vendor; and
(xv) Such other items as are set forth in the related Equipment Schedule or are reasonably required by Lessor.
(b) In addition to satisfaction of the conditions set forth in subsection (a) of this Section 3.04, the performance by Lessor of any of its obligations under the Related Documents shall be subject to: (i) no Material Adverse Change having occurred since the date of this Agreement, (ii) no Event of Default having occurred and then be continuing under any Lease then in effect, (iii) no Event of Non-appropriation under any Lease then in effect having occurred or being threatened, and (iv) no Lease having been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation.
(c) Subject to satisfaction of the foregoing, (i) Lessor will pay the Acquisition Amount for Equipment described in an Equipment Schedule to the Vendor or reimburse Lessee for its prior expenditures with respect to such Equipment (subject to satisfaction of Section 3.04(a)(xi) hereof), upon receipt of the documents described in Sections 5.01(a) and (b) hereof; or (ii) if an Escrow Account is being established with respect to the related Lease, Lessor will deposit the Acquisition Amount for Equipment described in the applicable Equipment Schedule with the Escrow Agent to be held and disbursed pursuant to the related Escrow Agreement. (d) This Agreement is not a commitment by Lessor or Lessee to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor or Lessee to enter into any proposed Lease, it being understood that whether Lessor or Lessee enters into any proposed Lease shall be a decision solely within their respective discretion.
(e) Lessee will cooperate with Lessor in Lessor’s review of any proposed Lease.
Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor’s review of any proposed Lease.
Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee.
(f) In the event of any conflict in terms between an Equipment Schedule and this Agreement, the terms of the Equipment Schedule shall control in the interpretation of the Lease created thereby.
12 Section 3.05 Evidence of Filing Form 8038-G. As soon as it is available, with respect to each Lease under this Agreement, Lessee shall provide to Lessor evidence that it, or its paid preparer, has filed the Form 8038-G for the applicable Lease with the Internal Revenue Service by delivering to Lessor proof of mailing such Form 8038-G. Notwithstanding anything to the contrary in this Agreement or the applicable Lease, it shall not be an Event of Default hereunder or thereunder if Lessee does not provide to Lessor evidence that it (or its paid preparer) filed the Form 8038-G for the applicable Lease with the Internal Revenue Service.
ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.03 of this Agreement, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the Rental Payment Dates and in such amounts as provided in each Lease. If any Rental Payment or other amount payable hereunder is not paid within ten (10) days of its due date, Lessee shall pay an administrative late charge of five percent (5%) of the amount not timely paid or the maximum amount permitted by law, whichever is less. Lessee shall not permit the Federal Government to guarantee any Rental Payments under any Lease. Rental Payments consist of principal and interest components as more fully detailed on the Payment Schedule for each Lease, the interest on which begins to accrue as of the Commencement Date for each such Lease.
Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the applicable Lease Term.
Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained in this Agreement or in any Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03 of this Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, disputes with the Lessor or the Vendor of any Equipment, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or unforeseen circumstances or failure of any Vendor to deliver any Equipment or otherwise perform any of its obligations for whatever reason, 13 including bankruptcy, insolvency, reorganization or any similar event with respect to any Vendor.
Section 4.05 Tax Covenants. Lessee agrees to comply with the tax covenants set forth in Section 2.01(n).
Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability with respect to a Lease, the interest component of Rental Payments under such Lease and any charge on Rental Payments or other amounts payable based on the Contract Rate shall have accrued and be payable at the Taxable Rate applicable to such Lease retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for Federal income tax purposes (which retroactive date for such Lease shall be the earliest date as of which the interest component of any Rental Payment for such Lease is deemed includible in the gross income of the owner or owners thereof for Federal income tax purposes, which may be earlier than the date of delivery of such determination by the Internal Revenue Service), and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease.
For purposes of this Section, “Event of Taxability” means the circumstance of the interest component of any Rental Payment paid or payable pursuant to a Lease becoming includible for Federal income tax purposes in an owner’s gross income as a consequence of any act, omission or event whatsoever, including but not limited to the matters described in the immediately succeeding sentence, and regardless of whether the same was within or beyond the control of Lessee. An Event of Taxability shall be presumed to have occurred upon (a) the receipt by Lessor or Lessee of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency or other written correspondence which legally holds that the interest component of any Rental Payment under such Lease is includable in the gross income of the owner thereof; (b) the issuance of any public or private ruling of the Internal Revenue Service that the interest component of any Rental Payment under such Lease is includable in the gross income of the owner thereof; or (c) receipt by Lessor or Lessee of a written opinion of a nationally recognized firm of attorneys experienced in matters pertaining to the tax-exempt status of interest on obligations issued by states and their political subdivisions, selected by Lessor and acceptable to Lessee, to the effect that the interest component of any Rental Payment under a Lease has become includable in the gross income of the owner thereof for Federal income tax purposes. For all purposes of this definition, an Event of Taxability shall be deemed to occur on the date as of which the interest component of any Rental Payment is deemed includable in the gross income of the owner thereof for Federal income tax purposes.
Section 4.07. Mandatory Prepayment. If the Acquisition Amount for a Lease is deposited into an Escrow Account, any funds not applied to Equipment Costs and remaining in such Escrow Account on the earlier of (a) the expiration of the applicable Acquisition Period, (b) the date on which Lessee delivers to the Lessor the executed Disbursement Request to effect the final disbursement to pay (or reimburse) Equipment Costs from such Escrow Account or (c) a termination of the Escrow Account as provided in the Escrow Agreement shall be applied by Lessor on each successive Rental Payment Date thereafter to pay all or a portion of the Rental 14 Payment due and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by Lessor as prepayment to the applicable unpaid Principal Portion of Rental Payments owing under the related Lease in the inverse order of the Rental Payment Dates. In connection with any partial prepayment of Rental Payments, Lessor shall prepare a new Payment Schedule and deliver the same to the Lessee, which shall be binding, absent manifest error.
ARTICLE V
Section 5.01. Acquisition, Delivery Installation and Acceptance of Equipment. (a) With respect to each Lease, Lessee shall order the Equipment to be acquired and financed thereunder, cause the Equipment to be delivered and installed at the location specified in such Lease and pay any and all delivery and installation costs and other Equipment Costs in connection therewith.
When the Equipment listed in a Lease has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor a Final Acceptance Certificate in the form attached hereto as Exhibit E; provided, however, that if an Escrow Account has been established with respect to such Lease as provided in Section 3.04 hereof, Lessee shall execute and deliver Disbursement Requests to the Lessor pursuant to the related Escrow Agreement for the purpose of effecting disbursements from the Escrow Account to pay (or reimburse) Equipment Costs for the Equipment so acquired and installed pursuant to such Lease. In connection with the execution and delivery by Lessee to Lessor of the final Disbursement Request under the applicable Escrow Agreement for a Lease, Lessee shall deliver to Lessor a “Final Acceptance Certificate” in the form attached hereto as Exhibit E. (b) (i) With respect to a Lease entered into without an Escrow Agreement, Lessee shall deliver to Lessor copies of invoices (and proof of payment of such invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. Lessee shall execute and deliver to Lessor an Equipment Schedule pursuant to Section 3.04(a)(i) within 5 business days of receipt from Lessor, subject to satisfaction of the conditions set forth in Section 3.04. (ii) With respect to a Lease entered into with an Escrow Agreement, Lessor shall prepare an Equipment Schedule. In connection with the execution and delivery of the related Escrow Agreement, Lessee shall execute and deliver to Lessor such Equipment Schedule pursuant to Section 3.04(a)(i) within 5 business days of receipt, subject to satisfaction of the conditions set forth in Section 3.04. Lessee shall deliver to Lessor together with each Disbursement Request invoices (and proof of payment of such invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale or other evidence of title transfer to Lessee relating to each item of Equipment accepted by Lessee as evidenced by such Disbursement Request. Once approved, Lessor shall deliver such Disbursement Request to the Escrow Agent for disbursement from the Escrow Account in accordance with the Escrow Agreement.
Section 5.02. Quiet Enjoyment of Equipment. So long as no Event of Default exists under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee’s quiet use and enjoyment of the Equipment during the Lease Term under such Lease.
15 Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be moved or relocated from the location (or the base location with respect to motor vehicles) specified for it in the related Lease without Lessor’s prior written consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property where the Equipment is located for the purpose of inspecting the Equipment.
Section 5.04. Use and Maintenance of the Equipment. Lessee shall not install, use, operate or maintain the Equipment (or cause the Equipment to be installed, used, operated or maintained) improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative or judicial body, including, without limitation, all anti-money laundering laws and regulations; provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Equipment or its interest or rights under the related Lease.
Lessee agrees that it shall maintain, preserve and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to re-certify the Equipment as eligible for manufacturer’s maintenance upon the return of the Equipment to Lessor as provided for in Sections 3.03 and 12.02(b) of this Agreement.
Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the security interest of Lessor.
ARTICLE VI
Section 6.01. Title to the Equipment. During the Lease Term under each Lease, and so long as Lessee is either not in default under Article XII hereof or an Event of Non-appropriation has not occurred, all right, title and interest in and to each item of the Equipment under the related Lease shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions hereof and under the applicable Lease. Lessee shall at all times protect and defend, at its own cost and expense, its title, and Lessor’s first priority security interest, in and to the Equipment (and Lessor’s other Collateral as defined in Section 6.02 hereof) from and against all claims, liens and legal processes of its creditors, and keep all Equipment (and such other Collateral) free and clear of all such claims, liens and processes. Upon the occurrence of an Event of Default under a Lease or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall, at Lessor’s option, pass to Lessor, and Lessee shall have no further interest therein. In addition, 16 upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee’s interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section 3.03 or 12.02 of this Agreement, as applicable. Upon payment of all amounts due and owing under a Lease by Lessee in accordance with Section 10.01 hereof (including upon payment of all Rental Payments and other amounts payable under such Lease), Lessor’s security interest or other interest in the Equipment under such Lease shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor’s security interest in the Equipment subject to the related Lease.
Section 6.02. Security Interest. As additional security for the payment and performance of all of Lessee’s obligations under each Lease, upon the execution of such Lease, Lessee hereby grants to Lessor a first priority security interest constituting a first lien on (a) the Equipment subject to such Lease, (b) moneys and investments held from time to time in any related Escrow Account and (c) any and all proceeds of any of the foregoing, including, without limitation, insurance proceeds (collectively, the “Collateral”). Upon the execution of each Lease, Lessee authorizes Lessor to file (and Lessee agrees to execute, if applicable) such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor’s security interest in the Collateral, including, without limitation, such financing statements with respect to personal property and fixtures under Article 9 of the Uniform Commercial Code in effect in the State and treating such Article 9 as applicable to entities such as Lessee.
Section 6.03. Personal Property; No Encumbrances. Lessee agrees that, to the extent permitted by State law, the Equipment is deemed to be and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Lessee shall not create, incur, assume or permit to exist any mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on any of the real estate where the Equipment under a Lease is or will be located or enter into any agreement to sell or assign or enter into any sale/leaseback arrangement of such real estate without the prior written consent of Lessor; provided, that if Lessor or its assigns is furnished with a waiver of interest in the Equipment under such Lease acceptable to Lessor or its assigns in their respective discretion from any party taking an interest in any such real estate prior to such interest taking effect, such consent shall not be unreasonably withheld.
ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment under each Lease free of all levies, liens, and encumbrances except those created by such Lease. The parties to this Agreement contemplate that the Equipment under each Lease will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the lease, sale, purchase, operation, use, possession or acquisition of any Equipment is nevertheless determined to be 17 subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the operation, use and maintenance of the Equipment. Lessee shall pay such taxes, assessments or charges as the same may become due; provided that, with respect to any such taxes, assessments or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the Lease Term under the affected Lease. During the Lease Term under each Lease, Lessor will not claim ownership of the Equipment thereunder for the purposes of any tax credits, benefits or deductions with respect to such Equipment.
Section 7.02. Insurance. Lessee shall, during the Lease Term under each Lease, maintain or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the greater of (i) the then applicable Casualty Value of the Equipment under such Lease or (ii) the replacement cost of such Equipment; (b) liability insurance naming Lessor and its assigns as additional insured that protects Lessor from liability for bodily injury and property damage coverage (i) in such coverage amounts as may be required by Lessor for the applicable Equipment or (ii) in such minimum coverage amounts as may be agreed upon between Lessor and Lessee in connection with the execution and delivery of a Lease, and in all events under clauses (a) and (b) issued in form and amount satisfactory to Lessor and by an insurance company that is authorized to do business in the State and having a financial strength rating by A.M. Best Company of “A-” or better; and (c) worker’s compensation coverage as required by the laws of the State. Notwithstanding the foregoing, Lessee may self-insure against the risks described in clauses (a) and/or (b) through a government pooling arrangement, self-funded loss reserves, risk retention program or other self-insurance program, in each case with Lessor’s prior consent (which Lessor may grant, withhold or deny in its sole discretion) and provided that Lessee has delivered to Lessor such information as Lessor may request with respect to the adequacy of such self-insurance to cover the risks proposed to be self-insured and otherwise in form and substance acceptable to Lessor. In the event Lessee is permitted, at Lessor’s sole discretion, to self-insure as provided in this Section 7.02, Lessee shall provide to Lessor a self-insurance letter in substantially the form attached hereto as Exhibit F.
Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout the Lease Term under each Lease. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least thirty (30) days in advance of such cancellation or modification.
Section 7.03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any persons or property arising from the Equipment under any Lease from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment under any Lease shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under any Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages 18 suffered or incurred by Lessor, regardless of the cause thereof (except to the extent caused by Lessor’s own gross negligence or willful misconduct) and all expenses incurred in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) entering into this Agreement or any Lease or any of the transactions contemplated hereby or thereby, (b) the ordering, acquisition, ownership, use, operation, condition, purchase, delivery, acceptance, rejection, storage or return of any item of the Equipment under any Lease, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment under any Lease resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee under or in connection with this Agreement or any Lease or any material misrepresentation provided by Lessee under or in connection with this Agreement or any Lease. The provisions of this Section 7.03 shall continue in full force and effect notwithstanding the full payment of all obligations under any or all Leases or the termination of the Lease Term under any or all Leases for any reason.
Section 7.04. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order or shall fail to maintain any insurance required by Section 7.02 hereof, Lessor may, but shall be under no obligation to, maintain and repair the Equipment or obtain and maintain any such insurance coverages, as the case may be, and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term under the affected Lease, and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate (or the Taxable Rate if then in effect) plus five percent (5%) per annum or the maximum amount permitted by law, whichever is less.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the Lease Term under the related Lease, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment or such part thereof and any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations under the affected Lease in accordance with Section 10.01(b) hereof.
If Lessee elects to replace any item of the Equipment (the “Replaced Equipment”) pursuant to this Section 8.01, the replacement equipment (the “Replacement Equipment”) shall be new or of a quality type, utility and condition at least as good as the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment as determined and approved by Lessor in its sole discretion. Lessee shall grant to Lessor a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each 19 item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor’s security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute “Equipment” for purposes of this Agreement and the related Lease.
Lessee shall complete the documentation of Replacement Equipment on or before the next Rental Payment Date after the occurrence of a casualty event, or be required to prepay the obligations under the related Lease with respect to the damaged Equipment for an amount that shall be determined and approved by Lessor in its sole discretion.
For purposes of this Article VIII, the term “Net Proceeds” shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys’ fees, incurred in the collection thereof.
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be paid to Lessor the amount of the then applicable Casualty Value under the related Lease plus all other amounts then owing thereunder, and, upon such payment, the applicable Lease Term shall terminate and Lessor’s security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds remaining, if any, after completing such repair, restoration, modification or improvement or after paying such Casualty Value for such Lease plus all other amounts then owing thereunder shall be retained by Lessee.
If Lessee shall make any payments pursuant to this Section 8.02, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV.
ARTICLE IX
Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of any of the Equipment under each Lease, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee’s acquisition of the Equipment under each Lease shall be on an “as is” basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, any Equipment or the existence, furnishing, functioning or Lessee’s use of any item, product or service provided for in this Agreement or any Lease.
Section 9.02. Vendor Agreements; Warranties. Lessee covenants that it shall not in any material respect amend, modify, rescind or alter any Vendor Agreement for any Lease without the prior written consent of Lessor. Lessor hereby irrevocably appoints Lessee its agent and 20 attorney-in-fact during the Lease Term under each Lease, so long as Lessee shall not be in default under such Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against a Vendor.
Lessee’s sole remedy for the breach of such warranty, indemnification or representation shall be against the applicable Vendor of the Equipment and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely Rental Payments and other payments under each Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties relating to any of the Equipment under each Lease.
ARTICLE X
Section 10.01. Prepayment; Payment in Full.
(a)Prepayment. Lessee shall have the option to prepay or satisfy all, but not less than all, of its obligations under a Lease, at the following times and upon the following terms:
(i)Optional Prepayment. From and after the date specified (if any) in the applicable Payment Schedule (the “Prepayment Option Commencement Date”), on the Rental Payment Dates specified in such Payment Schedule, upon not less than thirty (30) days prior written notice, and upon payment in full of the sum of all Rental Payments then due under the related Lease plus the then applicable Prepayment Price, which may include a prepayment premium on the unpaid Outstanding Balance as set forth in such Payment Schedule plus all other amounts then owing thereunder; or (ii)Casualty or Condemnation Prepayment. In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee’s notice to Lessor of its exercise of the prepayment option (which shall be the earlier of the next Rental Payment Date or sixty (60) days after the casualty event) upon payment in full to Lessor of (A) in the event such prepayment occurs on a Rental Payment Date, the sum of (i) all Rental Payments then due under such Lease plus (ii) the then applicable Casualty Value for such Lease plus (iii) all other amounts then owing thereunder OR, (B) in the event such prepayment for such Lease occurs on a date other than a Rental Payment Date, the sum of (i) the applicable Casualty Value shown on the Payment Schedule for such Lease for the Rental Payment Date immediately preceding the applicable date of such prepayment (or if the date of such prepayment occurs prior to the first Rental Payment Date for such Lease, the earliest Casualty Value shown on the related Payment Schedule) plus (ii) accrued interest at the Contract Rate (or the Taxable Rate if then in effect) on the Outstanding Balance as of the Rental Payment Date immediately preceding the applicable date of such prepayment from such Rental Payment Date (or if the date of such prepayment occurs prior to the first Rental Payment Date, the Commencement Date for such Lease) to the date of such prepayment plus (iii) all other amounts then owing thereunder. 21 (b)Payment in Full. Upon the expiration of the Lease Term under a Lease, the payment in full of all Rental Payments then due and all other amounts then owing under such Lease by Lessee to Lessor.
(c) Lessor’s security interests in and to the related Equipment under such Lease will be terminated and Lessee will own such Equipment free and clear of Lessor’s security interest in such Equipment after either (i) payment of either (A) the applicable Prepayment Price and all other amounts then owing under a Lease in accordance with Section 10.01(a)(i) of this Agreement or (B) the applicable Casualty Value and all other amounts then owing under a Lease in accordance with Section 10.01(a)(ii) of this Agreement or (ii) upon the expiration of the Lease Term of a Lease and payment in full of all Rental Payments then due and all other amounts then owing thereunder in accordance with Section 10.01(b) of this Agreement.
ARTICLE XI
Section 11.01. Assignment by Lessor. (a) Lessor’s right, title and interest in and to the Rental Payments and any other amounts payable by Lessee under any and all of the Leases and the Escrow Agreement relating to any Lease, its security interest in the Equipment subject to the related Lease and in any related Escrow Account, and all proceeds therefrom (collectively, with respect to each Lease and related Escrow Agreement, the “Related Assigned Rights”), may be assigned and reassigned by Lessor at any time, in whole or in part, to one or more assignees or sub-assignees without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance (i) shall be made only to investors each of whom Lessor reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended, and in either case is purchasing the Related Assigned Rights (or any interest therein) for its own account with no present intention to resell or distribute such Related Assigned Rights (or interest therein), subject to each investor’s right at any time to dispose of the Related Assigned Rights (or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than 35 owners of the Related Assigned Rights with respect to a Lease or the creation of any interest in the Related Assigned Rights with respect to a Lease in an aggregate principal component that is less than $100,000 and (iii) shall not require Lessee to make Rental Payments, to send notices or otherwise to deal with respect to matters arising under the Related Assigned Rights with respect to a Lease with or to more than one Lease Servicer (as such term is defined below), and any trust agreement, participation agreement or custodial agreement under which multiple ownership interests in the Related Assigned Rights with respect to a Lease are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Lease Servicer”) to act on their behalf with respect to the Related Assigned Rights with respect to a Lease, including with respect to the exercise of rights and remedies of Lessor on behalf of such owners upon the occurrence of an Event of Default or an Event of Non-appropriation under the related Lease.
Lessor and Lessee hereby acknowledge and agree that the restrictions and limitations on transfer as provided in this Section 11.01 shall apply to the first and subsequent assignees and 22 sub-assignees of any of the Related Assigned Rights with respect to a Lease (or any interest therein).
(b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective as against Lessee until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, participation interests, trust certificates or partnership interests with respect to the Rental Payments payable under a Lease, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank, trust company or other entity that acts as the Lease Servicer for such Lease. Notices of assignment provided pursuant to this Section 11.01(b) shall contain a confirmation of compliance with the transfer requirements imposed by Section 11.01(a) hereof.
During the Lease Term under each Lease, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees or Lease Servicer last designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or any Vendor. Assignments in part may include, without limitation, assignment of all of Lessor’s security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment and all of Lessor’s security interest in and to the related Escrow Account, or all rights in, to and under the related Escrow Agreement.
(c) If Lessor notifies Lessee of its intent to assign a Lease, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment with respect to such Lease, substantially in the form of Exhibit H attached hereto, within five (5) business days after its receipt of such request.
Section 11.02. Assignment and Subleasing by Lessee. None of Lessee’s right, title and interest in, to and under this Agreement, any Lease or any portion of the Equipment, any Escrow Agreement or the Escrow Account related thereto may be assigned, encumbered or subleased by Lessee for any reason, and any purported assignment, encumbrance or sublease without Lessor’s prior written consent shall be null and void.
ARTICLE XII
Section 12.01. Events of Default Defined. Any of the following events shall constitute an “Event of Default” under a Lease:
(a) Failure by Lessee to (i) subject to Section 3.03, pay any Rental Payment or other payment required to be paid under any Lease within ten (10) days of the date when due as specified therein, (ii) maintain insurance as required under such Lease (including Section 7.02 of this Agreement, which is incorporated therein), or (iii) observe and perform any covenant, condition or agreement on its part to be observed or performed under Section 6.01 or 6.02 hereof for any Lease;
23 (b) Failure by Lessee to observe and perform any covenant, condition or agreement contained in this Agreement or any Lease on its part to be observed or performed, other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; (c) Any statement, representation or warranty made by Lessee in or pursuant to this Agreement or any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made;
(d) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by Lessor or any affiliate of Lessor (including, without limitation, the occurrence of any Event of Default under any other Lease), or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $100,000.00; provided, that agreements and obligations referenced in the preceding sentence do not include bonds issued by Lessee solely as a conduit issuer and special tax or assessment bonds and other similar obligations for which Lessee is never ultimately responsible to pay from its own funds; (e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable Federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization, moratorium or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator for Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive days.
Section 12.02. Remedies on Default. Whenever any Event of Default exists under any Lease, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps with respect to any or all Leases with an 24 Event of Default under this Agreement, including those with an Event of Default pursuant to Section 12.01(d) (each a “Defaulted Lease”):
(a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to one or more Defaulted Leases and other amounts payable by Lessee under each such Defaulted Lease to the end of the then current Original Term or Renewal Term to be immediately due and payable;
(b) With or without terminating the Lease Term under any one or more Defaulted Leases, Lessor may enter the premises where the Equipment listed in any one or more of each such Defaulted Leases is located and retake possession of such Equipment or require Lessee at Lessee’s expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee pursuant to each such Defaulted Lease and other amounts related to each such Defaulted Lease that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under each such Defaulted Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer’s and attorney’s fees), subject, however, to the provisions of Section 3.03 of this Agreement.
The exercise of any such remedies respecting any such Event of Default under any such Defaulted Lease shall not relieve Lessee of any other liabilities under each such Defaulted Lease or any other Lease that Lessor determines not to treat as a Defaulted Lease or with respect to the Equipment listed therein;
(c) Lessor may terminate the Escrow Agreement relating to any one or more of such Defaulted Leases and apply any proceeds in each such applicable Escrow Account thereunder to the Rental Payments scheduled to be paid under any one or more of such Defaulted Leases as Lessor shall determine; and/or (d) Lessor may take whatever action at law or in equity as may appear necessary or desirable to enforce its rights under any one or more of such Defaulted Leases or each such Escrow Agreement relating thereto or as a secured party in any or all of the Equipment subject to any one or more of such Defaulted Leases or with respect to the related Escrow Account for one or more of such Defaulted Leases.
Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder and/or under any Lease now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article XII it 25 shall not be necessary to give any notice other than such notice as may be required in this Article XII.
Section 12.04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer’s or attorney’s fees), shall be applied as follows:
(a) If such remedy is exercised solely with respect to a single Defaulted Lease, Equipment listed in such Defaulted Lease or rights thereunder, then to amounts due pursuant to such Defaulted Lease and to other amounts related to such Defaulted Lease or such Equipment.
(b) If such remedy is exercised with respect to more than one Defaulted Lease, Equipment listed in more than one Defaulted Lease or rights under more than one Defaulted Lease, then to amounts due pursuant to one or more of such Defaulted Leases as Lessor shall determine and distribute on a pro rata basis or on such other basis as Lessor shall determine.
ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under this Agreement or any Lease shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee.
Section 13.02. Binding Effect. This Agreement and each Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.03. Severability. In the event any provision of this Agreement or any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof or thereof.
Section 13.04. Amendments, Changes and Modifications. This Agreement and each Lease may only be amended by Lessor and Lessee in writing.
Section 13.05. Execution in Counterparts. This Agreement and each Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided that only Counterpart No. 1 of each Lease (including the terms and provisions of this Agreement incorporated therein by reference) shall constitute chattel paper for purposes of the applicable Uniform Commercial Code.
26 Section 13.06. Applicable Law; Venue; Waiver of Jury Trial. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the State. The parties hereto consent and submit to the jurisdiction of the State and venue in any state or Federal court of such State for the purposes of any suit, action or other proceeding arising in connection with this Agreement or any Lease, and each party expressly waives any objections that it may have to the venue of such courts. The parties hereto expressly waive any right to trial by jury in any action brought on or with respect to this Agreement or any Lease.
Section 13.07. Captions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease.
Section 13.08. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated by this Agreement and each Lease thereunder (including in connection with any amendment, waiver or other modification hereof or of any other related document), the Lessee acknowledges and agrees that: (a) (i) the transactions regarding this Agreement and each Lease thereunder provided by the Lessor and any affiliate thereof are arm’s- length commercial transactions between the Lessee, on the one hand, and the Lessor and its affiliates, on the other hand, (ii) the Lessee has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Lessee is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement and each Lease thereunder and by the other related documents; (b) (i) the Lessor and its affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Lessee, or any other person and (ii) neither the Lessor nor any of its affiliates has any obligation to the Lessee with respect to the transactions contemplated by this Agreement and each Lease thereunder except those obligations expressly set forth herein and in the other related documents; and (c) the Lessor and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Lessee, and neither the Lessor nor any of its affiliates has any obligation to disclose any of such interests to the Lessee. To the fullest extent permitted by law, the Lessee, hereby waives and releases any claims that it may have against the Lessor or any of its affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated by this Agreement and each Lease thereunder.
Section 13.09. Entire Agreement. The parties agree that this Agreement and each Lease hereunder constitutes the final and entire agreement between the parties superseding all conflicting terms or provisions of any prior proposals, term sheets, solicitation documents, requests for proposals, award notices, approval letters or any other agreements or understandings between the parties.
Section 13.10. Electronic Signatures. The Related Documents may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the 27 same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of the Related Documents and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes. Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, Lessor and Lessee have caused this Master Equipment Lease/Purchase Agreement to be executed in their names by their duly authorized representatives as of the date first above written.
LESSOR:
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
LESSEE:
City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590
Attention: Finance Director
Email: [email protected]
Telephone: (707) 648-5433
By: _________________________________ By: _________________________________ Name: ____________________________ Name: ___________________________ Title: _____________________________ Title: ____________________________ Signature Page of Master Equipment Lease/Purchase Agreement
LIST OF EXHIBITS
Exhibit A-1 Form of Equipment Schedule – General Equipment Exhibit A-2 Form of Equipment Schedule – Energy Services Equipment Exhibit B Form of Payment Schedule
Exhibit C-1A Form of Authorizing Resolution (Agreement) Exhibit C-1B Form of Authorizing Resolution (Lease)
Exhibit C-2A Form of Incumbency and Authorization Certificate (Agreement) Exhibit C-2B Form of Incumbency and Authorization Certificate (Lease) Exhibit D Form of Opinion of Counsel to Lessee
Exhibit E Form of Final Acceptance Certificate
Exhibit F Form of Self-Insurance Certificate
Exhibit G Reserved
Exhibit H Form of Notice and Acknowledgement of Assignment Exhibit I Form of Escrow and Account Control Agreement
2 EXHIBIT A-1
FORM OF EQUIPMENT SCHEDULE NO. ______ - GENERAL EQUIPMENT Re: Master Equipment Lease/Purchase Agreement, dated as of ____________, between Banc of America Public Capital Corp, a Kansas corporation, as Lessor, and _______________________, as Lessee
1.Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”).
2.Equipment. For purposes of the Lease created hereby, the following items of Equipment are hereby included under this Equipment Schedule together with all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto as provided in the Agreement.
QUANTITY DESCRIPTION SERIAL NO. MODEL NO. LOCATION
3.Payment Schedule.
(a)Rental Payments; Commencement Date. The Rental Payments shall be in such amounts and payable on such Rental Payment Dates as set forth in the Payment Schedule attached to this Equipment Schedule and incorporated herein by this reference, subject to adjustment upon the occurrence of an Event of Taxability as provided in Section 4.06 of the Agreement. Lessee’s obligation to pay Rental Payments under the Lease created hereby shall commence on the earlier of (i) the date on which the Equipment listed in this Equipment Schedule is accepted by Lessee in the manner described in Section 5.01 of the Agreement, as evidenced by the Final Acceptance Certificate executed by Lessee and substantially in the form of Exhibit E attached to the Agreement, or (ii) the date on which the Acquisition Amount is deposited in an Escrow Account for the purpose of acquiring and installing the Equipment listed in this Equipment Schedule pursuant to Section 3.04(c) of the Agreement (the earlier of such two dates being herein referred to as the “Commencement Date”). (b)Prepayment Price Schedule. The Prepayment Price on each Rental Payment Date shall be the amount set forth for such Rental Payment Date in the “Prepayment Price” column of the Payment Schedule attached to this Equipment Schedule plus all Rental Payments then due (including the Rental Payment due on such Rental Payment Date) plus all other amounts then owing under this Equipment Schedule.
3 4.Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Agreement (particularly Section 2.01 thereof) are true and correct as though made on the Commencement Date. Lessee further represents and warrants that (a) no Material Adverse Change has occurred since the dated date of the Agreement; (b) no Event of Default has occurred and is continuing under any Lease currently in effect; (c) no Event of Non-appropriation under any Lease currently in effect has occurred or is threatened; (d) no Lease has been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation; (e) the governing body of Lessee has authorized the execution and delivery of the Agreement and this Equipment Schedule; (f) the Equipment listed in this Equipment Schedule is essential to the functions of Lessee or to the services Lessee provides its citizens; (g) Lessee has an immediate need for, and expects to make immediate use of, substantially all such Equipment, which will be used by Lessee only for the purpose of performing one or more of Lessee’s governmental or proprietary functions consistent with the permissible scope of its authority; and (h) Lessee expects and anticipates adequate funds to be available for all future payments or rent due after the current budgetary period.
5.The Lease. The terms and provisions of the Agreement (other than to the extent that they relate solely to other Equipment Schedules or Equipment listed on other Equipment Schedules) are hereby incorporated into this Equipment Schedule by reference and made a part hereof.
[OPTION: IF ESCROW AGREEMENT IS USED:
6.Acquisition Amount. The Acquisition Amount that Lessor shall pay to the Escrow Agent for deposit into the Escrow Account in connection with this Equipment Schedule is $____________. It is expected that by [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule No. ______, Lessee will have taken possession of all items of Equipment shown above and that the Lessee’s final Disbursement Request pursuant to the Escrow Agreement will be signed by Lessee, approved by Lessor and delivered to the Escrow Agent on or before [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule.
OR IF VENDOR PAID DIRECTLY USE:
6.Acquisition Amount. The Acquisition Amount for the Equipment listed in this Equipment Schedule to be paid to the Vendor (or reimbursed to Lessee) is $ _____________________.]
[OPTION: IF ESCROW AGREEMENT IS USED:
7.Acquisition Period. The Acquisition Period applicable to this Equipment Schedule shall end at the conclusion of the ____ month following the date hereof.] 4 [OPTION: IF ESCROW AGREEMENT IS USED AND A SURETY BOND IS REQUIRED:
[8.] Surety Bonds; Lessee to Pursue Remedies Against Contractors and Sub- Contractors and Their Sureties. Lessee shall secure from each Vendor directly employed by Lessee in connection with the acquisition, construction, installation, improvement or equipping of the Equipment listed in this Equipment Schedule, a payment and performance bond (“Surety Bond”) executed by a surety company authorized to do business in the State, having a financial strength rating by A.M. Best Company of “A-” or better, and otherwise satisfactory to Lessor and naming Lessor as a co-obligee in a sum equal to the entire amount to become payable under each Vendor Agreement. Each bond shall be conditioned on the completion of the work in accordance with the plans and specifications for the Equipment listed in this Equipment Schedule and upon payment of all claims of subcontractors and suppliers. Lessee shall cause the surety company to add Lessor as a co-obligee on each Surety Bond, and shall deliver a certified copy of each Surety Bond to Lessor promptly upon receipt thereof by Lessee. Any proceeds from a Surety Bond shall be applied in accordance with such Surety Bond to the payment and performance of the Vendor’s obligations in accordance with the related Vendor Agreement and, if for whatever reason such proceeds are not so applied, first to amounts due Lessor under this Equipment Schedule, and any remaining amounts shall be payable to Lessee.
In the event of a material default of any Vendor under any Vendor Agreement in connection with the acquisition, construction, maintenance and/or servicing of the Equipment listed in this Equipment Schedule or in the event of a material breach of warranty with respect to any material workmanship or performance guaranty with respect to such Equipment, Lessee will promptly proceed to exhaust its remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take in connection with any such default. Any amounts received by Lessee in respect of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to Lessor and applied against Lessee’s obligations under this Equipment Schedule.
As a prerequisite to the performance by Lessor of any of its obligations under this Equipment Schedule, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, a certified copy of each Surety Bond satisfying the conditions set forth in this Section ___, or, at Lessor’s sole discretion, such Surety Bonds may be provided after the Commencement Date of this Equipment Schedule, provided however, that no “Disbursement Request” pursuant to the Escrow Agreement for this Equipment Schedule shall be authorized by Lessor until such Surety Bonds satisfying the conditions set forth in this Section _________have been delivered to Lessor. [7][8][9].Lease Term. The Lease Term shall consist of the Original Term and ____ consecutive Renewal Terms, with the final Renewal Term ending on ____________, subject to earlier termination pursuant to the Agreement.
[OPTION: IF MOTOR VEHICLES ARE BEING FINANCED:
5 [8][9][10].Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows:
(a)Registered Owner:City of Vallejo
(b)Lienholder:Banc of America Public Capital Corp
Bank of America Plaza
600 Peachtree Street NE, 11th Floor
Atlanta, GA 30308-2265
Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor’s files throughout the Lease Term of the Lease created hereby.
Dated: _________________
LESSOR:
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
LESSEE:
City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590
Attention: Finance Director
Email: [email protected]
Telephone: (707) 648-5433
By: _________________________________ By: _________________________________ Name: ____________________________ Name: ___________________________ Title: _____________________________ Title: ____________________________ Counterpart No. _____ of _____ manually executed and serially numbered counterparts.
To the extent that the Lease created hereby constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
A-1
EXHIBIT A-2
FORM OF EQUIPMENT SCHEDULE NO. ______ - ENERGY SERVICES EQUIPMENT Re: Master Equipment Lease/Purchase Agreement, dated as of ____________, between Banc of America Public Capital Corp, a Kansas corporation, as Lessor, and _______________________, as Lessee
1.Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”).
2.Equipment.
(a) Location of Equipment: For purposes of the Lease created hereby, the location of Equipment is set forth below:
(b) Equipment Description (Scope of Work): For purposes of the Lease created hereby, the description of the Equipment and the scope of work is set forth below:
3.Payment Schedule.
(a)Rental Payments; Commencement Date. The Rental Payments shall be in such amounts and payable on such Rental Payment Dates as set forth in the Payment Schedule attached to this Equipment Schedule and incorporated herein by this reference, subject to adjustment upon the occurrence of an Event of Taxability as provided in Section 4.06 of the Agreement. Lessee’s obligation to pay Rental Payments under the Lease created hereby shall commence on the earlier of (i) the date on which the Equipment listed in this Equipment Schedule is accepted by Lessee in the manner described in Section 5.01 of the Agreement, as evidenced by the Final Acceptance Certificate executed by Lessee and substantially in the form of Exhibit E attached to the Agreement, or (ii) the date on which the Acquisition Amount is deposited in an Escrow Account for the purpose of acquiring and installing the Equipment listed in this Equipment Schedule pursuant to Section 3.04(c) of the Agreement (the earlier of such two dates being herein referred to as the “Commencement Date”). (b)Prepayment Price Schedule. The Prepayment Price on each Rental Payment Date shall be the amount set forth for such Rental Payment Date in the “Prepayment Price” column of the Payment Schedule attached to this Equipment Schedule plus all Rental Payments then due (including the Rental Payment due on such Rental Payment Date) plus all other amounts then owing under this Equipment Schedule.
A-2
4.Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Agreement (particularly Section 2.01 thereof) are true and correct as though made on the Commencement Date. Lessee further represents and warrants that (a) no Material Adverse Change has occurred since the dated date of the Agreement; (b) no Event of Default has occurred and is continuing under any Lease currently in effect; (c) no Event of Non-appropriation under any Lease currently in effect has occurred or is threatened; (d) no Lease has been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation; (e) the governing body of Lessee has authorized the execution and delivery of the Agreement and this Equipment Schedule; (f) the Equipment listed in this Equipment Schedule is essential to the functions of Lessee or to the services Lessee provides its citizens; (g) Lessee has an immediate need for, and expects to make immediate use of, substantially all such Equipment, which will be used by Lessee only for the purpose of performing one or more of Lessee’s governmental or proprietary functions consistent with the permissible scope of its authority; and (h) Lessee expects and anticipates adequate funds to be available for all future payments or rent due after the current budgetary period.
5.The Lease. The terms and provisions of the Agreement (other than to the extent that they relate solely to other Equipment Schedules or Equipment listed on other Equipment Schedules) are hereby incorporated into this Equipment Schedule by reference and made a part hereof.
6.Acquisition Amount. The Acquisition Amount that Lessor shall pay to the Escrow Agent for deposit into the Escrow Account in connection with this Equipment Schedule is $____________. It is expected that by [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule No. ______, Lessee will have taken possession of all items of Equipment shown above and that the Lessee’s final Disbursement Request pursuant to the Escrow Agreement will be signed by Lessee, approved by Lessor and delivered to the Escrow Agent on or before [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule.
7.Acquisition Period. The Acquisition Period applicable to this Equipment Schedule shall end at the conclusion of the ____ month following the date hereof.
8.Additional Representation Regarding the Use and Maintenance of the Equipment; Additional Representation Regarding Damage, Destruction and Condemnation. (a) Lessee agrees that it shall (a) proceed promptly, at its expense, to protect its rights and exercise its remedies under any warranty then in effect with respect to the Equipment under this Equipment Schedule; and (b) replace or rebuild any component of the Equipment under this Equipment Schedule that becomes permanently unfit for normal use or inoperable during the Lease Term of this Equipment Schedule (herein, the “Inoperable Component”) in order to keep the Equipment as a whole in good repair and working order during the Lease Term of this Equipment Schedule. Lessee shall promptly notify Lessor in writing when any component of the Equipment under this Equipment Schedule is reasonably expected within forty-five (45) days to A-3
become an Inoperable Component. Lessee shall promptly replace or rebuild the Inoperable Component under this Equipment Schedule with a similar component of comparable or improved make and model that has at least the equivalent value and utility of the applicable Inoperable Component, a remaining useful life of no less than the remaining Lease Term under this Equipment Schedule and such replacement or rebuilt component shall be in good operating condition.
(b) If Lessee elects to replace any item of the Equipment with Replacement Equipment pursuant to Section 8.01 of the Agreement, in addition to the other requirements set forth in Section 8.01, the Replacement Equipment shall also provide at least the same level of energy and/or operational savings expected in the aggregate from the Replaced Equipment prior to such casualty, destruction or condemnation.
9.Liability Insurance. Lessee shall, during the Lease Term under this Equipment Schedule, maintain or cause to be maintained liability insurance naming Lessor and its assigns as additional insured that protects Lessor from liability with limits of at least $5,000,000 per occurrence for bodily injury and property damage coverage (such liability insurance coverage may be in a combination of primary general liability and/or excess liability umbrella coverage).
10. Surety Bonds; Lessee to Pursue Remedies Against Contractors and Sub- Contractors and Their Sureties. Lessee shall secure from each Vendor directly employed by Lessee in connection with the acquisition, construction, installation, improvement or equipping of the Equipment listed in this Equipment Schedule, a payment and performance bond (“Surety Bond”) executed by a surety company authorized to do business in the State, having a financial strength rating by A.M. Best Company of “A-” or better, and otherwise satisfactory to Lessor and naming Lessor as a co-obligee in a sum equal to the entire amount to become payable under each Vendor Agreement. Each bond shall be conditioned on the completion of the work in accordance with the plans and specifications for the Equipment listed in this Equipment Schedule and upon payment of all claims of subcontractors and suppliers. Lessee shall cause the surety company to add Lessor as a co-obligee on each Surety Bond, and shall deliver a certified copy of each Surety Bond to Lessor promptly upon receipt thereof by Lessee. Any proceeds from a Surety Bond shall be applied in accordance with such Surety Bond to the payment and performance of the Vendor’s obligations in accordance with the related Vendor Agreement and, if for whatever reason such proceeds are not so applied, first to amounts due Lessor under this Equipment Schedule, and any remaining amounts shall be payable to Lessee.
In the event of a material default of any Vendor under any Vendor Agreement in connection with the acquisition, construction, maintenance and/or servicing of the Equipment listed in this Equipment Schedule or in the event of a material breach of warranty with respect to any material workmanship or performance guaranty with respect to such Equipment, Lessee will promptly proceed to exhaust its remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take in connection with any such default. Any amounts received by Lessee in respect of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to Lessor and applied against Lessee’s obligations under this Equipment Schedule.
A-4
As a prerequisite to the performance by Lessor of any of its obligations under this Equipment Schedule, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, a certified copy of each Surety Bond satisfying the conditions set forth in this Section ___, or, at Lessor’s sole discretion, such Surety Bonds may be provided after the Commencement Date of this Equipment Schedule, provided however, that no “Disbursement Request” pursuant to the Escrow Agreement for this Equipment Schedule shall be authorized by Lessor until such Surety Bonds satisfying the conditions set forth in this Section _________have been delivered to Lessor.
11.Lease Term. The Lease Term shall consist of the Original Term and ____ consecutive Renewal Terms, with the final Renewal Term ending on ____________, subject to earlier termination pursuant to the Agreement.
Dated: _________________
LESSOR: LESSEE:
Banc of America Public Capital Corp ____________________________________ 11333 McCormick Road ____________________________________ Hunt Valley II ____________________________________
M/C MD5-032-07-05 Attention: ____________________________ Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
By: _________________________________ By: _________________________________ Name: ____________________________ Name: ___________________________ Title: _____________________________ Title: ____________________________ Counterpart No. _____ of _____ manually executed and serially numbered counterparts.
To the extent that the Lease created hereby constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
EXHIBIT B
FORM OF PAYMENT SCHEDULE
RENTAL
PAYMENT
DATE
RENTAL
PAYMENT
AMOUNT
INTEREST
PORTION
PRINCIPAL
PORTION
OUTSTANDING
BALANCE
PREPAYMENT
PRICE
[including
prepayment
premium; if
applicable]
CASUALTY
VALUE
[including
casualty
premium; if
applicable]
Contract Rate; Taxable Rate. The Contract Rate for this Equipment Schedule is _________% per annum. The Taxable Rate for this Equipment Schedule is _________% per annum.
Prepayment Option Commencement Date. For purposes of Section 10.01 of the Agreement, the Prepayment Option Commencement Date for this Equipment Schedule is _______________.
LESSOR: LESSEE:
Banc of America Public Capital Corp City of Vallejo
By: ___________________ By: ___________________
Name: Name:
Title: Title:
EXHIBIT C-1A
FORM OF AUTHORIZING RESOLUTION (AGREEMENT)
RESOLUTION NO. 23-_____
AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT AND SEPARATE EQUIPMENT SCHEDULES
THERETO FOR THE ACQUISITION, FINANCING AND LEASING OF CERTAIN
EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE TERMS HEREIN PROVIDED; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND AUTHORIZING
THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION
WHEREAS, the City of Vallejo (the “City” or “Lessee”), a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, is authorized to acquire, finance and lease personal property (tangible and intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the City Council of the City (the “Council”) has determined that a need exists for the acquisition, financing and leasing of certain equipment consisting of a ladder truck, F550 SD, two type-1 apparatuses and related equipment and potentially other equipment in the future, all of which constitutes personal property necessary for the Lessee to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided; and WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that certain Master Equipment Lease/Purchase Agreement (the “Agreement”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Council at this meeting, and separate Equipment Schedules thereto substantially in the form attached to the Agreement; and
WHEREAS, the City is authorized to enter into such Agreement and Equipment Schedules under applicable law, including California Government Code Section 37350; and WHEREAS, the information required to be obtained and disclosed by the Council pursuant to Section 5852.1 of the California Government Code with respect to the financing of the Equipment is set forth in the staff report accompanying this Resolution; and WHEREAS, the Council deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Agreement and separate Equipment Schedules thereunder and the other documentation relating thereto from time to time as provided in the Agreement for the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Vallejo as follows:
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Agreement (including the form of Equipment Schedule and the form of Payment Schedule, both attached thereto), in the form presented to the Council at this meeting, are in the best interests of the Lessee for the acquisition financing and leasing of the Equipment.
Section 2. Approval of Documents. The form, terms and provisions of the Agreement (including the form of Equipment Schedule and the form of Payment Schedule, both attached thereto) are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by the City Manager or his or her designee (the “Authorized Officials”), the execution of such documents by an Authorized Official being conclusive evidence of such approval; and the Authorized Officials are hereby authorized and directed to execute, and the Authorized Officials are hereby authorized and directed to attest, the Agreement and any related Exhibits attached thereto and to deliver the Agreement (including such Exhibits) to the respective parties thereto. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the Lessee the Agreement, each Equipment Schedule thereto under which a separate Lease (as defined in the Agreement) is created, each Payment Schedule attached thereto, any related Escrow Agreement and any related exhibits attached thereto if and when required; provided, however, that, without further authorization from the governing body of the Lessee, (a) the aggregate principal component of Rental Payments under all Leases entered into pursuant to the Agreement shall not exceed $5,000,000; (b) the maximum term under any Lease entered into pursuant to the Agreement shall not exceed 7 years; and (c) the maximum tax-exempt interest rate used to determine the interest component of Rental Payments under each Lease shall not exceed 3.96% per annum (although such maximum is subject to increase pursuant to the terms of the Agreement). The Authorized Officials may sign and deliver Leases to the Lessor on behalf of the Lessee pursuant to the Agreement on such terms and conditions as they shall determine are in the best interests of the Lessee up to the maximum aggregate principal component, maximum term and maximum interest rate provided above. The foregoing authorization shall remain in effect for a period of two years from the date hereof during which the Authorized Officials are authorized to sign and deliver Leases pursuant to the Agreement on the terms and conditions herein provided and to be provided in each such Lease.
Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of Final Acceptance Certificates, Escrow Agreements, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Agreement and each Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Agreement, any Lease, any Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Agreement, any Lease, any Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under each Lease entered into pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.
Section 5. Appointment of Authorized Lessee Representatives. The Authorized Officials and the Finance Director of the City are each hereby designated to act as authorized representatives of the Lessee for purposes of each Lease and related Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Agreement and any Lease or Escrow Agreement.
Section 6. Appointment of Financing Team. In connection with the transactions described in this Resolution, the City Council hereby authorizes, ratifies, and confirms the appointment of PFM Financial Advisors LLC to serve as municipal advisor and Jones Hall, A Professional Law Corporation to serve as special legal counsel, with the fees and expenses of each such firm payable from the proceeds of the financing or other legally available funds. The Authorized Officials and the City Attorney, as applicable, are authorized to execute professional services agreements, as applicable, with each such firm.
Section 7. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.
Section 8. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.
Section 9. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.
Adopted by the City Council of the City of Vallejo at a regular meeting held on ________, 2023 with the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________________
ROBERT H. MCCONNELL, MAYOR
ATTEST:
______________________________________
DAWN G. ABRAHAMSON, CITY CLERK
The undersigned, a duly elected or appointed and acting City Clerk of the City of Vallejo identified in the above Resolution No. ___ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the City Council of the City of Vallejo on ____________, 2023. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.
DATED this ____ day of ____________, 20__.
_______________________________________
Name:_________________________________
Title:__________________________________
EXHIBIT C-1B
FORM OF AUTHORIZING RESOLUTION (LEASE)
RESOLUTION NO. 23-_____
AUTHORIZING THE EXECUTION AND DELIVERY OF AN
EQUIPMENT SCHEDULE TO THE MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT FOR THE
ACQUISITION, FINANCING AND LEASING OF CERTAIN
EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE
TERMS PROVIDED HEREIN; AUTHORIZING THE
EXECUTION AND DELIVERY OF OTHER DOCUMENTS
REQUIRED IN CONNECTION THEREWITH; AND
AUTHORIZING THE TAKING OF ALL OTHER ACTIONS
NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS
RESOLUTION.
WHEREAS, the City of Vallejo (the “City” or “Lessee”), a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, is authorized to acquire, finance and lease personal property (tangible and intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the governing body of the Lessee (the “Board”) has determined that a need exists for the acquisition, financing and leasing of certain equipment with a cost not to exceed $_____________ and consisting of ___________________, which constitutes personal property necessary for the Lessee to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided; and
WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that certain Equipment Schedule (the “Equipment Schedule”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Board at this meeting, which Equipment Schedule incorporates by reference the terms and provisions of that certain Master Equipment Lease/Purchase Agreement dated as of June 23, 2023 by and between Lessor and Lessee (the “Agreement”); and Whereas, the City is authorized to enter into such Agreement and Equipment Schedules under applicable law, including California Government Code Section 37350; and Whereas, the information required to be obtained and disclosed by the Council pursuant to Section 5852.1 of the California Government Code with respect to the financing of the Equipment is set forth in the staff report accompanying this Resolution; and WHEREAS, the Board deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Equipment Schedule and the other documentation relating to the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Vallejo as follows:
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Equipment Schedule and the form of Payment Schedule, in the form presented to the Board at this meeting, are in the best interests of the Lessee for the acquisition financing and leasing of the Equipment.
Section 2. Approval of Documents. The form, terms and provisions of the Equipment Schedule and Payment Schedule are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by the City Manager of the Lessee or his or her designee (the “Authorized Officials”) executing the same, the execution of such documents being conclusive evidence of such approval. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the Lessee the Equipment Schedule under which a separate Lease (as defined in the Agreement) is created, the Payment Schedule attached thereto, the Escrow Agreement and any related exhibits attached thereto.
Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Lease to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of a Final Acceptance Certificate, the Escrow Agreement, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Lease, the Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease, the Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under the Lease entered into pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.
Section 5. Appointment of Authorized Lessee Representatives. The Authorized Officials and the Finance Director of the City are each hereby designated to act as authorized representatives of the Lessee for purposes of the Lease and the Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Lease or the Escrow Agreement.
Section 6. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.
Section 7. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.
Section 8. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.
Adopted by the City Council of the City of Vallejo at a regular meeting held on ________, 2023 with the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________________
______________, MAYOR
ATTEST:
______________________________________
______________, CITY CLERK
The undersigned, a duly elected or appointed and acting __________________ City Clerk of the City of Vallejo identified in the above Resolution No. ___ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the City Council of the City of Vallejo on ____________, 2023. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.
DATED this ____ day of ____________, 20__.
_______________________________________
Name:_________________________________
Title:__________________________________
EXHIBIT C-2A
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE (AGREEMENT) The undersigned, a duly elected or appointed and acting City Clerk of the City of Vallejo (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; and B. THE OFFICIALS ARE DULY AUTHORIZED, ON BEHALF OF LESSEE, TO NEGOTIATE,
EXECUTE AND DELIVER THE MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT DATED AS OF JUNE 23, 2023 (THE “AGREEMENT”) AND SEPARATE EQUIPMENT SCHEDULES RELATING THERETO FROM TIME TO TIME AS PROVIDED IN THE AGREEMENT (COLLECTIVELY, THE “EQUIPMENT SCHEDULES”), EACH BY AND BETWEEN LESSEE AND BANC OF AMERICA PUBLIC CAPITAL CORP (“LESSOR”), THE ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF JUNE 23, 2023 BY
AND AMONG LESSOR, LESSEE AND TMI TRUST COMPANY, A FLORIDA TRUST COMPANY, AS
ESCROW AGENT, ALL DOCUMENTS RELATED THERETO AND DELIVERED IN CONNECTION
THEREWITH, AND ANY FUTURE MODIFICATION(S) OR AMENDMENTS THEREOF (COLLECTIVELY, THE “OPERATIVE AGREEMENTS”), AND THE OPERATIVE AGREEMENTS EACH ARE THE BINDING AND
AUTHORIZED AGREEMENTS OF LESSEE, ENFORCEABLE IN ALL RESPECTS IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.
Name of Official Title Signature
__________________ _________________ _____________________ __________________ _________________ _____________________ __________________ _________________ _____________________ DATED: ______________________ BY: ______________________________ NAME: _____________________________
TITLE: ______________________________
(THE SIGNER OF THIS CERTIFICATE CANNOT BE LISTED ABOVE AS AUTHORIZED TO EXECUTE THE OPERATIVE AGREEMENTS.)
EXHIBIT C-2B
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE (LEASE) The undersigned, a duly elected or appointed and acting City Clerk of the City of Vallejo (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; and B. THE OFFICIALS ARE DULY AUTHORIZED, ON BEHALF OF LESSEE, TO NEGOTIATE, EXECUTE AND DELIVER THE EQUIPMENT SCHEDULE NO. ___ DATED AS OF _________(THE “EQUIPMENT SCHEDULE”), WHICH INCORPORATES BY REFERENCE THE TERMS AND PROVISIONS OF THE MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT DATED AS OF JUNE 23, 2023 (THE “AGREEMENT”), EACH BY AND BETWEEN LESSEE AND BANC OF AMERICA PUBLIC CAPITAL CORP (“LESSOR”), [THE ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF _________ BY AND AMONG LESSOR, LESSEE ___________ AS ESCROW AGENT,] AND ALL DOCUMENTS RELATED
THERETO AND DELIVERED IN CONNECTION THEREWITH, AND ANY FUTURE MODIFICATION(S) OR AMENDMENTS THEREOF (COLLECTIVELY, THE “OPERATIVE AGREEMENTS”), AND THE OPERATIVE
AGREEMENTS EACH ARE THE BINDING AND AUTHORIZED AGREEMENTS OF LESSEE, ENFORCEABLE IN ALL RESPECTS IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.
Name of Official Title Signature
__________________ _________________ _____________________ __________________ _________________ _____________________ __________________ _________________ _____________________ DATED: ______________________ BY: ______________________________ NAME: _____________________________
TITLE: ______________________________
(THE SIGNER OF THIS CERTIFICATE CANNOT BE LISTED ABOVE AS AUTHORIZED TO EXECUTE THE OPERATIVE AGREEMENTS.)
1 EXHIBIT D
FORM OF OPINION OF COUNSEL TO LESSEE
(to be typed on letterhead of counsel)
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Re: Equipment Schedule No. __, dated ____________, to Master Equipment Lease/Purchase Agreement, dated as of June 23, 2023, by and between Banc of America Public Capital Corp, as Lessor, and the City of Vallejo, as Lessee
Ladies and Gentlemen:
As legal counsel to the City of Vallejo (“Lessee”), I have examined (a) an executed counterpart of that certain Master Equipment Lease/Purchase Agreement, dated as of June 23, 2023 (the “Agreement”) and Exhibits thereto, by and between Banc of America Public Capital Corp, as lessor (“Lessor”), and Lessee; (b) an executed counterpart of Equipment Schedule No. __, dated ____________, by and between Lessor and Lessee, which incorporates by reference the terms and provisions of the Agreement (such Equipment Schedule No. __ together with such incorporated terms and provisions are herein referred to collectively as the “Equipment Schedule”), has attached the Payment Schedule with respect thereto (the “Payment Schedule”) executed by Lessee, and provides for the lease of certain property listed in the Equipment Schedule (the “Equipment”); (c) an executed counterpart of that certain Escrow and Account Control Agreement dated as of June 23, 2023 (the “Escrow Agreement”), by and among Lessor, Lessee and TMI Trust Company, a Florida trust company, as Escrow Agent; (d) an executed counterpart of the ordinances or resolutions of Lessee with respect to authorization of the transaction contemplated by the Agreement, the Equipment Schedule, the Escrow Agreement and documents related thereto; and (e) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Agreement, the Equipment Schedule, including the terms and provisions of the Agreement incorporated therein by reference, the related Payment Schedule, the Escrow Agreement and the documents relating thereto are herein collectively referred to as the “Transaction Documents”.
Based on the foregoing, I am of the following opinions:
1. Lessee is a charter city and municipal corporation, duly organized and existing under the laws of the State, and is a political subdivision of the State within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the “Code”) and the obligations of Lessee under the Lease will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.
2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Transaction Documents.
3. The Transaction Documents have been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their respective terms, except to the extent limited by State and Federal law affecting creditor’s remedies and by bankruptcy, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors’ rights.
4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, procurement and public bidding laws and all other applicable State or Federal laws.
5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment under the Lease, the Escrow Account or other Collateral thereunder. [6. The portion of Rental Payments designated as interest is excluded from Lessor’s gross income for Federal income tax purposes under Section 103 of the Code and is exempt from State of California personal income taxes; and such interest is not a specific item of tax preference for purposes of the Federal alternative minimum tax.1] All capitalized terms herein shall have the same meanings as in the Transaction Documents, unless otherwise provided herein. Lessor and its successors and assigns[, and any counsel rendering an opinion on the tax-exempt status of the Rental Payments, 2] are entitled to rely on this opinion.
Printed Name: ________________________ Signature: ______________________________ Firm: _______________________________ Dated: _________________________________ Address: ____________________________
Telephone No.: _______________________
1 Please use this provision if the opinion of counsel will include a tax opinion. 2 Please use this provision if bond counsel will be providing a separate tax opinion.
EXHIBIT E
FORM OF FINAL ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Re: Equipment Schedule No. ___, dated ______________, to Master Equipment Lease/Purchase Agreement, dated as of June 23, 2023, by and between Banc of America Public Capital Corp, as Lessor, and City of Vallejo, as Lessee
Ladies and Gentlemen:
In accordance with the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”), the undersigned Lessee hereby certifies and represents to, and agrees with, Lessor as follows:
1. All of the Equipment listed in the above-referenced Equipment Schedule (the “Equipment Schedule”) has been delivered, installed and accepted on the date hereof.
2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Equipment Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes.
3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement.
4. Lessee hereby reaffirms that the representations, warranties and covenants contained in the Agreement and incorporated into the Equipment Schedule by reference are true and correct as of the date hereof.
5. (a) No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default exists at the date hereof under any Lease currently in effect; (b) no Material Adverse Change has occurred since the date of the execution and delivery of the Agreement; (c) no Event of Non-appropriation under any Lease currently in effect has occurred or been threatened; and (d) no Lease has been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation.
Capitalized terms used, but not defined, in this Final Acceptance Certificate shall have the same meanings as when such terms are used in the Agreement.
Date: _________________
LESSEE:
______________________________________
By:____________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT F
FORM OF SELF-INSURANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Re: Equipment Schedule No. ______, dated ____________, to Master Equipment Lease/Purchase Agreement, dated as of June 23, 2023 by and between Banc of America Public Capital Corp, as Lessor, and the City of Vallejo, as Lessee
In connection with the above-referenced Equipment Schedule (the “Equipment Schedule”), the City of Vallejo (the “Lessee”) hereby warrants and represents to Banc of America Public Capital Corp the following information. The terms capitalized herein but not defined herein shall have the meanings assigned to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”) incorporated into the Equipment Schedule by reference.
1. The Lessee is self-insured for damage or destruction to the Equipment listed in the Equipment Schedule (herein, the “Equipment”). The dollar amount limit for property damage to the Equipment under such self-insurance program is $_________________. [The Lessee maintains an umbrella insurance policy for claims in excess of Lessee’s self-insurance limits for property damage to the Equipment which policy has a dollar limit for property damage to the Equipment under such policy of $__________________.]
2. The Lessee is self-insured for liability for injury or death of any person or damage or loss of property arising out of or relating to the condition or operation of the Equipment. The dollar limit for such liability claims under the Lessee’s self-insurance program is $_________________. [The Lessee maintains an umbrella insurance policy for claims in excess of Lessee’s self-insurance limits for liability which policy has a dollar limit for liabilities for injury and death to persons as well as damage or loss of property arising out of or relating to the condition or operation of the Equipment in the amount of $_________________. [3]. The Lessee maintains a self-insurance fund. Monies in the self-insurance fund [are/are not] subject to annual appropriation. The total amount maintained in the self-insurance fund to cover Lessee’s self-insurance liabilities is $_________________. [Amounts paid from the Lessee’s self-insurance fund are subject to a dollar per claim of $__________________.] [3]. The Lessee does not maintain a self-insurance fund. The Lessee obtains funds to pay claims for which it has self-insured from the following sources: ______________________.
Amounts payable for claims from such sources are limited as follows: _________________ __________________________________.
4. Attached hereto are copies of certificates of insurance with respect to policies maintained by Lessee.
LESSEE:
CITY OF VALLEJO
By:____________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT G
RESERVED
EXHIBIT H
FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
Dated ____________________
BANC OF AMERICA PUBLIC CAPITAL CORP (“Assignor”) hereby gives notice that, as of _________, 20__, it has assigned and sold to _________________________ (“Assignee”) all of Assignor’s right, title and interest in, to and under Equipment Schedule No. ______, dated ____________________ (including the Payment Schedule attached thereto, the “Equipment Schedule”), which incorporates by reference the terms and provisions of that certain Master Equipment Lease/Purchase Agreement dated as of ____________ (the “Agreement”), each by and between Assignor and ____________________ (“Lessee”), together with all exhibits, schedules, riders, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith, the Rental Payments and other amounts due under the Lease (as such term is hereinafter defined), all of Assignor’s right, title and interest in the Equipment listed in the Equipment Schedule and all of Assignor’s right, title and interest in, to and under the Escrow and Account Control Agreement dated as of ____________, 20__ (the “Escrow Agreement”) by and among Lessee, Assignor and ______________________, as Escrow Agent, together with the Escrow Account related thereto (collectively, the “Assigned Property”).
For purposes of this Notice and Acknowledgment of Assignment (the “Acknowledgment”), “Lease” means collectively the Equipment Schedule and the terms and provisions of the Agreement incorporated therein by reference, together with all exhibits, schedules, riders, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith. The term “Lease” specifically excludes all other Equipment Schedules entered into under the Agreement and Rental Payments other than with respect to the Equipment Schedule. Each capitalized term used but not defined herein has the meaning set forth in the Agreement.
1. Lessee hereby acknowledges the effect of the assignment of the Assigned Property and absolutely and unconditionally agrees to deliver to Assignee all Rental Payments and other amounts coming due under the Lease in accordance with the terms thereof on and after the date of this Acknowledgment.
2. Lessee hereby agrees that: (i) Assignee shall have all the rights of Lessor under the Lease and all related documents, including, but not limited to, the rights to issue or receive all notices and reports, to give all consents or agreements to modifications thereto, to receive title to the Equipment in accordance with the terms of the Lease, to declare a default and to exercise all rights and remedies thereunder in connection with the occurrence of an Event of Non-appropriation or an Event of Default; and (ii) except as provided in Section 3.03 of the Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in the Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense.
3. Lessee agrees that, as of the date of this Notice and Acknowledgment of Assignment (this “Acknowledgement”), the following information about the Lease is true, accurate and complete:
Number of Rental Payments Remaining ________________
Amount of Each Rental Payment $_______________
Total Amount of Rental Payments
Remaining
$_______________
Frequency of Rental Payments ________________
Next Rental Payment Due ________________
Funds Remaining in Escrow Account $_______________
4. The Lease remains in full force and effect, has not been amended, no Event of Default (or event which with the passage of time or the giving of notice or both would constitute a default) has occurred thereunder and no Event of Non-appropriation has occurred or is threatened with respect thereto.
5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of the Agreement and confirms that the assignment to Assignee has been made in accordance with the provisions of that Section.
6. Any inquiries of Lessee related to the Lease and any requests for disbursements from the Escrow Account, if applicable, and all Rental Payments and other amounts coming due pursuant to the Lease on and after the date of this Acknowledgment should be remitted to Assignee at the following address (or such other address as provided to Lessee in writing from time to time by Assignee):
______________________________
______________________________
______________________________
ACKNOWLEDGED AND AGREED:
LESSEE: City of Vallejo
[FOR EXHIBIT PURPOSES ONLY]
By:_________________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR: BANC OF AMERICA PUBLIC CAPITAL CORP
[FOR EXHIBIT PURPOSES ONLY]
By:_________________________________
Name: ___________________________
Title: ____________________________
EXHIBIT I
ESCROW AND ACCOUNT CONTROL AGREEMENT
Jones Hall Draft of May 30, 2023
Approved as to form:
By: for
Veronica Nebb, City Attorney
ESCROW AND ACCOUNT CONTROL AGREEMENT
This ESCROW AND ACCOUNT CONTROL AGREEMENT (this “Agreement”), dated as of June 23, 2023 by and among Banc of America Public Capital Corp, a Kansas corporation (together with its successors and assigns, hereinafter referred to as “Lessor”), the City of Vallejo, a municipal corporation and charter city existing under the laws of the State of California (hereinafter referred to as “Lessee”) and TMI Trust Company, a Florida trust company (hereinafter referred to as “Escrow Agent”).
Reference is made to that certain Equipment Schedule No. 1, dated June 23, 2023 to Master Equipment Lease/Purchase Agreement dated as of June 23, 2023, between Lessor and Lessee (hereinafter referred to as the “Lease”), covering the acquisition and lease of certain Equipment described therein (the “Equipment”). It is a requirement of the Lease that the Acquisition Amount in the amount of $5,000,000 be deposited into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Creation of Escrow Account.
(a) There is hereby created an escrow fund to be known as the “City of Vallejo 2023 Escrow Account” (the “Escrow Account”) to be held by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof.
(b) Lessee may, from time to time, provide written instructions for Escrow Agent to use any available cash in the Escrow Account to purchase any money market fund or liquid deposit investment vehicle that Escrow Agent from time to time makes available to the parties hereto. Such written instructions shall be provided via delivery to Escrow Agent of a signed and completed Escrow Account Investment Selection Form (such form available from Escrow Agent upon request). All funds invested by Escrow Agent at the direction of Lessee in such short- term investments (as more particularly described in Escrow Agent’s Escrow Account Investment Selection Form) shall be deemed to be part of the Escrow Account and subject to all the terms and conditions of this Agreement. If any cash is received for the Escrow Account after the cut-off time for the designated short-term investment vehicle, the Escrow Agent shall hold such cash uninvested until the next Business Day. “Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in San Francisco, California or New York, New York. In the absence of written instructions from Lessee (on Escrow Agent’s Escrow Account Investment Selection Form) designating a short-term investment of cash in the Escrow 2 Account, cash in the Escrow Account shall remain uninvested and it shall not be collateralized.
Escrow Agent shall have no obligation to pay interest on cash in respect of any period during which it remains uninvested. Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing investment.
Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Escrow Account shall become part of the Escrow Account, and gains and losses on the investment of the moneys on deposit in the Escrow Account shall be borne by the Lessee. The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Account. The Escrow Agent shall not be responsible for any market decline in the value of the Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take any action with respect to the Escrow Account, except upon specific written instructions stated herein. For purposes of this Agreement, “Qualified Investments” means any investments which meet the requirements of California Government Code Sections 53600 et seq.
(c) Unless the Escrow Account is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of written instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Escrow Account are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition Period or (ii) the date on which Lessee executes an Acceptance Certificate shall be applied as provided in Section 4 hereof. (d) The Escrow Account shall be terminated at the earliest of (i) the final distribution of amounts in the Escrow Account, (ii) the date on which Lessee executes a Final Acceptance Certificate or (iii) written notice given by Lessor of the occurrence of an Event of Default under the Lease or termination of the Lease due to an Event of Non-appropriation.
Notwithstanding the foregoing, this Agreement shall not terminate nor shall the Escrow Account be closed until all funds deposited hereunder have been disbursed. (e) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Escrow Agent, and for the disposition of the same in accordance herewith. Notwithstanding and without limiting the generality of the foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively, shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee) and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with 3 and rely upon any notices, instructions or other communications believed by it to have been sent or given by the parties or by a person or persons authorized by the parties. The Escrow Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, to the extent permitted by law, Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) incurred or sustained by the Escrow Agent as a result of or in connection with the Escrow Agent’s reliance upon and compliance with instructions or directions given by written or electronic transmission given by each, respectively, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, it being understood that forbearance on the part of the Escrow Agent to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person shall not be deemed to constitute gross negligence or willful misconduct.
In the event conflicting instructions as to the disposition of all or any portion of the Escrow Account are at any time given by Lessor and Lessee, the Escrow Agent shall abide by the instructions or entitlement orders given by Lessor without consent of the Lessee. (f) Unless the Escrow Agent is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Escrow Agent and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expenses, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith, does to the extent permitted by law, indemnify the Escrow Agent against any and all expenses, including reasonable attorneys’ fees and the cost of defending any action, suit or proceeding or resisting any claim. (g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate civil action including an interpleader action to resolve the disagreement. The Escrow Agent shall be reimbursed by Lessee for all costs, including reasonable attorneys’ fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct. (i) Lessee shall reimburse the Escrow Agent for all reasonable costs and expenses, including those of the Escrow Agent’s attorneys, agents and employees incurred for non-routine administration of the Escrow Account and the performance of the Escrow Agent’s powers and duties hereunder in connection with any Event of Default under the Lease, any termination of the Lease due to an Event of Non-appropriation or in connection with any dispute between Lessor and Lessee concerning the Escrow Account. 4 (j) The Escrow Agent or any successor may at any time resign by giving mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of resignation (the “Effective Date”), which shall be a date not less than 60 days after such notice is delivered to an express carrier, charges prepaid, unless an earlier resignation date and the appointment of a successor shall have been approved by the Lessee and Lessor. After the Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow Account in accordance with the terms of this Agreement, pending receipt of written instructions from Lessor regarding further disposition of the Escrow Account.
(k) The Escrow Agent shall have no responsibilities, obligations or duties other than those expressly set forth in this Agreement and no implied duties, responsibilities or obligations shall be read into this Agreement.
2. Acquisition of Property.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Escrow Account. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. Escrow Agent shall have no duty to monitor or enforce Lessee’s compliance with the foregoing covenant. (b) Authorized Escrow Account Disbursements. It is agreed as between Lessee and Lessor that disbursements from the Escrow Account shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Escrow Account shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. All disbursements shall be made by wire transfer. The Escrow Agent is authorized to obtain and rely on confirmation of such Disbursement Request and payment instructions by telephone call-back to the person or persons designated for verifying such requests on Exhibit A-2 (such person verifying the request shall be different than the person initiating the request). The Lessor and Lessee hereby confirm that any call-back performed by Escrow Agent to verify a disbursement instruction pursuant to a Disbursement Request submitted pursuant to this Section 2(c) before release, shall be made to Lessor only and Escrow Agent shall have no obligation to call-back Lessee.
Each such Disbursement Request shall be signed by an authorized representative of Lessee (an “Authorized Representative”) and by Lessor, and shall be subject to the following conditions, which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition executed by Lessee and Lessor is delivered to it:
5 1. Delivery to Lessor of an executed Disbursement Request in the form attached hereto as Schedule 1; and
2. Delivery to Lessor of copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale or other evidence of title transfer (if title to such Equipment has passed to Lessee) therefor as required by Section 3.04 of the Lease and any additional documentation reasonably requested by Lessor.
Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1 and delivery of the executed form to Escrow Agent confirms that all of the requirements and conditions with respect to disbursements set forth in this Section 2 have been satisfied.
3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Escrow Account.
4. Excess Proceeds in Escrow Account. Upon receipt of written instructions from Lessor including a representation that one of the following conditions has been satisfied (upon which representation Escrow Agent shall conclusively rely), any funds remaining in the Escrow Account on or after the earlier of (a) the expiration of the Acquisition Period or (b) the date on which Lessee executes an Acceptance Certificate, as well as a Disbursement Request to effect the final disbursement to pay (or reimburse) Equipment Costs from the Escrow Account, if such a final disbursement is needed, or (c) upon the termination of the Escrow Account as otherwise provided herein, shall be distributed by the Escrow Agent to the Lessor in order for the Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with Section 4.07 of the Lease.
5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Escrow Account, and all proceeds thereof, and all investments made with any amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to investments as set forth in this Agreement, such investments shall be made in the name of Escrow Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest.
6. Control of Escrow Account. In order to perfect Lessor’s security interest by means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Escrow Account, (iii) all of Lessee’s rights in respect of the Escrow Account, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the “Collateral”), Lessor, Lessee and Escrow Agent further agree as follows:
6 (a) All terms used in this Section 6 which are defined in the Commercial Code of the State of California (“Commercial Code”) but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement.
(b) Escrow Agent will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee. (c) Provided that account investments shall be held in the name of the Escrow Agent, Escrow Agent hereby represents and warrants (i) that the records of Escrow Agent show that Lessee is the sole owner of the Collateral, (ii) that Escrow Agent has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (iii) that Escrow Agent is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Escrow Agent is obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Escrow Agent will not enter into any agreement by which Escrow Agent agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Escrow Agent shall promptly notify Lessor if any person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or adverse claim against any portion or all of the Collateral. (e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Lessee may effect sales, trades, transfers and exchanges of Collateral within the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any Collateral from the Escrow Account. Escrow Agent acknowledges that Lessor reserves the right, by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor’s claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter.
(f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all instructions and entitlement orders delivered by Lessor to Escrow Agent. (g) Escrow Agent will not attempt to assert control and does not claim and will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. 7 (h) Escrow Agent and Lessee hereby agree that any property held in the Escrow Account shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Escrow Agent may be a party. (i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or sent to Lessee with respect to the Escrow Account.
7. Information Required Under USA PATRIOT ACT. The parties acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account.
The parties to this Agreement agree that they will provide to the Escrow Agent such information as it may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This Agreement may not be amended except in writing signed by all parties hereto. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below.
Notices and other communications hereunder may be delivered or furnished by electronic mail provided that any formal notice be attached to an email message in PDF format and provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient. For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose hereunder or admissible as evidence of receipt.
It is understood and agreed that for no purpose shall notice to TMI Trust Company in its capacity hereunder constitute notice to Banc of America Public Capital Corp in its capacity hereunder.
If to Lessor:
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
8 M/C MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Fax: (443) 541-3057
If to Lessee: City of Vallejo
555 Santa Clara Street
Vallejo, CA 94590
Attn: Finance Director
Email: [email protected]
Telephone: (707) 648-5433
If to Escrow Agent: TMI Trust Company
5901 Peachtree Dunwoody Road, Suite C495
Atlanta, GA 30328
Telephone: (678) 221-5943
E-Mail: [email protected]
9. Lessee and Lessor understand and agree that they are required to provide the Escrow Agent with a properly completed and signed Tax Certification (as defined below) and that the Escrow Agent may not perform its duties hereunder without having been provided with such Tax Certification. As used herein “Tax Certification” shall mean an IRS form W-9 or W-8 as described above. The Escrow Agent will comply with any U.S. tax withholding or backup withholding and reporting requirements that are required by law. With respect to earnings allocable to a foreign person, the Escrow Agent will withhold U.S. tax as required by law and report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable law.
With respect to earnings allocable to a United States person, the Escrow Agent will report such income, if required, on IRS Form 1099 or any other form required by law. The IRS Forms 1099 and/or 1042-S shall show the Escrow Agent as payor and [Lessee] as payee. Escrow Agent shall recognize [Lessee] as the designated party for regulatory reporting purposes.
Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Code Section 6041, and the Treasury regulations thereunder, with respect to amounts of imputed interest income, as determined pursuant to Code Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.
10. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the parties hereto consent to jurisdiction in the State of California and venue in any state or federal court located in the State of California.
11. Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent without 9 the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding. Any bank or corporation into which the Lessor may be merged or with which it may be consolidated, or any bank or corporation to whom the Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.
12. This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.
13. No party hereto shall assign its rights hereunder until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.
14. Escrow Agent will treat information related to this Agreement as confidential but, unless prohibited by law, Lessee and Lessor authorize the transfer or disclosure of any information relating to this Agreement to and between the subsidiaries, officers, affiliates and other representatives and advisors of Escrow Agent and third parties selected by any of them, wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may transfer or disclose any such information as required by any law, court, regulator or legal process.
Lessor will treat information related to this Agreement as confidential but, unless prohibited by law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to this Agreement to and between the subsidiaries, officers, affiliates, other representatives and advisors of Lessor and debt and equity sources and third parties selected by any of them, and to their prospective assignees wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt and equity source or third party or prospective assignee may transfer or disclose any such information as required by any law, court, regulator or legal process.
Lessee will treat the terms of this Agreement as confidential except on a “need to know” basis to persons within or outside Lessee’s organization (including affiliates of such party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld.
Section 15.This Agreement may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of this Agreement and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes. 10 Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [Remainder of page intentionally left blank; signature page follows] [Signature page to Escrow Agreement – Schedule of Property No. 4] IN WITNESS WHEREOF, the parties have executed this Escrow and Account Control Agreement as of the date first above written.
BANC OF AMERICA PUBLIC CAPITAL CORPCITY OF VALLEJO
as Lessor as Lessee
By: By:
Name: Name: ______________________________
Title: Title: ______________________________
TMI TRUST COMPANY
as Escrow Agent
By:
Name:
Title:
Schedule 1-1
SCHEDULE 1
to the Escrow and Account Control Agreement
FORM OF DISBURSEMENT REQUEST
Re: Equipment Schedule No. ___ dated ________, 20__ to Master Equipment Lease/Purchase Agreement dated as of June 23, 2023 by and between Banc of America Public Capital Corp, as Lessor, and the City of Vallejo, as Lessee (the “Lease”) (Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease.)
In accordance with the terms of the Escrow and Account Control Agreement, dated as of June 23, 2023 (the “Escrow and Account Control Agreement”) by and among Banc of America Public Capital Corp (“Lessor”), the City of Vallejo (“Lessee”) and TMI Trust Company, as escrow agent (the “Escrow Agent”), the undersigned hereby requests the Escrow Agent pay the following persons the following amounts from the Escrow Account created under the Escrow and Account Control Agreement for the following purposes:
Disbursement Amounts:
Payee’s Name and Address Invoice Number Dollar Amount Purpose <Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required.>
<invoice list OR “see
attached” with a
spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required.>
<invoice list OR “see
attached” with a
spreadsheet>
<invoice amount> <general description of
equipment; ex “police cruiser”>
Lessee hereby represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
Schedule 1-2
(i) (a) Each obligation specified in the table herein titled as “Disbursement Amounts” has been incurred by Lessee in the stated amount, (b) the same is a proper charge against the Escrow Account for costs relating to the Equipment identified in the Lease, and (c) has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof).
(ii) Each item of Equipment relating to an obligation specified in the table herein titled as “Disbursement Amounts” has been delivered, installed (if applicable) and accepted by Lessee. Attached hereto is a copy of the invoice with respect to such obligation. (iii) The undersigned, as Authorized Representative, has no notice of any vendor’s, mechanic’s or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made. (iv) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent such amounts represent a reimbursement to Lessee).
(v) The Equipment is insured in accordance with the Lease. (vi) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to the Lease. (vii) The disbursement shall occur during the Acquisition Period. (viii) The representations, warranties and covenants of Lessee set forth in the Lease are true and correct as of the date hereof.
(ix) No Material Adverse Change has occurred since the date of the execution and delivery of the Lease.
(x)The information in this Disbursement Request regarding each Payee, including their respective name, address and wiring instructions, (collectively, the “Payee Information”) is true and correct, such Payee Information has been verified and confirmed by Lessee and the Lessor can rely on Lessee’s verification and confirmation of the accuracy of such Payee Information.
Lessee hereby acknowledges and agrees that any call-back performed by Lessor to verify the disbursement instructions pursuant to this Disbursement Request shall be made to Lessee only and Lessor shall have no obligation to call-back any Payee listed above. [Remainder of page intentionally left blank]
Schedule 1-3
Dated: CITY OF VALLEJO
By:
Name:
Title:
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized
BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:
Name:
Title:
A-1-1
[AN “EXHIBIT A-1” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT] EXHIBIT A-1
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Vallejo (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; and B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver Schedule of Property No. ___ dated June 23, 2023 (the “Schedule”) to that certain Master Equipment Lease/Purchase Agreement, dated as of June 23, 2023 (the “Agreement”) and separate Schedules relating thereto from time to time as provided in the Agreement (collectively, the “Schedules”), each by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of June 23, 2023, by and among Lessor, Lessee and TMI Trust Company as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements are binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.
Name of Official Title Signature
Terrance Davis Assistant City Manager _____________________ Rekha Nayar Finance Director _____________________
Florita Cruz Assistant Director, Finance _____________________ Dated: ________________ By: _____________________________ Name: _____________________________
Title: _____________________________
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.) A-2-1
[AN “EXHIBIT A-2” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT] EXHIBIT A-2
TO BE PROVIDED
ACTION ITEM 9.E.
DATE: June 13, 2023
TO: Mayor and Members of the City Council
FROM: Mike Malone, City Manager
SUBJECT: HOLD A PUBLIC HEARING AND ADOPT RESOLUTIONS RELATING TO THE ADOPTION OF THE FY 2023-24 BUDGET AND RELATED ACTIONS
RECOMMENDATION
Hold a public hearing and take public input for the FY 2023-24 Budget, and adopt seven Resolutions as follows:
1. Resolution Adopting the FY 2023-24 Budget for the City of Vallejo, as set forth in Attachment B.
2. Resolution Adopting the FY 2023-24 Positions and Salaries as set forth in Attachment C.
3. Resolution Approving the FY 2023-24 Blue Rock Springs Golf Course Fees and Charges Schedule, as set forth in Attachment D.
4. Resolution Approving the FY 2023-24 Marina Fees and Charges Schedule, as set forth in Attachment E.
5. Resolution Authorizing the City Manager to Purchase Vehicles Scheduled and Funded for Replacement in FY 2023-24, as set forth in Attachment F.
6. Resolution Authorizing the City Manager to execute purchase orders for the vendors and amounts for FY 2023-24, as set forth in Attachment G.
7. Resolution Authorizing the amendment to the amortization schedule of Fiber Enterprise Loan, as set forth in Attachment H.
REASONS FOR RECOMMENDATION
In accordance with the City of Vallejo Charter Section 701, the City Manager is required to annually submit to the City Council the proposed expenditure and revenue estimates for the following fiscal year, at least 45 days prior to the beginning of the new fiscal year. On May 15, 2023, the Proposed FY 2023-24 budget was delivered to the City Council and posted on the City website. On June 6th staff had a budget workshop for the council and the public. Charter Section 702 requires a public hearing of the proposed budget. Adopting the budget resolution at this time will allow the City to operate and provide services after June 30, 2023, based on the most current projection of revenues and expenditures.
Vallejo Municipal Code section 2.60.340 requires the City Council to adopt an official salary plan through adoption of the annual positions and salaries ordinance or resolution which shall continue or abolish positions which existed on the last day of the preceding fiscal year; create new positions and prescribe the number of regular positions authorized for each department, division, branch, section and other unit of the City’s organization.
The City of Vallejo owns the properties commonly known as the Blue Rock Springs Golf Course and Vallejo Municipal Marina. Touchstone Golf, LLC, manages the golf course while F3 Marina manages the marina for the City. Annually, the City includes proposed golf and marina berth fee changes with the adoption of the Proposed Budget.
In order to expedite the process of replacing aging, damaged, and/or obsolete vehicles and equipment that are
Date: June 13, 2023
Subject: HOLD A PUBLIC HEARING AND ADOPT RESOLUTIONS RELATING TO THE ADOPTION OF THE FY 2023-24 BUDGET AND RELATED ACTIONS