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Home My WebLink About2016 09 21u IOTICE AND CALL OF A SPECIAL MEETING OF THE CITY COUNCIL TO THE MEMBERS OF THE AFOREMENTIONED AGENCIES AND THE CITY CLERK OF THE CITY OF BALDWIN PARK NOTICE IS HEREBY GIVEN that a Special Meeting is hereby called to be held on WEDNESDAY, SEPTEMBER 21, 2016 at 6:00 PM. at City Hall — V Floor Conference Room 307, 14403 East Pacific Avenue, Baldwin Park, CA 91706. Said Special Meeting shall be for the purpose of conducting business in accordance with the attached Agenda. NO OTHER BUSINESS WILL BE DISCUSSED Dated: September 20, 2016 Manuel Lozano Mayor AFFIDAVIT OF POSTING I, Alejandra Avila, City Clerk of the City of Baldwin Park, certify that I caused the aforementioned Notice and Call of a Special Meeting to be delivered via email (hard copy to follow) to each Member and e-mail to the San Gabriel Valley Tribune, and that I posted said notice as required by law on September 20, 2016. �P Alejandra Avila City Clerk AMENDED AGENDA BALDWIN PARK CITY COUNCIL SPECIAL MEETING (Please Hare me and S PTEMBER 21,201 M--- cation 6:00 PM--'" CITY HALL — 3rd Floor, Conference Room 307 14403 EAST PACIFIC AVENUE BALDWIN PARK, CA 91706 (626) 960-4011 60T"ANNIVERSARY Manuel Lozano Monica Garcia Cruz Baca Ricardo Pacheco Susan Rubio Mayor - Mayor Pro Tem - Councilmember - Councilmember Councilmember PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING IS IN PROCESS POR FAVOR DE APAGAR SUS TELEFONOS CELULARES Y BEEPERS DURANTE LA JUNTA �...PUBLIC .... COMMENTS The public is encouraged to address the City Council or any of its Agencies listed on this agenda, but only on any matter posted on this agenda. If you wish to address the City Council or any of its Agencies, you may do so during the PUBLIC COMMUNICATIONS period noted on the agenda. Each person is allowed three (3) minutes speaking time. A Spanish-speaking intorpreter is available for your convenience. COMENTARIOS DEL PUBLICO Se invita al publico a dirigirse al Concilio o cualquiera otra de sus Agencias nombradas en esta agenda, para hablar solamente sobre asunto publicado an esta agenda. Si usted desea la oportunidad de dirigirse al Concilio o alguna de sus Agencias, podra hacerlo durante el periodo de Comentarios del Publico (Public Communications) anunciado en la agenda. A cada persona se le permite hablar por Cres (3) minutos. Ha un ml6r su conveniencia. CITY COUNCIL SPECIAL MEETING — 6:00 P.M. CALL TO ORDER ROLL CALL: Council Members: Cruz Baca, Ricardo Pacheco, Susan Rubio, Mayor Pro Tem Monica Garcia and Mayor Manuel Lozano PUBLIC COMMUNICATIONS Three (3) minute speaking time limit Tres (3) minutos sera el limite para hablar THIS IS THE TIME SET ASIDE TO ADDRESS THE CITY COUNCIL PLEASE NOTIFY THE CITY CLERK IF YOU REQUIRE THE SERVICES OF AN INTERPRETER No action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The legislative body or its staff may: 1) Briefly respond to statements made or questions asked by persons; or 2) Direct staff to investigate and/or schedule matters for consideration at a future meeting. (Government Code §54954.21 ESTE ES EL PERIODO DESIGNADO PARA DIRIGIRSE AL CONCILIO FAVOR DE NOTIFICAR A LA SECRETARIA SI REQUIERE LOS SERVICIOS DEL INTERPRETE No se podra tomar acci6n en algun asunto a menos que sea incluido en la agenda, o a menos que exista alguna emergencia o circunstancia especial. EI cuerpo legislativo y su personal podran: 1) Responder brevemente a declaraci6nes o preguntas hechas por personas; o 2) Dirigir personal a investigar y/o fijar asuntos para tomar en consideraci6n en juntas proximas. (Codigo de Gobierno §54954.21 OPEN SESSION/'STUDY SESSION 1. Presentation by Interim Director of Public Works, Sam Gutierrez, regarding bus shelters and bus graphics. RECESS TO CLOSED SESSION 2. PUBLIC EMPLOYEE DISCIPLINE / DISMISSAL / RELEASE (GC §54957) Title: Chief of Police 3. PUBLIC EMPLOYEE APPOINTMENT: Title: Human Resources Manager 4. REAL PROPERTY NEGOTIATIONS Pursuant to Government Code 54956.8: A. Property: 14434 East Pacific Avenue — APN #8553-023-007 Agency Negotiators: Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney Negotiating Parties: Amelia Perez and Mario Zavala, seller's agent Under Negotiation: Price and terms of payment B. Property: 4024 Maine Avenue – APN #8554-001-910; 14408 Ramona Blvd – APN #8554-001-012; and 14412 Ramona Blvd – APN #8554-001-011 Agency Negotiators: Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney Negotiating Parties: City of Baldwin Park; Ramon Arias; and Miguel Rascon Under Negotiation: Price and terms of payment 5. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION Pursuant to paragraph (1) of subdivision (d) of Government Code Section 54956.9: Case Name: CASAS v BPCCC, Case No. BS147794 6. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Government Code Section 54956.9: Potential Case(s): Two (2) RECONVENE IN OPEN SESSION REPORT FROM CLOSED SESSION ADJOURNMENT CERTIFICATION I, Alejandra Avila, City Clerk of the City of Baldwin Park hereby that, certify under penalty of perjury under the laws of the State of California, the foregoing agenda was posted on the City Hall bulletin board not less than 24 hours prior to the meeting on September 20, 2016. ,o Alejandra Avila City Clerk PLEASE NOTE: Copies of staff reports and supporting documentation pertaining to each item on this agenda are available for public viewing and inspection at City Hall, 2nd Floor Lobby Area or at the Los Angeles County Public Library in the City of Baldwin Park. For further information regarding agenda items, please contact the office of the City Clerk at (626) 960- 4011 ext. 466 or e-mail Ga,avila aaldwln ag ark corn In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Public Works Department or Risk Management at (626) 960-4011. Notification 48 hours prior to the meeting will enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 34.102.104 ADA TITLE ll) AGENDA N X KNN CIL I F .'" • SEPTEMBER 21, 2016 7:00 PM COUNCIL CHAMBER 14403 E. Pacific Avenue Baldwin Park, CA 91706 (626) 960-4011 6()THANNIVERSARY Manuel Lozano - Mayor Monica Garcia - Mayor Pro Tem Cruz Baca - Council Member Ricardo Pacheco - Council Member Susan Rubio - Council Member PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING IS IN PROCESS FOR FAVOR DE APAGAR SUS TELEFONOS CELULARES Y BEEPERS DURANTE LA JUNTA PUBLIC COMMENTS The public is encouraged to address the City Council or any of its Agencies listed on this agenda on any matter posted on the agenda or on any other matter within its jurisdiction. If you wish to address the City Council or any of its Agencies, you may do so during the PUBLIC COMMUNICATIONS period noted on the agenda. Each person is allowed three (3) minutes speaking time. A Spanish speaking interpreter is available for your convenience. COMENTARIOS DEL PUBLICO Se invita al publico a dirigirse al Concilio o cualquiera otra de sus Agencias nombradas en esta agenda, para hablar sobre cualquier asunto publicado en la agenda o cualquier tema que est6 bajo su jurisdicci6n. Si usted desea la oportunidad de dirigirse al Concilio o alguna de sus Agencias, podrb hacerlo durante el perfodo de Comentarios del Publico (Public Communications) anunciado en la agenda. A cads persona se le permite hablar por tres (3) minutos. Hay un int6rprete para su conveniencia. isf;f=1� CITY COUNCIL REGULAR MEETING — 7:00 PM CALL TO ORDER INVOCATION PLEDGE OF ALLEGIANCE ROLL CALL Council Members: Cruz Baca, Ricardo Pacheco, Susan Rubio, Mayor Pro Tem Monica Garcia and Mayor Manuel Lozano REPORT FROM CLOSED SESSION ANNOUNCEMENTS This is to announce, as required by Government Code section 54952.3, members of the City Council are also members of the Board of Directors of the Housing Authority and Finance Authority, which are concurrently convening with the City Council this evening and each Council Member is paid an additional stipend of $30 for attending the Housing Authority meeting and $50 for attending the Finance Authority meeting. PROCLAMATIONS COMMENDATIONS & P'RE'SENTATIONS • Employee Recognition — Retirement of long-time employee Gus Martinez, Public Works Dept. • Farewell Certificate Recognition — Public Works Department Assistant Jesus Saenz • Presentation on Medical Marijuana businesses and related issues. • Presentation on Measure M by Lilian De Loza-Gutierrez, LA Metro. PUBLIC COMMUNICATIONS Three (3) minute speaking time limit Tres (3) minutos sera el limite para hablar THIS IS THE TIME SET ASIDE TO ADDRESS THE CITY COUNCIL PLEASE NOTIFY THE CITY CLERK IF YOU REQUIRE THE SERVICES OF AN INTERPRETER No action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The legislative body or its staff may: 1) Briefly respond to statements made or questions asked by persons; or 2) Direct staff to investigate and/or schedule matters for consideration at a future meeting. (Government Code §54954.21 ESTE ES EL PERIODO DESIGNADO PARA DIRIGIRSE AL CONCILIO FAVOR DE NOTIFICAR A LA SECRETARIA SI REQUIERE LOS SERVICIOS DEL INTERPRETE No se podra tome accidn en algun asunto a menos que sea incluido en la agenda, o a menos que exista alguna emergencia o circunstancia especial. EI cuerpo legislativo y su personal podran: 1) Responder brevemente a declaracidnes o preguntas hechas por personas; o 2) Dirigir personal a investigar y/o filar asuntos para tomar en consideracion en juntas proximas. [Codigo de Gobiemo §54954.2] City Council Agenda Page 2 CONSENT CALENDAR All items listed are considered to be routine business by the City Council and will be approved with one motion. There will be no separate discussion of these items unless a City Councilmember so requests, in which case, the item will be removed from the general order of business and considered in its normal sequence on the agenda. 1. WARRANTS AND DEMANDS Staff recommends that Council ratify the attached Warrants and Demands Register. 2,. REJECTION OF CLAIMS Staff recommends that Council reject the following claim(s) and direct staff to send appropriate notice of rejection to claimant(s): Alvarez, Benito Claimant alleges The police department towed and impounded his vehicle; while the vehicle was in storage the claimant alleges money ($121.00) was taken from his ash tray. 3. SECOND READING AND ADOPTION OF NOISE ORDINANCE NO. 1388 WITH RESPECT TO TIME OF ENFORCEMENT Staff recommends that Council conduct a second reading, by title only and waive further reading, and following such reading, approve and adopt Ordinance 1388, entitled "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTIONS 130.31, 130.34, AND 139.37 OF CHAPTER 130: GENERAL OFFENSES, OF THE TITLE XIII OF THE BALDWIN PARK MUNICIPAL CODE WITH RESPECT TO NOISE REGULATIONS." 4. AMENDMENT OF FIREWORKS ORDINANCE NO. 1390 IN ORDER TO REDUCE THE NUMBER OF SALES DAYS AND INCREASE THE FINE FOR VIOLATION Staff recommends that the City Council waives the First Reading and adopt by Title only Ordinance No. 1390, entitled "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTION 93.10 AND ADDING SECTION 93.13 OF CHAPTER 93: FIRE PREVENTION; FIREWORKS, OF TITLE IX, GENERAL REGULATIONS, OF THE BALDWIN PARK MUNICIPAL CODE" 5. REVIEW OF THE COST OF CITY FEE SERVICES BASED ON A STUDY PREPARED BY REVENUE & COST SPECIALISTS, LLC (RCS) Staff recommends the Council approve the proposed City Schedule of Fees and the corresponding Resolution No. 2016-147, entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK APPROVING THE ADOPTION OF A NEW SCHEDULE OF SERVICE FEES FOR ISSUANCE, PROCESSING AND FILING OF VARIOUS CITY SERVICES AND PERMITS IN THE CITY." 6. ADOPTION OF RESOLUTION NO. 2016-148 APPROVAL TO APPLY FOR GRANT FUNDS FROM THE CALIFORNIA URBAN RIVERS GRANT PROGRAM UNDER THE WATER QUALITY, SUPPLY AND INFRASTRUCTURE IMPROVEMENT ACT OF 2014 (PROPOSITION 1) FOR WALNUT CREEK NATURE PARK Staff recommends the City Council to: City Council Agenda Page 3 1) Adopt Resolution No. 2016-148 entitled "Resolution of the City Council of Baldwin Park approving the application for grand funds for the California urban rivers grant program under the quality, supply, and infrastructure improvement act of 2014 (Proposition 1)" and 2) Authorize the Director of Recreation and Community Services and the Interim Director of Public Works to execute any further documents. 7. ACCEPT PLANS AND SPECIFICATIONS, AND AUTHORIZE PUBLISHING A NOTICE INVITING BIDS FOR CITY PROJECT NO. 2016-0165 — CENTER MEDIAN LANDSCAPE IMPROVEMENTS PROJECT It is recommended that the City Council approve the plans and specifications for the Median Landscape Improvements Project (City Project No. 2016-0165) and authorize the Notice Inviting Bids. 8. AMENDMENT TO WEST COAST ARBORIST CONTRACT FOR CITYWIDE TREE TRIMMING SERVICES It is recommended that the City Council: 1) Approve the amendment to the existing contract with West Coast Arborist, Inc. (WCA) for Citywide Tree Trimming Services, increasing rates by 31% over the next three years including two optional one-year renewal extensions with no rate increase; and 2) Authorize the Mayor to execute the attached Amendment to the Agreement. 9. ADOPTION OF SALARY RESOLUTION NO. 2016-150 TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE OF ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES It is recommended that the City Council approve resolution 2016-150, a resolution of the City Council of the City of Baldwin Park, to create and adopt the comprehensive Pay Schedule. 10. ADOPT RESOLUTION TO IMPLEMENT A POST EMPLOYMENT HEALTH PLAN FOR PUBLIC EMPLOYEES (PEHP) FOR THE CITY OF BALDWIN PARK It is recommended that the City Council approve resolution 2016-149 adopting a Post Employment Health Plan and direct the City to move forward with the process of implementing the plan with the Plan Sponsor, Nationwide Retirement Solutions, Inc. 11. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK SUPPORTING THE LOS ANGELES COUNTY "SAFE, CLEAN NEIGHBORHOOD PARKS AND OPEN SPACE FOR ALL MEASURE" Staff recommends the City Council: 1) Waive further reading, read by title only and adopt Resolution No. 2016-151 entitled, "RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK SUPPORTING THE LOS ANGELES COUNTY "SAFE, CLEAN NEIGHBORHOOD PARKS AND OPEN SPACE FOR ALL MEASURE" and City Council Agenda Page 4 2) Authorize the Mayor to execute resolution, letters of support as needed and appropriate to demonstrate the City Council's support of the Los Angeles County Safe, Clean Neighborhood Parks and Open Space for all Measure on behalf of the City Council. 12. 5 -YEAR CAPITAL IMPROVEMENT PROJECT (CIP) BUDGET FOR FISCAL YEAR 2016-2021 Staff evaluated the 5 -year CIP program and found the projects as necessary expenditures to maintain infrastructure and improve the City's delivery of quality services to its residents and customers. Staff recommends that the City Council approve the 5 -year CIP program and additional appropriations for FY 2016-17. 13. PURCHASE AGREEMENT AND LOAN DOCUMENTS BETWEEN THE CITY OF BALDWIN PARK, RIO HONDO COMMUNITY DEVELOPMENT COMMISSION, CITY'S COMMUNITY HOUSING DEVELOPMENT ORGANIZATION'S (CHDO'S) AND THE HOUSING SUCCESSOR AGENCY FOR THE PROPERTY LOCATED AT 4500 BRESEE AVENUE, BALDWIN PARK Staff recommends the City Council: 1) Approve the Loan Documents of $252,622 from the HOME Fund (Fund #221) with Rio Hondo CDC for the purpose of purchasing the property located at 4500 Bresee Avenue. Staff recommends the City Council: 2) Approve the Loan Documents of $157,338 (Equity Lien) from the Housing Successor Agency (Fund #890) with Rio Hondo CDC for the purpose of purchasing the property located at 4500 Bresee Avenue. 3) Approve the purchase agreement with Rio Hondo CDC for the property located at 4500 Bresee Avenue for the purpose of creating a single family affordable housing rental unit. CITY COUNCIL ACTING AS SUCCESSOR AGENCY CONSENT CALENDAR All items listed are considered to be routine business by the Successor Agency and will be approved with one motion. There will be no separate discussion of these items unless a Board members so request, in which case, the item will be removed from the general order of business and considered in its normal sequence on the agenda. SA — 1 AWARD CONTRACT FOR FINANCIAL ADVISORY SERVICES TO REFINANCE SUCCESSOR AGENCY TAX ALLOCATION BONDS Staff recommends that the Successor Agency approve the selection of Harrell & Company Advisors, LLC, to provide the financial advisory services and authorize the Chair to execute the agreement for services with Harrell & Company Advisors, LLC, (attachment 3 to the Staff Report.) City Council Agenda Page 5 CITY COUNCIL ACTING AS HOUSING SUCCESSOR AGENCY CONSENT CALENDAR All items listed are considered to be routine business by the Housing Successor Agency and will be approved with one motion. There will be no separate discussion of these items unless a Board members so request, in which case, the item will be removed from the general order of business and considered in its normal sequence on the agenda. This Report is Listed under Consent Calendar See Item #13 PURCHASE AGREEMENT AND LOAN DOCUMENTS BETWEEN THE CITY OF BALDWIN PARK, RIO HONDO COMMUNITY DEVELOPMENT COMMISSION, CITY'S COMMUNITY HOUSING DEVELOPMENT ORGANIZATION'S (CHDO'S) AND THE HOUSING SUCCESSOR AGENCY FOR THE PROPERTY LOCATED AT 4500 BRESEE AVENUE, BALDWIN PARK Staff recommends the City Council: 1) Approve the Loan Documents of $252,622 from the HOME Fund (Fund #221) with Rio Hondo CDC for the purpose of purchasing the property located at 4500 Bresee Avenue. Staff recommends the City Council: 1) Approve the Loan Documents of $157,338 (Equity Lien) from the Housing Successor Agency (Fund #890) with Rio Hondo CDC for the purpose of purchasing the property located at 4500 Bresee Avenue. 2) Approve the purchase agreement with Rio Hondo CDC for the property located at 4500 Bresee Avenue for the purpose of creating a single family affordable housing rental unit. PUBLIC HEARING None. REPORTS OF OFFICERS 14. SIX MONTH UPDATE ON GRANT WRITING ACTIVITIES FROM CALIFORNIA CONSULTING, AND DEL SOL SOLUTIONS It is recommended that the City Council provide staff direction. 15. PARLIAMENTARY PROCEDURE RULES TO BE CONSIDERED BY THE CITY COUNCIL Staff recommends that the City Council select form one of the following options: 1) Adopt Robert's Rules of Order as the official parliamentary procedures for all City Council meetings; 2) Adopt Rosenberg's Rules of Order as the official parliamentary procedures for all City Council meetings; 3) Direct the City Attorney to look for additional rules or draft a set of rules to use as the official parliamentary procedure rules for the City of Baldwin Park. City Council Agenda Page 6 CITY COUNCIL / CITY CLERK / CITY TREASURER / STAFF REQUESTS COMMUNICATIONS Request for Consideration by Councilmember Cruz Baca: • Councilmember Baca would like to have Council discussion regarding the Greenleaf contract that was terminated, September 7, 2016 and find out what is outstanding money owed to City of Baldwin Park, BPPD, and Vendors who purchased permits, licenses, and paid fees for duration of contract. And how will we/they get paid. Request for Consideration by Councilmember Susan Rubio: • Councilmember Rubio requests City Council discussion and consideration to explore a special meeting to update the City Council on completed task orders, to review phase study reports and to discuss future projects. ADJOURNMENT CERTIFICATION I, Alejandra Avila, City Clerk of the City of Baldwin Park hereby certify that, under penalty of perjury under the laws of the State of California, the foregoing agenda was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 15th day of September, 2016. � r 4'e f� AW Alejandra Avila City Clerk PLEASE NOTE: Copies of staff reports and supporting documentation pertaining to each item on this agenda are available for public viewing and inspection at City Hall, 2"d Floor Lobby Area or at the Los Angeles County Public Library in the City of Baldwin Park. For further information regarding agenda items, please contact the office of the City Clerk at (626) 960-4011 ext. 466 or via e-mail at aqvil 0fratcly�. i!tccgm. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Public Works Department or Risk Management at (626) 960-4011. Notification 48 hours prior to the meeting will enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 34.102.104 ADA TITLE II) City Council Agenda Page 7 ITEM NO. +-STAFF REPORT TO: Honorable Mayor and City Councilmembers FROM: Rose Tam, Director of FinanceI HE AN f��F�IEL � DATE: September 21, 2016 C6 1 V A 1.. EY ,, �P. wmr mx `0.1 SUBJECT: WARRANTS AND DEMANDS. SUMMARY Attached is the Warrants and Demands Register for the City of Baldwin Park to be ratified by the City Council. FISCAL IMPACT The payroll for the last period was $402,253.80 and the attached General Warrants Register were $535,348.42 for a total amount of $937,602.22. LEGAL REVIEW None required. RECOMMENDATION NDATION Staff recommends that the City Council ratify the attached Warrants and Demands Register. BACKGROUND The attached Claims and Demands report format meets the required information as set out in the California Government Code. Staff has reviewed the requests for expenditures for the appropriate budgetary approval and for the authorization from the department head or its designee. Pursuant to Section 37208 of the California Government Code, the Chief Executive Officer or his/her designee hoes hereby certify to the accuracy of the demands hereinafter referred. Payments released since the previous City Council meeting and the following is a summary of the payment released: 1. The payroll of the City of Baldwin Park consist of check numbers 198211 to 198234. Additionally, Automated Clearing House (ACH) Payroll deposits were made on behalf of City Employees from control number 250901 to 251161 for the period of August 14, 2016 through August 27, 2016, inclusive; these are presented and hereby ratified in the amount of $402,253.80. 2. 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CD ca CD (n --] -.3 -A \\ 0 CD H 0 (n x co CD C) CD CD CD 00 00 uj N CD 0 0 --j -] -1 m N) CD CD a) W 0 C� n 0 Ln Ln Ul 11O 00 N -- N yca w w w H 0w w 00 F- -3 xLn Ln L9 CD w00 00 at at at M H F3 0 F- -1 (.) H CD C) CD CD CD CD � 6 H 00 --j -L�) 1 0 I, -nF .bi HH w m 00 T ti at at H N H N ONM m C 0 0 0 0 0 0 ci ci G r- (i ci �-3 q H q CynM CynM U) q �3 1 1 H I I 0 I C; I a ITEM NO. 2-1 STAFF REPORT ��ap,t,/,A, TO: Honorable Mayor and City Councilmembers HUB OF THE FROM: Shannon Yauchzee, Chief Executive Officer SAN GABRI � DATE: September 21, 2016 VALLEY 1�1 0 M SUBJECT: CLAIM REJECTION SUMMARY This report requests the City Council reject the Claims for Damages to person or property received for filing against the City of Baldwin Park. FISCAL IMPACT Fiscal impact is unknown at this time. RECOMMENDATION omme ds that City Council reject the following claim and direct staff to send the appropriate notice of rejection to claimant(s): Alvarez, Benito The police department towed and impounded his vehicle; while the vehicle was in storage the claimant alleges money ($121.00) was taken from his ash tray. This government claim, and all government claims, should be considered as potential lawsuits in the future. Thus, it is requested that all City Staff, the Mayor and all Councilmembers refrain from making any statements, whether public or private in nature. It is important that no statements be made so as to not prejudice this claim in any way which can happen if public or private comments are made about this claim by City staff or Councilmembers. BACKGROUND In order for the statute of limitations to begin on the claims received, it is necessary for the City Council to reject the claims by order of motion and that the claimants are sent written notification of said action. LEGAL REVIEW Any specific questions should be referred to the City Attorney. ALTERNATIVES There are no other alternatives for the Council to consider since rejection of the claims is necessary for the Statute of Limitations to begin on the claims received. ITEM NO. iii' STAFF REPORT TO: Honorable Mayor and Members of the City Council H U OF FROM: Robert N. Tafoya, City Attorney �' / DATE: September 21, 2016 �V EL sr Bao �'�� Y A SUBJECT: SECOND READING AND ADOPTION OF NOISE ORDINANCE ``1�D JAN40 k NO. 1388 WITH RESPECT TO TIME OF ENFORCEMENT SUMMARY Lawful public and private entertainment and business activities occur within the City on a daily basis. The current noise ordinance begins enforcement of noise violations at 7:00 p.m. for some forms of noise. The solution to allowing reasonable activity by private and businesses owners is to extend the time for enforcement of certain portions of the noise ordinance to 10:00 p.m. FISCAL IMPACT Adoption of this Ordinance No. 1388 should have no fiscal impact at this time. RECOMMENDATION Staff recommends that Council conduct a second reading, by title only and waive further reading, and following such reading, approve and adopt Ordinance 1388, entitled "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTIONS 130.31, 130.34, AND 139.37 OF CHAPTER 130: GENERAL OFFENSES, OF THE TITLE XIII OF THE BALDWIN PARK MUNICIPAL CODE WITH RESPECT TO NOISE REGULATIONS." LEGAL REVIEW The City Attorney has reviewed the Staff Report and Ordinance as to form and content. BACKGROUND The City Council, at its meeting of September 7, 2016, discussed extending the time within which certain provisions of the noise ordinance is enforced from 7:00 p.m. to 10:00 p.m. The proposed amendment to the noise ordinance revises the definition of night and day (Section 130.31), changes the time of ambient noise measurement (Section 130.34), and revises the time for special noise sources (Section 139.37). By extending the enforcement of these provisions to 10:00 p.m., the ordinance allows for lawful beneficial activities to take place in the City. ALTERNATIVES 1) Reject the ordinance and leave the time of night for enforcement at 7:00 p.m.; or 2) Change the time of night for enforcement to some other time and reintroduce the ordinance. ATTACHMENT Ordinance No. 1388 ORDINANCE NO. 1388 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTIONS 130.31, 130.34 and 139.37 OF CHAPTER 130: GENERAL OFFENSES, OF TITLE XIII OF THE BALDWIN PARK MUNICIPAL CODE WITH RESPECT TO NOISE REGULATIONS WHEREAS, the City Council is desirous of changing the basic time for enforcement of noise regulations from the current time of 7:00 p.m. to a later time of 10:00 p.m.; WHEREAS, changing the time of enforcement to 10:00 p.m. will allow legitimate and lawful uses to continue until a reasonable time. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY ORDAIN AS FOLLOWS: Section 11. Sections 130.31, 130.34 and 130.37 of the Baldwin Park Municipal Code are hereby amended as follows: §130.31 DEFINITIONS. DAY. The time period from 7:00 a.m. of one day to 10:00 p.m. of the same day. NIGHT. The time period from 10:00 p.m. of one day to 7:00 a.m. of the following day. §130.34 AMBIENT BASE NOISE LEVELS STANDARDS Day Night 7:00 a.m. 10:00 P.M. Zone -10:00 p. m. -7:00 a.m. §130.37 SPECIAL NOISE SOURCES (B) Radios, television sets, and similar devices. It is unlawful for any person within any residential zone of the city to us or operate any radio receiving set, musical instrument, phonograph, television set, or other machine or device for the producing or reproducing of sound (between the hours of 10:00 p.m. of one day and 7:00 a.m. of the following day) in such a manner as to disturb the peace, quiet and comfort of neighboring residents or any reasonable person of normal sensitiveness residing in the area. Ordinance No. 1388 Page 2 (1) Machinery, equipment, fans and air conditioning. It is unlawful for any person to operate any machinery, equipment, pump, fan, air conditioning apparatus, or similar mechanical device (between the hour of 10:00 p.m. of one day and 7:00 a.m. of the following day), use of which is attended by loud or unusual noises." Section_. The Mayor or presiding officer of the City of Baldwin Park City Council is hereby authorized to affix his/her signature to this Ordinance signifying its adoption by the City Council of the City of Baldwin Park. Section 3. The City Clerk of the City of Baldwin Park shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and adoption as required by law, or in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five (5) days prior to the date of adoption of this Ordinance, and, within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of City Clerk. Section 4. This Ordinance shall go into effect and be in full force and operation from and after thirty (30) days from the date of its final passage and adoption. Section 5. If any chapter, section, subsection, subdivision, paragraph, sentence, clause or phrase, or portion of this Ordinance, or the application thereof to any person, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or its application to other persons. The City Council hereby declares that it would have adopted this Ordinance and each chapter, section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions of the application thereof to any person, be declared invalid or unconstitutional. PASSED, APPROVED AND ADOPTED by the City Council of the City of Baldwin Park this 21St day of September, 2016. MAYOR ATTEST: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF BALDWIN PARK I, Alejandra Avila, City Clerk, of the City of Baldwin Park, do hereby certify that the foregoing Ordinance No. 1388 was introduced for first reading at a regular meeting Ordinance No. 1388 Page 3 of the City Council held September 7, 2016 and was adopted by the City Council at its regular meeting and adopted) this 21St day of September, 2016 by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Alejandra Avila City Clerk ITEM NO. IN STAFF REPORT TO: Honorable Mayor and Members of the City Council I-weao� FROM: Robert N. Tafoya, City Attorney C° IrrI "+ DATE: September 21, 2016 ASV GABRIEL SUBJECT: AMENDMENT OF FIREWORKS ORDINANCE NO. 1390 IN '4 D �AN'10"� ORDER TO REDUCE THE NUMBER OF SALES DAYS AND INCREASE THE FINE FOR VIOLATION SUMMARY The City Council desires to make enforcement of illegal use of fireworks easier for the police department. To this end, reducing the days within which safe and sane fireworks may be sold and used would make enforcement of all fireworks more expeditious. This change seeks to limit the amount of time that fireworks can be sold and seeks to limit the days that safe and sane fireworks may be set off in Baldwin Park. An increase in the fine violation of the ordinance to $1,000.00 would also be a deterrent to illegal use of fireworks. FISCAL IMPACT Adoption of this Ordinance No. 1390 should have no fiscal impact at this time, RECOMMENDATION Staff recommends that the City Council waives the First Reading and adopt by Title only Ordinance No. 1390, entitled "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTION 93.10 AND ADDING SECTION 93.13 OF CHAPTER 93: FIRE PREVENTION; FIREWORKS, OF TITLE IX, GENERAL REGULATIONS, OF THE BALDWIN PARK MUNICIPAL CODE" LEGAL REVIEW The City Attorney has reviewed the Staff Report and Ordinance as to form and content. BACKGROUND The City Council at previous council meetings discussed lowering the number of days that safe and sane fireworks can be sold and hence used in the City prior to the 4th of July. Concerns were raised about to prevalence of illegal fireworks going off on City streets. The Police Department had difficulty enforcing illegal fireworks because the City sanctioned fireworks were being utilized for a longer period of time coinciding with its sale from stands. Shortening the amount of time that fireworks can be legally sold would aid in the enforcement of illegal fireworks use. The proposed change is to noon July 1St to 12:00 a.m. July 5th. Increasing the fine for a violation of this Chapter to $1,000.00 would be a deterrent to illegal use of fireworks. ALTERNATIVES 1) Leave the number of days fireworks are sold and used, as it is currently; or 2) Change the number of days by increasing or decreasing the number in the proposed amendment. 3) Leave the fine as it currently is set. ATTACHMENT Ordinance No. 1390 ORDINANCE NO. 1390 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTION 93.10 AND ADDING SECTION 93.13 OF CHAPTER 93: FIRE PREVENTION; FIREWORKS, OF TITLE IX, GENERAL REGULATIONS, OF THE BALDWIN PARK MUNICIPAL CODE WHEREAS, Section 93,10 of the Baldwin Park Municipal Code imposes rules and regulation for the operation of fireworks stands; WHEREAS, Section 93.10 (F) of the Baldwin Park Municipal Code provides for the time and dates that sales are allowed; WHEREAS, it is the intent of shortening the time period where fireworks are sold in order to lessen the days upon which illegal fireworks are used; WHEREAS, the City wishes to amend Section 93.10(F) in order to make safe and sane fireworks for sale and use in the City for a period of four days each year, beginning on July 1't instead of the current June 28th; and WHEREAS, the City desires to increase the fine for violation of the fireworks ordinance to $1000.00. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Section 93.10(F) and Section 93.13 of the Baldwin Park Municipal Code are hereby amended as follows: "§ 93.10 OPERATION OF STANDS. (F) Time and dates sale and use allowed. "Safe and Sane" Fireworks shall not be sold or used prior to 12 noon on July 1, and such sale and use shall cease at 12:00 a.m. on July 5 of each calendar year. § 93.13 FINES FOR VIOLATION OF THIS CHAPTER A violation of any provision of this Chapter by buyer or seller shall be punishable by a fine of $1,000.00 for each offense." Section 2. The Mayor or presiding officer of the City of Baldwin Park City Council is hereby authorized to affix his/her signature to this Ordinance signifying its adoption by the City Council of the City of Baldwin Park. Section 3. The City Clerk of the City of Baldwin Park shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and ORDINANCE NO. 1390 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING SECTION 93.10 AND ADDING SECTION 93.13 OF CHAPTER 93: FIRE PREVENTION; FIREWORKS, OF TITLE IX, GENERAL REGULATIONS, OF THE BALDWIN PARK MUNICIPAL CODE WHEREAS, Section 93,10 of the Baldwin Park Municipal Code imposes rules and regulation for the operation of fireworks stands; WHEREAS, Section 93.10 (F) of the Baldwin Park Municipal Code provides for the time and dates that sales are allowed; WHEREAS, it is the intent of shortening the time period where fireworks are sold in order to lessen the days upon which illegal fireworks are used; WHEREAS, the City wishes to amend Section 93.10(F) in order to make safe and sane fireworks for sale and use in the City for a period of four days each year, beginning on July Vt instead of the current June 28th; and WHEREAS, the City desires to increase the fine for violation of the fireworks ordinance to $1000.00. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY ORDAIN AS FOLLOWS: Section 1, Section 93.10(F) and Section 93.13 of the Baldwin Park Municipal Code are hereby amended as follows: "§ 93.10 OPERATION OF STANDS. (F) Time and dates sale and use allowed. "Safe and Sane" Fireworks shall not be sold or used prior to 12 noon on July 1, and such sale and use shall cease at 12:00 a.m. on July 5 of each calendar year. § 93.13 FINES FOR VIOLATION OF THIS CHAPTER A violation of any provision of this Chapter by buyer or seller shall be punishable by a fine of $1,000.00 for each offense." Section 2. The Mayor or presiding officer of the City of Baldwin Park City Council is hereby authorized to affix his/her signature to this Ordinance signifying its adoption by the City Council of the City of Baldwin Park. Section 3. The City Clerk of the City of Baldwin Park shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and adoption as required by law, or in the alternative, the City Clerk may cause to be Ordinance No. 1390 Page 2 published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five (5) days prior to the date of adoption of this Ordinance, and, within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of City Clerk. Section 4. This Ordinance shall go into effect and be in full force and operation from and after thirty (30) days from the date of its final passage and adoption. Section 5. If any chapter, section, subsection, subdivision, paragraph, sentence, clause or phrase, or portion of this Ordinance, or the application thereof to any person, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or its application to other persons. The City Council hereby declares that it would have adopted this Ordinance and each chapter, section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions of the application thereof to any person, be declared invalid or unconstitutional. PASSED, APPROVED AND ADOPTED by the City Council of the City of Baldwin Park this day of 0 2016. ATTEST: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF BALDWIN PARK ) I, Alejandra Avila, City Clerk, of the City of Baldwin Park, do hereby certify that the foregoing Ordinance No. 1390 was introduced for first reading at a regular meeting of the City Council held September 21, 2016 and was adopted by the City Council at its regular meeting and adopted this day of 2016 by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Alejandra Avila City Clerk ITEM NO, 16 STAFF REPORT ��i"i TO: Honorable Mayor and Members of the City Council Hup, a `��f FROM: Shannon Yauchzee, Chief Executive Officer ..� Rose Tam, Director of Finance sA�oXseEL t'kDATE: September 21, 2016 EY SUBJECT: REVIEW OF THE COST OF CITY FEE SERVICES BASED ON A STUDY PREPARED BY REVENUE & COST SPECIALISTS, LLC (RCS) SUMMARY Article XIIIC of the State Constitution requires that fees be set at a rate that does not exceed their cost. RCS has calculated that cost for many of the fees that have not been reviewed since 2008. Some fees need to be reduced and others can be raised to their cost if the Council wishes. To the degree that fee services are less than their cost, the general taxpayer is subsidizing that service with tax dollars. The Council may determine to continue a subsidy or may increase the fee to recoup costs. FISCAL IMPACT Staff expects to recoup an additional $196,000 per year (estimated at $131,000 for the rest of the fiscal year 2016-17) in general fund revenue from the proposed fee adjustments from the study to recoup some costs from city services that generate lesser fees than cost to perform the services. RECOMMENDATION Staff recommends that the City Council approve the proposed City Schedule of Fees and the corresponding Resolution No. 2016-147, entitled "A Resolution Of The City Council Of The City Of Baldwin Park Approving The Adoption Of A New Schedule Of Service Fees For Issuance, Processing And Filing Of Various City Services And Permits In The City." LEGAL REVIEW The City Attorney has reviewed the limitations on service fee adjustments and this report. BACKGROUND RCS has been performing Cost of Services studies for cities and counties since 1980. The lead consultant for the City, Rick Keymer, was a co-author of the League of California Cities publication, "Cost Accounting for California Cities". Mr. Keymer was also a California CPA, audited cities and was the finance director of a city for three years. The methodology of the study closely follows the author -intent document for Proposition 4 (The Gann Initiative) which became Article XIIIC of the California Constitution. Based on the results of the RCS study of the City fees (see Attachment 1), a few of the City fees may be reduced as the fee exceeds the cost. For those services, there will be a revenue loss. For most other City services, the cost exceeds the fee and additional general fund revenue can be available if the fees are increased. The Building Permit fees are not being changed. And many fees such as planning are only being raised by about 14%. Also, the Building Industry Association of Southern California reviewed the proposed fee schedule and they have no comment. City Fees Page 2 REPORT FROM THE CEO AND DIRECTOR OF FINANCE Public hearings were held on August 17, 2016 and September 7, 2016 to receive comments from the public. At the September 7, 2016 City Council meeting, Councilmembers expressed concerns about the fees the City was paying to the consultant for outside Building Plan Check expedited services. This has been researched and resolved. The City does retain 35% of the Building Plan Check Fees for expedited plan checks and details are in the weekly E -Blast report dated September 12, 2016. ALTERNATIVE 1) Provide staff alternative direction whether to proceed with the new fee structure or not. Fees can be raised no more than as justified by the study. ATTACHMENT 1) Cost of Services Study prepared by RCS (this report of 246 pages is available for inspection electronically at the City Clerk's Office) 2) Resolution No. 2016-147 2 RESOLUTION NO. 2016-147 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK APPROVING THE ADOPTION OF A NEW SCHEDULE OF SERVICE FEES FOR ISSUANCE, PROCESSING AND FILING OF VARIOUS CITY SERVICES AND PERMITS IN THE CITY WHEREAS, pursuant to Article X111C of the California State Constitution, it is the intent of the City Council of the City of Taldwiti Park to require the ascertainment and recovery of costs incurred by the City from the provisioi) of services to the public; and WHEREAS, the City Council approved a contract with Revenue & Cost Specialists, LLC (RCS) on April 1, 2015 to conduct a comprehensive fee study to evaluate the various City fees charged for such services to determine if' the City is recouping its costs and not overcharging for such services; and WHEREAS, said study has been completed and is available in the City Clerk's office; and WHEREAS, a properly noticed public hearing were held on August 17, 2016 and September 7, 2016 to receive public comments on the proposed new City fee schedule. NOW THEREFORE BE IT HEREBY RESOLVED, by the City Council of the City of Baldwin Park as follows: The new Fee Recovery Schedule for each fee and service charge is set forth in Exhibit "A", attached hereto and incorporated by reference, is hereby approved. 2. The fees established in Exhibit A shall become effective sixty (60) days after the effective date of this Resolution. 3. The City Clerk shall certify as to the adoption of the Resolution and shall cause the same to be processed in the manner required by law. PASSED, APPROVED, AND ADOPTED this 21 st day of September 2016. MANUEL LOZANO MAYOR Resolution No. 2016-147 Page 2 ATTEST: STATE OF CALIFORNIA COUNTY OF LOS ANGELES SS: CITY OF BALDWIN PARK 1, ALEJANDRA AVILA, City Clerk ol'itic City cel" Baldwin Park do hereby certify flint the I f(,)regoing Resoltition No. 2016-147 was chily adopted by the City (".0mcil Of tjje, City of 13aldwin Park at a regular mecting diereof tield orl Sc[iternber 21, 2016 and t,11,1t the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ALEJANDRA AVILA CITY CLERK ITEM NO. STAFF REPOT TO: Honorable Mayor and Members of the City Council 01 uURar FROM: Manuel Carrillo Jr. N Director of Recreation & !onitnuni Servs U • SAN 6A6KIEL Sam Gutierrez, Interim Director of Public Wor VALLEY ' DATE: September 21, 2016 SUBJECT: ADOPTION OF RESOLUTION NO. 2016-148 APPROVAL TO APPLY FOR GRANT FUNDS FROM THE CALIFORNIA URBAN RIVERS GRANT PROGRAM UNDER THE WATER QUALITY, SUPPLY, AND INFRASTRUCTURE IMPROVEMENT ACT OF 2014 (PROPOSITION 1) FOR WALNUT CREEK NATURE PARK SUMMARY The purpose of this staff report is for the City Council to adopt the Resolution No. 2016-148 to apply for the California Urban Rivers Grant Program, under the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1); to complete Phase III of the Walnut Creek Nature Park Restoration Project. FISCAL IMPACT There is no fiscal impact to the general fund, as this grant application does not require matching funds. RECOMMENDATION Staff recommends the City Council to: 1) Adopt Resolution No.2016-148 entitled "RESOLUTION OF THE CITY COUNCIL OF BALDWIN PARK APPROVING THE APPLICATION FOR GRANT FUNDS FOR THE CALIFORNIA URBAN RIVERS GRANT PROGRAM UNDER THE QUALITY, SUPPLY, AND INFRASTRUCTURE IMPROVEMENT ACT OF 2014 (PROPOSITION 1) " ; and 2) Authorize the Director of Recreation and Community Services and the Interim Director of Public Works to execute any further documents. LEGAL REVIEW The City Attorney has reviewed and approved Resolution No. 2016-148 as to form. BACKGROUND California voters passed the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Act). It added Section 79730 to the Public Resources Code, authorizing the Legislature to appropriate the sum of twenty million dollars ($20,000,000) to the California Natural Resources Agency (Agency) for green infrastructure that conserves water, buffers climate change impacts, improves water quality, water supply, public health, reduces greenhouse gas emissions, and energy demand, restores, and protects rivers, creeks and streams including the acquisition of resource lands. The Act provides funding to implement the three objectives of the California Water Action Plan which are 1) more reliable water supplies, 2) the Restoration of important species and habitat, and 3) a more resilient and sustainably managed water infrastructure. Staff is seeking approval to apply for The California Urban Rivers Grant Program, under the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1) to complete Phase III, of the Walnut Creek Nature Park Restoration Project. The proposed improvements at Walnut Creek Nature Park (WCNP) will allow for implementation of the City's existing Comprehensive Park Master Plan recommended connectivity to the San Gabriel Wash Bike Path and Emerald Necklace via Walnut Creek Wash. Adopt Resolution No. 2016-148 September 21, 2016 Page 2 According to the recently completed LA County Countywide Comprehensive Park Master Plan, Baldwin Park continues to rank as a park poor community with .3 park acres per 1,000 compared to the County average of 3.3 per 1,000. In addition, a mere 22% of the population has accessibility to walk to a park compared to the County average of 49% being within walking distance of a park. The project creates a linkage to natural open space from a disadvantage and park poor community, as well as improve the amenities at the existing park space. In May of 2016, Phase I, of the (WCNP) Restoration Project was completed with a project scope of; clearing grubbing of invasive non-native plants, grading & edging, paving partial concrete trail path, creating a bioswale, installing educational interpretive signage, benches, picnic tables, trash receptacles, drip irrigation and planting drought tolerant landscaping including native trees, and installing 4 - solar energy efficiency lights, placing log and boulders. Funding for Phase I, of the (WCNP) Restoration Project was possible by the following; • Rivers and Mountains Conservancy (Conceptual Plan) - $35,000 • TDA Article 3 - $50,000 • CA Natural Resource Agency - $220,000 • LA County Regional and Open Space District Excess Funds - $200,000 Recently, on August 3, 2016 the City Council Awarded Contract to complete Phase II of the project set to include; Two (2) nature playground structures, observation structure improvements, roofing, ADA decking railings & reinforcement, new large pedestrian ADA bridge, concrete paving, log and boulder placing, bubblers and drip irrigation expansion, native tree planting, update restrooms and eco -friendly bottle refillable fountain, and the installation of security cameras & solar lights features for energy efficiency. Funding for Phase II, of the (WCNP) Restoration Project was possible by the following; • Land and Water Conservation Fund - $480,000 • LA County Regional and Open Space District Competitive - $308,466 • Community Development Block Grant (CDBG) — $175,000 An additional $723,100 in funding is pending to finalize the entire (WCNP) Restoration Project, Phase III project scope includes the following; 1) Upgrade and Repair Automatic, Security Gate at Hensel Street 2) Pedestrian ADA Compliant Entrance to the Park 3) Completion of Irrigation and Drought Tolerant Landscaping 4) Completed Trail with PCC and Trail Markers to Promote Healthy Living Practices 5) Widened Curb Inlet (expand to 24") (Phase I) to Capture and Treat More Drained Water to be Harvested into Bioswale, overflow will drain to Walnut Creek Wash 6) Parking Lot Rehabilitation Improvements 7) Nature Play Equipment (Natural Activities that will fit with the Theme of Park) 8) Installation of New Picnic Tables with ADA Compliant Seating and Barbeques 9) Installation of Monument Entrance Sign, Multilingual Wayfinding Signage and Two Outdoor Educational Signs Addressing Nature, Cultural History and Watershed Stewardship The California Natural Resources Agency anticipates two funding cycles with approximately $9.3 million available to award in each cycle for the California Urban Rivers Grant Program. There are no minimum or maximum grant amounts for this grant program. Therefore, staff is hopeful that The California Urban Rivers Grant Program, under the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1) will fund the remaining $723,100 to finalize the entire (WCNP) Restoration Project. The grant deadline is scheduled for October 3, 2016. Adopt Resolution No. 2016-148 September 21, 2016 Page 3 ALTERNATIVES The alternative would be for City Council to not approve the Resolution No. 2016-148 Ismox"I MI "I'Mmoval WO' L., Resolution No. 2016-148 RESOLUTION OF THE CITY OF BALDWIN PARK APPROVING THE APPLICATION FOR GRANT FUNDS FOR THE CALIFORNIA URBAN RIVERS GRANT PROGRAM UNDER THE WATER QUALITY, SUPPLY, AND INFRASTRUCTURE IMPROVEMENT ACT OF 2014 (Proposition 1) WHEREAS, the Legislature and Governor of the State of California have provided Funds for the program shown above; and WHEREAS, the California Natural Resources Agency has been delegated the responsibility for the administration of this grant program, establishing necessary procedures; and WHEREAS, said procedures established by the California Natural Resources Agency require a resolution certifying the approval of application(s) by the Applicants governing board before submission of said application(s) to the State; and WHEREAS, the Applicant, if selected, will enter into an agreement with the State of California to carry out the Project NOW, THEREFORE, BE IT RESOLVED THAT THE BALDWIN PARK CITY COUNCIL HEREBY: 1. Approves the filing of an application for the Walnut Creek Nature Park Restoration; 2. Certifies that Applicant understands the assurances and certification in the application; and, 3. Certifies that Applicant or title holder will have sufficient Funds to operate and maintain the Project(s) consistent with the land tenure requirements; or will secure the resources to do so; and, 4. Certifies that it will comply with all provisions of Section 1771.5 of the California Labor Code; and, 5. If applicable, certifies that the project will comply with any laws and regulations including, but not limited to, the California Environmental Quality Act (CEQA), legal requirements for building codes, health and safety codes, disabled access laws, and, that prior to commencement of construction, all applicable permits will have been obtained; and, Resolution No. 2016-148 Page 2 6. Certifies that applicant will work towards the State Planning Priorities intended to promote equity, strengthen the economy, protect the environment, and promote public health and safety as included in Government Code Section 65041.1, and 7. ,Appoints the Director of Recreation and Community Services or designee, as agent to conduct all negotiations, execute and submit all documents including„ but not limited to applications, agreements, payment requests and so on, which may be necessary for the completion of the aforementioned Project(s). Approved and adopted the 21St day of September 2016 I, the undersigned, hereby certify that the foregoing resolution Number 2016-148 was duly adopted by the City Council following a roll call vete: MANUEL LOZANO MAYOR ATTEST: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS. CITY OF BALDWIN PARK ) 1, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify thatthe foregoing resolution was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting of the City Council on September 21, 2016, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ALEJANDRA AVILA CITY CLERK Item No. STAFF REPORT SUMMARY This item will authorize the publishing of a Notice Inviting Bids for City Project No. 2016-0165 — Center Median Landscape Improvements. FISCAL IMPACT There are no fiscal impacts at this time. Upon review of bids received, staff will recommend a construction contract award. At that time, staff will also provide a construction cost estimate with a breakdown by improvements to be constructed. This project is Included in the current Fiscal Year's Capital Improvement Program (CIP), which is expected to be approved by the City Council. The following table lists the funding available: The engineer's preliminary construction estimate is $1,800,000, which is within the construction budget shown above. RECOMM:ENDATIO It RECOMMrecommended ecommended that the City Council approve Landscape Improvements Project (City Project No. Notice Inviting Bids. BACKGROUND the plans and specifications for the Median 2016-0165) and authorize staff to advertise the On April 1, 2015, Governor Brown issued an executive order that directed the State Water Board to prohibit the irrigation of ornamental turf within the public street medians. Many of the major entrances into the City including Ramona Boulevard, Baldwin Park Boulevard and Badillo Street, as well as, smaller streets such as Sterling Way and Amar Road have turf covered medians. In an effort to meet Governor Brown's mandate, the City Council adopted Ordinance No. 1379 adding and modifying language of the City's Municipal Code relating to water efficient landscaping consistent TO: Honorable Mayor and City Council members HUB,oF ". � FROM: Sam Gutierrez Interim Director ofl�ubl j � THE t " , ," ,, GABRII SAN�EL „ DATE: Se tb21 2016 September p ' r` SUBJECT: ACCEPT PLANS AND SPECIFICATIONS, AND AUTHORIZE PUBLISHING A NOTICE INVITING BIDS FOR CITY PROJECT NO. 2016-0165 — CENTER MEDIAN LANDSCAPE IMPROVEMENTS PROJECT SUMMARY This item will authorize the publishing of a Notice Inviting Bids for City Project No. 2016-0165 — Center Median Landscape Improvements. FISCAL IMPACT There are no fiscal impacts at this time. Upon review of bids received, staff will recommend a construction contract award. At that time, staff will also provide a construction cost estimate with a breakdown by improvements to be constructed. This project is Included in the current Fiscal Year's Capital Improvement Program (CIP), which is expected to be approved by the City Council. The following table lists the funding available: The engineer's preliminary construction estimate is $1,800,000, which is within the construction budget shown above. RECOMM:ENDATIO It RECOMMrecommended ecommended that the City Council approve Landscape Improvements Project (City Project No. Notice Inviting Bids. BACKGROUND the plans and specifications for the Median 2016-0165) and authorize staff to advertise the On April 1, 2015, Governor Brown issued an executive order that directed the State Water Board to prohibit the irrigation of ornamental turf within the public street medians. Many of the major entrances into the City including Ramona Boulevard, Baldwin Park Boulevard and Badillo Street, as well as, smaller streets such as Sterling Way and Amar Road have turf covered medians. In an effort to meet Governor Brown's mandate, the City Council adopted Ordinance No. 1379 adding and modifying language of the City's Municipal Code relating to water efficient landscaping consistent Page 2 Bid No. 2016-0165 with the Governor's Executive Order. In addition, the City has implemented the following conservation measures: • Reduced City facility water use by more than 50% • Turned off irrigation to all median turf areas • Reduced watering of landscaping to only 3 days per week - medians and adjacent roadways, parks, and other City facilities. • Restricted water.xig to the hours of 5:00 p.m. and 8:00 a.m. • Require the prompt repair of water system malfunctions On May 18, 2015 the Public Works Department issued a Request for Qualifications (RFQ) for low water median landscape design services. The work to be performed included development of schematic design concepts for each center median and included presentations to both City Council and the general public. On August 5, 2015 the City Council awarded the design services agreement to Withers and Sandgren, Inc. and on October 7, 2015 at a special meeting the consultant presented plant pallet alternatives for the City Council's review and guidance. On November 18, 2015 Council furthered reviewed the options and plant pallets and directed the consultant to narrow the plants for final selection. On January 20, 2016, the consultant presented the final plant pallet based on the Council's direction. After a brief discussion, Council approved the new plant pallet and directed staff to work with the consultant to prepare and plans and specifications. The Consultant has completed the plans and specifications and the project is ready to be advertised for construction. The improvements include turf removal and installation of low water systems along the medians of Ramona Blvd., Badillo Street, Baldwin Park Blvd. and Amar Road. The plans call for installation of drought -tolerant landscape per the approved plant pallet and installation of all new smart irrigation systems. If Approved, the project will commence construction activities early December, 2016 and be completed in March, 2017. LEGAL REVIEW, None Required. ATTACHMENTS 1"" E1'STS 1. Notice Inviting Bids 2. Location Map Attachment 1 CITY OF BALDWIN, PARK Public Works Department NOTICE INVITING BIDS INSTRUCTIONS BIDDERS BID DOCUMENTS CONTRACT DiOCUMENT'S AND SPECIFICATIONS FOR BID NO. 2016-0165 CITY PROJECT NO. 2016-0165 MEDIAN LANDSCAPE IMPROVEMENTS PROJECT BID OPENING: NOVEMBER 3, 2016 Sam Gutierrez, Interim Public Works Director City Project No. 2016-0102 - Major Street Rehabilitation, Various Locations Citywide PUBLIC NOTICE IS HEREBY GIVEN that the City of Baldwin Park invites sealed bids for the above - stated project, and will receive such bids in the offices of the City Clerk, 14403 Pacific Avenue, Baldwin Park, California 91706, until 100.0000am,_fihursdayNovember at which time the proposals will be publicly opened and read. Bidders and/or authorized agents are invited to be present. All information submitted with the bid is public information and may be subject to disclosure. Project Description - The general nature of work consists of furnishing all labor, material, equipment, services, and incidentals required for drought tolerant median landscape improvements. The work includes removal of existing turf and placement of low water and drought -tolerant landscaping and irrigation. Irrigation improvements include removal of all existing irrigation systems and installation of new smart irrigation systems. Related work includes tree removal, traffic control and all appurtenant work. The bid items, corresponding estimated quantities and the time allowed to complete the work are listed in the Proposal. The descriptions of bid items are defined in the Technical Provisions. Pre -Bid Meeting - None Required. Bid Proposals - Bids shall be sealed and plainly marked "Bid No. 2016-0165 - Median Landscape Improvements Project." Bids must be prepared using the Contractor's Bid Proposal forms and all the other forms identified in the Instructions to Bidders. The forms required to complete a bid package are found in Section "C" of these Contract Documents. No bids will be accepted if not submitted using the approved forms. The Information to Bidders provides prospective bidders a summary of requirements for acceptance of bids, guidelines the City uses in awarding contracts, rules to ensure fairness in contractor procurement and guidelines to aid in interpretation of documents. The Construction Contract / Agreement define the Contract Documents which serve to control construction, work performed, and materials furnished, and includes the Specifications and Plans. Plans, Specifications, Documents - Specifications and proposal forms may be obtained at the Engineering Division office located at 14403 East Pacific Avenue, Baldwin Park, CA 91706, (626) 960-4011 on and after September 29, 2016 Monday thru Thursday between the hours of 7:30 A.M. and 6:00 P.M. A $35.00 per set, non-refundable fee is required for these specifications and proposal forms. An additional $10.00 is added to the fee, if mailed. Alternatively, the plans and specifications can be obtained on CIPList.com at no cost. Bid Security - Each bid must be accompanied by cash, certified check, cashier's check, or bidder's bond made payable to the City of Baldwin Park or issued by a surety admitted to do business in California, for an amount equal to at least ten percent (10%) of the amount bid. Such guaranty to be forfeited to the City of Baldwin Park should the bidder to whom the contract is awarded fail to enter into the contract. The City of Baldwin Park reserves the right to reject any and all bids and to waive any minor irregularities in the bid documents. Bidders may not withdraw their bid for a period of sixty (60) days after the opening date. City Business License, Contractors License and Permit - Prior to contract execution, the contractor and his/her subcontractors shall obtain a City of Baldwin Park business license. In accordance with provisions of Section 3300 of the California Public Contract Code, the City has determined that the Contractor shall possess a valid Class A California Contractor's License or other appropriate license classification under the State Contracting Code at the time the contract is bid. Failure to possess such license may render the bid non responsive. The successful bidder will be required to obtain a City encroachment permit to work in public right-of-way, issued at no fee for the project. Prevailing Wages - In accordance with the provisions of Sections 1770 et seq., of the Labor Code, the Director of the Industrial Relations of the State of California has determined the general prevailing rate of wages applicable to the work to be done. The Contractor will be required to pay to all persons employed on the project by the Contractor sums not less than the sums set forth in the documents entitled "General Prevailing Wage Determination made by the Director of Industrial Relations pursuant to California Labor Code, Part 7, Chapter 1, Article 2, Sections 1770, 1773, 1773.1." These documents can be reviewed in the office of the City Clerk or may be obtained from the State. Contractor's Registration - In accordance with Labor Code Section 1771.1, a contractor or subcontractor shall not be qualified to (a) bid on or be listed in a bid proposal on or after March 1, 2015, or (b) engage in the performance of this Work after April 1, 2015, unless currently registered with the Department of Industrial Relations and qualified to perform the Work pursuant to labor Code Section 1725.5. Compliance Monitoring and Enforcement - Contractor's performance of the Work described in this Notice Inviting Bids is subject to compliance monitoring and enforcement by the California Department of Industrial Relations. Equivalent Securities - Pursuant to California Public Contract Code Section 22300, substitution of eligible and equivalent securities for any moneys withheld to ensure performance under the contract for the work to be performed will be permitted at the request and expense of the successful bidder, unless otherwise prohibited by law. Advertising Dates: SAN GAB RIEL VALLEY EXAMINER: Thursday, September 29th, 2016 Thursday, October 6th, 2016 Attachment 2 #U 4 Median Landscape Improvements Project $A EL „ A" City Project No. 2016-0165 µ STAFF . µ TO: FROM: DATE: SUBJECT: AMENDMENT TO WEST COAST ARBORIST CONTRACT FOR CITYWIDE TRIMMING SERVICES SUMMARY It is requested that the City Council amend the existing contract agreement with West Coast Arborist, Inc. (WCA) for Citywide Tree Trimming Services. The amendment will increase the compensation to WCA by 31% over the next three years including two optional one-year renewal extensions with no rate increase. The increase request is a result of recent job title reclassifications of all Tree Trimmers by the California Department of Industrial Relations (DIR). The prevailing wage rates for these classified positions, as determined by the DIP, took affect on July 1St, 2016 and have increased WCA's current labor and related benefit costs by 31%. The unforeseen reclassification makes it extremely difficult for WCA to perform the services at the amounts originally agreed upon. FISCAL IMPACT The approval of this action will have no impact on the City's General fund. Funding for contractual services for tree trimming and related services will come from the Landscaping and Lighting Assessment District revenues and Measure R funds. Funding is available for the additional costs for the remainder of FY2016/2017. Additional funds will be requested for the new FY2017/2016 and FY2018/2017 budgets to compensate for the increased costs. The increased costs will be effective July 1St in each of the new fiscal years per Attachment 1 and as follows: Year% Increase ITEM NO. ._....... ..._......... _....... ........ _...1.i....._.. .................. ........... .............. Fiscal Year 2018/2019 10% _... _. .Fiscal Year 2017/2018 Honorable Mayor and City Council members Sam Gutierrez, Interim Director of Public Works September 21, 2016" SUBJECT: AMENDMENT TO WEST COAST ARBORIST CONTRACT FOR CITYWIDE TRIMMING SERVICES SUMMARY It is requested that the City Council amend the existing contract agreement with West Coast Arborist, Inc. (WCA) for Citywide Tree Trimming Services. The amendment will increase the compensation to WCA by 31% over the next three years including two optional one-year renewal extensions with no rate increase. The increase request is a result of recent job title reclassifications of all Tree Trimmers by the California Department of Industrial Relations (DIR). The prevailing wage rates for these classified positions, as determined by the DIP, took affect on July 1St, 2016 and have increased WCA's current labor and related benefit costs by 31%. The unforeseen reclassification makes it extremely difficult for WCA to perform the services at the amounts originally agreed upon. FISCAL IMPACT The approval of this action will have no impact on the City's General fund. Funding for contractual services for tree trimming and related services will come from the Landscaping and Lighting Assessment District revenues and Measure R funds. Funding is available for the additional costs for the remainder of FY2016/2017. Additional funds will be requested for the new FY2017/2016 and FY2018/2017 budgets to compensate for the increased costs. The increased costs will be effective July 1St in each of the new fiscal years per Attachment 1 and as follows: Year% Increase Fiscal Year 2016/2017 Retro ..._ . ... ....... ...... ._....... ..._......... _....... ........ _...1.i....._.. .................. ........... .............. Fiscal Year 2018/2019 10% _... _. .Fiscal Year 2017/2018 ._ .....�.�..._........ ......._.._... 10% RECOMMENDATION It is recommended that the City Council: 1. Approve the amendment to the existing contract agreement with West Coast Arborist, Inc. (WCA) for Citywide Tree Trimming Services increasing rates by 31% over the next three years including two optional one-year renewal extensions with no rate increase; and 2. Authorize the Mayor to execute the attached Amendment to the Agreement BACKGROUND A well maintained urban forest contributes significant social, neighborhood, environmental and economic benefits to the community. Trees play an important role in creating safer, more livable neighborhoods, establishing community image, improving blight, air quality and increasing property values. Amendment to West Coast Arborist Agreement 2 September 21, 2016 The City of Baldwin Park is recognized by the Arbor Day Foundation as a Tree City, USA and has an urban forest of more than 9,000 street trees. Historically, tree trimming has been done in house by staff and would be supplemented by WCA on as on -needed basis. Over the past decade, reduction in Public Works staff and equipment has diminished the City's ability to trim trees in a timely manner. On December 18, 2013 the City Council awarded a contract to WCA to provide all materials, equipment, tools, labor and incidentals for the annual trimming, tree and stump removal, tree planting services and emergency tree services. Under the agreement, every street tree in the City would be pruned every four to five years. The Contract also included establishing a grid pruning program and updating the Tree Inventory System which had not been updated for over ten -years. On June 1, 2015 WCA entered into at Collective Bargaining Agreement with the Laborers Union as a result of recent job title reclassification of all Tree Trimmers by the California Department of Industrial Relations. New prevailing wage rates for these reclassified positions has increased WCA's current labor and related benefit costs by 31%. At the time of entering into an agreement, it would have been difficult to account for this change in costs. The increase makes it extremely difficult for WCA to perform the services per the amounts of the current agreement. Staff met with representatives from WCA on August 9, 2016 to discuss the prevailing wage issue specifically with regard to how the changes affected the services provided under the current agreement. WCA demonstrated the unusual and extraordinary costs associated with providing the agreed upon services at the new prevailing wage rates. For this reason, WCA is asking to amend the current contract agreement and increase rates by 31 %. WCA employees working in the City of Baldwin Park are paid prevailing wages by their respective position titles. Staff acknowledges the importance of providing our community with the much-needed public service of tree maintenance and understands the realities associated with the new prevailing wage requirements of the DIR. WCA has proven to be a reliable and highly responsive contractor providing same-day tree maintenance service requests, as well as, emergency services due to wind or rain events. Despite the increase, the City of Baldwin Park will remain with the lowest tree maintenance rates among all L.A. County cities under contract with WCA. LEGAL REVIIEW___ This report has been reviewed and approved by the City Attorney as to legal form and content. C I EV111XII OR 1. Reject the proposed amendment, terminate the current agreement and send out a Request for Proposals (RFP) for a new Citywide Tree Trimming Services Agreement. Cities that have opted for an RFP have all received proposals with higher rates than the proposed amended rates of 31%. 2. Reject the proposed amendment, terminate the current agreement and piggy -back on another City's agreement. This is not recommended as all Cities currently under contract with WCA have higher compensation rates than the proposed amended rates for the City of Baldwin Park. 3. Council may choose to amend the agreement and authorize the 31 % increase immediately instead of phasing it over three years. This option will require appropriation of general funds for this Fiscal Year as the increase in cost was not originally budgeted. Amendment to West Coast Arborist Agreement ATTACHMENTS 1. Amendment to Agreement 2. Proposed Amended Rates (31% over three years) 3. Comparison of Prices 4. Original Agreement Amendment to West Coast Arborist Agreement AMENDMENT TO THE AGREEMENT FOR SERVICES This amends the Agreement entered into on the 18th day of December, 2013 by and between the City of Baldwin Park ("CITY") and West Coast Arborist, Inc. ("Service Provider"). A. Change in Compensation 1. Remove section 2. Compensation and replace it with the following: 2. COMPENSATION A. City shall pay for the services performed by Consultant pursuant to the terms of this agreement at the time and manner set forth in the revised Exhibit B "Schedule of Compensation" and attached to and incorporated into this Agreement Amendment as Schedule of Compensation, in the amount not to exceed $95,000 in the current Fiscal Year. 2. Remove section 3. Schedule of Performance and replace it with the following: 3. SCHEDULE OF PERFORMANCE A. Time is of the essence with the performance of the Agreement and this Amendment to the Agreement. This Amendment is a three-year contract agreement with up to two one-year renewal extensions upon mutual agreement of the parties. TO EFFECTUATE THIS AMENDMENT TO THE AGREEMENT, the parties have caused their duly authorized representatives to excecute this Agreement on the dates set forth below. IN WITNESS WHEREOF, the parties have executed this Agreement on the day first above written. ATTEST: City Clerk CITY OF BALDWIN PARK By: Manuel Lozano, Mayor Dated: CONSULTANT: WEST COAST ARBORIST By: Name/Title Dated: Amendment to West Coast Arborist Agreement R City of Baldwin Park Proposed Prices for Fiscal Year 2016-17 (effective July 1, 2016) Tree Maintenance Services provided by West Coast Arborists, Inc. Current t Unit a2017-18 Unit Prices Prices Prices s Item Description Unit (2013-2016),11111111 2016-17 2018-19 1 Street Tree Pruning Each $ 37.00 $ 37.00 $ 44.75 49.25 2 Palm Tree Pruning Each $ 37.00 �i $ 37.00 $ 44.75 $ 49.25 3 Service Request Pruning (0-6" dbh) Each $ 37.00 $ 41.00 $ 44.75 $ 49.25 4 Service Request Pruning (7-18" dbh) Each $ 95.00 $105.45 $115.00 $126.50 5 Service Request Pruning (19-24" dbh) Each $ 175.00 $194.25 $211.75 $232.90 6 Service Request Pruning (over 25" dbh) Each $ 265.00 f $294.15 $320.65 $352.70 7 Pruning for Crown Restoration (Ficus, Pine, Elm trees) Each $ 225.00 $249.75 $272.00 $299.00 8 Palm Tree Skinning Linear Foot $ 15.00 $ 16.65 $ 18.15 $ 20.00 9 Tree and Stump Removal Inch $ 19.00 $ 21.00 $ 22.90 $ 25.00 10 Tree Only Removal Inch $ 13.00 $ 14,40 $ 15.70 $ 17.25 11 Stump Only Removal Inch $ 9.00 j $ 10.00 $ 10.90 $ 12.00 12 Tree Plant 15 gal w/o RB Each $ 95.00 $105.45 $115.00 $126.50 13 Tree Plant 15 gal with RB Each $ 110.00 ;r $122.00 $133.00 $146.30 14 Tree Plant 24" Box w/o RB Each $ 200.00 $222.00 $242.00 $266.00 15 Tree Plant 24" Box with RB Each $ 225.00 l% $249.75 $272.00 $299.00 r ;1 16 Crew Rental - 3 man crew Hour $ 180.00 $199.80 $217.80 1 $239.55 17 Crew Rental - 2 man crew Hour $ 120.00 $133.20 $145.20 $159.70 18 Crew Rental -1-man crew Hour $ 60.00 " $ 66.60 $ 72.60 $ 79.85 19 Watering Day $ 400.00 $444.00 $484.00 $532.00 20 Emergency call -out (Evening, Weekend, Holiday) Man Hour $ 60.00 = $ 66.60 $ 72.60 $ 79.85 21 Specialty Equipment Rental Hour $ 120.00 $133.20 $145.00 $159.50 22 Arborist Services Hour $ 120.00 '� $133.20 $145..00 $159.50 Current prices have been in effect since 2013. Proposed prices for FY16-17 reflect an approx. 11% Increase off the current price baseline. Stree Tree Pruning and Palm Pruning rates remain the same. Proposed prices for FY17-18 reflect an approx. 10% increase off the current price baseline, Proposed prices for FY18-19 reflect an approx. 10% increase off the current price baseline. We agree to hold the FY18-19 rates the same for two option years (FY19-20 and FY20-21.) 6 Amendment to West Coast Arborist Agreement Comparison of Prices for Pruning Services GRID PRUNING CIN � UNIT PRICE Baldwin Park $ 37.00 Montebello $ 44.00 La Mirada $ 44.00 Norwalk $ 44.00 Commerce $ 46.00 Pomona $ 49.28 Duarte $ 50.00 Lakewood $ 50.85 Covina $ 52.00 Monterey Park $ 52.00 Alhambra $ 52.65 San Gabriel $ 54.00 Paramount $ 54.65 South Pasadena $ 55.00 La Puente $ 57.75 Bellflower $ 59.90 Temple City $ 60.15 Irwindale $ 62.00 San Dimas $ 62.30 Arcadia $ 63.00 Azusa $ 63.00 Monrovia $ 63.00 West Covina $ 63.00 Vernon $ 68.00 Whittier $ 90.00 La Verne $ 99.00 As of September 2016 SERVICES AGREEMENT THIS AGREEMENT is made and entered into this _.1�8�h. day of December, 2013 by and between the City of Baldwin Park, ("City"), and West Coast wArb ristslin . ("Consultant'). In consideration of the following mutual covenants, provisions and agreements, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Consultant agree as follows: 1, SCOPEOFSERVICES. Consultant agrees to perform during the term of this Agreement, the tasks, obligations, and services set forth in the "Scope of Services" attached to and incorporated into this Agreement as "Technical Specifications". 2. COMPENSATION. City shall pay for the services performed by Consultant pursuant to the terms of this Agreement at the time and manner set forth in the "Schedule of Compensation" attached to and incorporated into this Agreement as Schedule of Compensation, in an amount not to exceed $95,000 in the current City Fiscal Year. 3. TIME FOR PERFORMANCE. Time is of the essence in the performance of this Agreement. This is an annual contract with up to four one-year extensions upon mutual agreement of the parties. 4. AUDIT OR EXAMINATION. Consultant shall keep all records of funds received from City and make them accessible for audit or examination for a period of three years after final payments are issued and other pending matters. 5. STATUS OF CONSULTANT. Consultant shall provide all necessary personnel, equipment and material, at its sole expense, in order to perform the services required of it pursuant to this Agreement. For the purpose of this Agreement, Consultant shall be deemed, for all purposes, an independent contractor and shall have control of all work and the manner in which it is performed. Consultant shall be free to contract for similar services to be performed for other entities while under contract with City. Consultant is not an agent or employee of City, and is not entitled to participate in any pension plan, insurance, bonus or similar benefits City provides for its employees. Consultant shall be responsible to pay and hold City harmless from any and all payroll and other taxes and interest thereon and penalties, therefore, which may become due as a result of services performed hereunder. 6. ASSIGNMENT. This Agreement is for the specific, services with Consultant as set forth herein. Any attempt by Consultant to assign the benefits or burdens of this Agreement without written approval of City is prohibited and shall be null and void; except that Consultant may assign payments due under this Agreement to a financial institution. 7. RIGHT O UTILIZE OTHERS. City reserves the right to utilize others to perform work similar to the Services provided herein. 8. !COMPLIANCE WITH LAW. Contract services shall be provided in accordance with the applicable laws and regulations of all governmental agencies that are in force at the time services are performed. Consultant shall be responsible for becoming aware of and staying abreast of all such laws and ensuring that all services provided hereunder conform with Consultant Services Agreement — West Coast Arborists, Inc. such laws. The terms of this Agreement shall be interpreted according to the laws of the State of California. 9. LIABILITY. Consultant shall indemnify, hold harmless, and defend City, its officials, officers, and employees against any and all actions, claims, damages, liabilities, losses or expenses of whatsoever kind, name or nature, including legal costs and reasonable attorneys' fees, whether or not suit is actually filed, and any judgment rendered against City and/or its officials, officers, or employees that may be asserted or claimed by any person, firm, or entity to the proportionate extent arising out of Consultants' negligent performance, or the negligent performance of its agents, employees, subcontractors, or invitees, as well as, negligent acts or omissions of Consultant, it's agents, employees, subcontractors or invitees, however, this indemnity clause shall not apply if there is concurrent passive or active negligence on the part of City, or its officials, officers, agents or employees. 10. N%J ALICE,. Consultant shall maintain insurance coverage in accordance with the following during the course of its performance hereunder: (A) Comprehensive General Liability Insurance (including premises and operations, contractual liability, personal injury and independent Consultants' liability) with the following minimum limits of liability: (1) Personal or Bodily Injury -- $1,000,000, single limit, per occurrence; and (2) Property Damage -- $1,000,000, single limit, per occurrence; or (3) Combined single limits -- $2,000,000. (B) Comprehensive Automobile Liability Insurance including as applicable own, hired and non -owned automobiles with the following minimum limits of liability: (1) Personal or Bodily Injury — $1,000,000, single limit, per occurrence; and (2) Property Damage -- $1,000,000, single limit, per occurrence; or (3) Combined single limits -- $2,000,000. (C) Professional Liability insurance with annual aggregates of $1,000,000 or such other amount as may be approved in writing by the City. (D) Worker's Compensation Insurance that complies with the minimum statutory requirements of the State of California. (E) Prior to commencement of services hereunder, Consultant shall provide City with a certificate of Insurance reflecting the above, and an endorsement for each r)olicv of Insurance which shall provide: (1) the City, and its officials, officers, agents and employees are named as additional insured and Worker's Compensation); (2) the coverage provided shall be primary and Worker's Compensation) as respects to City, its officials, officers, agents or employees; moreover, any insurance or self-insurance maintained by City or its officials, officers, agents or employees shall be in excess of Consultants' insurance and not contributed with it. (3) The insurer shall provide at least thirty (30) days prior written notice to City of cancellation or of any material change in coverage before such change or cancellation becomes effective. Consultant Services Agreement -- West Coast Arborists, Inc. (F) With respect to Workers' Compensation Insurance, the insurer shall agree to waive all rights of subrogation against City and City personnel for losses arising from work performed by Consultant for City, and the insurer's agreement in this regard shall be reflected in the Workers' Compensation Insurance endorsement. 11. OWNERSI IIP Q UIQ CU RLS. All of the documents required to be prepared pursuant hereto shall, upon the completion thereof, be deemed for all purposes to be the property of City. City's ownership of documents includes any and all analysis, computations, plans, correspondence and/or other pertinent data, information, documents, and computer media, including disks and other materials gathered or prepared by Consultant in performance of this Agreement. Such work product shall be transmitted to City within ten (10) days after a written request therefore. Consultant may retain copies of such products. 12. RECORDS AND INSPECTION,. Consultant shall maintain full and accurate records with respect to all services and matters covered under this Agreement. City shall have free access at all reasonable times to such records, and the right to examine and audit the same and to make transcripts there from, and to inspect all program data, documents, proceedings and activities. Consultant shall maintain an up-to-date list of key personnel and telephone numbers for emergency contact after normal business hours. 13. TAXPAYER IDENTIFICATION NUMBER. Consultant shall provide City with a complete Request for Taxpayer Identification Number and Certification, Form W-9, as issued by the Internal Revenue Service. 14. CONFLICT OF INTEREST. Consultant agrees that any conflict or potential conflict of interest shall be fully disclosed prior to execution of contract and Consultant shall comply with all applicable federal, state and county laws and regulations governing conflict of interest. 15. POLITICAL ACTIVITY/LOBBYING CERTIFICATION. Consultant may not conduct any activity, including any payment to any person, officer, or employee of any governmental agency or body or member of Congress in connection with the awarding of any federal contract, grant, loan, intended to influence legislation, administrative rulemaking or the election of candidates for public office during time compensated under the representation that such activity is being performed as a part of this Agreement. 16. RIGHT TO TERMINATE ' ERMII A ""E. City may terminate this Agreement at any time, with or without cause, in its sole discretion, with thirty (30) days written notice. 17. EFFECT OF TERMINATION. Upon termination as stated in Paragraph "16" of this Agreement, City shall be liable to Consultant only for work performed by Consultant up to and including the date of termination of this Agreement, unless the termination is for cause, in which event Consultant need be compensated only to the extent required by law. Consultant shall be entitled to payment for work satisfactorily completed to date, based on proration of the compensation set forth in Exhibit "B" attached hereto. Such payment will be subject to City's receipt of a close-out billing. 18. LITIGATION FEES. Should litigation arise out of this Agreement for the performance thereof, the court shall award costs and expenses, including reasonable attorney's Consultant Services Agreement — West Coast Arborists, Inc. fees, to the prevailing party. In awarding attorney's fees, the court shall not be bound by any court fee schedule but shall award the full amount of costs, expenses and attorney's fees paid and/or incurred in good faith. "Prevailing Party" shall mean the party that obtains a favorable and final judgment. Should litigation occur, venue shall be in the Superior Court of Los Angeles County. This paragraph shall not apply and litigation fees shall not be awarded based on an order or otherwise final judgment that results from the parties' mutual settlement, arbitration, or mediation of the dispute. 19. COVENANTS AND CONATIONS. Each term and each provision of this Agreement to be performed by Consultant shall be construed to be both a covenant and a condition. 20. INTEGRA-TED AQREEMENT. This Agreement represents the entire Agreement between the City and Consultant. No verbal agreement or implied covenant shall be held to vary the provisions of this agreement. This Agreement shall bind and inure to the benefit of the parties to this Agreement, and any subsequent successors and assigns. 20. MODIFICATION OF AGIEE+IN. This Agreement may not be modified, nor may any of the terms, provisions or conditions be modified or waived or otherwise affected, except by a written amendment signed by all parties. 21. DESIGNATED REPRESENTATIVES. The Consultant Representative (A) designated below shall be responsible for job performance, negotiations, contractual matters, and coordination with the City. The City Representative (B) designated below shall act on the City's behalf as Project Manager. (A) CONSULTANT West Coast Arborists Inc.. 2200E. Via Burton Street Anaheim CA 92806 (B) Daniel Wall, P.E. Director of Public Works City of Baldwin Park 14403 East Pacific Avenue Baldwin Park, CA 91706 22. NOTICES. Notices pursuant to this Agreement shall be in writing and may be given by personal delivery or by mail. Notices shall be directed to City's Designated Representative identified in Paragraph "21" of this Agreement., Consultant shall send a copy of all notices to the City Attorney. City Attorney: Joseph Pannone / Aleshire & Wynder, LLP Continental Park Terrace 2361 Rosecrans Avenue, Suite 475 EI Segundo, CA 90245-4916 (310) 527-6663 SAFETY. Neither the professional activities of consultant, nor the presence of Consultant's employees or sub -consultants at the construction/project site(s), shall relieve the General Consultant Services Agreement — West Coast Arborists, Inc. Contractor(s) of their obligations, duties and responsibilities including, but not limited to, construction means, methods, sequence, techniques or procedures necessary for performing, superintending and coordinating the Work in accordance with the contract documents and any health or safety precautions required by any regulatory agencies, IN WITNESS WHEREOF, the parties have executed this Agreement on the day first above written. ATTEST; C A City CI rk CITY 0 Manuel Um CONSULTAN` WEST CiA R RISTS, INC. By:_ Narne: F rick � honey__ Gated: 1/15/1 Title: President Address: 2200 E. Via Burton �Anaheim,..CA 92806 Telephone: 1 991-1900 Consultant Services Agreement — West Coast Arborists, Inc. Exhibit A Scope of Services City of Baldwin Park Technical Specifications RFP2013-1 TREE TpimMENCir SERVICES CONTRACT N Or, ICE f _fNER—UCL'MM—TQ 211rLAMPLEK'- The intent of this document is to solicit proposals from bighly trained and qualified contractors with experience eproviding Tree jTijjjTdnV Services. ile C'ity is lodkig 1b I I le most responsive and responsible Contractor that will be committed to provide 6e best level of Service in Tnaintaiming the, City's trees. lluouoi a competitive qualification and. bid based procurement process, the City of Baldwin Park intends to enter into rni agreement with a qualified contra, axyrfor Tree Trimming Services. The ,contractor will be expected to use its own equipment, tools, traffic control and manpower to trim the City's trees. The contractor will also be responsible for material disposal. Services; Bidder shall complete, right-hand column indicating brief reasoning for exceptions to requirements when not acceptable. State, "Acceptable?' if requirements are agreeable as set forth in left-hand column. Equipment: Bidder sbaJ1 complete right-hand colmna indicating specific size and/or naa&e rind inodel of all c(,unponents when not oxactly as specific d. State "As Specified" if item is exactly as set forth in the left-hand column, FAILURE TO COMPLETE RIGHT HAND COL WILL INVALIDATE RIED ACCEPTABLE IAS CATEGORY I I SPECIFIED 1, PjjNERAL. SERVICES General services will consist of: A. Street trimming Acceptable B. Street tree aesthetic trimming C. Tree and stump removal (hourly basis) 10 '. N'` '. ..� { ... I, 1 ,'„I M n •. ...... a .......... ... ven .. ... e m For clarification, street tree trimming is raising the skirt and removing any hazardous limbs. Aesthetic trimming is raising the skirt, removing all dead or dying limbs, thinning, shaping, and crown reduction as needed. Please provide a cost breakdown for each section that is serviced In categories A-E. All trees assigned for trimming in any given month should be Acceptable trimmed in thirty (30) working days or less. General Services will not include emergency service calls. The trirnming will be re uest-driven and treys will vary in size according to the request, We have mature trees and developing trees and the best way to get a feel for the sl`e of trees is to dive different areas of the City and look at the trees,. Approximately 200 trees will be assigned for trimming each month. SCCttt E The Contractor shall meet with the City representative on Monday's between 9:30 a.m. and 10.00 a,m, in the City Yard office for the purpose of reviewing the week's work, receiving special, instructions, and discussing any problems encountered Acceptable on the job_ A list of the City trees that need work shall be given to the Contractor monthly, or more frequently if deemed necessary. The City will• provide maps and location of trees requiring maintenance. RGENQY WORK CALL OUT Three (3) men including all necessary equipment/disposal fees included and zero material markup. Emergency response should be within 24 hours. A cast per hour per emergency shall also be proposed. This must include all Acceptable manpower, equipment., tools, traffic control and disposal costs. The emergency call out includes travel time. 11 4.TAIIIA,� C lN�II"II.. Services shall be performed under the Contract in a skillful and competent manner; consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. The contractor represents Acceptable and maintains that it is highly skilled in the professional calling necessary to perform Tree Trimming Services. The contractor warrants that all employees and subcontractors shall have sufficient skill and experience to perform the services assigned to them. �- ;�.I.NAIa_Nl✓N �Ni.>��1f��l:�CmW, _w._._ Qualified personnel shall perform all services. The contractor represents that it, its employees and subcontractors have all licenses, including the State of California Contractors License, Acceptable License types (N -.fig, C, C-27). Permits, certifications, qualification and approvals of whatever nature that are legally required to perform .the services, including a City business license, and that such license and approvals shall be maintainedt _ .w�....__ l�rorr �houtthetermofthiscantract. 6. SUBCONTRACTORS ONT ACTC The contractor must disclose all subcontractors prior to being Acceptable awarded the bid. '7, EQUIPMENT AND PERSONNEL A. The contractor will provide all equipment and trained personnel to provide timely gree trimming services. Provide a feedback mechanism to keep the City informed As Specified on the status of each tree that is trimmed or completed work. The crew leader must be a certified Arborist. 12 Provide a pricing proposal that is a fixed fee per tree. Also include a cost per inch of trunk diameter on complete tree and Acceptable stump removals. Prevailing wage rust be paid for the terra of this contract. Prevailing wage reports shall accompany all invoices. l l'ii I� The contractor shall be knowledgeable of matters pertaining to tree trimming services. The contractor must have a minirnum o five (b) years experience in providing quality tree trimming Acceptable services. All crewmern ers performing trimming services rnust also have an Arborist license. The City of Baldwin Park desires a contractor that considers tree -trimming services a high priority. 0. W�"F tBPC� All tree branches, brush, tree trunks and other materials produced as a result of the contractor's operations under this contract become the property of the contractor. The contractor will be required to reduce, reuse, recycle and/or transform all materials whenever possible. Their materials shall not be deposited in a landfill. Ensure all waste materials generated from the service are properly disposed of in accordance with all applicable laws and Acceptable regulations. All costs for waste disposal are to be included in the contract price. Provide details of inethod of disposal or name and license number of the company that will provide these services for you. The contractor must turn in all dump and weight slips for waste disposal. . CrCI l MF ......_mm The contractor will provide brochures that are suitable to the Public Works Director, or his/her designee, that describe the tree trimming process and should be readily accessible to the citizens Acceptable of Baldwin Park. These brochures should be available in both English and Spanish. A sample brochure must be included with _your. bid submission. 13 12. BILLING Billing is to be by address and include tree species, caliper, variety (botani(,,a;l and common), trim date, condition and Acceptable appropriate data acceptable to the Public Works Director, or his/her designee. 13, i RE E INVENTORY DATABASE The Operations and Maintenanpe Division ision maintains a database of the existing trees in the City, The contractor will be Acceptable responsible for providing the City with information to keep the system current and accurate. 14. 'CCS"t� til The contractor is to supply, at no cost to the City, some representative pictures or video of "before" and "after" Acceptable trimming that are suitable for reproduction when requested by the 15CONTRACT LBI!H The length of this contract shall be for one (1) year with four (4) Acceptable one-year extensions at the Gity's option. 16, 1 IP:1.._ .,. . �ST ... .. kCP LI ..�..._ Provide three (3) local government agencies and/or company's Acceptable previous or current contact references that support your ability to provide Tree Trimming Services, 17,I.i AC��`CI pNON-COM LI NNE A. If the Public Works Director, or his/her designee, determines that there are deficiencies in the performance of this Agreement, the Public Works Director, or his/her designee, will provide a written notice to the contractor stating the deficiencies and specifying a time frame to correct the specified deficiencies. This time frame shall Acceptable be at least a 30 day notice or as determined by the Public Works Director, or his/her designee, to correct the specified deficiencies, 14 B. Sbould dic contractor fail to co sect any deficiencics within tile, stated tine frame, the Public Work's Director, or his/her designee, may exercise the following measures: 1. Deduct froll, the contractor's payment file amount Ilemsary to corred the daficiency, ftloladi:ng City overhead costs and impose a deficiency dedoofion, 2. Withhold the entire or partial payment 3. Terminate the contract 15 Acceptable Consultant Services Agreement — West Coast Arborists, Inc. Exhibit B Schedule of Com ensation REQUEST FOR QUOTES: DESCRIPTION OF RFP: COMPANY NAME/ADDRESS: NAME OF AUT110-RIZED ]ZE-PRI S'ENTA'JIVE PIUNT NAME, TE1.'X3P1-1ONJ-3. NO. FAXN0. PRICE FORM gjVynde Tree Tx' St' ices 2200 E. Via Burton A. GENERAL SERVICES 1. Cost per Street Tree Trimming 2. Cost per Palm Tree Trimming (714) 991-1027 3. Cost per Inch of Trunk Diameter on Tree and Stump Removal Ob< 17 FUM FIXED PRICE 37.00 37.00 $ 19.00 Price Form (Continued) B. EMERGENCY WORK 1. Call Out Cost per Hour �. mmm. 60.00.. man hour .. (includes all manpower, equipment.,tools, traffic contpl, disposal costs, and zero material markup) C. OTHER TOTAL: $ 153.00 Attach additional pages, if necessary, for other services not listed above. 18 STAFF REPORT ITEM NO. �, /yiD/r gm G% J��4v,,�, TO: Honorable Mayor and City Councilmembers 13 OF THE FROM: Richard Dukellis, Interim Human Resources Manager CTZ�1' SAN GABRIEL �� Shannon Yauchzee, Chief Executive Officer VALLEY `' DATE: September 21, 2016 SUBJECT: ADOPTION OF SALARY RESOLUTION NO. 2016-150 TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE OF ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES SUMMARY This action will adopt Salary Resolution #2016-150 creating a comprehensive City of Baldwin Park Pay Schedule that will include pay rate information for all full-time and part-time employees as well as Elected Officials. This document is compliant with CalPERS requirements and will "ensure consistency between CalPERS employees and enhance the disclosure and transparency of public employee compensation. FISCAL IMPACT There are no fiscal impacts related to this action. All payrates on the attached Pay Schedule are currently in place based on previous council actions of approving labor contracts with bargaining groups and the recent Chief Executive Officer's updated employment contract. There are no changes to existing salaries initiated by creation of this comprehensive Pay Schedule that is addressing CaIPERS' compensation reporting requirements. RECOMMENDATION It is recommended that the City Council approve resolution 2016-150, a resolution of the City Council of the City of Baldwin Park, to create and adopt the comprehensive Pay Schedule. BACKGROUND A comprehensive Pay Schedule for the City of Baldwin Park is being developed in accordance with CalPERS regulations. These requirements are intended to ensure consistency by CalPERS in the reporting of compensation and enhance the disclosure and transparency of public employee compensation by requiring that the payrates be listed on a single pay schedule or single document meeting CalPERS' requirements. CalPERS requires that each pay schedule include a position title for every employee position, payrate for each position and a time base for each pay rate. Whenever there are future changes to one or more payrates, whether through the Meet and Confer process, employment contracts, reclassifications, etc., the City is required to update the Salary Schedule and present to the City Council for review and approval. The Pay Schedule is required to be immediately accessible and available for public review from the employer. Posting the Pay Schedule on the City of Baldwin Park's website meets this requirement. The Pay Schedule is required to indicate an effective date and date of any revisions and is to be retained by the City and available for public inspection for not less than five years. The date of the most recent pay rate was on August 3, 2016 when the City approved the Chief Executive Officer's employment contract. Upon adoption of Resolution 2016-150, the Pay Schedule will be created, meet CalPERS requirements and placed on the City of Baldwin Park's website. Resolution 2016-150 Pay Schedule Salary Resolution Citv of Baldwin Park ALTERNATIVES There are no alternatives because if not approved, the City will not be in compliance with Ca1PERS guidelines. LEGAL REVIEW This report has been reviewed and approved by the City Attorney as to legal form and content. ATTACHMENTS #1: Resolution 2016-150 #2: Pay Schedule effective August 3, 2016 RESOLUTION NO. 2016-150 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups and has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CaIPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Attachment B, with the date, August 3, 2016, which was the effective date of the most recent individual salary adjustment. NOW, THEREFORE, the City Council of the City of Baldwin Park does hereby RESOLVE, DETERMINE AND ORDER as follows: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials.," attached hereto as Exhibit "B" to be effective on August 3, 2016. SECTION 2. Resolutions or portions thereof in conflict hereby are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. Resolution 2016-150 Page 2 APPROVED AND ADOPTED THIS 21St day of September, 2016. Manuel Lozano Mayor ATTEST: STATE OF CALIFORNIA COUNTY OF LOS ANGELES ss. CITY OF BALDWIN PARK I, Alejandra Avila, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at its regular meeting of the 21St day of September 2016, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS'. ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCILMEMBERS: Alejandra Avila CITY CLERK rz C 0 0 o I0 0 3cr N — 00 0) A 2r 0 0 01 g °c I < m �• 0 -I _n I 0 �o n N c 3 cn O � O• ? f N CD -.N IN TI ofo I� 0 0 l 0 i o 0 N m D n 0 _ o CL � O c<D .W4 D 00 D _ c� 0 m Q W n CD Z C:) `� D rn p M i of o ;o 0 0 O r o v l A I W N i (.0 C CD m Z 0 n o N N N N S S CD L+ M 0 0 o o o m 0 c m (n 69 Efl 69 169 N ',......... T •tND o_ I0 v n 3 m d m Q W 0 N � w W 2. m Ln � 3 n � - ' 0• CA m 90 m m0 O m Z 0 b.,. N 71M cO •n A -40n 1 0 c m (n 69 Efl 69 169 N ',......... 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O)(3) .,,,, W » I 69 64 69 b9 69 EA 69 69 69 EA � b9 69 "� 69 69 ..EA (A W Q) • G% d) O O) CJ) U7 (T Us (Jt A A A A A A W W W W W W O O O) m N W W 00 A l ,-• �I W W W W O 0) 0) m 6) 0) W (D W (D (0 1 00 00 00 00 (D I N (n O co CD co A O O O (O CD O m !2 c2 L G7 J O 6N) O •f (n cn (NT JA IA JA JA p �1AA A ACT tlC)(7A A C:) AOO W �J J J 9)� O O OO O fD T1 61 U) W I W O (D O (0 03 00 (D N N N I N U) W (O (D (D (D A m D n 0 SU =� o T C (D m (D`c C/) D m 3C cam' r a =01 Q W 0C Z CD N X c(Dn o � � v TDT N A E v -u{ v v z 'o � N W O m 00 -1 a) Ln fO C A ;o n CD (D Z 7 CD 0 on CD �I M ID 1 p ao ao v v v rn (n W N J W O O000 D .1 �, �I � co ao aD v � -- Jbo w 00 00 po --4 W _..w 11 �Cn Do '02 N� ..�-� W� ON N ' — E-A 1 10 W 00 W -P (O (h N I o o c2 OD a km 0 I A W W I{ CWi1 0000 N V N N �,I N ,O O CD C4 00O0 Cp � oo W W UWi OD N -n 69 EA fA ---bo fl <fl ER — N -�+ -�+ O W CC) ±W ..00 ? co 0) A W _... w0 0000 C) m V CD �D y n (D o CL C CD D � '. =r = O CD � Q W 0 (D N � O cn 0 � v ITEM NO, STAFF REPORT -i.)�J TO: Il+�anorable Mayorand Members ofthe +� ity ouuncillHUBFROM: llichardDukel s, Interim Huuu� an l esouuu cesT1SAN oDATE: Slily"l EMB1,� R 1, 2016viaSUBJECT: ADOPT A RESOLUTION TO IMPLEMENT A POST �'AEMPLOYMENT HEALTH PLAN FOR PUBLIC EMPLOYEES (PEHP) FOR THE CITY OF BALDWIN PARK SUMMARY This action will adopt Resolution 2016-149 adopting the employee funded Post Employment Health Plan for Public Employees (PEHP) for the City of Baldwin Park on behalf of the Chief Executive Officer (CEO). This action is a follow-up to the City Council's actions of August 17, 2016 where the City Council approved an amended employment agreement with the CEO. That agreement included provision that the City shall pass a resolution to set up a Post -Employment Health Plan. FISCAL IMPACT There is no fiscal impact to the City of Baldwin Park associated with this item. All contributions to the plan will be made by the employee and no contributions will be made by the City. RECOMMENDATION It is recommended that the City Council approve resolution 2016-149 adopting a Post Employment Health Plan and direct the City to move forward with the process of implementing the plan with the Plan Sponsor, Nationwide Retirement Solutions, Inc. BACKGROUND Per the City Council's direction on August 17, 2016 to pass a resolution to set up a Post Employment Health Plan for the City of Baldwin Park, staff has collaborated with Nationwide Retirement Solutions, Inc. to set up such a prograin. PlJIP is an employee benefit to help pre -find the future cost of health care expenses for former and retiring employees, their spouse and their dependents with tax-free dollars. "The employer may elect to fund the program with either an ongoing contribution or solely contribute other types of payouts employees would normally receive in the form of a cash payment (e.g., unused sick and/or vacation leave). The plan being set up with the City of Baldwin Parl< will be comprised exclusively of employee contributions. There will be no contributions made by the City to the program. LEGAL REVIEW This report has been reviewed and approved by the City Attorney as to legal form and content. ALTERNATIVES There is no alternative as this action fulfills a contractual obligation. ATTACHMENTS #1: Resolution 2016-149 RESOLUTION NO. 2016-149 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK APPROVING THE ADOPTION OF A POST EMPLOYMENT HEALTH PLAN (PERP) IN THE MATTER of adopting the Post Employment Health Plan for Public Employees (PEHP) for the Employees of the City of Baldwin Park: WHEREAS, a Post Employment Health Plan for Public Employees has been established for eligible public employees, pursuant to section 501(c)(9) of the Internal Revenue Code permitting such plans; and WHEREAS, the Plan may be funded with Employer contributions, mandatory Eligible Employee contributions or combination of both on behalf of the eligible employee in a manner permitted under the Plan; and WHEREAS, under the PEHP program, Nationwide Retirement Solutions (NRS), Inc., will provide administrative services in exchange for a fee as agreed upon by the Employer and NRS; NOW THEREFORE BE IT HEREBY RESOLVED, by the City Council of the City of Baldwin Park as follows: The City Council of the City of Baldwin Park, meeting in a regularly scheduled session, hereby adopts this PEHP program on behalf of the Chief Executive Officer/City Manager of the City of Baldwin Park to be funded by Mandatory Employee Contribution of $300.00 24 times per year and, upon separation, 20% of any remaining vacation pay. The officers and employers of the City of Baldwin Park are hereby authorized to execute, on behalf of the eligible employees of the Employer, a participation agreement with NRS, authorizing NRS to act as the Administrator of the Plan and the agent for the Employer, and other such agreements and contracts as are necessary to implement the program. PASSED, APPROVED, AND ADOPTED this 21St day of September, 2016. MANUEL LOZANO MAYOR Resolution No. 2016-149 Page 2 ATTEST: STATE OF CALIFORNIA COUNTY OF LOS ANGELES SS: CITY OF BALDWIN PARK I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2016-149 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on September 21, 2016 and that the same was adopted by the following vote to wit: AYES, COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ALEJANDRA AVILA CITY CLERK ITEM NO. STAFF RE POlUr ! TO: Honorable Mayor and Members of the City Council ^ ti... us of , . " r " �� ' �'�, FROM: Manuel Carrillo Jr., Director of Recreation & Community Servi ca J sANaG Bre-tri;' ,� DATE: September 21, 2016 SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY BALDWIN PARK SUPPORTING THE LOS ANGELES COUNTY "SAFE, CLEAN NEIGHBORHOOD PARKS AND OPEN SPACE FOR ALL MEASURE" SUMMARY The purpose of this staff report is for the City Council to consideradopting Resolution No. 2016-151 in support of the Los Angeles County "Safe, Clean Neighborhood Parks and Open Space for All Measure." FISCAL IMPACT There is no fiscal impact by this action at this time. RECOMMENDATION Staff recommends the City Council: 1) Waive further reading, read by title only and adopt Resolution No. 2016-151 entitled "RESOLUTION OF THE CITY COUNCIL OF THE CITY BALDWIN PARK IN SUPPORT OF THE LOS ANGELES COUNTY SAFE, CLEAN NEIGHBORHOOD PARKS AND OPEN SPACE FOR ALL MEASURE"; and 2) Authorize the Mayor to execute resolution, letters of support as needed and appropriate to demonstrate the City Council's support of the Los Angeles County Safe, Clean Neighborhood Parks and Open Space for All Measure on behalf of the City Council. BACKGROUND Communities in the Los Angeles County (County) have benefited for over the last twenty years from grant funds generated by Proposition A to protect and maintain our neighborhood parks, outdoor areas and water resources. However, in 2015, funding from the 1992 Proposition A expired. In 2019, the second measure will expire, eliminating this funding source from the County and local communities. The County has completed a comprehensive needs assessment with input from the 88 cities within the County, which clearly indicates the continuing need for this funding if our local parks are to remain clean and safe. The proposed Safe, Clean Neighborhood Parks and Beaches Measure of 2016 (Measure A) asks voters to continue to support for local parks, beaches, open space, and water resources by approving an annual parcel tax of $0.015 cents per square foot of development. If approved, the estimated tax for the owner of a 1,500 a square foot home would be $22.50 per year, and will be included on the annual property tax bill. Generating an approximately $94 million per year for our local parks, beaches, and open space areas, Measure A will replace expiring dedicated funding from the voter -approved Proposition A of 1992 and 1999. A total of 77.8% of the revenue generated will go directly to projects and priorities identified in the needs assessments; 15% will be set aside for maintenance and servicing of these grant projects; and the remaining 7.2% will be available for program implementation, innovation and oversight. Resolution No. 2016-151 Page 2 Proposition A was a County bond measure approved by the voters in 1992 and extended n 1996 which has provided funding to communities throughout the County to complete over 1,500 park projects. The City of Baldwin Park has received numerous Proposition A grants over the last twenty years, funding in whole or in part for over 6 park projects totaling $1,820,353, the most recent being Tree Planting Project, Barnes Park and Walnut Creek Nature Park Phase I. We are currently working on the Walnut Creek Nature Park Phase 11 restoration partially funded by Prop A. In addition, the City annually receives funding to maintain previously funded projects. LEGAL REVIEW The City Attorney has reviewed the resolution and has approved it as to form. ALTERNATIVES The City Council may choose not to endorse the resolution. ATTACHMENT 1) Resolution No. 2016-151 2) Ballot Measure Fact Sheet Resolution No. 2016-151 RESOLUTION OF THE CITY OF BALDWIN PARK SUPPORTING THE LOS ANGELES COUNTY "SAFE, CLEAN NEIGHBORHOOD PARKS AND OPEN SPACE FOR ALL MEASURE" WHEREAS, every year, more than 70 million people visit the over 3,000 parks in the County of Los Angeles ("County") and its cities, including their neighborhood parks, and participate in park -sponsored recreational programs. Parks are important to families, as millions of children and youth use park facilities for after-school, weekend, and summer programs, and millions of seniors attend programs at nearby senior centers; and WHEREAS, parks, natural lands, open space, and beaches contribute to the health and vitality of citizens in the County. These natural areas help make the community a wonderful place to live and protect our quality of life; and WHEREAS, the City of Baldwin Park ("City") has a long history of making significant investments in parks and recreation, open spaces, and natural areas; and WHEREAS, for over 20 years the City has relied on local voter approved funding to protect and maintain local neighborhood, City parks, outdoor areas, rivers, watersheds, and local water resources. This funding is expiring and the City faces the loss of the only source of dedicated local funding for neighborhood parks; and WHEREAS, dedicated local funding has served as matching funds for State, Federal, and philanthropic funding, and in this way is essential for communities to receive their fair share of available resources; and WHEREAS, the County has undertaken an inventory, analysis, and community engagement process that culminated in the 2016 Los Angeles Countywide Comprehensive Park and Recreation Needs Assessment Final Report ("2016 Countywide Park Needs Assessment"), which allowed the County to document and analyze the needs of all the communities within its jurisdiction; and WHEREAS, the 2016 Countywide Park Needs Assessment shows that there is a serious need for tens of billions of dollars in investments in safe neighborhood parks; protection of rivers, streams, lakes, beaches and watersheds; safe and healthy communities; urban greening; sustainability and energy efficiency; senior centers, community and facility rehabilitation and maintenance; at -risk youth job training and placement, gang violence prevention; and improved community access, connectivity and trails to these facilities Resolution No. 2016-151 Page 2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVES AS FOLLOWS: SECTION 1. The City Council hereby declares its support for the Los Angeles County "Safe, Clean Neighborhood Parks and Open Space for All" measure on the November 8, 2016 county -wide ballot. SECTION 2. The City Council hereby encourages all voters to educate themselves as to whether or not to support the Los Angeles County "Safe, Clean Neighborhood Parks and Open Space for All" measure and to get out and vote in the November election. SECTION 3. The City Council hereby encourages all of the City's local non-profit and volunteer organizations who use and benefit from the City's park facilities to educate themselves and their members about this legislation in a manner which is allowable and appropriate within the rules and judgment of each organization. SECTION 4. The City Council hereby authorizes the Mayor to sign letters of support as needed and appropriate to demonstrate the City Council's support of the Los Angeles County Safe, Clean Neighborhood Parks and Open Space for All measure on behalf of the City Council. SECTION 5. The City Clerk shall certify to the adoption of this Resolution which shall be effective upon adoption. Passed, approved and adopted the 21St day of September 2016 I, the undersigned, hereby certify that the foregoing Resolution No. 2016-151 was duly adopted by the City Council following a roll call vote: MANUEL LOZANO MAYOR Resolution No. 2016-151 Page 3 ATTEST: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS. CITY OF BALDWIN PARK ) I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 2016-151 was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting of the City Council on September 21, 2016, by the following vote: AYES: COUNCIL MEMBERS:: NOES: COUNCIL MEMBERS., ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ALEJANDRA AVILA CITY CLERK Parks, open space and natural water resources are vital to life here in L.A. These natural areas help make our community a wonderful place to live and protect our quality of life, as we all spend so much time indoors and in our cars. For over 20 years, our community has relied on local, voter -approved funding to protect and maintain our neighborhood parks, outdoor areas and water resources— and now this funding is expiring. When this funding expires, we could lose the only source of dedicated local funding for our neighborhood parks. LOCAL BALLOT MEASURE The County of L.A. has placed the Safe, Clean Neighborhood Parks Measure on the November 2016 ballot. The measure, if approved, will provide stable, local funding from an annual parcel tax of 1.5 cents per square foot of building floor area, for our parks and open space including beaches and cultural institutions throughout Los Angeles. Funding from the measure will: Repair and Upgrade Neighborhood Parks Local funding helps to ensure we can upgrade playground equipment, parks, recreation centers and senior centers so they are safe and meet the needs of our community. Keep Kids Safe and Out of Trouble Kids in our community need safe places to play and opportunities to participate in after school programs. Safe, clean parks and recreation centers are key to helping keep kids off the streets and out of trouble. Conserve Water We are four years into a historic drought, making water conservation critical. The implementation of drought -tolerant plants and use of recycled water and rainwater all help to reduce the amount of water wasted, saving money and protecting our local water resources. Protect Our Last Open Spaces Most of the remaining undeveloped open spaces and natural areas in LA County are located next to rivers, creeks, streams and lakes. Our parks help to protect and preserve these undeveloped natural areas for future generations.. M RPOSD.LACounty.govff] /RPOSD 13@RPOSD a @RPOSD The Safe, Clean Neighborhood Parks 'Measure of 2016 will provide funding for: �,„ Providing safe places to play Protectingclean water` rc�socrr-ces, including rivers and creeks Visit RPOSD.LACounty.gov to read the full text of the Removing asbestos, r�rnold and lead p�aintfrorn aging recreation canters Safe, Clean Neighborhood Deducing gang, activity Parks Measure and how it will impact parks I.-rrsuring that drinking water is, safe at park and recreation centers and open space in our Protecting clean and safe beaches neighborhoods. Protecting and preserving parks and natural ares ITEM NO. 12-1 SUMMARY This report is to present to the City Council, for its review and approval, the proposed 5 -year capital improvement projects (CIP) of the City of Baldwin Park from July 1, 2016 to June 30, 2021. The total 5 -year CIP budget is $15,704,257 as follows: Additional _. 2016-17* 2017-18 2018-19 2019-20 2020-21 Total General Fund LD TO: it Honorable Mayor and City Counc' members - N"�sro tE FROM: Rose Tam, Director of Financed - - 12,814,007 rl 8,00() 184,000 - ri - 192,000 Funding to be Determined • o,s� .,,., 875,750 DATE: September 21, 2016 JAY v,a w�,L Y ! SUBJECT: 5 -YEAR CAPITAL IMPROVEMENT PROJECT (CIP) BUDGET FOR FISCAL YEAR 2016-2021 SUMMARY This report is to present to the City Council, for its review and approval, the proposed 5 -year capital improvement projects (CIP) of the City of Baldwin Park from July 1, 2016 to June 30, 2021. The total 5 -year CIP budget is $15,704,257 as follows: *Only the FY 2016-17 column will require an additional appropriation at this time. Please see Attachments for details/list of the proposed CIP. FISCAL IMPACT The General Fund appropriation for FY 2016-17 will increase by $38,000, Special Revenue Funds by $10,934,007, and Internal Service Fund by $8,000. All other planned CIP from fiscal year 2017-18 to 2020-21 are presented for planning purposes and shall be funded from expected revenues in future fiscal years. RECOMMENDATION Staff evaluated the 5 -year CIP program and found the projects as necessary expenditures to maintain infrastructure and improve the City's delivery of quality services to its residents and customers. Staff recommends that the City Council approve the 5 -year CIP program and additional appropriations for FY 2016-17. LEGAL REVIEW None required. BACKGROUND During the preparation of the City's annual operating budget for the FY 2016-17, several capital improvement projects were deferred. As best practice, the City's department heads discussed the City's capital improvement plans for the next 5 years bearing in mind the available fund balances Additional 2016-17* 2017-18 2018-19 2019-20 2020-21 Total General Fund $ 38,000 $ 165,000 $ $ - $ - $ 203,000 Special Revenue Funds 10,934,,007 1,880,000 - - 12,814,007 Internal Service Funds 8,00() 184,000 - ri - 192,000 Funding to be Determined _ .,,., 875,750 281,000 383,500 955,000 2,4195,250 Total $10,9'80,007 $3,104,750 $281,000 $383,500 $955,000 $15,704,257 *Only the FY 2016-17 column will require an additional appropriation at this time. Please see Attachments for details/list of the proposed CIP. FISCAL IMPACT The General Fund appropriation for FY 2016-17 will increase by $38,000, Special Revenue Funds by $10,934,007, and Internal Service Fund by $8,000. All other planned CIP from fiscal year 2017-18 to 2020-21 are presented for planning purposes and shall be funded from expected revenues in future fiscal years. RECOMMENDATION Staff evaluated the 5 -year CIP program and found the projects as necessary expenditures to maintain infrastructure and improve the City's delivery of quality services to its residents and customers. Staff recommends that the City Council approve the 5 -year CIP program and additional appropriations for FY 2016-17. LEGAL REVIEW None required. BACKGROUND During the preparation of the City's annual operating budget for the FY 2016-17, several capital improvement projects were deferred. As best practice, the City's department heads discussed the City's capital improvement plans for the next 5 years bearing in mind the available fund balances CIP Staff Report September 21, 2016 Page 2 of each fund. After several meetings, listed below are the proposed major capital improvement plans for the next 5 fiscal years. Administration Staff recommends appropriating $203,000 to upgrade the City's telephone system and IT -related equipment from the General Fund. $8,000 is allocated for database software and will be funded by the Information Services Fund. The existing telephone system was acquired in 2005. The re- wiring of the computer network cable, database software, purchase of new desktop workstations, and network storage server will improve efficiency and increase the storage capacity of the City's computer system. Police Staff recommends allocating $90,000 for the purchase of three electric / hybrid vehicles for code enforcement and will be funded from the Air Quality Improvement Fund. $200,000 is allocated to replace the Police radio system. The existing radio system was acquired in 1997. Funding for this project is yet to be determined. Public Works Some of the major capital improvement projects that will commence in FY 2016-17 are as follows: 1. Complete Streets — Maine ($3,511,000) - to be funded from Prop C, Safe Route to School, and Active Transportation Program grants. The Maine Avenue Complete Streets project will construct improvements along Maine Avenue from Los Angeles Street to Arrow Highway. These improvements will include the reconfiguration of the corridor by means of a road diet decreasing automobile travel lanes from the current four to two. This project will also include Class II bikeways, curb extensions, sidewalk extensions, roundabout, pedestrian lighting and ADA accessibility improvements. The project is scheduled for construction in February 2017. 2. Median Landscaping ($1,925,000) - to be funded from Prop C, Gas Tax, Surface Transportation, and Measure R. This project will remove turf from selected center medians and replace it with low water landscaping. The project is nearing design completion and will be taken to City Council for approval of plans and specifications in September 2016. Construction will commence in November 2016. 3. San Gabriel River Bikeway ($1,078,000) - to be funded from Surface Transportation, Bicycle and Pedestrian Safety, and other grants. The proposed bike path will run along Walnut Creek Wash from Baldwin Park Blvd. to the San Gabriel River. The pathway will connect to Walnut Creek Nature Park. The project is currently in design phase and it is not expected to go to construction until next year. 4. Walnut Creek NP Restoration, Phase 2 ($963,000) - to be funded from CDBG, California NRA and LA Parks grants. This project will bring needed structural improvements to the park's Observation Structure. Improvements include new roofing, flooring, deck replacement and new guardrail. Additionally, a new pedestrian bridge and two play areas will be constructed featuring nature themed amenities. Other improvements include expansion of irrigation system, tree planting, concrete paving, log and boulder placement CIP Staff Report September 21, 2016 Page 3 and ADA parking lot stalls. The project is expected to commence construction in August 2016. The amount includes $175,000 from CDBG Fund which is included in the FY 2016-17 adopted budget. 5. Frasier Avenue Improvement ($895,288) - to be funded from other grants. This project will provide pedestrian and bicycle safety improvements along Frasier Avenue between San Bernardino Freeway and Foster Avenue. The project is currently under design. It is expected that the design will be completed by November 2016. 6. Corak Storm Drain ($883,553) - to be funded from CDBG, Gas Tax, Prop C and Measure R. This project will bring greatly needed drainage improvements to the intersection of Ramona Blvd. and Francisquito Avenue. The benefit area includes a portion of Earl Street, Corak Street and Francisquito Avenue. This project is expected to commence construction in August 2016. The amount includes $633,553 from CDBG and Prop C which is included in the FY 2016-17 adopted budget. 7. Metrolink Quiet Zones ($500,000) - to be funded from Surface Transportation Program. This project consists of two Metrolink street crossings: Merced Avenue and MacDevitt Avenue. The project will bring needed safety improvements required by the State for the designation of a Quiet Zone 8. Pacific Ave/Bogart Traffic Signal ($484,430) - to be funded from Prop C and Highway Safety Improvement Program grant funds. This project will install a new traffic signal at Pacific Avenue and Bogart Street including all rail crossing safety improvements required by the State for designation of a Quiet Zone. 9. Bus Stop Enhancement Program ($374,000) - to be funded from Prop C and grant funds. This project will bring upgrades to City bus stops, including ADA access improvements, as well as amenities such as, new bus shelters and trash receptacles. This project is currently under design and will commence construction in January 2017. At the City Council's direction, the originally -adopted banner poles budget of $250,000 from the Measure R funds has been re -allocated to: (a) $120,000 for dual -sided digital marquees (design and locations to be determined), (b) $80,000 for alley improvements (locations to be determined), and (c) $50,000 for Corak Storm Drain project which was awarded on 8-3-2016 and the construction was started on 8-29-2016. ALTERNATIVES The alternatives that the City Council can choose include: 1. Approve the 5 -Year Capital Improvement Project budget in its present form 2. Provide staff alternative direction to fund or not fund specific projects ATTACHMENTS 1. 5 -Year Capital Improvement Project Summary 2. 5 -Year Capital Improvement Project Funding Schedule by Fund 3. 5 -Year Capital Improvement Project Funding Schedule by Department City of Baldwin Park FN6-Year Capital Improvement Project Summary Fiscal Year 2016-17 to Fiscal Year 2020-21 General Fund Air Quality Park Fees (Quimby Act) Gas Tax Surface Transportation Traffic Congestion Bicycle and Pedestrian Safety Prop C Measure R Other Grants Information Services Fleet Service Funding to be Determined Total Additional 2016-17* 2017-18 2018-19 2019-20 2020-21 Total $ 38,000: $ 165,000 $ - $ - $ - $ 203,000 195,000 - 195,000 66,000 66,000 495,000 495,000 1,818,000 1,818,000 158,289 158,289 140,000 140,000 1,099,430 480,000 1,579,430 61.0,000 600,000 m 1,210,000 6,352,288 800,000 7,152,288 8,000 8,000 - 184,000 - 184,000 875,750 281,000 383,500 955,000 2,495,250 $ 10,980,007 $ 3,104,750 $ 281,000 $ 383,500 $ 9155,000 $ 15,704,257 *Only the FY2016-17column will require an additional appropriation at this time. 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"6VIM STAFF REPORT CITYOF BALD'"�IN /In� J Y ISI III it 0°k` ^" TO: The Honorable Mayor and Members of the City Council and the 0 ru�or , Honorable Chair and Members of the HousingSuccessor !c�tc ,r�r y°, o ssa f FROM: Manuel Carrillo, Director of 11 �cr anti � end. Community Serve T "L L Suzie Ruelas, Housing Manager DATE: September 21, 2016 SUBJECT: Purchase Agreement and Loan Documents between the City of Baldwin Park, Rio Hondo Community Development Commission, City's Community Housing Development Organization's (CHDO's) and the Housing Successor Agency for the Property Located at 4500 Bresee Avenue, Baldwin Park SUMMARY The City Council is requested to consider approval of a loan of $252,662 from the HOME Fund (Fund #221) to the Rio Hondo Community Development Corporation (RHCDC), the City's CHDO, to purchase the property located at 4500 Bresee Avenue from the Housing Successor Agency. Agency Board is requested to consider approval for the Rio Hondo Community Development Corporation (RHCDC), the City's CHDO, to purchase the property located at 4500 Bresee Avenue from the Housing Successor Agency for the purpose of permitting Rio Hondo CDC, as the owner, to operate an affordable housing rental unit. FISCAL IMPACT There is no impact to the general fund. RECOMMENDATION Staff recommends the City Council: 1) Approve the Loan Documents of $252,662 from the HOME Fund (Fund #221) with Rio Hondo CDC for the purpose of purchasing the property located at 4500 Bresee Avenue. Staff recommends the Agency Board: 1) Approve the Loan Documents of $157,338 (Equity Lien) from the Housing Successor Agency (Fund #890) with Rio Hondo CDC for the purpose of purchasing the property located at 4500 Bresee Avenue. 2) Approve the purchase agreement with Rio Hondo CDC for the property located at 4500 Bresee Avenue for the purpose of creating a single family affordable housing rental unit. CHDO/Bresee Sept 21, 2016 Paqe 2 -p �lfZlnWul Property Background — 4500 Bresee The Housing Successor Agency is the owner of the property located at 4500 Bresee Avenue. Several unsuccessful attempts have been made to sell the property to low income households. Unfortunately, it was impossible to locate a lender willing to accept the State of California Housing and Community Development (HCD) required 45 -year restricted covenant. In spite of seeking several options, the sale to a private party has not been possible. HOME Fund Requirements and Commitment to RHCDC The City is considered an Entitlement Participating Jurisdiction and receives HOME funds directly from HUD currently averaging $250,000 annually. Of this amount, the City must reserve 15% for CHDO activities. The City must also provide a matching funding source for every HOME Fund dollar expended. The City's current matching requirement is 12.5% and HOME funds must be committed in two years and expended in five. On July 20, 2016, the City Council approved the commitment of HOME funds to RHCDC for the purchase of the Bresee property to implement an affordable housing single family rental project. Although HOME funds in the amount of $252,662 were committed to RHCDC, $81,146 of that amount is at risk of recapture from HUD if not expended by September 30, 2016. Loan and Purchase Agreement Terms Because two separate funding sources are utilized for this project, the most restrictive requirements are considered in the Loan Documents terms as follows: 1) Loan Amount *Agency Lien (gap between HOME Fund and appraised value) *Also meets matching requirement 2) Affordability Period — 55 years (Agency requirement for rental projects) 3) Term — Zero percent interest, Principal forgiven after affordability period a. All funds to be recapture by City if property is sold or CHDO is in non-compliance 4) Documents specify the following: a. Property Standards b. Lease Requirements c. Tenant Selection for Baldwin Park residents d. Monitoring requirements and City inspections CHDO/Bresee Sept 21, 2016 Page 3 �" Legal Counsel has reviewed and approved the Loan Documents and Purchase Agreement. If the project is denied, the City Council and Agency Board may direct staff with alternative options, however, it must be noted that alternative options may result in the loss of HOME CHDO funds recaptured by HUD. Alternate options may include, but are not limited to, the Agency retaining the property and operating an affordable rental unit with the assistance of the Baldwin Park Housing Authority. ATTACHMENTS A — Regulatory Agreement (City and Agency) B — City Loan Documents C — Agency Purchase Agreement Loan Documents UMMB�� RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO CITY OF BALDWIN PARK 8838 E. Valley Boulevard Baldwin Park, California 91770 Attention: Michelle Ramirez Exempt from Recording Fee per Government Code Section 27383 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) CITY OF BALDWIN PARK AND BALDWIN PARK HOUSING SUCCESSOR AGENCY HOME INVESTMENT PARTNERSHIP PROGRAM AND LOW AND MODERATE INCOME HOUSING FUNDS REGULATORY AGREEMENT THIS HOME INVESTMENT PARTNERSHIP PROGRAM AND LOW AND MODERATE INCOME HOUSING FUNDS REGULATORY AGREEMENT (the "REGULATORY AGREEMENT) is dated as of w , 2016 by and among the CITY OF BALDWIN PARK, a California municipal corporation (the "CITY"), the BALDWIN PARK housing SUCCESSOR AGENCY, a California public agency (the "AGENCY") and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California public benefit corporation (the "RHCDC"). CITY, AGENCY and RHCDC may be referred to collectively as "Parties" or individually as a "Party." RECITALS A. The CITY has received funds from the HOME Investment Partnership Act of the United States, 42 U.S.C. §12701, et seq., for the purpose of the acquisition and operation of affordable rental housing through a community development housing organization ("CHDO"). B. The AGENCY owned a single-family dwelling unit located at 4500 Bresee Avenue in the City of Baldwin Park that was acquired by the former Baldwin Park Redevelopment Agency using low and moderate income housing funds, which was transferred to the AGENCY after the dissolution of the redevelopment agency. The aforementioned property shall be referred to as the "PROPERTY" and is more specifically described in the legal description attached and incorporated hereto as Cy�,hibit `""lam'. C. RHCDC is a CHDO committed to working with the City of Baldwin Park's residents, community organizations, governmental agencies, and other stakeholders to provide and preserve high quality affordable housing, stabilize residential neighborhoods suffering from neglect, and promote economic opportunity and the restoration of economic vitality to areas of the community struggling with economic distress. D. The CITY and AGENCY have determined that the public interest shall be served by RHCDC acquiring and operating the PROPERTY as an affordable residential rental property thereby furthering the public purpose of providing affordable housing for the CITY's low income families. RIV #4833-1716-4853 v1 E. The CITY has agreed to loan RHCDC funds in the amount of Two Hundred Fifty -Two Thousand Six Hundred Sixty -Two Dollars ($252,662.00) of HOME Investment Partnership funds for the purchase of the Property. F. The AGENCY has agreed to sell the PROPERTY to RHCDC and to provide a silent second loan to finance RHCDC's remaining acquisition costs; and G. RHCDC has agreed to acquire and operate the PROPERTY subject to the terms of this REGULATORY AGREEMENT. H. The execution and recording of this REGULATORY AGREEMENT is a condition to the CITY and AGENCY financing of RHCDC's acquisition of the PROPERTY. NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND COVENANTS OF THE PARTIES CONTAINED HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES COVENANT AND AGREE AS FOLLOWS: 1. PURPOSE. The purpose of this REGULATORY AGREEMENT is to set forth those duties and responsibilities of the Parties with respect to the management, operation and maintenance of the PROPERTY. 2. DEFINITIONS. The following capitalized terms shall have the following meanings under this REGULATORY AGREEMENT, unless otherwise stated herein: (a) "AGENCY DEED OF TRUST" means that deed of trust for the PROPERTY which serves as security for the AGENCY NOTE. (b) "AGENCY NOTE" means that certain promissory note secured by the AGENCY DEED OF TRUST and executed by RHCDC in favor of AGENCY in the amount of $ ..........m (c) "AGENCY LOAN AGREEMENT" means the Purchase, Sale and Loan Agreement pursuant to which the loan from the AGENCY to RHCDC is being made. (d) "CITY DEED OF TRUST" means that deed of trust for the PROPERTY which serves as security for the CITY NOTE. (e) "CITY NOTE" means that certain promissory note secured by the CITY DEED OF TRUST and executed by RHCDC in favor of CITY in the amount of $252,662.00. (f) "CITY LOAN AGREEMENT" means that 2016 Affordable Housing Development Loan Agreement pursuant to which the loans from the CITY is being made to RHCDC. (g) "DEEDS OF TRUST" means both the CITY DEED OF TRUST and the AGENCY DEED OF TRUST. (h) "HOME Regulations" means those regulations relating to the federal HOME Investment Partnership Program authorized under Titles I and II of the National Affordable Housing Act of 1990 and all related amendments and successors statutes thereto. RIV #4833-1716-4853 v1 2 (i) "HUD" means the Department of Housing and Urban Development of the United States of America. (j) "LOAN AGREEMENTS" means both the CITY LOAN AGREEMENT and the AGENCY LOAN AGREEMENT. (k) "Low Income Households" means low-income families whose annual incomes do not exceed fifty percent (50%) of the area median income ("AMP') adjusted for family size for Los Angeles County as established and amended from time to time by HUD. (1) "Monthly Rent" means the total monthly payments for use and occupancy of the one (1) residential dwelling unit on the PROPERTY and land and facilities associated therewith; (2) any separately charged fees or service charges assessed by the RHCDC which are required of all tenants, other than security deposits; (3) a reasonable allowance for an adequate level of service of utilities, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone service; and (4) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than RHCDC. (m) "NOTES" means both the CITY NOTE and the AGENCY NOTE. (n) "Related Documents" means the NOTES, DEEDS OF TRUST, and LOAN AGREEMENTS. (o) "Very -Low Income Households" means very -low income families whose annual incomes do not exceed thirty percent (30%) of the area median income ("AMP') adjusted for family size for Los Angeles County as established and amended from time to time by HUD. 3. DUTY TO PREVENT HAZARDOUS MATERIAL CONTAMINATION. During any rehabilitation, repair and/or operation of the PROPERTY, the RHCDC shall take all necessary precautions to prevent the release of any Hazardous Materials on, under or about the PROPERTY. Such precautions shall include compliance with all applicable federal, state, county and local governmental laws, ordinances, statutes, codes, rules, regulations, orders or decrees relating to Hazardous Materials. The RHCDC shall notify the CITY and provide to the CITY a copy or copies, of any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirements relating to Hazardous Materials and underground tanks. RHCDC shall report all incidents and releases to the CITY, as soon as possible after each incident or release and shall also report any unusual, potentially important in the event of an incident or release of any Hazardous Materials. For the purposes of this Section 3, "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Los Angeles, the City of Baldwin Park, Baldwin Park Community Development Commission or any other public entity or agency with regulatory jurisdiction over the territory where the PROPERTY are located. For purposes of this Section 3, "Hazardous Materials" means any substance, material, or waste which is or becomes, regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, RIV #4833-1716-4853 v1 3 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act); (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls; (viii) methyl tertiary butyl ether; (ix) listed under Article 9 or defines as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4, Chapter 20; (x) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317); (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §§6901, et seq. (42 U.S.C. §6903); or (xii) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§9601, et seq. RHCDC will also comply with all Federal and state regulations as the apply to lead based paint and asbestos. 4. COMPLIANCE WITH LAWS. The RHCDC shall undertake the management, operation, maintenance, repair and/or rehabilitation of the PROPERTY in conformity with all applicable federal, state, county and local laws, ordinances, statutes, codes, rules, regulations, orders and decrees, including but not limited to, all applicable state labor standards, local zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the Baldwin Park Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights, Civil Code Section 51, et seq. 5. AFFORDABILITY. RHCDC agrees to make available, restrict occupancy to, and rent the PROPERTY to Low Income and Very -Low Income households, at an affordable rent, as determined in Section 6 below. If, after a tenant -household's initial occupancy of an PROPERTY the tenant -household's income increases above levels that would qualify it as a Low or Very -Low Income Household, the rent charged by RHCDC may be increased to the maximum rent set forth in Section 6 hereof. To preserve the affordability of the PROPERTY, RHCDC covenants and agrees that the PROPERTY shall remain affordable for a period of fifty-five (55) years following the date of recordation of this duly executed REGULATORY AGREEMENT. It is intended by the Parties to this REGULATORY AGREEMENT, that the rent affordability covenant of this Section shall run with the PROPERTY with the benefit of this covenant running to the CITY and AGENCY and their respective successors and assigns, in order to preserve the public interest in maintaining the affordability of the PROPERTY. The terms and conditions of this REGULATORY AGREEMENT (including but not limited to, the affordability restrictions on the PROPERTY) shall remain in full force and effect, without regard to the term of any mortgage, transfer ownership, payment or pre -payment of the indebtedness evidenced by the NOTE for a period that will end no sooner than fifty-five (55) years following the date this REGULATORY AGREEMENT is recorded; this 55 -year period of affordability shall hereinafter be referred to as the "Affordability Period." RIV #4833-17164853 vl 4 6. AFFORDABLE MONTHLY RENTS. The maximum Monthly Rent for the PROPERTY shall be annually determined by the CITY and AGENCY in accordance with the HOME Regulations and this REGULATORY AGREEMENT. The CITY shall transmit these annual determinations to the RHCDC each year after such Monthly Rents have been determined. As the PROPERTY shall be restricted to Low and Very -Low Income households, the maximum initial Monthly Rent, less tenant -paid utility allowances, shall conform to the rent limitations set forth in Section 92.252 of Title 24 of the United States Code of Federal Regulations or its successor regulation. In the event a tenant -household's income increases above levels that qualify it as a Very -Low Income Household, yet such income remains at or below levels that qualify it as a Low Income Household, the Monthly Rent charged by RHCDC may be increased to conform to the rent limitations set forth in Section 92.252 of Title 24 of the United States Code of Federal Regulations or its successor regulation. In the event a tenant -household's income increases above levels that qualify it as a Low Income Household, the Monthly Rent shall be increased in the manner provided under Section 92.252, subdivision (i) of Title 24 of the United States Code of Federal Regulations or its successor regulation. 7. ANNUAL TENANT INCOME. The methodology for calculating a tenant -household's annual income shall be the methodology set forth in Section 5.609 of Title 24 of the United States Code of Federal Regulations — a methodology commonly, and hereinafter, referred to as the "Section 8 Program Methodology." In keeping with Section 92.203(d)(1) of Title 24 of the United States Code of Federal Regulations, RHCDC shall estimate and ascertain whether a tenant -household's annual income during its initial rental period qualifies it as a Very -Low to Low Income Household. The amount of Monthly Rent required to be paid by a tenant -household whose income subsequently increases above levels that qualify it as a Very -Low to Low Income Household shall be subject to the provisions of Section 6 (Affordable Monthly Rents), above. 8. INCOME CERTIFICATION. RHCDC shall be responsible for monitoring and keeping itself apprised of the income status of the tenants upon the PROPERTY. The RHCDC, prior to initial occupancy of the PROPERTY by a prospective tenant -household and annually thereafter on the anniversary of the aforementioned title transfer, shall diligently verify the tenant -household's income. Such verification shall be conducted in accordance with the Section 8 Program Methodology; HUD's Technical Guide for Determining Income and Allowances for the HOME Program, Second Edition or any subsequent editions thereto; and one or more of the following methods: a. The procurement from the tenant -household of documents such as paycheck stubs, tax returns, bank statements; or b. The procurement of a verified statement and certification from the tenant -household; or c„ The procurement of a true and correct certified income verification documents prepared for another governmental program, the adequacy of which, meets with CITY and AGENCY approval. 9. LEASE REQUIREMENTS. Prior to the rental of the PROPERTY the RHCDC shall submit a standard lease form to the CITY and AGENCY for its approval. The CITY shall reasonably approve such lease form upon a finding that such lease form is consistent with this REGULATORY AGREEMENT and contains all of the provisions required pursuant to the HUD's HOME Investment Partnership Program and the HOME Regulations. The RHCDC shall enter into a written lease, in the RIV #4833-1716-4853 v1 5 form approved by the CITY and AGENCY, for the PROPERTY. No lease shall contain any of the provisions, which are prohibited pursuant to Section 92.253 of Title 24 of the United States Code of Federal Regulations. Pursuant to Section 92.253 (Tenant and Participant Protections) of Title 24 of the United States Code of Regulations and its successor regulations, such leases may not contain any of the following provisions: (a) Agreement to be sued. Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of any owner of the property (including, RHCDC, its successors or assigns) in a lawsuit brought in connection with the lease; (b) Treatment of property. An agreement by the tenant that any owner of the property (including, RHCDC, its successors or assigns) may take, hold, or sell personal property of a tenant -household members without notice to the tenant and a court decision on the rights of the parties; (c) Excusing Owner from responsibility. An agreement by the tenant not to hold any owner of the property (including RHCDC, its successors or assigns) or their respective agents legally responsible for any action or failure to act, whether intentional or negligent; (d) Waiver of notice. An agreement of the tenant that any owner of the property (including RHCDC, its successors or assigns) may institute a lawsuit without notice to the tenant; (e) Waiver of legal proceedings. An agreement by the tenant that any owner of the property (including RHCDC, its successors or assigns) may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (f) Waiver of a jury trial. An agreement by the tenant to waive any right to a trial by jury; (g) Waiver of right to appeal court decision. An agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; (h) Tenant chargeable with cost of legal actions regardless of outcome. An agreement by the tenant to pay attorney's fees or other legal costs even if the tenant wins in a court proceeding by any owner of the property (including RHCDC, its successors or assigns) against the tenant; (i) Termination of tenancy. An agreement that any owner of the property (including RHCDC, its successors or assigns) may terminate the tenancy or refuse to renew the lease of a tenant residing in rental housing assisted with HOME Program funds, except for serious or repeated violation of the terms and conditions of the lease; for violation of applicable Federal, State, or local law; or for other good cause; (j) Maintenance and replacement. An agreement that provides that any owner of the property (including RHCDC, its successors or assigns) need not maintain the premises in compliance with all applicable housing quality standards and local code requirements. Pursuant to Section 92.254 of the United States Code of Federal Regulations, the following exceptions and clarifications to the prohibitions set forth in paragraphs (a) through 0) of this Section 9 shall apply: The prohibition set forth in paragraph (b) of this Section 9, does not apply to an agreement by the tenant concerning the disposition of personal property remaining in the RIV #4833-1716-4853 v1 6 housing unit after the tenant has moved out of the unit; under such circumstances, the owner may dispose of such personal property in accordance with the laws of the State of California. 2. The prohibition set forth in paragraph (h) of this Section 9 notwithstanding, a tenant may be obligated to pay costs if the tenant loses. 3. In order to terminate or refuse to renew a tenancy, any owner of the property (including RHCDC, its successors and assigns) must serve written notice upon the tenant specifying the grounds for the action at least thirty (30) days before the termination of the tenancy. 10. AFFIRMATIVE MARKETING. The rental of the PROPERTY shall be conducted in accordance with the affirmative marketing requirements adopted by the CITY and the requirements of Section 92.351 of Title 24 of the United States Code of Federal Regulations, or its successor regulation, and other applicable HOME Investment Partnership Program requirements. 11. SELECTION OF TENANTS. The PROPERTY shall be leased to a tenant -household selected by the RHCDC who meet all of the requirements provided herein. The RHCDC shall adopt a tenant selection system in conformity with Section 92.253(d) of the United States Code of Federal Regulations or its successor regulations, which establishes a chronological waiting list system and/or random lottery system for selection of tenants and which shall be approved by the CITY and AGENCY, in it's reasonable discretion. RHCDC shall not refuse to lease to a holder of a certificate of family participation under 24 CFR part 882 (Rental Certificate Program) or a rental voucher under 24 CFR part 887 (Rental Voucher Program) or to the holder of a comparable document evidencing participation in HUD's HOME Investment Partnership Program; the Section 8 program or other tenant -based assistance programs, who is otherwise qualified to be a tenant in accordance with the approved tenant selection criteria. 12. OCCUPANCY STANDARDS. The PROPERTY is a three-bedroom residential home and shall be limited to six -persons. 13. MAINTENANCE. RHCDC shall, at all times relevant, maintain the interior and exterior of the PROPERTY in a neat, clean, sanitary and orderly condition, that complies with the maintenance standards set forth in this REGULATORY AGREEMENT and the Related Documents and that are no less stringent than HUD Housing Quality Standards; maintenance standards required by Section 92.251 of Title 24 of the United States Code of Federal Regulations, or the standard of maintenance for similar residential unit within the County of Los Angeles, State of California, whichever standard is the more stringent. If at any time RHCDC fails to maintain the PROPERTY in accordance with the maintenance standards set forth in this REGULATORY AGREEMENT or in the Related Documents, CITY or AGENCY shall issue notice specifying the nature of such maintenance deficiency to RHCDC. With respect to maintenance deficiencies relating to the general maintenance and up -keep of the PROPERTY or the presence of graffiti, debris or waste material, RHCDC shall cure all such deficiencies within seventy-two (72) hours from the date of CITY or AGENCY issuance of its notice of such deficiencies. With respect to all other maintenance deficiencies (including but not limited to landscaping, landscape up -keep or structural improvements), RHCDC shall cure all such deficiencies within thirty (30) calendar days from the date of CITY or AGENCY issuance of its notice of such deficiencies. In the event RHCDC fails to cure any noticed maintenance deficiency within the applicable time period required, then the CITY and/or AGENCY in addition to whatever remedy it may have at law or in equity, shall have the right to enter upon the PROPERTY and perform all acts and work necessary to protect, maintain, and preserve the PROPERTY and landscaped areas on the PROPERTY, and to attach a lien upon the PROPERTY, or to assess the PROPERTY, in the amount of the expenditures arising from RIV #4833-1716-4853 v1 7 such acts and work of protection, maintenance, and preservation by the CITY and AGENCY and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by RHCDC to the CITY and AGENCY, as appropriate, upon demand. Graffiti which is visible from any public right-of-way which is adjacent to, or contiguous with, the PROPERTY shall be removed by the RHCDC from any exterior surface of a structure or improvement on the PROPERTY by either painting over the evidence of such vandalism with a paint which has been color -matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the PROPERTY and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application; then in such event and without notice to the RHCDC, the CITY and AGENCY shall have the right to enter the PROPERTY and remove the graffiti. Notwithstanding any provision of this AGREEMENT to the contrary, any sum expended by the CITY for the removal of graffiti from the PROPERTY as authorized by this Section 10(b) shall become a lien on the PROPERTY. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the CITY to the RHCDC, the CITY shall have the right to enforce its lien in the manner as provided in Section 7(c). The Parties hereto further mutually understand and agree that the rights conferred upon the CITY under this section expressly include the power to establish and enforce a lien or other encumbrance against the PROPERTY, or any portion thereof, in the manner provided under Civil Code Sections 2924 et al. in the amount reasonably necessary to restore the PROPERTY to the maintenance standard forth herein or in the Related Documents, including reasonable attorneys fees and costs of the CITY associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of the CITY in connection with such action. The provisions of this section shall be a covenant running with the land for the duration of the Affordability Period and shall be enforceable by the CITY, and its successors and assigns. Nothing in the foregoing provisions of this section shall be deemed to preclude the RHCDC from making any alterations, additions, or other changes to any structure or improvement or landscaping on the PROPERTY, provided that such changes comply with this REGULATORY AGREEMENT and other applicable law. No lien as may arise under this Section shall interfere with or be superior to the security interest of any mortgage secured by the PROPERTY. Any lease for the PROPERTY shall contain a provision acceptable to CITY and AGENCY whereby the tenant acknowledges and agrees to the foregoing rights of entry and rights of repair in favor of CITY and AGENCY and to the rights of entry provided for in Section 17. 14. MANAGEMENT PLAN. RHCDC shall submit for the approval of the CITY and AGENCY a "Management Plan" which sets forth in detail the RHCDC's property management duties, the affirmative marketing procedures in accordance with Section 10 (Affirmative Marketing) hereof, the tenant selection process in accordance with Section 11 (Selection of Tenants) hereof, a security system and crime prevention program, the procedures for the collection of rent, the procedures for eviction of tenants, the rules and regulations of the PROPERTY and manner of enforcement, a standard lease form in accordance with Section 9 (Lease Requirements) hereof, the identity of the manager of the PROPERTY (the "Management Agent"), and other matters relevant to the management of the PROPERTY. The Management Plan shall require the RHCDC to adhere to a fair lease and grievance procedure and provide a plan for tenant participation in management decisions. The management of the PROPERTY shall be in compliance with the Management Plan that is approved by the CITY and AGENCY. If CITY and AGENCY, in their sole discretion, determine that the performance of the Management Agent is deficient based upon the standards set forth in the Management Plan, this REGULATORY AGREEMENT or the Related Documents, then CITY and AGENCY shall provide notice to the RHCDC to compel a meeting within fifteen (15) days of such notice wherein the Parties RIV 44833-1716-4853 v1 8 shall in good faith consider methods for improving the operation, management and/or maintenance of the PROPERTY. In the event that RHCDC or the Management Agent fail to correct its management, operation or maintenance practices to conform to the standards of this REGULATORY AGREEMENT and the Related Documents, the CITY and AGENCY shall have the right to require the RHCDC to immediately remove and replace the Management Agent with another Management Agent or Agency reasonably acceptable to the CITY and AGENCY and not related to or affiliated with the RHCDC, and possessing no less than five (5) years experience in the property management field, including significant experience managing multiple affordable residential dwelling unit properties of the size and nature involved herein. 15. [RESERVED] 16. MONITORING & RECORD KEEPING. Throughout the Affordability Period, RHCDC shall comply with all applicable record keeping and monitoring requirements set forth in Section 92.508 of Title 24 of the United States Code of Federal Regulations (or successor regulation) and shall annually complete and submit to CITY and AGENCY a Certification of Continuing Program Compliance in the form provided by the CITY and AGENCY. follows: 17. RECORD RETENTION & ACCESS TO RECORDS. Records shall be retained as (a) The Parties shall each retain this REGULATORY AGREEMENT and the Related Documents for a period of sixty (60) years from the date this duly executed REGULATORY AGREEMENT is recorded. (b) RHCDC shall retain all documentation relating to tenant income, rent and unit inspection information for a period of sixty (60) years from the date this duly executed REGULATORY AGREEMENT is recorded. (c) RHCDC shall retain records related to property acquisition and any related displacements for a period of five (5) years from the date all persons displaced from the property and all persons whose property is acquired for the project have received the final payment to which they are entitled in accordance with 92.353 of Title 24 of the United States Code of Federal Regulations. (d) The Parties shall retain all other records for a period of not less than five (5) years. If any litigation, claim, negotiation audit, monitoring inspection or other action has started before the expiration of the required record retention period, records shall be retained until completion of that matter and all issues arising therefrom, or until the end of the required period, whichever is later. CITY, AGENCY, HUD and the Controller General of the United States, and their respective agents, officers or employees shall have the right of access to any and all pertinent books, documents, papers or other records to conduct audits, examinations or to make excerpts and transcripts. Representatives of the CITY and AGENCY shall further have the right (a) to enter onto the PROPERTY, upon at least twenty-four (24) hours notice to RHCDC to monitor compliance with this REGULATORY AGREEMENT and the Related Documents; (b) to inspect the records of the PROPERTY; and (c) to conduct an independent audit or inspection of such records. RHCDC agrees to cooperate with the CITY and AGENCY and in making the PROPERTY available for such inspection or audit. If for any reason CITY and AGENCY is unable to obtain the RHCDC's consent to such an inspection or audit, RHCDC understands and agrees that the CITY and AGENCY may obtain at RHCDC's expense an administrative RIV #4833-1716-4853 vl 9 inspection warrant or other appropriate legal order to obtain access to records and/or the PROPERTY themselves. 18. NON-DISCRIMINATION COVENANTS. A. RHCDC covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the PROPERTY or there residential dwelling unit located therein, nor shall RHCDC itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees on the PROPERTY. RHCDC shall also comply with the equal opportunity and fair housing requirements set forth in Section 92.350 of Title 24 of the United States Code of Federal Regulations. B. RHCDC covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, national origin, sex, marital status, handicap, religion or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the RHCDC itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, leases, subtenants, sublessees, or vendees of the Property. C. The RHCDC shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, ancestry, national origin, sex, marital status, handicap, or religion of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, national origin, sex, religion, marital status, handicap, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, national origin, sex, marital status, handicap, religion, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." RIV #/4833-1716-4853 v1 10 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, national origin, sex, religion, marital status, handicap, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." D. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Property or any part thereof. The covenants contained in this section shall remain in perpetuity. 19. Indemnity and Insurance A. RHCDC shall defend, indemnify, assume all responsibility for and hold the AGENCY and the CITY, and their respective elected and appointed officials, officers, agents and employees, harmless from all costs (including attorneys' fees and costs), claims, demands or judgments for injury or damage to property and injuries to persons, including death, which may be caused by any negligent acts or omissions of RHCDC under this Agreement, whether such acts or omissions be by the RHCDC or anyone directly or indirectly employed or contracted with by the RHCDC and whether such damage shall accrue or be discovered before or after termination of this Agreement. B. Not in derogation of the indemnity provisions of this Section, the RHCDC shall take out and maintain during the life of this Agreement the following: 1. A comprehensive liability policy in the amount of at least One Million Dollars ($1,000,000) for injury to any person, One Million Dollars ($1,000,000) for any occurrence, and One Million Dollars ($1,000,000) property damage naming the CITY and AGENCY as additional insureds. RHCDC shall also insure the Property (fire, etc.) for the full acquisition amount. 2. A policy of workers' compensation insurance in such amount as will fully comply with the California laws and which shall indemnify, insure and provide legal defense for the RHCDC against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the RHCDC in the course of carrying out the activities in the CC&Rs. 3. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence and (ii) property damage liability limits of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) per occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. Said policy shall include coverage for owned, non -owned, leased and hired vehicles. C. All policies of insurance shall be primary insurance and not contributing with any insurance which may be maintained by CITY or AGENCY, and shall name the CITY and the AGENCY, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the CITY and/or the AGENCY and their officers, R1V #4833-1716-4853 vl 11 employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) calendar days prior written notice by registered mail to the CITY and AGENCY. In the event any of said policies of insurance are canceled, the RHCDC shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 4.3 to the CITY Manager/AGENCY Executive Director. No operation of the Project shall commence until the RHCDC has provided the CITY and AGENCY with certificates of insurance or appropriate insurance binders evidencing the above insurance coverage, and said certificates of insurance or binders are approved by the CITY and AGENCY. The types and limits of coverage of all policies of insurance shall be subject to periodic review and increase in the reasonable discretion of CITY and AGENCY to insure that the same remain appropriate to the then -existing circumstances. 20. DEFAULTS & REMEDIES. Defaults under this REGULATORY AGREEMENT and remedies therefore shall be governed by the default provisions of the DEEDS OF TRUST. 21. WAIVER OF TERMS & CONDITIONS. Either Party may, in its sole discretion, agree to waive any duty or obligation owed to it by the other Party under this REGULATORY AGREEMENT, provided such waiver is (a) in writing; and (b) permitted under the HOME Investment Partnership Program or under regulations set forth by HUD. Any waiver that does not satisfy the foregoing conditions shall be invalid Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. 22. NON -LIABILITY OF CITY OFFICIALS & EMPLOYEES. No member, official, officer, employee or agent of the CITY or AGENCY shall be personally liable to the RHCDC, or any successor in interest, in the event of any default or breach by the CITY or AGENCY or for any amount which may become due to the RHCDC or its successors, or on any obligations under the terms of this REGULATORY AGREEMENT. 23. TIME. Time is of the essence under this REGULATORY AGREEMENT. The Parties acknowledge and agree that the time periods set forth herein are to be strictly adhered to, unless otherwise provided under this REGULATORY AGREEMENT or unless strict compliance with such time periods is properly waived. 24. NOTICES. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this REGULATORY AGREEMENT must be in writing and may be given either by (i) personal service; (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below, or at any other address that party may later designate by Notice: CITY/AGENCY: City of Baldwin Park Housing Manager 14403 E. Pacific Avenue Baldwin Park, CA 91706 RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Blvd., Suite 107 El Monte, California 91732 Attention: Executive Director RIV #4833-1716-4853 v1 12 Notice shall be deemed given on the date of personal delivery, the five (5) from the date deposited with the United States Postal Service if by regular mail; or the date upon which notice is received if by certified mail or reputable document delivery service such as Federal Express. Such addresses may be changed by notice to the other party given in the same manner as provided above. 25. EFFECTIVE DATE; AGREEMENT TERM; SUCCESSORS & ASSIGNS. This REGULATORY AGREEMENT shall become effective upon the date it is signed and duly executed by all of the Parties. The REGULATORY AGREEMENT and all terms, conditions and restrictions contained herein shall continue in full force and effect for a period that shall end fifty-five (55) years following the date this duly executed REGULATORY AGREEMENT is recorded, this period shall be referred to as the "Contract Term." This REGULATORY AGREEMENT and all covenants, terms, conditions and restrictions contained herein shall run with the land, and shall be binding upon the RHCDC, the CITY, their respective successors and assigns, and any subsequent owner of the PROPERTY for the duration of the Contract Term. Whenever the term "RHCDC," or "CITY" or "AGENCY" is used in this REGULATORY AGREEMENT, such term shall include any other successors and assigns. 26. NO THIRD PARTY BENEFIT. This REGULATORY AGREEMENT is made and entered into for the sole protection and benefit of the CITY and AGENCY, and RHCDC, and no other person or persons shall have any right of action hereon. 27. PARTIAL EWAILIDITY. If any provision of this REGULATORY AGREEMENT shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 28. GOVERNING LAW. This REGULATORY AGREEMENT and the Related Documents shall be construed in accordance with and be governed by the laws of the State of California, except to the extent any of its provisions are exclusively governed by federal law. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. 29. CORPORATE AUTHORITY. The persons executing this REGULATORYAGREEMENT on behalf of the Parties hereto warrant that they are duly authorized to execute this REGULATORY AGREEMENT on behalf of said Parties and that by doing so, the Parties hereto are formally bound to the provisions of this REGULATORY AGREEMENT. 30. ENTIRE AGREEMENT. This REGULATORY AGREEMENT and the Related Documents constitute the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the REGULATORY AGREEMENT and the Related Documents. No statements, representations or other agreements, whether oral or written, made by any Party which are not embodied herein shall be valid or binding. No amendment to, or modification of, this REGULATORY AGREEMENT or the Related Documents shall be valid or binding unless in writing and duly signed and executed by each of the Parties. 31. AMENDMENT. This REGULATORY AGREEMENT may not be modified or amended orally. Any contemplated modification or amendment shall be made by mutual written agreement of the Parties. RIV #4833-1716-4853 v1 13 32. RESOLVING INCONSISTANCY WITH RELATED DOCUMENTS. In the event of inconsistency between this REGULATORY AGREEMENT and any of the Related Documents, this REGULATORY AGREEMENT shall control. [Signatures are on the Next Page] RIV #4833-1716-4853 v1 14 IN WITNESS WHEREOF, the parties hereto have executed this REGULATORY AGREEMENT as of the ___ Day of 2016. CITY OF BALDWIN PARK, a municipal corporation By: Mayor Date: APPROVED AS TO FORM: By:__,_ Robert Tafoya, City Attorney Date: BALDWIN PARK HOUSING SUCCESSOR AGENCY, a public agency By: Chairman Date: APPROVED AS TO FORM: 13y:......,....___ _ - ..........------------- �.�.......................... Robert Tafoya, Legal Counsel Date: RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California public benefit corporation By: ............................. Patrick Piatt, President Date: RIV #4833-17164853 vl 15 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 4500 Bresee Avenue (1 SFD unit on lot) Legal Description: Lot 12 of Tract No. 4624, as per map recorded in Book 68, Page(s) 33 of Maps, as recorded in the office of the County Recorder of County of Los Angeles. Parcel: 8542-017-900 RIV #4833®1716-4853 vl 16 ON: mu 1 Recording Requested By WHEN RECORDED MAIL TO CITY OF BALDWIN PARK Attention: Suzie Ruelas 14403 E. Pacific Avenue Baldwin Park, California 91706 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (4500 Bresee Avenue) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ("Deed of Trust") Is made as of ...........................'............................. _a 2016, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor"), whose address is 11706 Ramona Blvd., Suite 107, El Monte, CA, 91732, to_.......................................,.._n.._n._....' whose address is _..........m ---------- (hereinafter referred to as "Trustee"), for the benefit of the City of Baldwin Park ("City"), a municipal corporation, its successors and assigns (herein called "Beneficiary"), whose address is 14403 E. Pacific Avenue, Baldwin Park, CA 91706. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiary may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note of even date herewith in the principal amount not to exceed Two Hundred Fifty -Two Thousand Six Hundred Sixty -Two Dollars ($252,662), together with interest thereon specified therein, executed by Trustor, as maker, to the order of Beneficiary and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the 2016 Affordable Housing Loan Agreement dated as of July 21, 2016, by and between Trustor and the Beneficiary (herein called "Loan Agreement") or any other instrument or instruments heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiary, whether or not evidenced by a promissory note or notes which are secured by this Deed of Trust; and 4. The due, prompt and complete observance, performance and discharge of each and RIV #4840-7666-1557 v1 I every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other Loan Document. TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiary a security interest for the benefit and security of Beneficiary under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference, together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and/or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and/or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the real property described in Exhibit "A" (hereinafter referred to as the "Improvements"), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of said structures, buildings, improvements on the real property described in Exhibit "A" or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the real property described in Exhibit "A" as between the parties hereto and all persons claiming by, through or under such parties except that same shall not include such machinery and equipment of Trustor, its contractors or subcontractors, or any tenant of any portion of the real property described in Exhibit "A" or Improvements, which is part of and/or used in the conduct of the normal business of Trustor or its tenant conducted upon the real property described in Exhibit "A» (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, other than personal property which is or at any time has become toxic waste, waste products or hazardous substances, including without limitation all installations, shelving, partitions, door -tops, vaults, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of property, the specific enumerations herein not excluding the general, now or at any time hereafter R1V #4840-7666-1557 v1 2 placed upon or used in any way in connection with the ownership, operation or maintenance of the real property described in Exhibit "A" or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the real property described in Exhibit "A" and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, real property described in Exhibit "A" shall not include (i) personal property which may be owned by lessees or other occupants of the real property described in Exhibit "A"; (ii) inventory of any lessee or occupant of the real property described in Exhibit "A" used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the real property described in Exhibit "A" only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the real property described in Exhibit "A"; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right-of-way of any street, road, alley or public place, opened or proposed, vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the real property described in Exhibit "A" or now or hereafter used in connection with or now or hereafter belonging or appertaining to the real property described in Exhibit "A"; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the real property described in Exhibit "A"; (e) All judgments, awards of damages, settlements and any and all proceeds derived from such hereafter made as a result of or in lieu of any taking of the real property described in Exhibit "A" or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the real property described in Exhibit "A" or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi -public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the real property described in Exhibit "A", or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the real property described in Exhibit "A" now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiary may demand, sue for and recover such payments but shall not be required to do so; and (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into RIV #4840-7666-1557 v1 3 cash or liquidated claims. Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust or any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiary in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiary that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiary, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiary, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: rus[or"s ("Ovelian( of l�'q rrac t:. Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title. Trustor warrants to Beneficiary that it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except as otherwise provided in this section, or approved in writing by Beneficiary, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiary's prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiary's interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor'.s Right to lor7acs( Statutory,_ Liens. As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiary and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond RIV #4840-7666-1557 v1 4 issued by a California admitted surety acceptable to Beneficiary in an amount not less than the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiary and pays for an endorsement to Beneficiary's title insurance policy, in a form satisfactory to Beneficiary, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any such judgment. 4. 5, Maintenance and ps ecli !L f Improvements. Trustor shall maintain the buildings and other improvements now or hereafter located on the Property in a good and reasonable condition and state of repair. Trustor shall not commit or suffer any waste; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof, and shall pay all fees or charges of any kind in connection therewith. 6., oiist11��.t1o;1 �. jqI R� air . Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. A I to ratiops. No building or other improvement on the Property shall be structurally altered, removed or demolished without the Beneficiary's prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiary's prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiary. 8. Compliance with Laws. Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenaii(s Re reseN�tatioels. 'anptifies and 11.1deninit� . (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any improvements on or about the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined herein below), including, RIV #4840-7666-1557 v1 without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Property to assure and monitor continued compliance by Trustor and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, certifying that the Property is not now being used nor has it ever been used for any Environmental Activities. Beneficiary reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Trustor hereby grants to Beneficiary, its agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as is reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiary of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiary a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiary a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiary may reasonably request. The plan shall be subject to Beneficiary's written approval, which approval may be granted or withheld in Beneficiary's sole but reasonable discretion. Beneficiary shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiary. If Beneficiary disapproves the plan, Beneficiary's notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Trustor shall submit to Beneficiary a revised final written environmental plan that remedies the defects identified by Beneficiary as reasons for Beneficiary's disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiary within said thirty (30) day period, or if such revised plan is submitted to Beneficiary and Beneficiary disapproves said plan, such failure or disapproval shall, at Beneficiary's option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiary do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiary of Beneficiary's failure to respond, at which time Beneficiary shall have an additional forty-five (45) days after receipt of such notice from Trustor to notify Trustor of their approval or disapproval of the final plan within said additional forty-five (45) day period. If Beneficiary fail to notify Trustor of their disapproval or approval of said plan within said forty-five (45) day period the plan shall be deemed approved. Once any such plan is approved in writing or deemed approved by Beneficiary, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiary, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiary with respect to the approval or disapproval of the RIV #4840-7666-1557 v1 6 environmental plan set forth herein and the actions of Beneficiary pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiary a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiary reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property. Trustor hereby grants to Beneficiary, their agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiary deem are necessary to conduct such a review and/or investigation. Beneficiary shall hold in confidence any report delivered by Trustor to Beneficiary pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiary to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiary, (c) regulatory officials having jurisdiction over Beneficiary who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiary's or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superf ind Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. "Environmental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and RIV #4840-7666-1557 v( 7 groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. (f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiary's choice), Beneficiary, their successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee", and collectively, the "Indemnitees") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiary: (i) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Property or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Property or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; RIV #4840-7666-1557 vI 8 (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property or any portion thereof; (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (viii) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall terminate and be of no further force and effect, if no Claim is pending, upon the repayment of the Loan in accordance with its terms. (g) Trustor hereby represents and warrants as follows: (i) The Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Property is in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims") pending or threatened against Trustor or any previous owner or user of the Property (and relating to Trustor's and/or such previous owner's or user's ownership of the Property), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. RIV #4840-7666-1557 vI 9 10. Insurance 10.1.`:s�ir�lb , Ct,ltrmNq. Trustor shall at all times keep the Property insured for the benefit of Trustee and Beneficiary as follows, despite governmental requirements that may detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Property, with a deductible amount not to exceed an amount satisfactory to Beneficiary; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiary; 10.1.3. Against damage or loss by flood, if the Property is located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiary may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiary may require; 10.1.5. During any alteration, construction, or replacement of improvements on the Property, or any substantial portion thereof, a Builder's All Risk policy with extended coverage with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the improvements on the Property with provision for replacement with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed portion of improvements on the Property and workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiary, if such insurance is required by Beneficiary in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Property is located. 10.2. l.liabijilw 111surmi e. Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiary against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Property, or any street, drive, sidewalk, curb, or passageway adjacent to it, in standard form and with such insurance company or companies and in an RIV #4840-7666-1557 v1 10 amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiary may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 10.3. Other Insurance. Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Property, as (a) may be required by the terms of any construction contract for any improvements on the Property or by any governmental authority, other than Beneficiary or (b) may be reasonably required by Beneficiary from time to time. 10.4. Form of Policies. All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiary from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiary shall approve in Beneficiary's sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiary, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiary; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (43 8 BFU Endorsement or equivalent), and name Beneficiary and Trustee as insureds; and (d) include such deductibles as Beneficiary may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiary. 10.5.Duplicate i.l� iginr�ls or Certificates. Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiary and, in addition, Trustor shall deliver to Beneficiary (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiary of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiary under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiary's reasonable judgment, is sufficient to allow Beneficiary to ascertain whether such policies comply with the requirements of this Section 10. 10.6. increased Cover w. If Beneficiary determines that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiary, procure such additional coverage as Beneficiary may require in Beneficiary's sole and absolute discretion. 10.7. o' lir (c hisj�rance. Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiary, as required by this Section 10 and otherwise approved by Beneficiary in all respects. RIV #4840-7666-1557 v1 1 1 10.8. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment t o f the Property in extinguishment, in whole or in part, of the Trustor's obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies required under this Section 10 or otherwise then in force with respect to the Property and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Re laceiriept�Cost. For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Property in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiary's request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiary. Trustor shall pay the cost of such appraisal. 10.10. Aivroval Not Wgarrarity. No approval by Beneficiary of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiary as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beii f c'iaE y',s Rigli °I o Obtairi I1ASU1 1flc_e. Trustor shall deliver to Beneficiary original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiary or if any such policy is canceled, whether or not Beneficiary have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiary, without notice to or demand on Trustor, may (but are not obligated to) obtain such insurance insuring only Beneficiary and Trustee with such company as Beneficiary may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor. Trustor acknowledges that, if Beneficiary obtains insurance, it is for the sole benefit of Beneficiary and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiary to protect Trustor in any way. 10.12. Dutvto Restore After Casualty. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Property, Trustor shall immediately give notice of such loss or damage to Beneficiary and, if Beneficiary so instruct, shall promptly, at Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repaid, replace, and rebuild the Property as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. 11. A�;� �ll�t7e11'I� of Insurance and C"o1� einriatiori Proceeds.. Should the Property or �..�. . any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiary or Trustee may, at their option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all RN #4840-7666-1557 v1 12 compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiary, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiary any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiary and all refunds or rebates made of taxes or assessments on the Property, and Beneficiary may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiary shall be deemed to be held in trust and Beneficiary may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiary or Trustee may require. 12. Use of Insurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiary generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Property. Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiary shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiary of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiary of proof reasonably satisfactory to Beneficiary that there exists and will continue to exist, until the Property is reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiary's estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and Beneficiary may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses RIV 44840-7666-1557 v1 13 of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiary may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; (iv) Receipt by Beneficiary from Trustor of sufficient cash funds to cover one hundred percent (100%) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiary in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiary with said amount and any interest earned thereon shall be released to Beneficiary, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiary. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiary may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiary of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiary in writing stating that the work described in the Trustor's certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiary to provide assurance that the Proceeds will be used to restore the Property to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiary's prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiary shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiary's discretion, be subject to reasonable holdbacks required by Beneficiary, not exceeding ten percent (10%) of the total estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiary's written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiary in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiary in connection with its construction loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiary. Trustor shall, IUV ##4840-7666-1557 vl 14 during the progress of the work, also submit to the Beneficiary, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiary furnished by an architect or engineer approved by Beneficiary in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiary shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiary upon delivery to Beneficiary of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiary confirming that the Property has been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. If. (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiary may, at their option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiary under the Loan and all other debts of Trustor to Beneficiary are discharged, Beneficiary shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiary's rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiary consent in writing thereto, which consent may be withheld by Beneficiary in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Property to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. RN #4840-7666-1557 v1 15 In any event in which the Beneficiary are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Property as hereinabove described and, at the option of Beneficiary, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiary, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards. Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiary shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiary's costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiary toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiary, renders or will render the Property not economically viable or which substantially impairs Beneficiary's security or lessens to any extent the value, marketability or intended use of the Property, Beneficiary may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiary may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiary or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiary from Trustor shall be paid to Trustor or Trustor's assignee. 14. l o Bei°t I� xruc .ass ssnients. Trustor shall pay in full on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiary with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts. Trustor agrees to consent to inclusion of the Property in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Property, upon the Beneficiary's written request. 16.ilrt Taxes. In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiary or any payments secured hereby, Trustor shall bear and pay the full amount of such taxes. RiV #4840-7666-1557 v1 16 17.la c .al Assessment �rnd 111SU� ��nce Reserves. Trustor shall, at the request of the Beneficiary, pay to Beneficiary equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiary next to become due, in addition to any other periodic payment or performances owed by Trustor under the Loan Agreement, the Promissory Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiary will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiary deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiary of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiary on account of assessments or insurance premiums may be commingled and invested with Beneficiary's own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiary shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiary may, at their option, then or thereafter exercised; require Trustor to pay the additional sums described in this paragraph. 18. Trustor's Right to CoLitest Taxes. Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. ReLLort of &e 1 ,tat "Frat Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiary, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiary. FUV #4840-7666-1557 vl 17 20. Leases/ RentaI zici iits. With respect to any leases and/or rental agreements currently or hereafter relating to any portion of the Property, Trustor agrees that: (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Property to be made available for rent and occupancy by a low- or very low income household as those terms are defined with respect to the HOME Investment Partnership Program. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the Regulatory Agreement of even date herewith relating to the rental and occupancy of each such dwelling unit on the Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Property shall comply with the covenants of the Trustor under the Loan Agreement, this Deed of Trust the Promissory Note and the Regulatory Agreement of even date herewith; (c) Trustor shall fully comply with all of its obligations under all leases or rental agreements on the Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Trustor shall not permit an assignment of any leases, or any subletting thereunder; and (e) Beneficiary and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assigninetil of Leases and Rents to BclieliciqU. Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiary, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiary all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiary confer upon Trustor a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiary upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiary may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiary upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan Agreement or the Promissory Note, and Beneficiary shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as RIV 44840-7666-1557 v1 18 Beneficiary shall determine. In the event the Beneficiary exercise or are entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiary shall have, and are hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiary in writing, Beneficiary's exercise of any of the rights provided in this paragraph shall preclude Trustor from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiary any duty to produce rents from the Property, and such assignment shall not cause Beneficiary to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiary in any separate assignment of leases and rents. 22. 1 r1MgJ.r 1 c!1t� of S c rjty. Trustor shall not, without first obtaining Beneficiary's written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiary's lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiary, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non -conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits. Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiary or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiary, has waived and does hereby waive any immunity to such liability to Beneficiary under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiary's rights against Trustor. Should Beneficiary elect to appear in or defend any such action or proceeding or be made a parry to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiary and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of evidence of title RIV 44840-7666-1557 v1 19 expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiary to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24, Due Sale and Sale e of Premises or Additional fLhiapcjnng Not Permitted. nn. Trustor specifically agrees that: (a) In order to induce Beneficiary to make the loan secured hereby, Trustor agrees that if the real property described in Exhibit "A" or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other than that secured hereby or otherwise alienated by Trustor whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiary, then Beneficiary, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the real property described in Exhibit "A" whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the real property described in Exhibit "A"; provided, however, that any transfer of the real property described in Exhibit "A" or any interest therein to an entity which controls, is controlled by, or is under common control with Trustor shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiary in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the real property described in Exhibit "A" may materially alter and reduce Beneficiary's security for the indebtedness secured hereby. Moreover, Beneficiary have agreed to make its loan based upon the presumed value of the real property described in Exhibit "A" and the rents and profits thereof. Therefore, it will be a diminution of Beneficiary's security if junior financing, except as shall be permitted by Beneficiary, or if other liens or encumbrances should attach to the real property described in Exhibit "A". (b) Trustor may request Beneficiary to approve a sale or transfer of the real property described in Exhibit "A" to a party who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser"). Beneficiary shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiary may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the real property described in Exhibit "A", or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiary may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Trustor, without in any way releasing, discharging or otherwise affecting the liability of Trustor under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the real property described in Exhibit "A", no forbearance on the part of Beneficiary, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiary shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of the Trustor herein, either in whole or in part. Any deed conveying the real property described in Exhibit "A", or any part thereof, shall provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of RIV #4840-7666-1557 v1 20 Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiary shall have all rights reserved to it hereunder in the event of a default or if Beneficiary shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the real property described in Exhibit "A" or such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be construed to waive the restrictions against the transfer of the real property described in Exhibit "A" contained in paragraph 24(a). 25. Further Encumbrances. Trustor acknowledges that Beneficiary relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiary in bankruptcy; the risks to Beneficiary in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiary's rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiary's option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiary's requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiary to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiary will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiary's express written consent in each instance, which consent may be withheld by Beneficiary in their sole discretion. A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiary may exercise all remedies available to Beneficiary under the Loan Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiary shall encumber the Property, except for that certain purchase money subordinate deed of trust of even date herewith by and among the Trustor, the City and the Trustee in the original principal amount of $457,899 to which the Beneficiary hereby consent as a subordinate security interest to this Deed of Trust. 26. RESERVED — NO TEXT, 27. Event of Default. An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust, the Loan Agreement or the Promissory Note when due; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (30) days from the date of such notice, and shall be determined by Beneficiary in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in RN 44840-7666-1557 v1 21 the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiary) portion of the Property; (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code"), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiary that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiary in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiary the payment of RIV #4840-7666-1557 vl 22 the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiary's interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiary by reason of their ownership of this Deed of Trust, the Loan Agreement or the Promissory Note and, in such event, Trustor, after demand by Beneficiary, does not pay such taxes or assessments or reimburse Beneficiary therefor or, in the opinion of counsel for Beneficiary, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiary under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other parry thereto; and (k) Trustor acknowledges and agrees that all material non -monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiary shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non -monetary default. 28. Rights and Remedies on I.)cflault. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiary may exercise any one or more of the following rights and remedies: (a) Loan A r�-qt. Beneficiary may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Accelcratiori. Beneficiary may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) 1 ar ,u6 Isarhe l l t t�. Beneficiary may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale herein. Should Beneficiary elect to foreclose by exercise of the power of sale herein, Beneficiary shall also deposit with Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the RIV #4840-7666-1557 vI 23 highest bidder upon any terms and conditions specified by Beneficiary and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase all or any portion of the Property, as applicable, at sale. (d) l %glit to Rescigd. Beneficiary, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) 1,1 (2, QR cirie�d ies. Beneficiary shall have all the rights and remedies under this Deed of Trust as a secured party under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiary at a place to be designated by Beneficiary that is reasonably convenient to both parties. Upon repossession, Beneficiary may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiary disposes of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiary; and (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. RIV #4840-7666-1557 v1 24 (f) Remedial Advances. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, without obligation so to do and without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiary shall be subrogated to the rights and lien interests of any person who is paid by Beneficiary pursuant to the terms of this paragraph. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiary, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) Sunit a y Possession. Beneficiary may, at their option, either in person or by agent, employee or court-appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. O N lection of Rents. Beneficiary may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiary, regardless of whether Beneficiary has taken possession of the Property. If any rents are collected by Beneficiary, then Trustor hereby irrevocably designates Beneficiary as Trustor's attorney-in- fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiary in response to Beneficiary's demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiary may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) l eneficiaj 's f lill(,)t Ge1"L emit ¢.rf l,,cases. Beneficiary are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court-appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement. Trustor hereby grants to Beneficiary full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to RIV #4840-7666-1557 v1 25 Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiary, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiary under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiary may determine. Beneficiary shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiary nor shall it operate to make Beneficiary liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiary after taking possession of the Property hereunder. 0) Beneficiary's Etilo cetl ent o f Colitr�� cts. Beneficiary shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiary or, at Beneficiary's option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiary acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiary as its attorney-in-fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiary do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiary be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiary in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiary in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiary under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. (k) Appointment of Receiver. Beneficiary have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect RIV #4840-7666-1557 vI 26 and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Loan. The receiver may serve without bond, if permitted by law. Beneficiary's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiary shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiary may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiary's option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiary deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiary or otherwise, as Beneficiary may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (1) Specific Enforcement. Beneficiary may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) i rra r aI Credi1,ors-f gibed%% . Beneficiary shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. 29. aplication ofSale ale Proceeds. After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiary and any other person or persons legally entitled thereto. 30. Remedies Cumulative. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies. RIV 44840-7666-1557 v1 27 31. No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiary shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiary shall be required to marshal Trustor's assets. 33. SIJT1MISSION TO ,Il.JlZlSD[C'fl()N. (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARY OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. Trustor's Indemnification. Trustor agrees to indemnify and hold harmless Trustee and Beneficiary from and against any and all losses, liabilities, penalties, claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiary by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Loan Agreement; (b) Trustee's and/or Beneficiary's good faith and commercially reasonable exercise of any of their rights and ItIV #4840-7666-1557 v1 28 remedies or the performance of any of their duties hereunder or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person. Any amount payable to Trustee, Beneficiary or counsel for Beneficiary under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Trustor of a statement from Trustee, Beneficiary and/or counsel for Beneficiary setting forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiary, Trustee or counsel for Beneficiary, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiary that is subject to the indemnity set forth in this paragraph, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiary, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiary. Notwithstanding the foregoing, Trustee and Beneficiary, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiary for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's payment of the Loan secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorsiots' Fees. Costs. Trustor agrees to reimburse Beneficiary for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiary incur in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Loan Agreement or the Promissory Note, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiary prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work-out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Loan Agreement or the Promissory Note. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 36. AccigvLzance b 1°l ustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 37. Successor Trustee. Trustee may resign by an instrument in writing addressed o„ to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiary and duly recorded. In case of the death, resignation, removal or RiV #4840-7666-1557 v1 29 disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiary and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiary by an officer of Beneficiary, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiary. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiary or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 38. Reconveyance. Upon written request of Beneficiary, stating that all performances and sums secured hereby have been satisfied and paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No "Re ']cases. The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Loan Agreement or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiary may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described herein, take or release any other security or make compositions or other arrangements with debtors. Beneficiary may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. RIV #4840-7666-1557 v1 30 t:'()IJscnt. At any time, upon written request of Trustor, Trustor's payment of Beneficiary's fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiary may: (a) consent to the making of any map or plat of said Property; (b)join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. 41. I -R SF VED No Tum I1: 42. Further Assurances. Trustor, from time to time, within fifteen (15) days after request by Beneficiary, shall execute, acknowledge and deliver to Beneficiary, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiary, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiary, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiary, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiary may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiary on demand all reasonable costs and expenses incurred by Beneficiary in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiary, nor the failure of Beneficiary to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiary are cumulative and given as additional security. 43. Time of Performance. Time is of the essence hereof in connection with all obligations of the Trustor herein and under the Loan Agreement and Promissory Note. 44. Notices. The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any notices to be given to Trustor by Beneficiary hereunder shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiary. Any time period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first-class postage pre -paid mail, as officially recorded on the certified mail receipt. R1V #4840-76661557 vl 31 45. Bcrlcliciarr i ht to Mspect:. Beneficiary and their agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiary's interest and to inspect the Property. 46. Repo a an(] tatcnients. Trustor shall deliver to Beneficiary, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiary's request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiary covering the Property, both certified as correct by Trustor. At Beneficiary's option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiary so request, such statements shall specify, in addition to other information requested by Beneficiary, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Trustor shall permit Beneficiary or their representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiary all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 47. Assigru ent 1) [ e ,.lic:ial y, "gr1ic�ip .tiwn. Beneficiary may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiary may make available to any person all credit and financial data furnished or to be furnished to Beneficiary by Trustor. Trustor agrees to provide to the person designated by Beneficiary any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiary, under the terms of this Deed of Trust. 48. R l,`1 E Nth 1"lidTI, 49. L a'1 I�emlatonaThe relationship between Beneficiary and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiary. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party Beneficiary are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiary of this Deed of Trust. 50, LLCI-1I:,,L1 Y.s JNO.....��: EAT, 51. Modification. This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiary and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiary's delay or RIV #4840-7666-1557 vt 32 omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiary's failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 52. Successors. Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 53. Partial InyaliclJt . If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 54. Mutual„ g t i ttigg. Beneficiary and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 55.�IC, ” 111 lead p gs. The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 56. Awfigable�Law. This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 57. 1� mire Aaleelrlc ;t,. This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 58. COU,I t�.fl?apt . This Deed of Trust may be executed in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 59. Fixture Filing aid Recording. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 60. S a rylv l oMepr �ons and „Warranties. All of Trustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Loan secured hereby, until performance of all obligations set forth in the Loan Agreement and in RIV #4840-7666-1557 v1 33 the Promissory Note or, alternatively, full repayment of the Loan and release and reconveyance of this Deed of Trust. MV #4840-7666-1557 v1 34 IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and Assignment of Rents as of the day and year first above written. TRUSTOR Rio Hondo Community Development Corporation, a California public benefit corporation [NOTARY JURAT ATTACHED] RIV #4840-7666-1557 v1 35 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 4500 Bresee Avenue (1 SFD unit on lot) Legal Description: Lot 12 of Tract No. 4624, as per map recorded in Book 68, Page(s) 33 of Maps, as recorded in the office of the County Recorder of County of Los Angeles. Parcel: 8542-017-900 RI`t #4852-6954-7829 v1 36 PROMISSORY NOTE Secured b a Deed of Trust Executed By Rio Hondo Community Development Corporation In Favor of the City of Baldwin Park, California [20 YEAR TERM] Amount: $252,662.00 Date: , 2016 BORROWER(S) PROMISE TO REPAY FOR VALUE RECEIVED, the undersigned, Rio Hondo Community Development Corporation, a California public benefit corporation, whose address is 11706 Ramona Blvd., Suite 107, EI Monte, CA. 91732 (hereafter referred to as "BORROWER"), hereby promises to pay to the CITY OF BALDWIN PARK, a California municipal corporation (hereinafter, "CITY'), or its order, the sum total of Two Hundred Fifty -Two Thousand Six Hundred Sixty -Two Dollars ($252,662.00), and in such manner as set forth in this promissory note and the Related Documents (defined below), in lawful money of the United States of America. A. DEFINITIONS. The following definitions shall apply throughout this Note* 1. Property. "Property" shall collectively mean the real property parcel described in Exhibit "A" attached to this NOTE and made a part of hereof. This Property shall serve as security for the NOTE by way of a single deed of trust. 2. REGULATORY AGREEMENT: "REGULATORY AGREEMENT" means that certain same dated Regulatory Agreement by and between the CITY, BORROWER, and the Baldwin Park Housing Successor Agency. 3. DEED OF TRUST. The term "DEED OF TRUST" means that same dated trust deed evidencing the real property security for this Note with Borrower as Trustor, CITY as Beneficiary, and W _.... as Trustee. 4. LOAN AGREEMENT. The term "LOAN AGREEMENT" means that 2016 Affordable Housing Loan Agreement by and between the CITY and BORROWER dated July 21, 2016. 5. Principl _�jum. The term "Principal Sum" means the principal indebtedness of Two Hundred Fifty -Two Thousand Six Hundred Sixty -Two Dollars ($252,662.00) evidenced by this NOTE, excluding any interest or other fees Page 1 the CITY may be owed pursuant to this NOTE and/or the Related Documents. 6. Loan: The term "Loan" means the loan evidenced by this NOTE and granted to the BORROWER pursuant to the terms, conditions, restrictions and covenants of the REGULATORY AGREEMENT and the Related Documents. 7. Promissory Note. "NOTE" means the instant promissory note. 8. Affordability Period, The term "Affordability Period" means the twenty (20) year period commencing from the date the REGULATORY AGREEMENT is recorded. 9. Related Documents. The term "Related Documents" means the DEED OF TRUST, LOAN AGREEMENT and the REGULATORY AGREEMENT. TERMS A. INTEREST. Interest shall accrue at a rate of ZERO PERCENT (0%) per annum on all outstanding indebtedness evidenced by this NOTE until the NOTE is paid in full.. B.TIME AND MANNER OF PAYMENT. The indebtedness evidenced by this NOTE shall be repaid by the BORROWER in the following manner: 1. BORROWER shall only be required to pay back the Sum loaned by the CITY in the amount of Two Hundred Fifty -Two Thousand Six Hundred Sixty -Two Dollars ($252,662.00) in the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS. 2. If no uncured default or breach exists at the end of the twenty (20) year term of the Loan, CITY shall forgive the outstanding principal balance of the Loan and any other indebtedness evidenced by this NOTE or any of the RELATED DOCUMENTS. C. ASSIGNMENT. BORROWER may not assign its interest or obligations in this NOTE without the prior written consent of the CITY. Any request for assignment must be made to the CITY in writing no less than sixty (60) days prior to the proposed assignment date. Any request for assignment must be accompanied by financial documentation demonstrating the creditworthiness and financial assets of the proposed assignee and the assignees ability to properly operate the Property. The decision to approve the assignment shall be the sole discretion of the CITY and the CITY. Page 2 RIV #4832®4605®8037 v1 D. SECURITY, This NOTE is secured by a first position DEED OF TRUST in the Property. E. DEFAULT UNDER NOTE DEED OF TRUST REGULATORY AGREEMENT OR CO—W AGREEMENT Notwithstanding any other provisions of this NOTE, if default occurs in any of the covenants or agreements contained herein or the Related Documents, the Principal Sum shall be immediately due and payable in full at the option of the CITY. Failure by the CITY to exercise its option to accelerate in the event of a default shall not constitute waiver of the right to exercise such option in the event of the same or any other default. Further, the occurrence of a default shall not relieve the BORROWER or any subsequent owner of the Property from adhering to the affordability restrictions contained herein or in the Related Documents. F. DUE ON SALE. CITY may, at its option, declare immediately due and payable all sums secured by the DEED OF TRUST upon the sale or transfer, without the CITY's prior written consent, of all or any part of the Property, or any interest in the Property. Except as set forth in the REGULATORY AGREEMENT a "sale or transfer" means the conveyance of Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land, contract, contract for deed, leasehold interest, lease option contact, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of property interest. G. ATTORNEYS FEES. If any default or dispute gives rise to litigation, the prevailing party in such litigation shall pay reasonable attorney fees and costs and expenses incurred by the non -prevailing in connection with any such default or any other action or other proceeding brought to enforce any of the provisions of this NOTE. The prevailing party's right to such fees shall be valued at customary and reasonable rates for private sector legal services. H. MODIFICATION: This NOTE may not be modified or amended, except by mutual agreement of the parties and then only if such agreement is made by written instrument expressing such intention, which writing must be so firmly attached to this NOTE so as to become a permanent part thereof. I. SEVERABILITY. The covenants of this NOTE are severable. Invalidation of any covenant or any part thereof by law, judgment, or court order shall not affect any other covenants. J. BORROWER'S WAIVERS. BORROWER waives any rights to require the CITY to do the following: (1) to demand payment of amounts due (known as a "presentment"); (2) to give notice that amounts due have not been paid (known as Page 3 RIV #4832-4605-8037 v1 "notice of dishonor"); (3) to obtain an official certificate of nonpayment (known as a "protest"). K. GIVING OF NOTICES. Any notice that must be given to the CITY under this NOTE will be given by hand delivery or mailing it certified mail to the City of Baldwin Park at 14403 E. Pacific Avenue, Baldwin Park, CA 91706, attention Housing Manager. Any notice that must be given to the BORROWER will be given by hand delivery or mailing it certified mail to the BORROWER at Rio Hondo Community Development Corporation at 11706 Ramona Blvd., Suite 107, EI Monte, CA. 91732, attention Executive Director. Each party agrees to provide the other with thirty (30) days written notice of any change of address. L. NON-RECOURSE PROVISION. The indebtedness evidenced by this NOTE and secured by the DEED OF TRUST is a non-recourse obligation of the BORROWER. Neither the BORROWER nor any other party shall have any personal liability for repayment of the loan indebtedness. Except as otherwise provided in this NOTE or the Related Documents, the sole recourse of the CITY and the CITY for repayment of the principal and interest shall be the exercise of the CITY'S or the CITY's right to foreclose on the Property and all structures and improvements constructed thereon. M. AUTHORIZATION: BORROWER'S signatories to this NOTE warrant, represent and agree that they are duly authorized to bind BORROWER in the manner set forth in this NOTE. BY SIGNING BELOW, THE BORROWER ACCEPTS AND AGREES TO THE TERMS CONTAINED IN THIS NOTE. BORROWER RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California public benefit corporation Date: Pat Piatt, President Rio Hondo Community Development Corporation Page 4 EXHIBIT `A' LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 4500 Bresee Avenue, Baldwin Park, CA (1 SFD unit on lot) Legal Description: 01 04 61 Page 5 RIV #4832-4605-8037 v1 Agency Purchase Agreement And, Loan'.Documents PURCHASE, SALE AND LOAN AGREEMENT THIS PURCHASE, SALE AND LOAN AGREEMENT ("Agreement") is entered into as of , 2016 ("Effective Date") by and among the BALDWIN PARK HOUSING SUCCESSOR AGENCY, a California public agency ("Seller") and RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Buyer"). RECITALS A. Seller owns the land and improvements thereon located in the City of Baldwin Park, County of Los Angeles, State of California, more particularly described in Exiii, attached hereto and located at 4500 Bresee Avenue (herein the "Property"). The improvements consist of a three bedroom single-family residence. As used herein, the "Property" shall mean and include (i) the land described on Exhibit A, (ii) all improvements and fixtures located on the land, and (iii) all rights, privileges and easements appurtenant to the land. B. The City of Baldwin Park (the "City") and Buyer have entered into a "2016 Affordable Housing Loan Agreement" dated July 21, 2016, (the "City Loan") whereby the City agrees to loan Buyer $252,662.00 of Federal HOME funds (HOME Investment Partnership Act Program pursuant to the Cranston -Gonzales National Housing Act of 1990, as amended) for the purchase of the Property. The City Loan will be secured by a first position deed of trust recorded against the Property. C. Seller desires to sell the Property to Buyer and finance the difference between the Purchase Price contained herein and the amount of the City Loan subject to the terms and conditions stated herein. AGREEMENTS NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, Buyer and Seller agree as follows: 1. Purchase and Sale. 1.1 Sale. Subject to all of the terms and conditions of this Agreement, Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller the Property. 1.2 11t:irckiase Price. The purchase price of the Property shall be FOUR HUNDRED AND TEN THOUSAND DOLLARS ($410,000.00) (the "Purchase Price"). The Purchase Price for the Property reflects the land value based on the covenants, conditions and requirements of this Agreement, in particular the requirement in Section 2.2.3 that Seller and Buyer enter into a Regulatory Agreement. RIV #4814-7960-0693 v1 2. Loan of Funds. 2.1 L a ii AnioLpit. Subject to the terms and conditions contained in this Agreement, Seller agrees to loan to Buyer, and Buyer hereby agrees to repay to Seller, in accordance with the terms of this Agreement, the principal sum of the difference between the Purchase Price plus Buyer's closing costs as set forth in Section 8.3.2 below and the City Loan (the "Agency Loan"). 2.2 i.egllired Documents. In addition to execution of this Agreement, Buyer shall .. execute the following documents in evidence of the Agency Loan: 2.2.1 A Note Secured By Deed Of Trust (the "Note") in the form of Exhibit B attached hereto and by this reference incorporated herein. 2.2.2 A Deed of Trust (the "Deed of Trust") to be recorded against the Residence in the form of Exhibit C attached hereto and by this reference incorporated herein. The Deed of Trust shall be in second lien position after the deed of trust for the City Loan. 2.2.3 A Regulatory Agreement (the "Regulatory Agreement") to be recorded against the Property in the form of Exhibit D attached hereto and by this reference incorporated herein. 2.3 Term. The term of the Agency Loan is fifty-five (55) years, commencing upon the Close of Escrow (the "Commencement Date"). 2.4 Interest. No interest shall accrue on the principal balance of the Agency Loan. 2.5 1 grg,ive If Buyer has fully complied with the terms and provisions of this Agreement, the Note, the Deed of Trust and the Regulatory Agreement and is not in default on the fifty-fifth (55th) anniversary of the Commencement Date, the entire unpaid principal amount of the Agency Loan will be forgiven. 2.7 1-'"ra :)a inept. Buyer may prepay the outstanding principal of the Note at any time. 3. f pepinr s of Escrow. 3.1 t°',,s3 r '11t1pa l-Ap . On or before five (5) days after the Effective Date, an escrow ("Escrow") shall be opened with n _ located at ("Title Company"). 3.2 Escrow Instructions. The terms and conditions set forth in this Agreement shall constitute both an agreement between Seller and Buyer and escrow instructions for Title Company. Seller and Buyer shall promptly execute and deliver to Title Company any separate or additional escrow instructions requested by Title Company. Any separate or additional instructions shall be consistent with the terms of this Agreement and shall not modify or amend the provisions of this Agreement unless signed by both Buyer and Seller. Rlv #4814-7960-0693 v1 3.3 (1os, _Qatc aiid I 'x[egsiop . As used in this Agreement, "Closing" means the consummation of the purchase and sale of the Property contemplated by this Agreement and "Closing Date" means the date on which the Closing occurs. The Closing shall occur, and Escrow shall close, on or before September 16, 2016 (the "Closing Date"). If the Closing has not occurred on or before the Closing Date, this Agreement shall terminate and neither party shall be obligated to the other hereunder. 4. lIIJI-M actio ns. 4.1 Title Matters. 4.1.1 Within ten (10) days after the Effective Date, Seller shall obtain from the Title Company and provide to Buyer a current CLTA standard coverage preliminary title report for the Property ("PTR") issued by the Title Company and copies of all documents referred to in the PTR. 4.1.2. Buyer shall have fourteen (14) days following the receipt of the PTR during which to deliver to Seller written notice of Buyer's disapproval of any matters affecting title as shown on the PTR except for current installments of general and special real property taxes and assessments which are a lien not yet delinquent and any matter arising from the acts or omissions of Buyer ("Disapproved Exceptions"). Buyer's failure to provide such notice on or before such date shall constitute Buyer's approval of the condition of title as shown on the PTR. If Buyer timely delivers to Seller such notice, then within ten (10) days following the date of Seller's receipt of such notice ("Seller Election Period"), Seller shall deliver to Buyer written notice that Seller has elected to remove such Disapproved Exception of record or otherwise to cure such Disapproved Exception (and in such case the Disapproved Exception shall be so removed or cured on or before the Closing Date) or that Seller has elected not to remove such Disapproved Exception or otherwise to cure such Disapproved Exception. If Seller fails to timely deliver such notice or if Seller delivers written notice to Buyer that Seller has elected to not remove or cure the Disapproved Exception, then Buyer shall be entitled to waive the Disapproved Exception by notice in writing delivered to Seller on or before the Closing Date. If Buyer delivers such notice within such period, Buyer shall be deemed to have accepted the Disapproved Exception. If, however, Buyer fails timely to deliver such notice or delivers to Seller notice in writing of Buyer's rejection of the Disapproved Exception, then this Agreement shall be deemed terminated. 4.1.3 All title items and matters directly or indirectly caused by Buyer or any of Buyer's agents, and all title matters approved or deemed approved by Buyer are herein the "Permitted Exceptions." Notwithstanding the foregoing, none of the following shall be Permitted Exceptions: (a) the Disapproved Exceptions and other title matters revealed through inspection or through any survey and not approved by Buyer, or (b) any monetary liens affecting the Property, which shall be removed by Seller prior to the Closing, and. HUZZUKUMMUM 4.2 Addrtioilgi li,ispcctiLm� Within ten (10) days after the Effective Date, Seller shall make available to Buyer true and correct copies of (i) all leases, licenses and occupancy agreements affecting the Property, (ii) all contracts and agreements for materials or services affecting the Property, (iii) any ALTA survey of the land and improvements in Seller's possession or control, and (iv) all inspection reports, environmental reports, soils reports and engineering reports respecting the Property in Seller's possession or control. From and after the Effective Date, Seller shall provide Buyer with access to all books and records and all material documents and information respecting the Property during normal business hours at a mutually agreed location. Buyer shall have the right to inspect and to have its consultants inspect the Property during normal business hours, upon reasonable advance notice to Seller. Buyer will indemnify and defend Seller from any claims for personal injury or property damage arising out of the activities of Buyer's consultants in connection with the inspection, except to the extent relating to the discovery of a pre-existing condition. 4.3 I: Uy isl ifli � nuc r rOn or prior to the Effective Date, Buyer shall deliver a written notification to Seller of Buyer's approval of all matters relating to the Property. Buyer's failure to deliver such written notice shall constitute Buyer's disapproval of such matters. If Buyer notifies Seller that Buyer does not approve of all such matters, or Buyer is deemed to have disapproved of all such matters in accordance with the previous sentence, then all of the rights and obligations of Buyer and Seller under this Agreement shall terminate and neither party shall be obligated to the other hereunder. 5. Seller's I em-eserrtations, Itivestipatl n,_and,_Di clostire Ft rin. 5.1 I c lreserltalions ��d Mirua irides of Seller. Seller hereby represents, warrants and covenants to and agrees with Buyer that each of the representations and warranties set forth below in this Section 5.1 is truc and accurate as of the Effective Date and will continue to be true and accurate as of the Closing Date. 5.1 .1 ( rg�Pliz rtirrrr aml 1 �rwllrt 1�°ly � atten'i. Seller is a California public entity and the successor -in -interest of the rights and obligations of the former Redevelopment Agency of the City of Baldwin Park in and to the Property. The Property is a housing asset of the former Redevelopment Agency and was designated as such on the Housing Asset Transfer form submitted by the Seller to the California Department of Finance on . , 201_,,, and approved by the California Department of Finance on 201. Seller and the individuals signing this Agreement on behalf of Seller have the requisite right, legal capacity, and authority to enter into this Agreement, to perform its obligations hereunder, and to consummate the transaction contemplated hereby. This Agreement and all other agreements, documents, and instruments to be executed in connection herewith have been effectively authorized by all necessary action on the part of Seller, which authorizations remain in full force and effect, have been duly executed and delivered by Seller, and no other proceedings on the part of Seller are required to authorize this Agreement and the transactions contemplated hereby. 5.1.2 Owtiersliip. Seller is the sole owner of (and, upon the Close of Escrow, Buyer will acquire) the entire right, title and interest in and to the Property. 5.1.3 Breach. Performance of this Agreement by Seller shall not result in (a) any material breach of, or constitute any material default under, any contract, agreement or instrument to which Seller is a party, or (b) the imposition of any lien or encumbrance upon the Property. 5.1.4 Hazardous Materials. Except as disclosed to Buyer in writing, Seller has not received notice of the presence of any Hazardous Substance on, in, or under the Property in violation of any applicable law or regulation and to Seller's knowledge there are no Hazardous Materials on, in, or under the Property in violation of any applicable law or regulation. For the purpose of this Agreement, "Hazardous Materials" shall mean substances defined as "hazardous substances," "hazardous materials," "toxic substances," "hazardous wastes," "extremely hazardous wastes" or "restricted hazardous wastes" or stated to be known to cause cancer or reproductive toxicity under any of the Environmental Laws, as such term is defined below. As used herein, the term "Environmental Laws" shall mean the following as they have been amended or revised from time to time prior to the date of this Agreement: (a) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq.; (b) the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; (c) the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et seq.; (d) the Clean Water Act, 33 U.S.C. Section 1251 et seq.; (e) the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; (f) the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; (g) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 et seq.; (h) the Clean Air Act, 42 U.S.C. Section 7401 et seq.; (i) the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq.; 0) the Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.; (k) the California Hazardous Substance Act, Health & Safety Code Sections 28740 et seq.; (1) the Hazardous Substance Account Act, California Health & Safety Code Section 25300 et seq.; (m) the California Hazardous Waste Control Act, Health & Safety Code Sections 25100 et seq.; (n) the California Safe Drinking Water and Toxic Enforcement Act, Health & Safety Code Sections 24249.5 et seq.; (o) the Porter -Cologne Water Quality Act, Water Code Sections 1300 et seq.; (p) the California Air Resources Law, California Health and Safety Code Section 39000 et seq.; (q) Section 25359.7(a) of the California Health & Safety Code (the "Hazardous Materials Disclosure Law"); (r) common law and case law relating to Hazardous Materials and other hazardous substances; (s) laws, ordinances, regulations, orders, and directives of all political subdivisions with jurisdiction over any portion of the Property; (t) any of the regulations promulgated pursuant to any of the foregoing matters. 5.1.5 Litgl�Ci��:r��. There are no actions, suits, arbitrations or other legal proceedings (including without limitation condemnation proceedings) pending or, to Seller's knowledge, threatened against the Property or the transaction contemplated by this Agreement. 5.1.6 gre�j . There are no contracts or leases affecting the Property, and to Seller's knowledge there are no unrecorded liens, encumbrances, easements, rights of way or other matters affecting the Property, or the possession, use or occupation of the Property or any portion thereof. 5.1.7 "Dciiv umy. Seller has made available to Buyer all of Seller's files and records respecting the Property and all inspection reports, environmental reports, soils reports and engineering reports respecting the Property in Seller's possession or control. 5.1.8 Condition. To Seller's knowledge, there are no encroachments onto the land or by improvements from adjoining property and the improvements do not encroach onto any adjoining property. To Seller's knowledge, there are no defects (latent or patent) in the roof, exterior walls or structural components or operating systems of the improvements. 5.2 hivestiyation 41.tid Disclairner. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT (THE "SELLER WARRANTIES") AND AS SET FORTH IN SECTIONS 6.3 AND 6.5, NEITHER SELLER NOR ANY OF SELLER'S AGENTS, BROKERS, EMPLOYEES OR ATTORNEYS (COLLECTIVELY WITH SELLER, A "SELLER PARTY") HAS MADE, IS MAKING OR SHALL LATER BE DEEMED TO HAVE MADE ANY WARRANTY OR REPRESENTATION OF ANY KIND OR CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, THE LEASES, THE ASSSUMED CONTRACTS, OR ANY OTHER MATTER ASSOCIATED WITH ANY OF THEM, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OR REPRESENTATION AS TO THE AVAILABILITY, ACCEPTABILITY, NATURE, TYPE OR CONSEQUENCES OF ANY BUSINESS, ECONOMIC, MARKET, MARKETING, TAX CONSEQUENCES, PHYSICAL, LEGAL OR ENVIRONMENTAL CONDITION, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS, ANY ENVIRONMENTAL LAW, ANY HAZARDOUS MATERIAL, OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING OR SIMILAR TO SUCH MATTERS AND THAT, EXCEPT FOR THE SELLER WARRANTIES AND AS SET FORTH IN SECTIONS 6.3 AND 6.5, BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF ANY SELLER PARTY. BUYER HAS CONDUCTED AND WILL CONDUCT SUCH INSPECTIONS AND INVESTIGATIONS OF SUCH MATTERS, INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITION OF THE PROPERTY, THE LEASES, THE ASSUMED CONTRACTS, HAZARDOUS MATERIALS, AND ENVIRONMENTAL LAWS, AND RELY SOLELY UPON SAME, OR BUYER SHALL HAVE DETERMINED TO NOT CONDUCT SUCH INSPECTION OR INVESTIGATION, AND, UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR BUYER'S RELIANCE UPON THE SELLER WARRANTIES AND AS SET FORTH IN SECTION 6.3 AND 6.5, UPON CLOSING SELLER SHALL SELL AND CONVEY THE PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS." THE TERMS AND CONDITIONS OF THIS SECTION SHALL EXPRESSLY SURVIVE THE CLOSING AND SHALL NOT MERGE THEREIN. RIV #4814-7960-0693 v1 5.3 Reoresetitatiotis z��ac1_''WarralltaCS of 13 1 . Buyer hereby represents, warrants and covenants to and agrees with Seller that each of the representations and warranties set forth below in this Section 5.3 is true and accurate as of the Effective Date and will continue to be true and accurate as of the Closing Date. 5.3.1 Or laiiizatiog aid l r tit t ;r.. Buyer is a nonprofit public benefit corporation duly incorporated, validly existing and in good standing under the laws of the State of California. Buyer and all individuals signing on behalf of Buyer have the requisite right, legal capacity and authority to enter into this Agreement, to perform their obligations hereunder and to consummate the transaction contemplated hereby. This Agreement and all other agreements, documents and instruments to be executed in connection herewith have been effectively authorized by all necessary action on the part of Buyer, which authorizations remain in full force and effect, have been duly executed and delivered by Buyer, and no other proceedings on the part of Buyer are required to authorize this Agreement and the transactions contemplated hereby. 6. Additional Agreements of the Parties. 6.1 Q'oridemnation. If, prior to Closing, any portion of the Property shall be condemned or becomes the subject of any pending or threatened condemnation action, Seller shall promptly notify Buyer thereof. If the condemnation or the pending or threatened condemnation action relates to all or, in Buyer's reasonable opinion, a significant portion of the Property (where "significant portion" means more than five percent (5%) of the area of the land associated with the Property five percent (5%) of the area of the land associated with the Property, any loss of parking, any loss of access, or which causes the Property not to comply with applicable law), Buyer shall have the right to terminate this Agreement on written notice to Seller delivered within ten (10) business days after receipt of Seller's notice. Buyer's failure to deliver such notice within such time period shall irrevocably constitute Buyer's election to acquire the Property. In the event Buyer exercises its termination rights hereunder, this Agreement shall be terminated. In the event Buyer elects not to so terminate this Agreement, then it shall remain in full force and effect, regardless of such condemnation or threatened or pending action, and Seller shall assign to Buyer all of its rights, if any, as owner of the condemned portion of the Property, as the case may be, to any condemnation award and all claims in connection therewith, and Buyer shall have the right during the pendency of this Agreement to participate with Seller in the condemnation proceeding and, after the Closing, the sole right to negotiate and otherwise deal with the condemning authority in respect of such matter. 6.2 DwzrTw.,,eor Destrumflon. In the event of any damage to or destruction of the Property prior to the Closing, Seller shall promptly notify Buyer thereof. If, in Buyer's reasonable opinion, all or a significant portion of the Property has been damaged (where "significant portion" means more than five percent (5%) of the net rentable square footage of buildings on the Property, five percent (5%) of the area of the land associated with the Property, any loss of parking, any loss of access, or which causes the Property not to comply with applicable law), Buyer shall have the right to terminate this Agreement on written notice to Seller delivered within ten (10) business days after receipt of Seller's notice. Buyer's failure to deliver such notice within such time period shall irrevocably constitute Buyer's election to acquire the Property. In the event Buyer exercises its termination rights hereunder, this Agreement shall be terminated. If Buyer elects not to terminate this Agreement, then this Agreement shall remain in full force and effect, regardless of such damage or destruction, Seller shall have no obligation to repair any such damage or destruction, Seller shall assign to Buyer all of its rights to any insurance proceeds and all claims in connection therewith, and Buyer shall be credited at the Closing with the deductible portion of such proceeds. 6.3 1_)Pcltirt Ir a I lli l�ro ��erty. Between the Effective Date and the Closing Date, (a) Seller shall maintain the Property in its present condition and shall not make any alteration to the Property without first obtaining Buyer's prior written consent, which Buyer may withhold in its sole discretion, and (b) Seller shall maintain or cause to be maintained, at Seller's sole expense, Seller's existing policy or policies of insurance insuring the Property. 6.4 Waiver and Release. Buyer hereby waives, releases, forgives, and absolutely forever discharges Seller of, from, and with respect to any and all losses, claims, complaints, demands, reimbursements, contributions, cost recovery actions, obligations to indemnify, remedies, damages, obligations, liabilities, liens, judgments, awards, expenses, costs (including, without limitation, all attorneys' fees, court costs, and litigation costs and expenses), accounts, reckonings, actions, and causes of action of every kind and nature whatsoever which arise out of or pertain, directly or indirectly, to (a) any Hazardous Material actually or alleged to be in, on, under, or about the Property, or (b) the environmental condition of the Property, in all events in each of the foregoing cases, whether or not revealed or indicated by or based on any of the Environmental Reports or any other of the Seller's Materials, whether now known or unknown, suspected or unsuspected, including, without limitation, in all events, any of the foregoing related to any death, personal injury, damage to property, remediation, removal, treatment, excavation, testing, surveying, or transporting, disposal, or processing of any Hazardous Material whether occurring on the Property or otherwise and any diminution in value of the Property (collectively, the "Waived Claims"), provided, however, that the Waived Claims shall not be deemed to include any of the foregoing arising from or out of (i) any breach by Seller of any of the Seller's representations or warranties in this Agreement, (ii) any third -party claim against Buyer (except for claims by Buyer's tenants against Buyer for matters unrelated to Hazardous Materials), or (iii) any matter for which Seller is responsible under Section 6.5. BUYER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." RIV #4814-7960-0693 v1 BUYER, BEING AWARE OF THIS CODE SECTION, HEREBY EXPRESSLY WAIVES AND RELEASES ANY RIGHTS IT MAY HAVE THEREUNDER WITH RESPECT TO THE WAIVED CLAIMS, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. BUYER'S INITIALS NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION, THE PROVISIONS OF THIS SECTION SHALL NOT RELEASE OR DISCHARGE SELLER PARTY FROM ANY CLAIM RELATING TO (i) SELLER'S BREACH OF ANY REPRESENTATION OR WARRANTY IN THIS AGREEMENT (INCLUDING ANY CLAIM OR INTENTIONAL OR GROSS NEGLIGENCE IN THE MAKING OF SUCH REPRESENTATION AND WARRANTY, (ii) FRAUD, or (III) SELLER'S OBLIGATIONS UNDER SECTION 6.5. 6.5 Seller's Environmental Indemn . From and after the Closing, Seller shall indemnity, defend and hold harmless Buyer from and against any and all losses, claims, complaints, demands, reimbursements, contributions, cost recovery actions, obligations to indemnify, remedies, damages, obligations, liabilities, liens, judgments, awards, expenses, costs (including, without limitation, all attorneys' fees, court costs, and litigation costs and expenses), accounts, reckonings, actions, and causes of action of every kind and nature whatsoever which arise out of or pertain, directly or indirectly, to (a) any Hazardous Material actually or alleged to be in, on, under, or about the Property, or (b) the environmental condition of the Property, in all events in each of the foregoing cases, whether or not revealed or indicated by or based on any of the Environmental Reports or any other of the Seller's Materials, whether now known or unknown, suspected or unsuspected, including, without limitation, any of the foregoing related to any death, personal injury, damage to property, remediation, removal, treatment, excavation, testing, surveying, or transporting, disposal, or processing of any Hazardous Material whether occurring on the Property or otherwise and any diminution in value of the Property, to the extent caused or suffered by Seller (or any occupant of the Property or party claiming under Seller) during Seller's period of ownership of the Property, provided, however, that Seller's indemnity shall not extend to any third -party claim against Seller (except for claims by Seller's tenants against Seller for matters unrelated to Hazardous Materials). The provisions of this Section shall expressly survive the Closing. 7. �C:".onditio ns to'l2sj - 7.1 Conditions to t�' L f Buyer. The obligations of Buyer to consummate the Ibli a M�tions o a transactions contemplated by this Agreement shall be subject to the satisfaction or written waiver, on or before the Closing Date or any earlier time specified herein below, of each of the following conditions. 7.1.1 Reps ntatiops and Warranties. Each of the representations and warranties made by Seller under this Agreement (including all Exhibits hereto) shall be true and correct in all material respects on the dates required in this Agreement. 7.1.2 P rlonnance.. With respect to agreements, covenants and obligations in this Agreement and required to be performed or complied with by Seller thereto on or prior to the Closing Date, Seller shall have performed or complied with all such agreements, covenants and obligations on the dates required in this Agreement. 7.1.3 Title Matters and Title bisw,ti►ice. Buyer shall have reviewed and approved the state of title to the Property and the other matters described in Section 4.1.2 above in accordance with the terms of that section and the Title Company shall be committed to issuing the Title Policy as provided in Section 8.6 below with respect to the Property. 7.1.4 Execution of Documents �,,no rm,i,veries. The agreements and funds required to be executed and/or delivered by Seller under this Agreement shall have been duly executed and delivered at the Closing. 7.1.5 kisoectioi . Buyer's shall have approved the physical condition of the Property, the Leases and Assumed Contracts, and any unrecorded title matters disclosed through the PTR, Seller's representations and warranties or any survey of the Property provided by Seller or obtained by Buyer. 7.2 Comiitions to t: blig,�itions of eller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction or written waiver, on or before the Closing Date or any earlier time specified herein below, of each of the following conditions. 7.2.1 ReDresentatiotis and Warranties.. Each of the representations and warranties made by Buyer under this Agreement (including all Exhibits hereto) shall be true and correct in all material respects on the dates required in this Agreement. 7.2.2 Perlornuincde. With respect to agreements, covenants and obligations in this Agreement required to be performed or complied with by Buyer on or prior to the Closing Date, Buyer shall have performed or complied with this Agreement, covenants and obligations on the dates required in this Agreement. 7.2.3 No Injunction. There shall not be in effect any preliminary or permanent injunction or other order issued by any state or federal court which prevents the transactions contemplated by this Agreement, and no proceedings with respect to any such injunction or order shall be pending. 7.2.4 Execution of Doeuizierits and Deliveries. The agreements and funds required to be executed and/or delivered by Buyer under this Agreement shall have been duly executed and delivered at the Closing. 8. cllo im 8.1 l)c o its imito Escror . 8.1.1Olrosil�s by eller. At least one (1) business day prior to the Closing Date, Seller shall deposit into Escrow: (a) An executed and acknowledged grant deed conveying fee simple title to the Property to Buyer (the "Grant Deed"). (b) An executed and acknowledged counterpart Regulatory Agreement, in substantially the form attached hereto as Exhibit D. 8.1.2 l%arsIts y�:uycr° Except as otherwise provided herein, at least one (1) business day prior to the Closing Date, Buyer shall deposit into Escrow: (a) The City Loan proceeds. (b) An executed and acknowledged counterpart Regulatory Agreement, in substantially the form attached hereto as Exhibit D. 8.1 .3 10thc ;)e )osi.ts. Seller and Buyer shall each deposit such other instruments, duly executed and acknowledged or notarized where appropriate, and funds as are required by this Agreement, which are reasonably required by Title Company, or which are otherwise required to close Escrow and consummate the sale and transfer of the Property in accordance with the terms of this Agreement or to issue the Title Policy, including but not limited to, any Seller's or lessee's affidavit required by Title Company in connection therewith. 8.2 Prorations. ,8.2.1 Proratio ns and Prorated Items. All income and expenses of the type listed in this Section 8.2.1 shall be prorated effective as of 12:01 a.m. on the Closing Date on the basis of actual invoices and receipts or, if the foregoing are not reasonably available, on the basis of estimates agreed to in good faith by Buyer and Seller: (a) All service contract charges and utilities shall be prorated on the basis of the actual number of days during the month in which the proration is to occur. (b) Real property general and special taxes and assessments, costs of maintenance, and other items of expense for the Property shall be prorated on the basis of a 365 - day year. 8.2.2. Other Proration Matters. For purposes of calculating prorations under this Section 8.2, except as otherwise set forth herein, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Buyer. All other items customarily prorated as of a closing in similar transactions shall be calculated in good faith by Seller and Buyer on the basis of information obtained by them or, to the extent such information may not be reasonably available, on the basis of Buyer's and Seller's good faith estimates. Buyer and Seller shall confer, provide each other with information and make payments to each other as often as reasonably necessary after the Closing Date in order to give effect to this Section 8.2. 8.3 Payment oft It ;�r� Costs. 8.3.1 Closirig, Costs, Bonle bye Seller. Seller shall pay and bear, and Title Company shall discharge on Seller's behalf out of the sums payable to Seller hereunder (a) one- half (1/2) of Title Company's escrow fee, (b) the documentary transfer tax, if any, required in connection with the transfer of the Property to Buyer, (c) the recording fees, if any, with respect to the Grant Deed, (d) the sums necessary to obtain and the cost of recording any reconveyance required by this Agreement and any prepayment or other charges arising from the prepayment by Seller of any indebtedness encumbering the Property, and (e) other charges arising and any additional costs and charges customarily charged to sellers in transactions of this type in accordance with common escrow practices in the County of Los Angeles. 8.3.2 Closing Costs Borne by Buveer,, Buyer shall pay, bear, and deposit with Title Company at least one (1) day prior to the Closing Date for disbursement by Title Company (a) the Title Company's escrow fee, and (b) all costs and expenses of the Title Policy for the Property (including, without limitation, any endorsements requested by Buyer, and any cost of updating or recertifying any existing survey or obtaining any survey which may be required by the Title Company in connection therewith). Seller shall pay any transfer tax imposed by the County of Los Angeles and Seller and Buyer shall share equally any transfer tax imposed by the City of Baldwin Park (which the parties understand will be based upon actual consideration). Any additional charges shall be allocated in accordance with common escrow practices in the County of Los Angeles. 8.4 Closing of Escrow. 8.4.1 Title Company shall Close on the Closing Date if (a) it has received in a timely manner all the funds and materials required to be delivered into Escrow by Buyer and Seller and (b) it is irrevocably committed to issue on the Closing Date to Buyer the Title Policy. 8.4.2 To Close the Escrow, Title Company shall: (a) Cause the Grant Deed to be recorded. (b) Cause the Regulatory Agreement to be recorded. (c) Deliver to Seller in immediately available funds the City Loan proceeds and any proration or closing costs to be borne by Buyer hereunder. 8.4.3 Pursuant to Section 6045 of the Internal Revenue Code, Title Company shall be designated the closing agent hereunder and shall be solely responsible for complying with the tax reform act of 1986 with regard to reporting all settlement information to the Internal Revenue Service. 8.5 Possession. Possession of the Property shall be delivered to Buyer effective as of 12:01 a.m. on the Closing Date. 8.6 Title "'111S�a1¢11lce. At Closing, Title Company shall issue with such endorsements as may be required by Buyer, a CLTA Owner's Policy (or at the election of Buyer, an ALTA Extended Coverage Policy of Title Insurance) insuring Buyer as the fee owner of the Property, subject to no exceptions to title except for the Permitted Exceptions (the "Title Policy"). Buyer shall pay all premiums for title insurance coverage or special endorsements and all costs associated with obtaining title insurance coverage or special endorsements. 9. Default, Termination mid Remedies. 9.1 Btly is I l tull�l'rior to Closi-1-1.gi. In the event of Buyer's default hereunder prior to the Closing Date, this Agreement may be terminated by the Seller by written notice to the Buyer. Upon such termination, neither party shall have any further rights against or liability to the other under this Agreement. 9.2 Blr"s_lflllt_. Post C',?Lt„. Buyer's failure to comply with any term or provision of this Agreement with respect to the Agency Loan or failure to comply with the Regulatory Agreement, Note or Deed of Trust shall constitute a default of this Agreement if such failure to comply is not remedied within thirty (30) days of notice thereof by Seller, or if the breach is not correctable within thirty (30) days the Buyer has not commenced actions to correct the breach within thirty (30) days of notice thereof by Seller. In the event of Buyer's default hereunder post Closing, Seller may, at its option, and in addition to all other rights and remedies available to it, all of which are cumulative and not alternative: (i) declare all outstanding sums due under the Promissory Note immediately due and payable; (ii) institute suit for the foreclosure of the Deed of Trust or deliver to the trustee under the Deed of Trust a written declaration of default by Buyer and of election to cause the Property to be sold, all as provided in the Deed of Trust; (iii) institute any proceeding at law or in equity to enforce the obligations and covenants of the Buyer under this Agreement, the Note, the Deed of Trust, or the Regulatory Agreement. 9.2 Seller's Default. In the event of Seller's default hereunder, including but not limited to failure to approve the Note, Deed of Trust or Regulatory Agreement, Buyer may seek appropriate legal or equitable relief, including specific performance. 10. t.Ienei-A Provisions. RTV #4814-7960-0693 v1 10.1 Counte-rnG—ts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. 10.2 1 11t "�, Esa hll ,µlit.. This Agreement contains the entire integrated agreement between the parties with respect to the subject matter of this Agreement. It supersedes all prior understandings and agreements, whether oral or in writing, between the parties involving the subject matter of this Agreement. There are no other representations, agreements, arrangements or understandings, oral or in writing, between or among the parties to this Agreement relating to this subject matter which are not fully expressed in this Agreement. Its terms are intended by the parties as a final expression of their agreement and they may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement constitutes the complete and exclusive statement of its terms and no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Agreement. 10.3 1,e l �1vi , eut�A�1i Inter.) etatioti 11cacjj I . Each party has received independent legal advice from its attorneys with respect to the advisability of executing this Agreement and the meaning of the provisions hereof. The provisions of this Agreement shall be construed as to their fair meaning, and not for or against any party based upon any attribution to such party as the source of the language in question. Headings used in this Agreement are for convenience of reference only and shall not be used in construing this Agreement. 10.4 Choice of L,a . This Agreement shall be governed by the laws of the State of California. 10.5 Scvei�ability. If any term, covenant, condition or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, covenants, conditions or provisions of this Agreement, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. 10.6 Waive o (.oveiia tts, Conditions or 1 .ltite c"l�.s. The waiver by one party of the performance of any covenant, condition or promise under this Agreement shall not invalidate this Agreement nor shall it be considered a waiver by it of any other covenant, condition or promise under this Agreement. The waiver by either or both parties of the time for performing any act under this Agreement shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. The exercise of any remedy provided in this Agreement shall not be a waiver of any consistent remedy provided by law, and the provision in this Agreement for any remedy shall not exclude other consistent remedies unless they are expressly excluded. 10.7 Exhibits. All exhibits to which reference is made in this Agreement and which are attached hereto are deemed incorporated in this Agreement. RIv #4814-7960-0693 v1 10.8 Agiendincti.i. This Agreement may be amended at any time but only by the written agreement of Buyer and Seller. All amendments and discharges of this Agreement, in whole or in part, and from time to time, shall be binding upon the parties despite any lack of legal consideration, so long as the same shall be in writing and executed by the parties hereto. 10.9 R latiopsh�ip of Parties. The parties agree that their relationship is that of Seller and Buyer, and that nothing contained herein shall constitute either party the agent or legal representative of the other for any purpose whatsoever, nor shall this Agreement be deemed to create any form of business organization between the parties hereto, nor is either party granted any right or authority to assume or create any obligation or responsibility on behalf of the other party, nor shall either party be in any way liable for any debt of the other. 10.10 No,,Third l) ar(y I3wic("i . This Agreement is intended to benefit only the parties hereto and no other person or entity has or shall acquire any rights hereunder. 10.1 t Time of the Essence. Time shall be of the essence as to all dates and times of performance, whether contained herein or contained in any escrow instructions to be executed pursuant to this Agreement, and all escrow instructions shall contain a provision to this effect. 10.12 Further Acts. Each party agrees to perform any further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement. 10.13 At . In the event of any litigation involving the parties to this Agreement to enforce any provision of this Agreement, to enforce any remedy available upon default under this Agreement, or seeking a declaration of the rights of either party under this Agreement, the prevailing party shall be entitled to recover from the other such attorneys' fees and costs as may be reasonably incurred, including the costs of reasonable investigation, preparation and professional or expert consultation incurred by reason of such litigation. All other attorneys' fees and costs relating to this Agreement and the transactions contemplated hereby shall be borne by the party incurring the same. 10.14 Brokers. Each of Buyer and Seller represent and warrant to the other that (a) it has not dealt with any brokers or finders in connection with the purchase and sale of the Property and (b) insofar as such party knows, no broker or other person is entitled to any commission or finder's fee in connection with the purchase and sale of the Property. Buyer shall indemnify, defend, and hold harmless Seller against any loss, liability, damage, cost, claim or expense incurred by reason of any brokerage fee, commission or finder's fee which is payable or alleged to be payable to any broker or finder because of any agreement, act, omission or statement of Buyer. Seller shall indemnify, defend, and hold harmless Buyer against any loss, liability, damage, cost, claim or expense incurred by reason of any brokerage fee, commission or finder's fee which is payable or alleged to be payable to any broker or finder because of any agreement, act, omission or statement of Seller. 10. 15 Manner of Giving Notice. All notices and demands which either party is required or desires to give to the other shall be given in writing by certified mail, return receipt requested, personal delivery, or express courier service, provided that if any party gives notice of a change of address, notices to that party shall thereafter be given to the address in that notice. All notices and demands so given shall be effective upon receipt by the party to whom notice or a demand is being given. To Seller: Baldwin Park Housing Successor Agency 14403 E. Pacific Avenue Baldwin Park, CA 91706 Attention: Housing Manager To Buyer: Rio Hondo Community Development Corporation 11706 Ramona Blvd., Suite 107 El Monte, CA 91732 Attention: Executive Director 10.16 Survival. All representations, warranties, covenants and indemnities hereunder shall survive the Closing and the consummation of the purchase and sale of the Property. 10.17 Ansi Y ini t, Buyer shall have the right to assign this Agreement without Seller's consent, to any successor -in -interest by merger. Except as otherwise provided in this Agreement, neither Buyer nor Seller may assign its interest in this Agreement or any rights or obligations hereunder without the prior written consent of the other party, which shall not be unreasonably withheld. 10.18. Coin ion ok' l imtn . Thep eriod during which any act under this Agreement is to be performed shall be calculated by excluding the first day and including the last day. If the last day of any period stated herein shall fall on a Saturday, Sunday, or legal holiday, then the duration of such period shall be extended so that it shall end on the next succeeding day which is not a Saturday, Sunday, or a legal holiday. Unless preceded by the word "business," the word "day" as used in this Agreement shall mean a calendar day. As used in this Agreement, the phrase "business day" or "business days" shall mean those days on which banks in Los Angeles County and the Los Angeles County Recorder's Office are open for business. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. BALDWIN PARK HOUSING SUCCESSOR AGENCY RIV #4814-7960-0693 v1 ATTEST: APPROVED AS TO FORM: RIO HONDO COMMUNITY DEVELOPMENT CORPORATION Pat Piatt, President RIV #4814-7960-0693 v lwqff�I Subject Address: 4500 Bresee Avenue (I SFD unit on lot) Legal Description: Lot 12 of Tract No. 4624, as per map recorded in Book 68, Page(s) 33 of Maps, as recorded in the office of the County Recorder of County of Los Angeles. Parcel: 8542-017-900 RIV #4814-7960-0693 vI [TO BE INSERTED] RIV #4814-7960-0693 v PROMISSORY NOTE Secured bv a Deed of Trust Executed By Rio Hondo Community Development Corporation In Favor of the Baldwin Park Housing Successor Agency [55 YEAR TERM] Amount: $ Date: , 2016 BORROWER(S) PROMISE TO REPAY FOR VALUE RECEIVED, the undersigned, Rio Hondo Community Development Corporation, a California public benefit corporation, whose address is 11706 Ramona Blvd., Suite 107, EI Monte, CA. 91732 (hereafter referred to as "BORROWER"), hereby promises to pay to the BALDWIN PARK HOUSING SUCCESSOR AGENCY, a California public agency (hereinafter, "AGENCY"), or its order, the sum total of Dollars ($ ), and in such manner as set forth in this promissory note and the Related Documents (defined below), in lawful money of the United States of America. A. DEFINITIONS. The following definitions shall apply throughout this Note: 1. Property. "Property" shall collectively mean the real property parcel described in Exhibit "A" attached to this NOTE and made a part of hereof. This Property shall serve as security for the NOTE by way of a single deed of trust. 2. REGULATORY AGREEMENT: "REGULATORY AGREEMENT" means that certain same dated Regulatory Agreement by and between the AGENCY, BORROWER, and the City of Baldwin Park. 1 DEED OF TRUST. The term "DEED OF TRUST" means that same dated trust deed evidencing the real property security for this Note with Borrower as Trustor, AGENCY as Beneficiary, and as Trustee.. 4. LOAN AGREEMENT. The term "LOAN AGREEMENT" means that Purchase, Sale and Loan Agreement by and between the AGENCY and BORROWER dated , 2016. 5. _Principal Sum. The term "Principal Sum" means the principal indebtedness of Dollars ($_, IT�) evidenced by this NOTE, excluding any interest or other fees the AGENCY may be owed Page 1 RIV #4813.-3502-8277 v1 pursuant to this NOTE and/or the Related Documents. 6. Loan: The term "Loan" means the loan evidenced by this NOTE and granted to the BORROWER pursuant to the terms, conditions, restrictions and covenants of the REGULATORY AGREEMENT and the Related Documents. 7. Promisso Note. "NOTE" means the instant promissory note. 8. Affordability Period. The term "Affordability Period" means the fifty-five (55) year period commencing from the date the REGULATORY AGREEMENT is recorded. 9. Related Documents. The term "Related Documents" means the DEED OF TRUST, LOAN AGREEMENT and the REGULATORY AGREEMENT. TERMS A. INTEREST. Interest shall accrue at a rate of ZERO PERCENT (0%) per annum on all outstanding indebtedness evidenced by this NOTE until the NOTE is paid in full.: B. TIME AND MANNER OF PAYMENT. The indebtedness evidenced by this NOTE shall be repaid by the BORROWER in the following manner: 1. BORROWER shall only be required to pay back the Sum loaned by the AGENCY in the amount of Dollars ($_ ) in the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS. 2. If no uncured default or breach exists at the end of the fifty-five (55) year term of the Loan, AGENCY shall forgive the outstanding principal balance of the Loan and any other indebtedness evidenced by this NOTE or any of the RELATED DOCUMENTS. C. ASSIGNMENT. BORROWER may not assign its interest or obligations in this NOTE without the prior written consent of the AGENCY. Any request for assignment must be made to the AGENCY in writing no less than sixty (60) days prior to the proposed assignment date. Any request for assignment must be accompanied by financial documentation demonstrating the creditworthiness and financial assets of the proposed assignee and the assignees ability to properly operate the Property. The decision to approve the assignment shall be the sole discretion of the AGENCY and the AGENCY. Page 2 RIV #4813-3502-8277 v1 D. SECURITY. This NOTE is secured by a first position DEED OF TRUST in the Property. E. DEFAULT UNDER NOTE, DEED OF TRUST REGULATORY AGREEMENT OR LOAN AGREEMENT Notwithstanding any other provisions of this NOTE, if default occurs in any of the covenants or agreements contained herein or the Related Documents, the Principal Sum shall be immediately due and payable in full at the option of the AGENCY. Failure by the AGENCY to exercise its option to accelerate in the event of a default shall not constitute waiver of the right to exercise such option in the event of the same or any other default. Further, the occurrence of a default shall not relieve the BORROWER or any subsequent owner of the Property from adhering to the affordability restrictions contained herein or in the Related Documents. F. DUE ON SALE. AGENCY may, at its option, declare immediately due and payable all sums secured by the DEED OF TRUST upon the sale or transfer, without the AGENCY's prior written consent, of all or any part of the Property, or any interest in the Property. Except as set forth in the REGULATORY AGREEMENT a "sale or transfer" means the conveyance of Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land, contract, contract for deed, leasehold interest, lease option contact, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of property interest. G. ATTORNEYS FEES. If any default or dispute gives rise to litigation, the prevailing party in such litigation shall pay reasonable attorney fees and costs and expenses incurred by the non -prevailing in connection with any such default or any other action or other proceeding brought to enforce any of the provisions of this NOTE. The prevailing party's right to such fees shall be valued at customary and reasonable rates for private sector legal services. H. MODIFICATION: This NOTE may not be modified or amended, except by mutual agreement of the parties and then only if such agreement is made by written instrument expressing such intention, which writing must be so firmly attached to this NOTE so as to become a permanent part thereof. I. SEVERABILITY. The covenants of this NOTE are severable. Invalidation of any covenant or any part thereof by law, judgment, or court order shall not affect any other covenants. J. BORROWER'S WAIVERS. BORROWER waives any rights to require the AGENCY to do the following: (1) to demand payment of amounts due (known as a Page 3 RIV #4813-3502-8277 v1 "presentment"); (2) to give notice that amounts due have not been paid (known as "notice of dishonor"); (3) to obtain an official certificate of nonpayment (known as a "protest"). K. GIVING OF NOTICES. Any notice that must be given to the AGENCY under this NOTE will be given by hand delivery or mailing it certified mail to the Baldwin Park Housing Successor Agency at 14403 E. Pacific Avenue, Baldwin Park, CA 91706, attention Housing Manager. Any notice that must be given to the BORROWER will be given by hand delivery or mailing it certified mail to the BORROWER at Rio Hondo Community Development Corporation at 11706 Ramona Blvd., Suite 107, EI Monte, CA. 91732, attention Executive Director. Each party agrees to provide the other with thirty (30) days written notice of any change of address. L. NON-RECOURSE PROVISION. The indebtedness evidenced by this NOTE and secured by the DEED OF TRUST is a non-recourse obligation of the BORROWER. Neither the BORROWER nor any other party shall have any personal liability for repayment of the loan indebtedness. Except as otherwise provided in this NOTE or the Related Documents, the sole recourse of the AGENCY and the AGENCY for repayment of the principal and interest shall be the exercise of the AGENCY'S or the AGENCY's right to foreclose on the Property and all structures and improvements constructed thereon. M. AUTHORIZATION: BORROWER'S signatories to this NOTE warrant, represent and agree that they are duly authorized to bind BORROWER in the manner set forth in this NOTE. BY SIGNING BELOW, THE BORROWER ACCEPTS AND AGREES TO THE TERMS CONTAINED IN THIS NOTE. BORROWER RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California public benefit corporation Pat Piatt, President Rio Hondo Community Development Corporation Date: Page 4 RIV #4813®3502-8277 v1 EXHIBIT `A' LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 4500 Bresee Avenue (1 SFD unit on lot) Legal Description: Lot 12 of Tract No. 4624, as per map recorded in Book 68, Page(s) 33 of Maps, as recorded in the office of the County Recorder of County of Los Angeles. Parcel: 8542-017-900 Page 5 RIV #4832-4605-8037 v1 [TO BE INSERTED] RIV #4814-7960-0693 vl Recording Requested By WHEN RECORDED MAIL TO BALDWIN PARK HOUSING SUCCESSOR AGENCY Attention: Suzie Ruelas 14403 E. Pacific Avenue Baldwin Park, California 91706 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (4500 Bresee Avenue) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ("Deed of Trust") is made as o ,, 2016, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor"), whose address is 11706 Ramona Blvd., Suite 107, El Monte, CA, 91732, to , whose address is ____ _ __________________^ (hereinafter referred to as "Trustee"), for the benefit of the Baldwin Park Housing Successor Agency ("Agency"), a public agency, its successors and assigns (herein called "Beneficiary"), whose address is 14403 E. Pacific Avenue, Baldwin Park, CA 91706. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiary may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note of even date herewith in the principal amount not to exceed Dollars ($ ;), together with interest thereon specified therein, executed by Trustor, as maker, to the order of Beneficiary and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the Purchase, Sale and Loan Agreement dated as of__ , 2016, by and between Trustor and the Beneficiary (herein called "Loan Agreement") or any other instrument or instruments heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiary, whether or not evidenced by a promissory note or notes which are secured by this Deed of Trust; and MV 44852-6954-7829 v1 I 4. The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other Loan Document. TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiary a security interest for the benefit and security of Beneficiary under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference, together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and/or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and/or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the real property described in Exhibit "A" (hereinafter referred to as the "Improvements"), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of said structures, buildings, improvements on the real property described in Exhibit "A" or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the real property described in Exhibit "A" as between the parties hereto and all persons claiming by, through or under such parties except that same shall not include such machinery and equipment of Trustor, its contractors or subcontractors, or any tenant of any portion of the real property described in Exhibit "A" or Improvements, which is part of and/or used in the conduct of the normal business of Trustor or its tenant conducted upon the real property described in Exhibit "A» (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, other than personal property which is or at any time has become toxic waste, waste products or hazardous substances, including without limitation all installations, shelving, partitions, door -tops, vaults, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of RIV #4852-6954-7829 v1 2 property, the specific enumerations herein not excluding the general, now or at any time hereafter placed upon or used in any way in connection with the ownership, operation or maintenance of the real property described in Exhibit "A" or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the real property described in Exhibit "A" and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, real property described in Exhibit "A" shall not include (i) personal property which may be owned by lessees or other occupants of the real property described in Exhibit "A"; (ii) inventory of any lessee or occupant of the real property described in Exhibit "A" used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the real property described in Exhibit "A" only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the real property described in Exhibit "A"; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right-of-way of any street, road, alley or public place, opened or proposed, vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the real property described in Exhibit "A" or now or hereafter used in connection with or now or hereafter belonging or appertaining to the real property described in Exhibit "A"; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the real property described in Exhibit "A"; (e) All judgments, awards of damages, settlements and any and all proceeds derived from such hereafter made as a result of or in lieu of any taking of the real property described in Exhibit "A" or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the real property described in Exhibit "A" or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi -public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the real property described in Exhibit "A", or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the real property described in Exhibit "A" now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiary may demand, sue for and recover such payments but shall not be required to do so; and RIV #4852-6954-7829 v1 3 (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust or any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiary in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiary that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiary, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiary, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: 1. Trustor's Covenant of Payment. Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title. Trustor warrants to Beneficiary that it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except as otherwise provided in this section, or approved in writing by Beneficiary, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiary's prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiary's interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor's Riiaht to Contest St ftl[ Mjjq Ls. As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiary and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; RIV #4852-6954-7829 v1 4 (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable to Beneficiary in an amount not less than the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiary and pays for an endorsement to Beneficiary's title insurance policy, in a form satisfactory to Beneficiary, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any such judgment. 4.lJ �9 t-,RVE1 NOTEXT. 5. Ndaintenwice rind lWe,ctiion of 1�inproyeinents. Trustor shall maintain the buildings and other improvements now or hereafter located on the Property in a good and reasonable condition and state of repair. Trustor shall not commit or suffer any waste; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof, and shall pay all fees or charges of any kind in connection therewith. 6. (",!oilst:roct.ioti and Re airs. Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7.lter�ati�am. No building or other improvement on the Property shall be structurally altered, removed or demolished without the Beneficiary's prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiary's prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiary. 8. Coin liance with Laws. Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants. Represciiiatiops. Warranties and Indemni (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any improvements on or about the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to RIV #4852-6954-7829 v1 5 any Hazardous Materials or to any Environmental Activities (as defined herein below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Property to assure and monitor continued compliance by Trustor and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, certifying that the Property is not now being used nor has it ever been used for any Environmental Activities. Beneficiary reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Trustor hereby grants to Beneficiary, its agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as is reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiary of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiary a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiary a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiary may reasonably request. The plan shall be subject to Beneficiary's written approval, which approval may be granted or withheld in Beneficiary's sole but reasonable discretion. Beneficiary shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiary. If Beneficiary disapproves the plan, Beneficiary's notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Trustor shall submit to Beneficiary a revised final written environmental plan that remedies the defects identified by Beneficiary as reasons for Beneficiary's disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiary within said thirty (30) day period, or if such revised plan is submitted to Beneficiary and Beneficiary disapproves said plan, such failure or disapproval shall, at Beneficiary's option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiary do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiary of Beneficiary's failure to respond, at which time Beneficiary shall have an additional forty-five (45) days after receipt of such notice from Trustor to notify Trustor of their approval or disapproval of the final plan within said additional forty-five (45) day period. If Beneficiary fail to notify Trustor of their disapproval or approval of said plan within said forty-five (45) day period the plan shall be deemed approved. Once any such plan is approved in writing or deemed approved by Beneficiary, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiary, and shall diligently and continuously pursue such action to completion in strict accordance with the RIV #4852-6954-7829 v1 6 terms of said plan. The rights of Beneficiary with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiary pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiary a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiary reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property. Trustor hereby grants to Beneficiary, their agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiary deem are necessary to conduct such a review and/or investigation. Beneficiary shall hold in confidence any report delivered by Trustor to Beneficiary pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiary to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiary, (c) regulatory officials having jurisdiction over Beneficiary who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiary's or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. RIV #4852-6454-7824 vl 7 "Environmental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. (f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiary's choice), Beneficiary, their successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee", and collectively, the "Indemnitees") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiary: (i) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Property or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Property or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; RIV #4852-6954-7829 vI 8 (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property or any portion thereof, (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (viii) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall terminate and be of no further force and effect, if no Claim is pending, upon the repayment of the Loan in accordance with its terms. (g) Trustor hereby represents and warrants as follows: (i) The Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Property is in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims") pending or threatened against Trustor or any previous owner or user of the Property (and relating to Trustor's and/or such previous owner's or user's ownership of the Property), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." RIV 44852-6954-7829 vI 9 The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1 m PSl 11x] tnAi:rtiiic . Trustor shall at all times keep the Property insured for the benefit of Trustee and Beneficiary as follows, despite governmental requirements that may detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Property, with a deductible amount not to exceed an amount satisfactory to Beneficiary; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiary; 10.1.3. Against damage or loss by flood, if the Property is located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiary may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiary may require; 10.1.5. During any alteration, construction, or replacement of improvements on the Property, or any substantial portion thereof, a Builder's All Risk policy with extended coverage with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the improvements on the Property with provision for replacement with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed portion of improvements on the Property and workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiary, if such insurance is required by Beneficiary in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Property is located. 10.2. Li bil ty lrisr�rotice. Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiary against claims for bodily injury or death or for damage RIV #4852-6954-7829 v1 10 occurring in, on, about, or resulting from the Property, or any street, drive, sidewalk, curb, or passageway adjacent to it, in standard form and with such insurance company or companies and in an amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiary may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 10.3. Other Insurance. Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Property, as (a) may be required by the terms of any construction contract for any improvements on the Property or by any governmental authority, other than Beneficiary or (b) may be reasonably required by Beneficiary from time to time. 10.4. Form of Policies. All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiary from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiary shall approve in Beneficiary's sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiary, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiary; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (43 8 BFU Endorsement or equivalent), and name Beneficiary and Trustee as insureds; and (d) include such deductibles as Beneficiary may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiary. ate r_gii10.5. �tMj1Lpsalo�6 icate . Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiary and, in addition, Trustor shall deliver to Beneficiary (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiary of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiary under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiary's reasonable judgment, is sufficient to allow Beneficiary to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased C"ovei-al W. If Beneficiary determines that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiary, procure such additional coverage as Beneficiary may require in Beneficiary's sole and absolute discretion. 10.7. N.o..... Separate Insurance. Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section RiV #4852-6454-7829 v1 1 1 10, unless endorsed in favor of Trustee and Beneficiary, as required by this Section 10 and otherwise approved by Beneficiary in all respects. 10.8. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Trustor's obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies required under this Section 10 or otherwise then in force with respect to the Property and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Rcphwenieiit Cast. For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Property in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiary's request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiary. Trustor shall pay the cost of such appraisal. 10.10. Approval Not' 'ar rgmq. No approval by Beneficiary of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiary as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11„erreli�i��ry'sli1t'l`crll�rlNr1�wrrlce. Trustor shall deliver to Beneficiary original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiary or if any such policy is canceled, whether or not Beneficiary have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiary, without notice to or demand on Trustor, may (but are not obligated to) obtain such insurance insuring only Beneficiary and Trustee with such company as Beneficiary may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor. Trustor acknowledges that, if Beneficiary obtains insurance, it is for the sole benefit of Beneficiary and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiary to protect Trustor in any way. 10.12. Duty to Restore After Casual . If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Property, Trustor shall immediately give notice of such loss or damage to Beneficiary and, if Beneficiary so instruct, shall promptly, at Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repaid, replace, and rebuild the Property as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. 11. Assi,gr1mg1ito�flnsurgpceand Conde iimgtti(gi11rocce sShould the Property or any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiary or Trustee may, at their option, RIV #4852-6954-7829 v1 12 commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiary, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiary any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiary and all refunds or rebates made of taxes or assessments on the Property, and Beneficiary may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiary shall be deemed to be held in trust and Beneficiary may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiary or Trustee may require. 12. Use of Insurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiary generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Property. Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiary shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiary of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiary of proof reasonably satisfactory to Beneficiary that there exists and will continue to exist, until the Property is reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiary's estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and RIV #4852-6954-7829 v1 13 Beneficiary may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiary may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; (iv) Receipt by Beneficiary from Trustor of sufficient cash funds to cover one hundred percent (100%) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiary in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiary with said amount and any interest earned thereon shall be released to Beneficiary, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiary. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiary may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiary of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiary in writing stating that the work described in the Trustor's certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiary to provide assurance that the Proceeds will be used to restore the Property to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiary's prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiary shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiary's discretion, be subject to reasonable holdbacks required by Beneficiary, not exceeding ten percent (10%) of the total estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiary's written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the proj ect architect approved by Beneficiary in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiary in connection with its construction loans, RIV #4852-6954-7829 v1 14 no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiary. Trustor shall, during the progress of the work, also submit to the Beneficiary, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiary furnished by an architect or engineer approved by Beneficiary in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiary shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiary upon delivery to Beneficiary of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiary confirming that the Property has been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. If: (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiary may, at their option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiary under the Loan and all other debts of Trustor to Beneficiary are discharged, Beneficiary shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiary's rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiary consent in writing thereto, which consent may be withheld by Beneficiary in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Property to any mechanic's, RN #4852-6954-7829 v1 15 materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. In any event in which the Beneficiary are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Property as hereinabove described and, at the option of Beneficiary, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiary, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards. Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiary shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiary's costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiary toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiary, renders or will render the Property not economically viable or which substantially impairs Beneficiary's security or lessens to any extent the value, marketability or intended use of the Property, Beneficiary may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiary may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiary or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiary from Trustor shall be paid to Trustor or Trustor's assignee. 14. Property Taxes and Assessments. Trustor shall pay in full on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiary with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts. Trustor agrees to consent to inclusion of the Property in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Property, upon the Beneficiary's written request. 16. Mort In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of RIV #4852-6954-7829 v1 16 mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiary or any payments secured hereby, Trustor shall bear and pay the full amount of such taxes. 17. pgcgk l Assessnietit quid fnsurance Reserves. gyres. Trustor shall, at the request of the Beneficiary, pay to Beneficiary equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiary next to become due, in addition to any other periodic payment or performances owed by Trustor under the Loan Agreement, the Promissory Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiary will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiary deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiary of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiary on account of assessments or insurance premiums may be commingled and invested with Beneficiary's own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiary shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiary may, at their option, then or thereafter exercised; require Trustor to pay the additional sums described in this paragraph. 18. l`rLlstor's l fight to -test Taxes. Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. Report X11��I l l its e [ N ��t1swt ion. Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiary, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to KIV #4852-6954-782.9 vI 17 the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiary. 20. Leases/lZental Agreei� acts. With respect to any leases and/or rental agreements currently or hereafter relating to any portion of the Property, Trustor agrees that: (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Property to be made available for rent and occupancy by a low- or very low-income household as this term is defined in Health and Safety Code Sections 50079.5 and 50105. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the Regulatory Agreement of even date herewith relating to the rental and occupancy of each such dwelling unit on the Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Property shall comply with the covenants of the Trustor under the Loan Agreement, this Deed of Trust the Promissory Note and the Regulatory Agreement of even date herewith; (c) Trustor shall fully comply with all of its obligations under all leases or rental agreements on the Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Trustor shall not permit an assignment of any leases, or any subletting thereunder; and (e) Beneficiary and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assignment of Leases , and Rents to Beneficiary. Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiary, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiary all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiary confer upon Trustor a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiary upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiary may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiary upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan RIV #4852-6954-7829 vI 18 Agreement or the Promissory Note, and Beneficiary shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiary shall determine. In the event the Beneficiary exercise or are entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiary shall have, and are hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiary in writing, Beneficiary's exercise of any of the rights provided in this paragraph shall preclude Trustor from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiary any duty to produce rents from the Property, and such assignment shall not cause Beneficiary to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiary in any separate assignment of leases and rents. 22. I,..I.�°Ict11 11�1ient (:)[ Secgrjl . Trustor shall not, without first obtaining .roe. Beneficiary's written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiary's lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiary, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non -conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits. Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiary or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiary, has waived and does hereby waive any immunity to such liability to Beneficiary under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiary's rights against Trustor. Should Beneficiary elect to appear in or defend any such action or proceeding or be made a parry to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiary and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with RIV #4852-6954-7829 v1 19 any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiary to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. ..r Additional hia� ancii�) Not .1�eraiwila d. 24. ll�... I Sale ,�� el Sale of'Premises o...e Trustor specifically agrees that: (a) In order to induce Beneficiary to make the loan secured hereby, Trustor agrees that if the real property described in Exhibit "A" or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other than that secured hereby or otherwise alienated by Trustor whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiary, then Beneficiary, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the real property described in Exhibit "A" whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the real property described in Exhibit "A"; provided, however, that any transfer of the real property described in Exhibit "A" or any interest therein to an entity which controls, is controlled by, or is under common control with Trustor shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiary in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the real property described in Exhibit "A" may materially alter and reduce Beneficiary's security for the indebtedness secured hereby. Moreover, Beneficiary have agreed to make its loan based upon the presumed value of the real property described in Exhibit "A" and the rents and profits thereof. Therefore, it will be a diminution of Beneficiary's security if junior financing, except as shall be permitted by Beneficiary, or if other liens or encumbrances should attach to the real property described in Exhibit "A". (b) Trustor may request Beneficiary to approve a sale or transfer of the real property described in Exhibit "A" to a party who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser"). Beneficiary shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiary may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the real property described in Exhibit "A", or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiary may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Trustor, without in any way releasing, discharging or otherwise affecting the liability of Trustor under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the real property described in Exhibit "A", no forbearance on the part of Beneficiary, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiary shall in any way whatsoever operate to RIV #4852-6954-7829 vi 20 release, discharge, modify, change or affect the original liability of the Trustor herein, either in whole or in part. Any deed conveying the real property described in Exhibit "A", or any part thereof, shall provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiary shall have all rights reserved to it hereunder in the event of a default or if Beneficiary shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the real property described in Exhibit "A" or such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be construed to waive the restrictions against the transfer of the real property described in Exhibit "A" contained in paragraph 24(a). 25. Further Encumbrances,. Trustor acknowledges that Beneficiary relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiary in bankruptcy; the risks to Beneficiary in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiary's rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiary's option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiary's requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiary to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiary will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiary's express written consent in each instance, which consent may be withheld by Beneficiary in their sole discretion. A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiary may exercise all remedies available to Beneficiary under the Loan Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiary shall encumber the Property, except for that certain purchase money subordinate deed of trust of even date herewith by and among the Trustor, the Agency and the Trustee in the original principal amount of $457,899 to which the Beneficiary hereby consent as a subordinate security interest to this Deed of Trust. 26. l la [,rl VE -N01EVY. 27. Event of Default. An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust, the Loan Agreement or the Promissory Note when due; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty RIV #4852-6954-7829 vl 21 (30) days from the date of such notice, and shall be determined by Beneficiary in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiary) portion of the Property; (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code"), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiary that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiary in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; RIV #4852-6954-7829 v1 22 (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiary the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiary's interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiary by reason of their ownership of this Deed of Trust, the Loan Agreement or the Promissory Note and, in such event, Trustor, after demand by Beneficiary, does not pay such taxes or assessments or reimburse Beneficiary therefor or, in the opinion of counsel for Beneficiary, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiary under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party thereto; and (k) Trustor acknowledges and agrees that all material non -monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiary shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non -monetary default. 28. Rigxlus apd Reiiiedi s, oti De -fault. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiary may exercise any one or more of the following rights and remedies: (a) Loan ,^'' _,r.S:nicnt. Beneficiary may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Acceleration. Beneficiary may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) FONCIOsUce LZi&l sw. Beneficiary may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale herein. Should Beneficiary elect to foreclose by exercise of the power of sale herein, Beneficiary shall also deposit with Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been RIV #4852-6954-7829 v1 23 given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the highest bidder upon any terms and conditions specified by Beneficiary and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase all or any portion of the Property, as applicable, at sale„ (d) lei to ;s c: -ii' . Beneficiary, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) MC Rerno..oN yes. Beneficiary shall have all the rights and remedies under this Deed of Trust as a secured parry under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiary at a place to be designated by Beneficiary that is reasonably convenient to both parties. Upon repossession, Beneficiary may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiary disposes of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiary; and RIV #4852-6954-7829 v1 24 (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. (f) Remedial Advances. Should Trustor fail to make any payment or to do any act as herein provided, v'ded, then Beneficiary or Trustee, without obligation so to do and without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiary shall be subrogated to the rights and lien interests of any person who is paid by Beneficiary pursuant to the terms of this paragraph. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiary, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) SurralIlr 1!oss�siori. Beneficiary may, at their option, either in person or by agent, employee or court-appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) (gUectiop of t�e� . Beneficiary may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiary, regardless of whether Beneficiary has taken possession of the Property. If any rents are collected by Beneficiary, then Trustor hereby irrevocably designates Beneficiary as Trustor's attorney-in- fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiary in response to Beneficiary's demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiary may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) 13enelicig, sl nll.or cti,iclitol"I_,e�ise . Beneficiary are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court-appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on RIV #4852-6954-7829 v1 25 the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement. Trustor hereby grants to Beneficiary full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiary, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiary under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiary may determine. Beneficiary shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiary nor shall it operate to make Beneficiary liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other parry, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiary after taking possession of the Property hereunder. (j) II�q!�fir iai-y's Ent' Irceii1cn of(.'o tracts. Beneficiary shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiary or, at Beneficiary's option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiary acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiary as its attorney-in-fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiary do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiary be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiary in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiary in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiary under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. RIV #4852-6954-7829 vI 26 (k)�:��tnl!it of Receiver. Beneficiary have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Loan. The receiver may serve without bond, if permitted by law. Beneficiary's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiary shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiary may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiary's option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiary deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiary or otherwise, as Beneficiary may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (1) veil a 1;atra e1°rert. Beneficiary may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) General- reditors-1 enIcdie, . Beneficiary shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. �, 3 mlicati�,. f ' . After deducting all costs and expenses of 29. of Sale � roceeds Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiary and any other person or persons legally entitled thereto. 30. Remedies „Cumulative. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised concurrently or independently, RIS! #4852-6454-7824 v1 27 from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies. 31. No Waiv,,,,er. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiary shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. M rsiml ipt . In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiary shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION. (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARY OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. Trustor's Indemnification_. Trustor agrees to indemnify and hold harmless Trustee and Beneficiary from and against any and all losses, liabilities, penalties, claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses") that may be imposed RIV #4852-6954-7829 v1 28 on, incurred or paid by or asserted against Trustee and/or Beneficiary by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Loan Agreement; (b) Trustee's and/or Beneficiary's good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties hereunder or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person. Any amount payable to Trustee, Beneficiary or counsel for Beneficiary under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Trustor of a statement from Trustee, Beneficiary and/or counsel for Beneficiary setting forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiary, Trustee or counsel for Beneficiary, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiary that is subject to the indemnity set forth in this paragraph, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiary, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiary. Notwithstanding the foregoing, Trustee and Beneficiary, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiary for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's payment of the Loan secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. At carne wy °" 1'C. Trustor agrees to reimburse Beneficiary for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiary incur in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Loan Agreement or the Promissory Note, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiary prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work-out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Loan Agreement or the Promissory Note. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 36. Acceptailce, by I"t-ustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. RIV #4852-6954-7829 v1 29 37. Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiary and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiary and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiary by an officer of Beneficiary, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiary. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiary or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 38. Reconvevance'. Upon written request of Beneficiary, stating that all performances and sums secured hereby have been satisfied and paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No l mc�leciscs. The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Loan Agreement or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiary may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described herein, take or release any other security or make compositions or other RIV #4852-6954-7829 v1 30 arrangements with debtors. Beneficiary may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. 40. Be nefic Lq!y :,onsept. At any time, upon written request of Trustor, Trustor's payment of Beneficiary's fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiary may: (a) consent to the making of any map or plat of said Property; (b) join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. 41. [R]," SERVE1) N0 T.1',X ['.J, 42. Further Assurances. Trustor, from time to time, within fifteen (15) days after request by Beneficiary, shall execute, acknowledge and deliver to Beneficiary, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiary, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiary, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiary, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiary may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiary on demand all reasonable costs and expenses incurred by Beneficiary in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiary, nor the failure of Beneficiary to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiary are cumulative and given as additional security. 43. Time of Performance. Time is of the essence hereof in connection with all obligations of the Trustor herein and under m g the Loan Agreement and Promissory Note. 44. Notices. The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any notices to be given to Trustor by Beneficiary hereunder shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiary. Any time period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first-class postage pre -paid mail, as officially recorded on the certified mail receipt. RN #4852-6954-7829 vl 31 45. Bege iciary's Riglitto liisq) Beneficiary and their agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiary's interest and to inspect the Property. 46. Re; orts nd Suitements. Trustor shall deliver to Beneficiary, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiary's request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiary covering the Property, both certified as correct by Trustor. At Beneficiary's option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiary so request, such statements shall specify, in addition to other information requested by Beneficiary, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Trustor shall permit Beneficiary or their representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiary all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 47. Asslgini lty i3crel�ciry�iclitlr�tioit. Beneficiary may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiary may make available to any person all credit and financial data furnished or to be furnished to Beneficiary by Trustor. Trustor agrees to provide to the person designated by Beneficiary any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiary, under the terms of this Deed of Trust. 48. LR1 w` Lel ED NO TEN, --], .J- 49. Le �' e[atioiisli4)sThe relationship between Beneficiary and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiary. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party Beneficiary are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiary of this Deed of Trust. 50. titl,,SJ', VF1 NO ,i'EXE,•. 51. Modification. This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiary and any such waiver RIV #4852-6954-7829 v1 32 shall be effective only as to its terms and on a single occasion. Neither, Beneficiary's delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiary's failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 52. Successors. Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 53. l?ai tical iii validit . If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 54. Mutua.l Ne rotiation. Beneficiary and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 55. Pail-ti&rapli1 le i ing . The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 56. N_p ugible 1..aa.+ . This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 57. Entire EgWq! 2gc . This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 58. cruMlte1 larts. This Deed of Trust may be executed in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 59. Fx t u el"i I iI''w and ccoi ��i ilg. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 60. Survival of'Relll went ations and Warranties. All of Trustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Loan secured hereby, until performance of all obligations set forth in the Loan Agreement and in RN #4852-6954-7829 v1 33 the Promissory Note or, alternatively, full repayment of the Loan and release and reconveyance of this Deed of Trust. R1V #4852-6954-7829 vl 34 IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and Assignment of Rents as of the day and year first above written. TRUSTOR Rio Hondo Community Development Corporation, a California public benefit corporation La -M U81M [NOTARY JURAT ATTACHED] RIV #4852-6954-7829 vi 35 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 4500 Bresee Avenue (1 SFD unit on lot) Legal Description: Lot 12 of Tract No. 4624, as per map recorded in Book 68, Page(s) 33 of Maps, as recorded in the office of the County Recorder of County of Los Angeles. Parcel: 8542-017-900 R1V #4852-6954-7829 v1 36 ITEM NO. STAFF REPORT '�p,L�d��r� TO: Honorable Chair and Board Members of the Successor Agency to the Dissolved Community Development ,�� u L� o �= Tri Commission of the City of Baldwin Park s ASRAFL 5 FROM: Rose Tam, Director of Finance �.. w + VALLEY 6 ��q,, DATE: September 21, 2016 SUBJECT: AWARD CONTRACT FOR FINANCIAL ADVISORY SERVICES TO REFINANCE SUCCESSOR AGENCY TAX ALLOCATION BONDS SUMMARY This item approves an agreement with Harrell & Company Advisors, LLC to provide financial advisory services for the refinancing the Successor Agency's outstanding tax allocation bonds. FISCAL IMPACT Fees for the services total $47,000 and are payable from bond proceeds. The fees are comprised of $12,000 for the projection of tax increment revenues and $35,000 for all other services including structuring the bonds, preparing the official statement for the bonds, assisting with selection of financing team, negotiating the bond pricing with the underwriter, and negotiating the deferral repayment with the County. The objectives of the refinancing are: 1. To take advantage of the lower interest rate; savings from the lower financing costs will eventually be distributed to the City and other agencies. 2. To release to the City the pledged sales tax revenue from the project areas. 3. To reduce administration expenses by consolidating the four (4) bonds into one. RECOMMENDATION Staff recommends that the Successor Agency approve the selection of Harrell & Company Advisors, LLC to provide the financial advisory services and authorize the Chair to execute the agreement for services with Harrell & Company Advisors, LLC (ATTACHMENT 3). BACKGROUND/DISCUSSION Prior to dissolution, the Baldwin Park Redevelopment Agency, predecessor to the Community Development Commission of the City of Baldwin Park ("Commission"), had issued several series of tax allocation bonds and entered into loan agreements secured by tax increment. The Dissolution Act permits the previously issued bonds and loans to be refinanced if the Commission can demonstrate that debt service savings can be realized and reduce the amount of debt payment from the Redevelopment Property Tax Trust Fund ("RPTTF"). The Dissolution Act requires successor agencies to hire a financial advisor in connection with any refinancing. Harrell & Company Advisors, LLC September 7, 2016 Paee 2 The staff issued a Request for Proposals ("RFP") for financial advisory services for the refunding of the Commission's 4 outstanding tax allocation bonds and loans. The RFP asked for the consultants to: (1) Coordinate with the banking team and negotiate fees with the banking team on behalf of the Successor Agency; (2) Prepare a report for inclusion in the Official Statement of the projected tax increment revenues and tax base of the project areas; (3) Prepare all Successor Agency and Oversight Board staff reports for Board approval of the refinancing; (4) Negotiate a deferral repayment agreement with the Los Angeles County; (5) Prepare rating agency presentations; (6) Negotiate bond pricing and interest rates with underwriters; (7) Prepare the Official Statement to be used for the sale of the bonds; and, (8) Prepare savings analysis required by Health and Safety Code 34177.5. Five responses to the RFP were received (refer to ATTACHMENT 1 summary of proposals). Only two firms indicated that they would perform all services and not contract out to third party consultants for certain services. Staff believes that the best service would be received from a firm providing all requested functions since they understand how the pieces all fit together and can better provide a comprehensive solution to the Successor Agency's refinancing. Passing -on the other tasks to another set of consultants tends to further increase the refinancing costs and delay in the completion of the bond refinancing. The two firms that proposed to provide all services were Harrell & Company Advisors, LLC ("Harrell") and Kosmont Transactions Services ("KTS"). After evaluating the proposals of Harrell and KTS, staff is recommending Harrell to provide the services. Harrell's response to the RFP is included as ATTACHMENT 2. Harrell was formed by Suzanne Harrell in 2000. Suzanne personally has a long history (going back to 1990) of providing assistance to the City of Baldwin Park, the former Redevelopment Agency and the Commission and, post -dissolution, to the Successor Agency. She has: • Been the financial advisor on many of the City and Agency bond issues; • Completed the merger of the redevelopment projects in 2000; • Prepared the annual continuing disclosure reports for all the City and Agency bonds since 2000; • Provided guidance with ROPS preparation and the meet and confer process; • Assisted the staff with negotiating with the County, the Department of Finance and the 1998 Bonds Bond Insurer relating to the cash flow shortfall created upon dissolution, and made certain that the General Fund was reimbursed for any advances relating to dissolution; and • Been the Successor Agency's liaison with the 1990 Bonds Bondholder, and assisted with the post -dissolution draw on the reserve fund to make the payment in August 2012 payment and the subsequent replenishment. Harrell & Company Advisors, LLC September 7, 2016 Paae 3 In addition: • She has served as financial advisor on over $2 billion of tax allocation bonds prior to RDA dissolution; • Her projections of tax increment revenues are accepted by rating agencies; • She has the capability of preparing all numerical analysis required for the refinancing in- house; and • She is a member of the Good Practices subcommittee of the National Association of Municipal Advisors. Her historical knowledge of the Successor Agency finances and passthrough agreements, together with her familiarity with the Dissolution Act, her technical ability to structure the refunding bonds, project RPTTF revenues accepted by rating agencies, her experience and ability to prepare the official statement and finally, her working relationship with the County on behalf of the Successor Agency, will allow Harrell to assist the Successor Agency in meeting all its objectives for the financing. Suzanne has been the financial advisor on 22 tax allocation bond issues totaling $668 million since dissolution. The proposal submitted by Harrell also addressed the shortfall in the administrative cost allowance for 2016-17 and the ability to eliminate the pledge of sales tax to the Puente -Merced 2003 Tax Allocation Bonds, which will replace the loss of the Successor Agency cost reimbursement in 2016-17. The fees are contingent upon the bond closing and are paid from bond proceeds. LEGAL REVIEW This report and the agreement have been reviewed by the City Attorney. ALTERNATIVES 1. Approve staff recommendation to hire Harrell & Company 2. Provide staff direction to request presentation from selected firms 3. Provide alternative direction to staff ATTACHMENTS 1. Summary of Proposals 2. Harrell & Company Response to RFP and Fee Proposal 3. Harrell & Company Advisors, LLC Agreement for Financial Advisory Services Attachment # m F E E E - c c U O O - n � p p c m N a Z Z O u O vi a mm Y c «o oO O N U a E _ a L Q E ECL CL pNo f0 a = u _ - ,.,. - 4 c _ g em Y om 3 vZ LL � Y z�O > > a } y > y.. ,...... _. ... .....�. w v E E E 12 .E 0(A •LA O ii. ry a p a Uw z 41 C C CL O O O o y 0) a19„ E E E E E E 2 O G i a m —. ...m...m mm.,:.... -- 0 u, o o tN.a E E E E E E t n o a O E'ZI VI p;�'ff H Y{al u 7 .... __ __ .. .... -_- -------- . e � n 1 p t q y w ~ O O— eu f0 o� Q a N m E E a o 2 RBXKU• � 1- • RON., f� Pp 60TH AN N IVE RSARY july, 8,, 2016 ATTACHMENT 2 TABLE OF CONTENTS PROPOSALSUMMARY ... .................. ...................................................................... Page I FIRMOVERVIEW ., ............................ ...........,.................. ......... ........... ................. Page 2 Harrell & Company Advisors ..................................... ........ .................. .......... Page 2 Dodd-FrankWall Street Reform and Consumer Protection Act ......................... Page 2 Qualifications............................................................................................................ Page 4 ProjectFinance Experience of Suzanne Q. Harrell .............................................. Page 4 References for Tax Allocation Bond Issuance....................................................... Page 6 SCOPE OF WORK ....................... .......... ................. ..................................................... Page 7 Financial Advisory Services.................................................................................... Page 7 Harrell & Company Approach............................................................................... Page 8 3 YEAR FINANCING SUMMARY.......................................................................... Appendix A PRELIMINARY REFUNDING CASHFLOWS...................................................... Appendix B PROPOSAL SUMMARY This Proposal consists of sections that detail the requirements outlined in the City of Baldwin Park's Request for Proposal (RFP) for Financial Advisory Services in connection with the proposed refinancing by the Successor Agency to the Dissolved Community Develoment Commission of the City of Baldwin Park (Successor Agency) of the former Baldwin Park Redevelopment Agency tax allocation bonds. The Proposal contains information on the scope of work, Harrell & Company Advisors' staff qualifications and experience, and references. The Successor Agency's objectives for the financing can be summarized as: Refinancing outstanding tax allocation bonds for debt service savings, a portion of which accrue to the City's General Fund; Negotiate the repayment of the deferral of County passthrough payments under existing agreements with as little impact on the General Fund loan repayment as possible; and Eliminate the pledge of sales tax currently contained in the 2003 Puente -Merced Sales Tax And Tax Allocation Refunding Bonds, for the benefit of the City's General Fund. Ms. Suzanne Harrell, managing director and founder of Harrell & Company Advisors, is uniquely qualified to perform the activities needed to meet these objectives. As described in this Proposal, she personally has a long history providing assistance to the City, the former Redevelopment Agency and Community Development Commission and, post -dissolution, to the Successor Agency. She has personally been financial advisor on many of your bond issues, completed the merger of the redevelopment projects in 2000, has prepared the annual continuing disclosure reports for all the City's bonds since 2000, has provided guidance with ROPS preparation and the meet and confer process, and has assisted the staff with negotiating with the County, the Department of Finance and the 1998 Bonds Bond Insurer relating to the cashflow shortfall created upon dissolution, making certain that the General Fund was reimbursed for any advances relating to dissolution. Her historical knowledge of the Successor Agency finances and passthrough agreements, together with her familiarity with the Dissolution Act, her technical ability to structure the refunding bonds, project tax increment (RPTTF) revenues suitable for inclusion in an official statement and accepted by rating agencies, her experience and ability to prepare the official statement and finally, her working relationship with the County on behalf of the Successor Agency, will allow Ms. Harrell and Harrell & Company Advisors to assist the Successor Agency in meeting all its objectives for the financing. Page 1 FIRM OVERVIEW Harrell & Company Advisors Harrell & Company Advisors, LLC offers independent financial advisory services and debt management strategies to local governments and public agencies throughout the State of California. The firm specializes in financing city and special district capital improvement projects, economic development and infrastructure. Since its formation by Ms. Suzanne Harrell in 2000, Harrell & Company Advisors has acted as the independent financial advisor on 284 financings totaling more than $5.0 billion. A list of financings for which Harrell & Company Advisors acted as financial advisor in the last three years is found in "Appendix A." The firm is a member of the National Association of Municipal Advisors. Harrell & Company has registered as a municipal advisor with the Municipal Securities Rulemaking Board (MSRB) and the Securities and Exchange Commission (SEC) and is in compliance with all rules promulgated by such bodies pursuant to the Dodd -Frank Wall Street Reform and Consumer Protection Act. Harrell & Company Advisors, LLC is a limited liability company. Our offices are located at 333 City Boulevard West, Suite 1430, Orange, California, (714) 939-1464. Dodd -Frank Wall Street Reform and Consumer Protection Act and Municipal Advisor Disclosures Under Rule G-42 �. The Dodd -Frank Wall Street Reform and Consumer Protection Act (Act) makes the fiduciary duty that independent muncipal advisors owe to their clients a federal duty, and tasked the MSRB with promulgating rules to implement the Act. The MSRB developed rules applicable to municipal advisors on fair dealing, fiduciary duty and pay -to -play, among other things. As a municipal advisor, in connection with any financing that may arise from the information provided herein or to be provided by us with respect to refinancing the Successor Agency's bonds, Harrell & Company Advisors will owe a fiduciary duty to the Successor Agency and will carry out its duties in accordance with such duty. Simply put, this means that we owe you both a duty of loyalty and a duty of care and that in performing services that we may undertake in connection with any bond issue, we will put the needs of the Successor Agency ahead of our own. This standard of care is higher than that required of other financial services providers such as underwriters. We advise the Successor Agency that Harrell & Company Advisors is registered as a "municipal advisor" pursuant to Section 15B of the Securities Exchange Act and rules and regulations adopted by the SEC and the MSRB. The SEC recently approved MSRB Rule G-42 which, among other Page 2 matters, requires us to provide you with information regarding any conflicts of interest that we may have and with information about where to find our SEC filings on the SEC website. If we are engaged as the municipal advisor on this transaction, the fees to be paid by the Successor Agency to us would be based on the relative size of the transaction and contingent on the successful closing of the bonds. Although this form of compensation may be customary, it presents a conflict because we may have an incentive to recommend unnecessary financings or financings that are disadvantageous to the Successor Agency. In addition, if facts or circumstances arise that could cause the financing or other transaction to be delayed or fail to close, we may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing or other transaction We manage and mitigate this conflict primarily by adherence to the fiduciary duty which we owe to municipal entities such as the Successor Agency which require us to put the interests of the Successor Agency ahead of our own. We have determined, after exercising reasonable diligence, that other than described above, we have no known material conflicts of interest that would impair our ability to provide advice to the Successor Agency in accordance with our fiduciary duty to municipal entity clients such as the Successor Agency. To the extent any such material conflicts of interest arise after the date of our engagement we will inform you of such conflicts as described below. Once we have agreed on a fee and an engagement for our services, the Successor Agency may terminate our services at any time upon written notice. If the Successor Agency terminates our services we would expect to be reimbursed for actual out-of-pocket expenses associated with the transaction. We may withdraw from our representation as Municipal Advisor upon written notice to the Successor Agency subject to the fiduciary duty described above which may require us to continue to represent the Successor Agency until an appropriate replacement is identified which will depend on the status of the transaction. We are required to disclose to the SEC information regarding criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation involving us. Pursuant to MSRB Rule G-42, we are required to disclose any legal or disciplinary event that is material to the Successor Agency's evaluation of us or the integrity of our management or advisory personnel. As reflected in our filings with the SEC, Harrell & Company Advisors has determined that no such event exists. Copies of our filings with the United States Securities and Exchange Commission can currently be found by accessing the SEC's EDGAR system Company Search Page which is currently available at https://www.sec.gov/edgar/searchedgar/companysearch.html and searching for either "Harrell & Company" or for our CIK number which is 0001610917. The Act further prohibits underwriters from switching from a financial advisory role in developing a financing to an underwriting role. Harrell & Company Advisors is not engaged in underwriting. Page 3 1 Qualifications a � Suzanne Harrell, Managing Director Suzanne Q. Harrell has over 25 years of experience in all aspects of capital financing and financial analysis. Since beginning her public finance career in 1988, she has acted as financial advisor on over $5 billion in total financing for California public agencies. Ms. Harrell is a graduate of Old Dominion University in Norfolk, Virginia and became a Certified Public Accountant in 1984. She has four years of experience in governmental auditing and accounting with the public accounting firm of McGladrey & Pullen. Ms. Harrell currently serves on the Good Practices Subcommittee of the National Association of Municipal Advisors. While an auditor with McGladrey & Pullen, she was assigned to the City of Baldwin Park's financial audit in 1987. After becoming a financial advisor, she maintained her relationship with the City of Baldwin Park and the former Baldwin Park Redevelopment Agency, working on numerous bond issues for the City and the former Agency since 1990. She also implemented the merger of the former Agency's 5 of the 6 redevelopment agency project areas in 2000. Ms. Harrell is personally involved in all aspects the financing and attends all staff meetings, Council meetings, develops financing strategies, conducts public sales or negotiations with underwriters, as well as prepares any other written material necessary to complete the transactions. Ms. Harrell has the technical, legal and analytical experience to provide all services required by the Successor Agency and has a comprehensive understanding of tax law and State law, and particularly the Dissolution Act. Her long history with the former Redevelopment Agency/Community Development Commission, and the assitance that she provided to the Successor Agency staff post-dissolution, provides her with a thorough understanding of the Successor Agency's tax revenues, cashflow, passthrough agreements and ROPS requirements. This understanding places Ms. Harrell in a uniquely knowledgeable position to perform the services outlined in the Successor Agency's RPF. Project Finance Experience of Suzanne Q. Harrell In addition to Tax Allocation Bonds, Harrell & Company Advisors provides municpal advisory services on bond issues backed by a diverse array of securities, such as General Fund Lease Financings, Water/Sewer Revenue Bonds and Land Secured Bonds. Ms. Harrell's broad experience provides exposure to the widest possible range of financing alternatives and funding techniques used throughout the industry and can benefit issuers of all types of obligations. Harrell & Company Advisors has provided structuring, financial planning, tax increment (RPTTF) projections, prepared official statements, run cashflows and advised on Page 4 disclosure issues to a variety of issuers of lease revenue bonds, tax allocation bonds, water bonds, assessment district bonds and special tax bonds. The GFOA Best Practices suggests that issuers select a method of sale based on a thorough analysis of the relevant rating, security, structure and other factors pertaining to the proposed bond issue. With all the wide-ranging types of credits and bond structures Ms. Harrell has worked on over the last 25 years, she is experienced in analyzing ratings, security and structure needed to advise the Successor Agency on the selection of a sale method for its bonds. Successor Agency Refinancing Ms. Harrell has acted as financial advisor over $2.0 billion in tax allocation bonds since the firm was founded in 2000 and on 22 series of tax allocation refunding bond issues totalling $635 million since redevelopment dissolution (including issues closing in July 2016). Ms. Harrell is well -versed in the Department of Finance procedures required for refinancing the Successor Agency's tax allocation bonds. Harrell & Company's recent (2016) post -dissolution transactions are shown below.. SANTA CRUZ COUNTY SUCCESSOR AGENCY Tac. Allocation Refunding Bonds, 2016 Series A $20,335,000 $72,955,000 P, ,AII)ALE SUCCESSOR AGENCY Subordinate Tax Allocation Refunding Bonds, 2016 Series A & B STANTON SUCCESSOR AGENCY Subordinate Tax Allocation Refunding Bonds, 2016 Series A Taxable Series B Page 5 $29,315,000 CHULA VISTA SUCCESSOR AGENCY Tax Allocation Refunding Bonds, Series 2016 CITY OF CHULA VISR $20,810,000 GLENDALE SUCCESSOR AGENCY The RFP requires the municipal advisor to prepare tax increment projections for use in the official statement. Harrell & Company is accepted by rating agencies and bond insurers for preparation of tax increment projections. The RFP also requires the municipal advisor to negotiate the repayment of the existing passthrough deferrals with Los Angeles County. It is critical to understand the terms of the existing agreements concerning repayment, while not impairing the ability to refinance the outstanding tax allocation bonds. Ms. Harrell has a long relationship working with the County staff on behalf of the former Commission, as well as on behalf of the Successor Agency in connection with its passthrough agreements and deferrals, and believes no other financial advisor is in a better position to negotiate an advantageous repayment plan on behalf of the Successor Agency. References for Tax Allocation Bond Issuance r, Santa Cruz County, 701 Ocean Street, Santa Cruz, CA 95060 Carlos Palacios, Assistant County Administrative Officer; (83 1) 454-3402 Carlos.Palacios@santacruzcounty.us Edith Driscoll, Auditor -Controller -Treasurer -Tax Collector; (831) 454-2500 Edith.Driscoll@santacruzcounty.us City of Glendale, 633 East Broadway, Room 103, Glendale, CA 91206 Philip S. Lanzafame, Director of Community Development; (818) 548-2140 planzafame@glendaleca.gov City of Palmdale, 38300 N. Sierra Highway, Suite D, Palmdale, CA 93550 Karen Johnston, Finance Manager/City Treasurer; (661) 267-5411 KJohnston@cityofpalmdale.org City of Chula Vista, 276 Fourth Avenue, Chula Vista, CA 91910 Maria Kachadoorian, Deputy City Manager/Chief Financial Officer, (619) 409-5818 mkachadoorian@chulavistaca.gov City of Stanton, 7800 Katella Avenue, Stanton, CA 90680 Stephen M. Parker, Director of Administrative Services, (714) 890-4226 sparker@ci.stanton.ca.us Page 6 SCOPE OF WORK. Financial Advisory Services Pre -Issuance Services. Ms. Harrell will be the person from the firm who provides the following services prior to issuance of the tax allocation refunding bonds (the "Refunding Bonds"): a Prepares timeline for issuance of the Refunding Bonds taking into account steps needed to meet the requirements of the Dissolution Act. Assists with the selection on Banking Team and negotiates fees with Banking Team. Participates in staff meetings relating to the issuance of the Refunding Bonds, as well prepares the staff reports for Successor Agency and Oversight Board financing approvals. Projects tax increment revenues and a report on tax revenues and the tax base for inclusion in the official statement. Prepares the rating strategy and rating agency credit presentation to optimize the credit rating assigned to the Refunding Bonds. Assists the staff in preparing for dialogue with the rating analysts. Solicits and analyzes bond insurance bids and makes recommendation for credit enhancement. Negotiates a repayment schedule for the County passthrough deferrals, based on available RPTTF revenue after debt service and other enforceable obligations. Debt Issuance Services. Ms. Harrell will also be the person from the firm who provides the following services in connection with the issuance of the Refunding Bonds: Structures the debt issue (in consultation with the Successor Agency underwriter in a negotiated sale of the Refunding Bonds). Makes recommendations on timing of sale, maturity schedule, lien structure and security, restrictions and covenants included in the financing documents. Conducts negotiated sale of the Refunding Bonds. Prepares refunding cashflows. Prepares the official statement. Assists the finance team in the preparation and review of legal documents. Presents a summary of the financing. Prepares and maintains debt -related schedules for use in preparing future ROPS. Prepares the savings analysis required by the Dissolution Act. A further discussion of how some of the key services are accomplished follows. Page 7 Harrell & Company Approach Ms. Harrell's comprehensive approach to the refinancing of the Successor Agency's 4 series of outstanding bonds will take into account the many factors which affect refinancings of tax allocation bonds since dissolution. She understands not only the Dissolution Act requirements for refinancing, but how to project tax increment revenue, how to prepare the ROPS, and how to model the Successor Agency's cashflow. Dissolution Act and Refunding Savings. Broadly, under the Dissolution Act, the Successor Agency must show debt service savings pursuant to Health & Safety Code Section 34177.5(a)(1) in order to issue refunding bonds. Ms. Harrell has successfully assisted issuers in demonstrating the savings for the required refinancing approval by the Department of Finance (DOF). The firm has the capacity to run refunding cashflow analysis in-house. We have included our refunding analysis in Appendix B. The analysis shows that, using current market rates, the present value of the savings from a refinancing will be approximately 150/.. That translates to $2.55 million in nominal dollar net savings (a 13.1% reduction in annual payments) over the remaining 15 years the Refunding Bonds will be outstanding. The estimated cashflow savings are summarized below, and a reduction for the application of existing bonds reserve funds (and in the case of the CBD 1990 Bonds, earnings) that would be used to offset the existing bonds debt service is shown, since no similar cash funded reserve fund will be used for the Refunding Bonds. For purposes of the DOF analysis, the reserve funds are not shown, but since they affect the residual available for distribution which is based on cashflow, it is important to to note the net payments. The City's General Fund share of the net payments is 16%. Fiscal Prior Bonds Refunding Bonds Less Prior Bonds Net Reduction Year End, Debt Service, Debt Service* Reserve Funds in Pa ^Jr * 6/30/2017 $ 420,255 $ (55,705) $ (19,900) $ 344,650 6/30/2018 2,446,116 (2,153,600) (38,800) 253,716 6/30/2019 2,448,961 (2,000,100) (38,800) 410,061 6/30/2020 2,464,443 (1,999,125) (490,700) (25,383) 6/30/2021 1,752,909 (1,294,400) 458,509 6/30/2022 1,751,221 (1,298,700) (446,000) 6,521 6/30/2023 1,234,230 (914,100) 320,130 6/30/2024 1,232,645 (915,900) 316,745 6/30/2025 1,228,210 (907,875) 320,335 6/30/2026 1,230,640 (909,625) 321,015 6/30/2027 1,224,519 (904,500) 320,019 6/30/2028 476,825 (351,625) (502,000) (376,800) 6/30/2029 478,681 (356,375) 122,306 6/30/2030 474,244 (350,375) 123,869 6/30/2031 353 625 490 000 (365,256) $19,342,268 $(14,765,630) $(2,026,200) $2,550,438 * Projected. Page 8 The Puente-Merced Redevelopment Project 2003 Sales Tax and Tax Allocation Bonds contain a pledge of sales tax generated by the Baldwin Park Town Center. Approximatley $485,000 of City sales tax is captured and applied first to the debt service on the 2003 Bonds, and then to other enforceable obligations. Prior to dissolution, any surplus sales tax was not required to be shared with other project areas. The sales tax pledge extends until August 1, 2021. Our plan for the refinancing would eliminate the pledge of sales tax to any of the Refunding Bonds, and allow the City to rescind the ordinance which directs the Baldwin Park Town Center sales tax to the Successor Agency. This will result in an increase in sales tax to the General Fund. This increase is critical in Fiscal Year 2016-17 to offset the one-time loss of the $250,000 administrative cost allowance due to ROPS cashflow issues. The projected net impact on residual RPTTF is shown below after considering the loss of the sales tax to the Successor Agency, and the corresponding projected benefit to the City's General Fund. Successor AgC.n�.y Cashflow General Fund Benefit Net Debt Net Residual City 16% Service Less RPTTF Share Plus Year S lyif) )S Sales Tax Impact* RPTTF* Sales Tax Total* 6/30/2017 $ 344,650 $ (242,500) $ 102,150 $ 16,344 $ 242,500 $ 258,844 6/30/2018 253,716 (485,000) (231,284) (37,005) 485,000 447,995 6/30/2019 410,061 (485,000) (74,939) (11,990) 485,000 473,010 6/30/2020 (25,383) (485,000) (510,383) (81,661) 485,000 403,339 6/30/2021 458,509 (485,000) (26,491) (4,239) 485,000 480,761 6/30/2022 6,521 6,521 1,043 - 1,043 6/30/2023 320,130 - 320,130 51,221 51,221 6/30/2024 316,745 - 316,745 50,679 50,679 6/30/2025 320,335 - 320,335 51,254 mm 51,254 6/30/2026 321,015 - 321,015 51,362 51,362 6/30/2027 320,019 320,019 51,203 51,203 6/30/2028 (376,800) mm (376,800) (60,288) (60,288) 6/30/2029 122,306 122,306 19,569 - 19,569 6/30/2030 123,869 - 123,869 19,819 - 19,819 6/30/2031 (365,256) - (365,256) (58,441) (58,441) $2,550,438 $(2,182,500) $ 367,938 $ 58,870 $2,182,500 $2,241,370 * Projected. Sales tax after August 1, 2021 is excluded from both analysis since it would revert to the City at that time in any case. For Fiscal Year 2016-17, only one-half year of sales tax is shown benefitting the General Fund because we do not expect the refinancing, and therefore the release of the lien on sales tax, until mid-year. Page 9 Financing Schedule. Harrell & Company Advisors develops and monitors the schedule of activities during the financing to assist the Successor Agency in meeting agenda deadlines and DOF filing requirements. A pro -forma timeline for financing is shown below, assuming that the Municipal Advisor contract is completed as shown in the Request for Proposals on August 17, 2016. It also assumes that the Successor Agency has already hired its Bond Counsel. The Dissolution Act has added a number of steps to the traditional refinancing process, and requires more time to actually bring the bonds to market. If the Successor Agency Board adopts the resolution authorizing the Refunding of the Bonds, the Oversight Board will then be presented with a companion resolution approving the action taken by the Successor Agency. This Oversight Board action must be submitted to and approved by DOF for conformity with the provisions of Health & Safety Code Section 34177.5(a)(1). DOF can take up to 65 days from the time the Oversight Board resolution is submitted to approve the financing. Further, it has been the policy of S&P not to release their rating on the Refunding Bonds until the DOF approval letter is received. That can add a few more days to the financing schedule, since the date that the DOF will respond is never a date certain. Once approved by DOF, the rating can be assigned, and the bonds can be marketed and sold. * The DOF may approve the financing sooner and Refunding Bonds could be sold earlier. Depending on the timing of DOF approval and holiday schedules, we may recommend moving the sale to January 2017. A determination for the best time to sell the Refunding Bonds would be made as the DOF deadline for approval approaches. Page 10 U iN lall 1 semi Preparation of Draft Documents By September 14 E I Successor Agency and Oversight Board By September 30 Approvals . Submit Oversight Board Resolution to DOF .._ BY September tember 30 4 Rating Presentation Week of November 14 DOF Approval By November 30 Rating Assigned By December 7 Bond Sale Week of December 19* * The DOF may approve the financing sooner and Refunding Bonds could be sold earlier. Depending on the timing of DOF approval and holiday schedules, we may recommend moving the sale to January 2017. A determination for the best time to sell the Refunding Bonds would be made as the DOF deadline for approval approaches. Page 10 Agenda Documents. Ms. Harrell has a number of municipal clients that, like Baldwin Park, are infrequent issuers. For those issuers who may be unfamiliar with the process or not have a variety of staff report form documents relating to bond issuance to use as a starting point, Ms. Harrell will draft all staff reports for the Successor Agency and Oversight Board using the City's format. This makes less work for staff and removes doubt that something was left out of the report that should have been included to meet the DOF requirements. Ms. Harrell also provides the "debt service savings analysis" required under Health & Saftey Code Section 34177.5(a)(1) to be attached to the report. She assembles the entire financing document package (resolutions, draft official statement, draft bond purchase agreement, draft indenture and draft escrow agreements) and provides the entire package to staff for inclusion in the agenda package to eliminate any concern that a document is missed. Since the draft documents come from a variety of finance team members, it is sometimes difficult to keep track of all the documents required and the lastest versions of the documents. The postive feedback we receive for this assistance tells us that it is very much appreciated by staff. Finally, once the Oversight Board resolution is approved, Ms. Harrell can provide assistance on the filing of the resolution and estimated savings report with the Department of Finance. Harrell & Company also provides a worksheet where staff can keep track of time spent on the various financing activities to document the requested reimbursement of City costs related to the refunding permitted under Health & Safety Code Section 34177.5(f) so that no reimbursable staff time is overlooked. Tax Allocation Bond issuance post dissolution is very "process -oriented" and Ms. Harrell excels at keeping staff informed of current and next steps, and providing any assistance to staff to accomplish the financing steps with the minimum intrusion on staff's time. Revenue Projections. Harrell & Company Advisors will prepare the tax increment projections for use in the official statement. Harrell & Company Advisors is accepted by rating agencies and bond insurers for preparation of tax increment projections. As an example, in the case of the Palm Springs Successor Agency's Tax Allocation Bonds issued in August 2014, Harrell & Company prepared the tax increment projections for all 10 of the underlying redevelopment projects, most of which have complicated tax sharing agreements with stepped up payments over time. The bonds were both rated and insured. Bond Sizing. Harrell & Company Advisors prepares all numerical analysis associated with the issuance of the bonds, including preparation of sources and uses and debt service cashflows and refunding analysis. Ms. Harrell has the expertise to prepare all numerical analysis in-house. The refunding analyses for the Successor Agency's Tax Allocation Refunding Bonds prepared by Harrell & Company Advisors is attached in Appendix B. Review Legal Documents. Ms. Harrell reviews all legal documents prepared by bond counsel in connection with the issuance of the bonds to make certain they conform to the legal structure proposed for the Refunding Bonds. Page 11 Disclosure Issues. Ms. Harrell is well versed in defining disclosure issues necessary to meet SEC guidelines, and incorporates any required disclosure in the Official Statement. Recently, the SEC has undertaken its Municipal Continuing Disclosure Compliance Initiative and has made accurate reporting in future official statements regarding an issuer's past compliance with the annual reporting requirements and significant event notices for outstanding debt a priority. Harrell & Company Advisors prepared the former Commission and Successor Agency flings and has all the data needed to ensure past compliance is accurately disclosed. Terms and Conditions of Sale. The bond issue will be structured using terms and conditions which most advantageously meet current market conditions and the objectives of the Successor Agency. Generally, the financing structure addresses sizing considerations for the proposed debt, the Dissolution Act requirements and, in consultation with the Successor Agency's bond counsel, any tax law implications. Harrell & Company will offer its recommendation on selling the bonds at competitive or negotiated sale. While competitive sale is generally a preferable sale method for most cities, outside factors will likely result in the recommendation for a negotiated sale for the Refunding Bonds. These factors include the size of your transaction and the fact that "RPTTF"and the ROPS process has still not gained as much market recognition from individual investors. This makes it difficult for underwriters to bid competitively on tax allocation bonds - they do want to spend much time to analyze the ROPS cashflow, since they are not guaranteed that they will be able to buy the issue. There has not been a competitive sale of tax allocation bonds since dissolution for these reasons. A thoughtful, comprehensive analysis of the which sale method would better serve the Successor Agency will be made. Official Statement. Harrell & Company will prepare the Preliminary and final Official Statement and provide for their distribution, both in printed and electronic formats. Harrell & Company routinely prepares official statements in-house. This provides the firm with the foundation to prepare the best presentation of financial information for the Official Statement that is relevant to investors. This generally goes beyond just the cookie -cutter approach to drafting this document. This includes not only making sure that the legal structure and risks are well documented, but that special and important features of the Successor Agency's project area and ROPS process are highlighted. Page 12 �sl �iunr.ry wry« :anx n.duviwav SPOJi]QINBI SPCCOSORAGENCY TO T11F ear.kronar,w:xrtinF.� o-7.r'rrvrr•. Ac;>'vcw� SZ�iTR1LC[.SYriA1,Bi rua:aai�:rrr,r�rhr¢vr i�ra€unca' LbY fi Sr;wclxrll ldA'6'F.'CAi Ai.rdH'A'r'ICB\ Idi:A+l:\&YI VCv 6K]MIlS .,. a.;m ��►�BAM hJrdlar U ti�.W Ynr w pe.,m otw xr. mw a I+a wxww 1 w".+wry � • a' � R.+m4 u a �n,. . u r w. ien fp gtlarp''I'lo'.rv', iav'M1 Rating Agency Presentation. Our experience with rating and bond insurer analysts, post- dissolution, is that the focus of the rating presentation has shifted from in-depth discussion of the Project Areas and future tax increment growth potential, to very specific legal and financial data. Most of the information required by the rating agency revolves around the assessment appeals, largest taxpayers, ROPS cashflow, DOF approvals and any potential clawback pursuant the State Controller's audit. When Ms. Harrell prepares the rating presentation, she also provides a "script" to the staff to assist in the smooth transition of between speakers and detail of the discussion points to be addressed by each speaker on a particular slide. If the rating presentation is conducted by conference call with the rating analysts, it is Ms. Harrell's practice to participate in the call at City Hall along with the staff. Since there are no visual clues on conference calls, everyone knows they can sometimes be confusing and disjointed. Ms. Harrell is experienced in guiding the call along with a minimum of interruptions and disruptions while making certain staff is confident that they have presented all the information required of them. Bond Sale and Market Access. For the negotiated sale of the Refunding Bonds, we will: advise the Successor Agency on the propriety of the underwriter's proposed pricing and compensation relative to the current market conditions; negotiate to provide the lowest available rates and costs to the Successor Agency; pN provide the Successor Agency with a pricing analysis and comparison of its transaction with other recent sales of comparable credit quality; and provide quantitative schedules showing the results of the final pricing. Harrell & Company Advisors uses a variety of sources to obtain current market information. This information is critical in negotiating interest rates in a negotiated sale. The primary tool used by Harrell & Company Advisors to access current market information is the Thomson Municipal Market Monitor ("TM3" ). TM3 provides real-time data for: Municipal Market Data Index (MMD) Results of Competitive and Negotiated Bond Sales in the Primary Market Municipal Market News Trade Data in the Secondary Market Upcoming Bond Sale Calendar In the pricing phase of a bond issue, we access TM3 for all the recent bond pricings of similar security or credit quality and the MMD Index for the date of the sales. Harrell & Company Advisors maintains a data base of these bond sales going back to 2006. The Municipal Market Data Index ("MMD') is a daily composite index ofyield curves for varying maturities from 1 to 30 years, determined from trading activity and markets of the highest -grade AAA rated state general obligation bonds. Most tax- exempt bonds are priced as a spread to this index. Page 13 In a negotiated sale, we will compile all the relevant information and provide a comparison of the proposed rates on the Refunding Bonds with other recent financings. However, the underwriter may also prepare this information, and if so, we may simply review their information to make sure it includes all the data that Harrell & Company Advisors would include in our own analysis. Because the market changes over time, we focus primarily on the spread in the interest rate to MMD proposed for the Refunding Bonds compared to the actual spreads on other similar financings. This ensures that the Successor Agency is getting a competitive market interest rate, or in the event no sales are comparable, an appropriate interest rate, for its bonds. TM3 also provides data on upcoming competitive and negotiated bond sales, which are reviewed when scheduling the bond sale. Typically, the bond sale would be scheduled around any large upcoming sales. TM3 has a market news and commentary feature as well. This feature provides real-time information on market conditions, federal reserve board actions and calendars, latest economic news releases and other helpful information used in monitoring the market for planning purposes and for up-to-date pricing trends as the bond sale date approaches. Bond Closing. Ms. Harrell will review all the closing documents prepared by bond counsel and making sure that any necessary representations are made by parties to the financing. We will also review the arrangement for closing and transfer of funds. Post Issuance Services. Harrell & Company Advisors will also work with the Successor Agency to fulfill its continuing disclosure responsibilities under the Securities and Exchange Commission Rule 15c2-12 and the use of the MSRB's Electronic Municipal Market Access (" EMMA") system. In addition to providing quality financial advisory services and providing timely response to issuer needs, Harrell & Company Advisors has demonstrated its availability and willingness to work on any other issues that arise after closing. Page 14 Appendix A LU l �, n a r, n s rCo 'v v C, v" ro u_ Z44,.y N 'C C UZ � C om„, C C 'n fa C C ~' c �sN to O O N 7 7 V) Q(7� 4-. QJ cvy �. ti O z �e9 C1 a O O N O O O z z QC7� z . 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Ln ri Qk � ;o .� r -j r14 O OQ N N� N W kD Z s 0000 J\ \7 NCQ r4 r14 LU q - D Sq u Appendix B Delivery Date Expenses: Cost of Issuance Successor Agency to Baldwin Park Community Development Commission 43,000.00 35,700.00 Tax Allocation Bonds Refunding Underwriter's Discount 9,730.00 15,050.00 Dated Date 01/15/2017 84,560.00 Bond Insurance 10,136.94 15,674.72 Delivery Date 01/15/2017 63,898.19 103,359.41 Surety _12,231.25 - Tax Allocation Tax Allocation 23,257.50 Tax Allocation 59,898.19 Bonds Bonds Tax Allocation Bonds Other Uses of Funds: Refunding Refunding Bonds Refunding Rounding Amount Sources: (CBD) (SGR) Refunding (PM) (Merged) Total Bond Proceeds: 2,203,517.20 2,424,676.05 8,902,637.30 15,426,505.35 Par Amount 1,390,000.00 2,150,000.00 1,785,000.00 6,755,000.00 12,080,000.00 Premium 34,874.80 53,517.20 106 676.05 ........ 1,215,637.30 ....... 1,410 705 35 .... 1,424,874.80 2,203,517.20 1,891,676.05 7,970,637.30 13,490 705.35 Other Sources of Funds: Debt Service Reserve Fund 470,800.00 533,000.00 932,000.00 1,935,800.00 1,895,674.80 2,203,517.20 2,424,676.05 8,902,637.30 15,426,505.35 Tax Allocation Tax Allocation Tax Allocation Bonds Bonds Tax Allocation Bonds Refunding Refunding Bonds Refunding Uses: (CBD) (SGR) Refunding (PM) (Merged) Total Refunding Escrow Deposits. Cash Deposit 0.75 0.21 0.96 SLGS Purchases 1,833,393.00 2,106,375.00 2,351,250.00 8,630,530.00 14,921,548.00 .,___-. 1,833,393.75 2,106,375.00 2,351,250 00 8,630,530.21 14,92 1 548.96 4,92 Delivery Date Expenses: Cost of Issuance 27,800.00 43,000.00 35,700.00 135,100.00 241,600.00 Underwriter's Discount 9,730.00 15,050.00 12,495.00 47,285.00 84,560.00 Bond Insurance 10,136.94 15,674.72 13,649.56 63,898.19 103,359.41 Surety _12,231.25 - 18,668.75 668.:.,.... ... 795.00 . ......... .. 9 ___ -. 23,257.50 63,952.50 59,898.19 92,393.47 71,639.56 269,540.69 493,471.91 Other Uses of Funds: Rounding Amount 2,382.86 4,748.73 1,786.49 2,566.40 11,484.48 1,895,674.80 2,203,517.20 2,424,676.05 8,902,637.30 15,426,505.35 Note: Based on Estimated Insured Bond Interest Rates in December 2016 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 1 bU 'g 00 0 Q CD c) 6 'n C� C) r- 6 '1 "I' W) " Q4 W) 25 a, C5 W) 'n 00 CD m en Do m C:) 0 CD 4 cr) C) W) kn v1 e C-4 ON CD 00m 61 (N r4 00 "D Cq:) 8 00 c! rq m h m0— rq CD CD N C� C-4 cq -,r en W) rt Vl 00 2N r,4 In C:)0 0 0W) CD CD o00 'n bn CD C:, rq O r- a, a, O K1 0 W CD oo C7, t-: 21, CD C:) C-4 Vn N 00 N N00 O 0 o (ON c, C:- C� �n r - CD C:- N C -q "I m ooh 'No "o COD -t �-D "i (CE m CD ire C) CD C� Od� m C'4 trirq a, t> C=� W) M C� Do m 0 U u uo 0 , CLn > Oh C7, ® O- q r - c! N cq 8, C� , 'o 00 0, C:, C3 'D 'D ®C� ClC) Okn rq O 0 r. bp g N eq C� oo t- oo c:> r-- C, CD CD cq -.cc Zn rq C:> CD w) �t " "q 6 C:� a, a, �D 'IT 4n l0 O "D N CD C:) cr,,I, cc:" "t et en w) h oo C) cD N r4 a,, c O O 42 d) 0 p0 0 cl, u a) IM H 0 0 oo t6 O -IM 4; �6 u . lu > z > z P� aa. aNW&KIWILO) a 00 Ll I &I ti a ILI) 01 Q a INAFTsTRMI IM5 1 3 0 Tax Allocation Bonds Reftinding (CBD) am Maturity Interest Bond Date Rate 1990 CBD Loan: SERIAL 08/01/2017 7.750% 08/01/2018 7.750% 08/01/2019 7.750% Par Call Call Amount Date Price 535,000.00 02/01/2017 100.000 585,000.00 02/01/2017 100.000 645,000.00 02/01/2017 100.000 1,765,000.00 ............... 11,11,11,11,11— . . .................. . ................. - ----- . . . . . ..................... . . . . . .................. . . ................ . . . . . . -- --------------- ---------- Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 3 Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding (SGR) w Maturity Interest Par Call Call Bond Date Rate . . . ..... . . . ........................................................... Amount ..... Date .... . ............... Price 1998 SGR Bonds: SERIAL 08/01/2017 5.000% 650,000.00 02/01/2017 100.000 08/01/2018 5.000% 685,000.00 02/01/2017 100.000 08/01/2019 5.000% 720,000.00 02/01/2017 100.000 ............ . . . . . . ........... .. ................ . ....... . ..... . . . ...... . . . . .. ..... . . . ....................... 2,055,000.00 ... . . . ...... . .... . . ..... .............................................. ...... . . ...... . . . . . ........... .... Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 4 Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding (PM) W Maturity Interest Par Call Call Bond Date Rate Amount Date Price 2003 Puente Merced Project Bonds: SERIAL 08/01/2017 5.250% 410,000.00 02/01/2017 100.500 08/01/2018 5.250% 430,000.00 02/01/2017 100.500 08/01/2019 5.250% 455,000.00 02/01/2017 100.500 08/01/2020 5.250% 480,000.00 02/01/2017 100.500 08/01/2021 5.250% ..... . ........................... 505,000.00 . . . . . ....... . . . . . ....... . . . . . . 02/01/2017 100.500 . . . . . ................... . ............. . ....... . . ....... . . . . . . . ........ . ..... . .. ....................... . . . ......... .............. . ................. . . 2,280,000.00 ............. ..... . . . . . . . . . ...... . . ........................... . . . . . . . . ..................... — ... Jul 6, 2016 928 am Prepared by Harrell & Company Advisors Page 5 Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding (Merged) Maturity Interest Par Call Call Bond Date Rate Amount Date Price Merged Project 2000 Tax Allocation Refunding Bonds: SERIAL 09/01/2017 5.500% 60,000.00 02/01/2017 100.000 09/01/2018 5.600% 60,000.00 02/01/2017 100.000 09/01/2019 5.600% 65,000.00 02/01/2017 100.000 09/01/2020 5.650% 785,000.00 02/01/2017 100.000 TE 25 09/01/2025 5.700% 4,660,000.00 02/01/2017 100.000 TE 30 09/01/2030 5.750% 2,800,000.00 02/01/2017 ----- 100.000 - ................ . . ................. . ...... . . . . ..... .. ............ . ... ..... . . .... ..... ;� . . . . . . . . . ....................................... . ........... ......... ...... 8,430,000.00 . . . . .................... . . . . . . . . . . ................. .. Ju16,2016 9:28am Prepared by Harrell &Company Advisors Page 6 Tax Allocation Bonds Refunding (CBD) Prior Refunding Date Debt Service Debt Service Savings 06/30/2017 68,393.75 4,159.17 64,234.58 06/30/2018 651,056.25 483,000.00 168,056.25 06/30/2019 657,656.25 478,850.00 178,806.25 06/30/2020 669,993.75 482,125.00 187,868.75 2,047,100.00 1,448,134.17 598,965.83 ----- --------- . ... . . ....................................................................... . . .. . . ........ ��-qyjflg� S, tjo�ll t.1-1 tq-y Savings PV date 01/15/2017 Savings PV rate 2.024255% PV of savings from cash flow 584,038.66 Less: Prior funds on hand (470,800.00) Plus: Refunding funds on hand 2,382.86 MM104 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 7 Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding (SGR) 2,264,000.00 2,239,245.83 24,754.17 ",-I'll, .......................... ............ . ........................................................................................... ; --- ... . . . ..... Ssndua symn'try Savings PV date Savings PV rate PV of savings from cash flow Plus: Refunding funds on hand Net PV Savings 01/15/2017 2.024255% 28,267.64 4,748.73 33,016.37 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 8 Prior Refunding Date Debt Service Debt Service . .................. Savings 06/30/2017 . . . ........................ 51,375.00 1111-11,11,11-1 . . . . 6,420.83 1--l".."---.------ 44,954.17 06/30/2018 736,500.00 758,100.00 (21,600.00) 06/30/2019 738,125.00 738,850.00 (725.00) 06/30/2020 738,000.00 735,875.00 2,125.00 2,264,000.00 2,239,245.83 24,754.17 ",-I'll, .......................... ............ . ........................................................................................... ; --- ... . . . ..... Ssndua symn'try Savings PV date Savings PV rate PV of savings from cash flow Plus: Refunding funds on hand Net PV Savings 01/15/2017 2.024255% 28,267.64 4,748.73 33,016.37 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 8 SAVINGS Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding (PM) Prior Refunding Date Debt Service Debt Service Savings 06/30/2017 59,850.00 6,887.22 52,962.78 06/30/2018 518,937.50 405,350.00 113,587.50 06/30/2019 516,887.50 388,350.00 128,537.50 06/30/2020 518,656.25 384,650.00 134,006.25 06/30/2021 519,112.50 382,200.00 136,912.50 06/30/2022 518,256.25 382,500.00 135,756.25 2,651,700.00 1,949,937.22 701,762.78 -7��......... . Smv ki, I yIkm Imm ryl Savings PV date 01/15/2017 Savings PV rate 2.024255% PV of savings from cash flow 671,059.58 Less: Prior funds on hand (533,000.00) Plus: Refunding funds on hand 1,786.49 Net PV Savings 139,846.07 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 9 SAVINGS Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding (Merged) 12,379,467.50 9,128,312.50 3,251,155.00 "°�avon�.*:ti ',4tiamruero�c�a•�,r Savings PV date Savings PV rate PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings 01/15/2017 2.024255% 2,847,052.03 (932,000.00) 2,566.40 1,917,618.43 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 10 Prior Refunding Date Debt Service Debt Service Savings 06/30/2017 240,636.25 38,237.50 202,398.75 06/30/2018 539,622.50 507,150.00 32,472.50 06/30/2019 536,292.50 394,050.00 142,242.50 06/30/2020 537,792.50 396,475.00 141,317.50 06/30/2021 1,233,796.25 912,200.00 321,596.25 06/30/2022 1,232,965.00 916,200.00 316,765.00 06/30/2023 1,234,230.00 914,100.00 320,130.00 06/30/2024 1,232,645.00 915,900.00 316,745.00 06/30/2025 1,228,210.00 907,875.00 320,335.00 06/30/2026 1,230,640.00 909,625.00 321,015.00 06/30/2027 1,224,518.75 904,500.00 320,018.75 06/30/2028 476,825.00 351,625.00 125,200.00 06/30/2029 478,681.25 356,375.00 122,306.25 06/30/2030 474,243.75 350,375.00 123,868.75 06/30/2031 478,368.75 353,625.00 124,743.75 12,379,467.50 9,128,312.50 3,251,155.00 "°�avon�.*:ti ',4tiamruero�c�a•�,r Savings PV date Savings PV rate PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings 01/15/2017 2.024255% 2,847,052.03 (932,000.00) 2,566.40 1,917,618.43 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 10 SAVINGS Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding 19,342,267.50 14,765,629.72 4,576,637.78 Savings Sumnlary Savings PV date Savings PV rate PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings Note: Based on Estimated Insured Bond Interest Rates in December 2016 01/15/2017 2.024255% 4,130,417.90 (1,935,800.00) 11,484.48 2,206,102.38 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 11 Prior Refunding Date Debt Service Debt Service Savings 06/30/2017 420,255.00 55,704.72 364,550.28 06/30/2018 2,446,116.25 2,153,600.00 292,516.25 06/30/2019 2,448,961.25 2,000,100.00 448,861.25 06/30/2020 2,464,442.50 1,999,125.00 465,317.50 06/30/2021 1,752,908.75 1,294,400.00 458,508.75 06/30/2022 1,751,221.25 1,298,700.00 452,521.25 06/30/2023 1,234,230.00 914,100.00 320,130.00 06/30/2024 1,232,645.00 915,900.00 316,745.00 06/30/2025 1,228,210.00 907,875.00 320,335.00 06/30/2026 1,230,640.00 909,625.00 321,015.00 06/30/2027 1,224,518.75 904,500.00 320,018.75 06/30/2028 476,825.00 351,625.00 125,200.00 06/30/2029 478,681.25 356,375.00 122,306.25 06/30/2030 474,243.75 350,375.00 123,868.75 06/30/2031 478,368.75 353,625.00 124,743.75 19,342,267.50 14,765,629.72 4,576,637.78 Savings Sumnlary Savings PV date Savings PV rate PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings Note: Based on Estimated Insured Bond Interest Rates in December 2016 01/15/2017 2.024255% 4,130,417.90 (1,935,800.00) 11,484.48 2,206,102.38 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 11 W) Vn kn CD O CD C) CD kn CD W) CD wl W) wl -i \0 w W " M C, kn Lc 00 h I: C, kn a, et C) rl- m \D N to r - O ON CD m Itt CD -Ilk I- rq \o �D t- N C7, g CD ('4 m C) a.0 cy, a, U a) 0 c) Cd U°C 0000 CD O CD cq C14 eq CD O C> O ti SCCl S C=, Cl O 0CD cP �.Ol .�o 160, C=) (=C:) rq 00 CD 00 9i 00 t-- C> rl- <o 00 CD lD r-: O 0 bb rw U u u u r- r- r- CD Vn W) O vn M h 0 CD a, kr W) to ON m m w It W) m t- `10 V1 I'D N I�t CD W) W) C) ID kn Vl ®3 a, a, 01 Wl oo 't 'r Cl! V^ CD CD C) 17 -,t rq 4 'n "t m C-4 lc�-,O C:, 2 C� m 00 C) Tt 0 P� u QO O CD CD CD O O c, O O CD CD CD g CD CD W)t- m 00 m 00 h�2 CD O%n oo m C> m � t- Ol Cl N rq eq Cj N O 0 C) CD CD CD CD C) CD a) C) O CD C> CD CD C) CD CD CD CD CD C) a) C=> O CD C> C> C) u bb O O O IR O O O a, C, CD al O O O cq m kn " In Vn Vn Vn In C C) Cl C) C:� CD C) CD CD CD CD CD CD C:) CD CD al C) C> CD O CD CD C) CD CD CD cm I= N 0 0 z O O O O, C� > Q cd O CD C) �n �n Vi vn M ,t (7, Cq N M ra N ,4, C> 00 El \C� \z� (ON O !o r- r- r- 00 N M M m ow 1- 00 ON �o h w C7\ C. � C> Cl C:. cz O O O CD 1=1 C) C) C:) C) mco" —M —M —0\ ;3, 6� 'S C:, CD CD CD O cl CD C) C) CD CD C, C) 0 00 U M —Cd 0 M cn BOND DEBT SERVICE Successor Agency to Baldwin Park Community Development Commission Tax Allocation Bonds Refunding Period Ending Principal Coupon Interest Debt Service 06/30/2017 55,704.72 55,704.72 06/30/2018 1,735,000 2.000% 418,600.00 2,153,600.00 06/30/2019 1,615,000 2.000% 385,100.00 2,000,100.00 06/30/2020 1,655,000 3.000% 344,125.00 1,999,125.00 06/30/2021 995,000 4.000% 299,400.00 1,294,400.00 06/30/2022 1,040,000 4.000% 258,700.00 1,298,700.00 06/30/2023 690,000 4.000% 224,100.00 914,100.00 06/30/2024 720,000 4.000% 195,900.00 915,900.00 06/30/2025 745,000 5.000% 162,875.00 907,875.00 06/30/2026 785,000 5.000% 124,625.00 909,625.00 06/30/2027 820,000 5.000% 84,500.00 904,500.00 06/30/2028 295,000 5.000% 56,625.00 351,625.00 06/30/2029 315,000 5.000% 41,375.00 356,375.00 06/30/2030 325,000 5.000% 25,375.00 350,375.00 06/30/2031 345,000 5.000% 8,625.00 353,625.00 12,080,000 2,685,629.72 14,765,629.72 Note: Based on Estimated Insured Bond Interest Rates in December 2016 Jul 6, 2016 9:28 am Prepared by Harrell & Company Advisors Page 13 FEE PROPOSAL The following fees are proposed: A fixed fee of $15,000 for preparation of Tax Revenue/RPTTF Projections for the Successor Agency's 5 Project Areas and the Project Areas' statistical information suitable for inclusion in the official statement and meeting rating agency and investor criteria. A fixed fee of $10,000 for preparation of the preliminary/final official statement. A fixed fee of $40,000 for all other financial advisory services in connection with the refunding of the four outstanding bond issues as described under the scope of services. There would be no difference in fees for a competitive or negotiated sale. The expected issue size of the issue is between $12 million and $14 million. A fixed fee of $5,000 for negotiation of the County passthrough deferral repayment. Total fees for the Refunding Bonds are $70,000. Fees are contingent on the successful closing of the Refunding Bonds and delivery of funds. out-of-pocket expenses are billed at cost, not to exceed $1,500. ATTACHMENT 3 AGREEMENT FOR FINANCIAL ADVISOR SERVICES BETWEEN SUCCESSOR AGENCY TO THE DISSOLVED COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF BALDWIN PARK AND HARRELL & COMPANY ADVISORS, LLC THIS AGREEMENT is made and entered into this _ day of August, 2016 by and between the Successor Agency to the Dissolved Community Development Commission of the City of Baldwin Park, a body corporate and politic in the State of California (hereinafter called "Agency") and Harrell & Company Advisors, LLC, a California limited liability company (hereinafter called "Harrell & Co."). RECITALS WHEREAS the Agency is proposing to issue tax allocation refunding bonds (the "Bonds") for the purpose of refunding the Agency's outstanding tax allocation bonds; and WHEREAS the Agency requires assistance from a financial advisor in the development of a sound and practical financing plan to implement the issuance of the Bonds; and WHEREAS Harrell & Co. represents it is qualified to perform the services under this contract; and WHEREAS the Agency Chair is authorized to enter into this Agreement on behalf of the Agency, NOW, THEREFORE, AND IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, it is mutually agreed between the parties as follows: APPOINTMENT OF HARRELL & COMPANY The Agency hereby appoints and designates Harrell & Co. as its financial advisor for the purpose of assisting the Agency in the preparation and sale of the Bonds. Harrell & Co. represents and warrants that it is duly qualified to perform the services under this contract. FEDERAL SECURITIES LAW DISCLOSURES In connection with recent changes to the federal securities laws that require persons providing advice to municipal issuers to register with the Securities and Exchange Commission and the Municipal Securities Rulemaking Board ("MSRB"), Harrell & Co. makes the following disclosures to the Agency: 1. Harrell & Co. owes a fiduciary duty to the Agency and will provide any municipal advisory services in accordance with such duty. Harrell & Co. will owe the Agency both a duty of loyalty and a duty of care and that in performing services under this Agreement, will put the needs of the Agency ahead of its own. 2. The fees to be paid by the Agency to Harrell & Co. are based on the relative size of the Bonds and are contingent on the successful closing of the Bonds. Although this form of compensation may be customary, it presents a conflict because Harrell & Co. may have an incentive to recommend unnecessary financings or financings that are disadvantageous to the Agency. In addition, if facts or circumstances arise that could cause the financing or other transaction to be delayed or fail to close, Harrell & Co. may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing or other transaction Harrell & Co. manages and mitigates this conflict primarily by adherence to the fiduciary duty which it owes to the Agency which require it to put the interests of the Agency ahead of its own. 3. Harrell & Co. has determined, after exercising reasonable diligence, that other than described above, it has no known material conflicts of interest that would impair its ability to provide advice to the Agency in accordance with its fiduciary duty to municipal entity clients such as the Agency. To the extent any such material conflicts of interest arise after the date of this Agreement, Harrell & Co. will inform the Agency of such conflicts as described below. 4. Harrell & Co. may withdraw from its representation as Municipal Advisor upon written notice to the Agency subject to the fiduciary duty described above which may require it to continue to represent the Agency until an appropriate replacement is identified which will depend on the status of the transaction. 5. Harrell & Co. is registered as a "municipal advisor" pursuant to Section 15B of the Securities Exchange Act and rules and regulations adopted by the United States Securities and Exchange Commission ("SEC") and the MSRB. As part of this registration Harrell & Co. is required to disclose to the SEC information regarding criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation involving it. No such event exists with respect to Harrell & Co. 6. Copies of Harrell & Co. filings with the SEC can currently be found by accessing the. SEC's EDGAR system Company Search Page which is currently available at https://www.sec.gov/edgar/searchedgar/companysearch.html and searching for either "Harrell & Company" or for our CIK number which is 0001610917. SCOPE OF SERVICES Harrell & Co. will be responsible for performing the following: 1. Financing Schedule. Develop and monitor the schedule of activities during the financing to assist the Agency in meeting agenda deadlines and public notice requirements. 2. Agenda Documents. Prepare all staff reports and provide all documents for Successor Agency and Oversight Board agendas to Finance Director. 3. Revenue Projections. Prepare a report for inclusion in the official statement relating to the projected tax increment revenues and the Project Area tax base. 4. Bond Sizing. Prepare numerical analysis for the Bonds, including all cashflows and prepare savings analysis required by Health and Safety Code 34177.5. 5. Document Review. Review and comment on all legal documents prepared by the Agency's bond counsel to ensure conformance with the proposed financing structure. 6. Disclosure Issues. Summarize 5 year compliance with continuing disclosure requirements. 7. Official Statement. Prepare the Preliminary and Final Official Statement to be used in connection with the offering of the bonds. Revise the Preliminary Official Statement for final interest rates and tables related thereto. Arrange for printing and distribution of Final Official Statement within seven business days from the sale date. 8. Rating and Insurance Agencies. Prepare rating presentation, prepare staff for dialogue with rating analysts, submit documentation, conduct negotiations and attend meetings with rating agencies and bond insurance companies as may be required. 9. Pricing. For the negotiated sale of the Bonds: • advise the Successor Agency on the propriety of the underwriter's pricing and compensation relative to the current market conditions; 3 • negotiate with the underwriter to provide the lowest possible rates and costs to the Successor Agency; • provide the Successor Agency with a pricing analysis and comparison of its transaction with other recent sales of comparable credit quality; and • provide quantitative schedules showing the results of the final pricing. 10. Bond Closing. Review all closing documents prepared by bond counsel and making certain that any necessary representations are made by parties to the financing, and review the arrangement for closing and transfer of funds. 11. Bond Administration. Advise the Agency in administration of the financing after bond closing to fulfill its continuing disclosure responsibilities under the SEC Rule 15c2-12. 12. Attendance at Meetings. Attend all meetings of the working group and the board of directors as required. COMPENSATION Harrell & Co. shall be compensated a fixed fee of $47,000, payable from bond proceeds at closing, together with actual out-of-pocket expenses not to exceed $1,500. COST THE RESPONSIBILITY OF THE AGENCY The Agency understands that there are several program costs that are required for completion of the financings that shall be the responsibility of the Agency. These may include the cost of printing and distributing the Official Statement, notices, accountants, rating services, bond counsel, trustees, disclosure counsel, and of any other experts required for completion of the financing. COOPERATION BY AGENCY The Agency agrees to make available to Harrell & Co. without cost, sufficient copies of the resolutions, and other relevant material pertaining to the financings or the Agency as reasonably may be required from time to time for the prompt and efficient performance by Harrell & Co. of its obligations hereunder. 4 NOTICES Notice to Harrell & Co. shall be deemed delivered if sent by certified mail, return receipt requested, to Harrell & Company Advisors, LLC, 333 City Boulevard West, Suite 1215, Orange, CA 92868. Notices by Harrell & Co. to Agency shall be deemed delivered if sent by certified mail, return receipt requested, to the City Clerk, City of Baldwin Park, 14403 E. Pacific Avenue, Baldwin Park, CA 91706. TERM OF THE AGREEMENT The term of this Agreement is a one year period commencing from the date first written above. This Agreement may be terminated by either party due to either party's failure to comply to the terms of this Agreement, provided that notice must be given not less than 7 days prior to such unilateral termination. In addition, this Agreement may be terminated by either party without cause upon 30 days' prior notice. In the event of such termination, Harrell & Co. shall be compensated for all reasonable out-of-pocket expenses and for actual time expended (based upon Harrell & Co.'s hourly rate of $200) on behalf of Agency pursuant to this Agreement. INSURANCE Harrell & Co. will maintain errors and omissions insurance during the term of the agreement with a combined single limit of at least $1,000,000. INDEMNIFICATION Neither party hereto shall be liable for any damages approximately resulting from the negligent or wrongful actions or omissions of the other party, or the other party's employees, agents or contractors performing under this agreement, and each party shall indemnify, defend and save harmless the other party from such damage or liability. It is expressly understood and agreed by Agency that in performing the duties and activities under this agreement Harrell & Co. is to be acting solely on Harrell & Co.'s own behalf. 5 ENTIRE AGREEMENT This Agreement shall constitute the entire agreement between the parties. Any amendments to or clarification necessary to this agreement shall be in writing and acknowledged by both parties to the agreement. In witness whereof that the parties hereto have caused this agreement to be executed by their duly authorized officials and representatives as of the day and year above written: Successor Agency to the Dissolved Community Development Commission of the City of Baldwin Park LIZA Chair Harrell & Company Advisors, LLC Suzanne Q. Harrell Managing Director 6 STAFF REPORT Lh" TO: HUB oF' 4 THE FROM: v LI EV 4 DATE: SUBJECT: ITEM NO. ////1p j j Honorable Mayor and City Councilmembers Shannon Yauchzee, Chief Executive Officer / y September 21, 2016 SIX MONTH UPDATE ON GRANT WRITING ACTIVITIES FROM CALIFORNIA CONSULTING, AND DEL SOL SOLUTIONS SUMMARY In January 2016, the City Council approved contracts with two grant writing firms and asked that each firm appear before them to present a report on the progress they have made during the first 6 months of the contract period. At the previous meeting there was a presentation and staff was asked to negotiate with the two firms. FISCAL IMPACT The total fiscal impact is unknown at this time and depends on future grants that can be obtained and the directions from the City Council. At this time California Consulting and Del Sol Consulting are each paid $3,900 per month for their services plus minor expenses, and the cost for the services will be appropriated from funds related to the grant applied for. RECOMMENDATION It is recommended that the City Council provide staff direction. BACKGROUND In January 2016, California Consulting, LLC, and Del Sol Solutions were awarded contracts for grant writing services with a contingency that they each report back to Council after six months. The contract terms were also revised to provide that either party may end the contract with 30 -day notice. Attached is the written report from each on their grant writing activities thus far. California Consulting's contract provides services specific to Public Works and Community (and Economic) Development. Del Sol Solutions contract provides services to the Police Department and Community Services and Recreation. On August 3, 2016 both firms provided a report to the City Council. Staff held discussion with each firm and resulted in the following: California Consulting California Consulting is offering to pursue grants for the City in the following ways: 1) Pursue grants for two department (Public Works and Community/Economic Development) for the current rate of $3,900 per month with a $200 cap on allowances (Current Method) 2) Pursue grants for all Departments for the rate of $4,900 per month with a $100 cap on allowances. 3) Pursue grants on an as needed per grant basis per the attached table. According the information provided option three would have cost the city more money over the last 6 months as opposed to the current option one with an estimated saving of over $6,000. Del Sol Solutions Del Sol Solutions is proposing that they will pursue and administer grants for two departments (Police Department and Community Services and Recreation) at an as -needed hourly rate of $90.00 per hour per the attached letter. LEGAL REVIEW Legal review is not required at this time. Grant Writing Services September 21, 2016 Page 2 ALTERNATIVES The City Council may give staff direction to 1) continue the contract(s), 2) end the contract(s) (requiring a 30 -day notice) or 3) to modify the contract(s) based on the attached information ATTACHMENTS #1 — Updated Proposal and Cost Comparison from California Consulting, LLC #2 — Letter from Del Sol Solutions Attachment #1 The State's Premier ier Grant Wrihng Firm A Proposal for City of Ballwin Park History Founded in 2004, California Consulting, LLC has a solid reputation for hard work and a commitment to success for its clients. California Consulting, LLC is the largest grant writing firm in California. With offices in Southern California, Northern California and Central California, we have almost 80 clients statewide. We have more than 30 members of our team from Chico in the North, to San Diego in the South. California Consulting has developed an expertise in representing public agencies, private companies, and non-profit organizations. We have secured over $1.5 billion for our clients since inception through grant writing and government advocacy efforts combined. The California Consulting team boasts over 25 grant writers. Through years of experience our grant writers have a proven track record of success and have mastered their skills of identifying, researching, and obtaining funding for significant projects at every level of government. California Consulting grant writers have written over 735 competitive grants that have been funded, generating nearly $174 million for our clients. Our aggressive, hard-working, and results -oriented style has translated into millions of dollars for our clients. Our professional grant writers are diligent and stay current on every Federal and State grant available on a myriad of different topics and public policy areas. Whether it is recreation, education, parks money, or public safety our grants team knows where to locate grant funds and how to successfully write the applications. Sacramento Trips Our office regularly organizes trips to Sacramento for our clients. We organize a full day of meetings with key State Agencies with grant monies available. Usually the City Manager or District Superintendent along with elected officials will attend the day long visit to the Capitol accompanied by California Consulting. These visits include a full day of meetings with State Agencies and key decision makers for grant money. Events In order to keep our clients regularly informed of updates from the Capitol, we routinely invite special guests from Sacramento to visit with our clients. We periodically host invitation only events with a key elected or appointed official from Sacramento. We have held events in Montebello, Salinas and Fresno. Guests have included CalTrans Director Malcolm Dougherty, the Governor's Cabinet Secretary, Director of California Governor's Office of Business and Economic Development, Kish Rajan and other key policymakers. This allows clients to interact with major policymakers in a unique small group setting. References California Consulting references include key leaders from around the State. Our relationships are bi-partisan and we have references from major figures and leaders in both political parties. California Consulting currently represents over 35 cities across California, almost 40 School Districts, non -profits and others. We have also been retained to work for agencies including Chevron Corporation and academic institutions including the California Institute of Technology in Pasadena, as well as several private sector clients. A full client list can be obtained at www c,a h Irarn%acrrnr asli it .ar Scope of Services and Cost 1. Calil"ornia C,011SUl1in','s grant research it4jg aiac included Burin the erigth ofr �rl��rt,r��n., .tl��, Contract with tlacnionthly retaine.....,. 2. California Consulting will conduct a Needs Assessment at the outset of the contract in which all relevant staff members involved with grants should be present to provide input. 3. The Client will provide an established point of contact for California Consulting grant writer(s) to contact regarding the grant. 4. California Consulting will have reasonable access to the required information and documentation required to complete the grant on behalf of the Client. 5. The Client will provide the required information and documentation in a timely manner in order for California Consulting to submit the grant by deadline. 6. We propose that to the extent legally allowed, the Client hire California Consulting as grant administrators when dollars are available from within the grant (at no additional cost to the Client). When grant dollars from the grant are not available for administration, reporting and evaluation purposes we will provide these services to the Client for a monthly fee, or a one- time fee based on the Client's preference. 7. California Consulting will provide monthly reports to Client to include grants in progress, grants submitted, grants pending and grants awarded. 8. California Consulting will provide Client with a monthly email list of current and upcoming grant opportunities specific to the Client's needs. 9. We propose a cost of $4,900 per month plus reimbursement of out of pocket expenses capped at $100.00 per month, to provide grant writing services to .all delic rtnients within the City of Baldwin Park. Comparison of Retainer and Per Grant Fee Structure for past six months: Grant Name Grant Amount Cost under "Per Grant" Fee Structure SGC Affordable Housing Sustainable $102,000 $6,000 Communities Kaiser Southern California Regional $75,000� $4,000 Grant Caltrans Systemic Safety Analysis.._.... — --_ $134,860 $6,000 Report Program _.rr,. _________ U. S. Department of Transportation $3,640,000 $12,000 Federal Railroad Administration Railroad Safety Infrastructure Improvement Grant .............— ____ - 11111-111-1--- ...... ...... .. �.� People for Bikes $25,000 $3,000 TOTAL AMOUNT: $31,000.00 The retainer of $3,900 paid from January 20, 2016 through July 31, 2016 is a total of $24,783.87. Under the "per grant" fee structure, the total amount the City would have paid for the grants submitted is $31,000. Utilizing the monthly retainer fee structure saved the City $6,216.13. Attachment # GRANT WRITING CONSULTING AGREEMENT DATED: August 25, 2016 PARTIES: Del Sol Solutions, LLC, A California Limited Liability Company (hereinafter the "Consultant"); and City of Baldwin Park, (hereinafter the "Client") AGREEMENT: The undersigned hereby agree to the following terms and conditions: Section 1. Duties of Consultant: During the term of this Agreement, Consultant shall provide the Client as follows: a. Focused grant research on projects specifically identified by the client, identification of funding opportunities, and grant writing at direction of Client; b. Offering Client general advice on matters involving funding mechanisms, grants research, identification, and writing; and c. Perform post -grant award administration on the grants which are awarded to the Client, including the filing of required documents by the deadlines set by the awarding entity. Section 2. Time for Performance of Duties: Notwithstanding any other term or condition of this Agreement, Client specifically acknowledges that Consultant has other clients and/or outside employment. Consultant shall have control over the time and manner of performing its duties described in Section 1, and shall make available such time as it, in its sole discretion, shall deem appropriate for the performance of its duties under this Agreement. Section 3. `I"erm of the Arreernent: The effective date of this Agreement is August 1, 2016, and shall continue until June 30th, 2017. Both parties will discuss potential new contract terms in May 2017 that can be mutually modified and agreed to. Section 4. ComPL!!!itt.ion: plus reimbursement for out of pocket expenses.. - The hourly rate is set at $90 per hour. Client shall pay Consultant on an hourly basis, Consultant shall provide client with a written invoice. Client agrees to pay invoice upon receipt. Section 5. 11, . l��)cPi s e : The Client agrees to reimburse the Consultant for reasonable out-of-pocket expenses related to performing services on behalf of the Client, not to exceed $150 per month for the term of the agreement. Such expenses typically might include, but are not limited to, conference calls, copies, postage, parking, gas, messengers, and travel. Consultant shall provide Client with a receipt and a description of the expense. Client shall reimburse Consultant within Thirty (30) days of Consultant providing the receipt and description of services to Client. Section 6. Itela j2111hip: Consultant shall perform its services hereunder as an independent contractor and not as an employee of the Client or an affiliate thereof. It is expressly understood and agreed to by the parties hereto that Consultant shall have no authority to act for, represent or bind the Client or any affiliate thereof in any manner, except as may be agreed to expressly by the Client in writing from time to time. Section 7. Confidentiality: Except in the course of the performance of its duties hereunder, each party agrees that it shall not disclose any trade secrets, know-how, or other proprietary information not in the public domain learned as a result of this Agreement. Similarly, the parties agree that they shall not disclose or divulge this Agreement, or any of its term or conditions to third parties, except as is necessary to perform the terms and conditions stated herein. Section 8. Intlemnilic.ation: The Client agrees to indemnify and hold harmless the Consultant, its members, officers, directors, employees and each person who controls Consultant or any of its affiliates from and against any losses, claims, damages, liabilities and expenses whatsoever (including reasonable costs of investigation or defending any action) to which they or any of them may become subject under any applicable law arising out of Consultant's performance under this Agreement and will reimburse Consultant for all expenses (including counsel fees) as they are incurred. Consultant maintains liability insurance in the amount of one million dollars. Section 9. Assignment;: This Agreement shall not be assignable by either party; provided however, that Consultant shall have the discretion to allocate its duties hereunder to owners, affiliates, or employees of Consultant. Section 10. No Guaranteed Result: Client acknowledges and agrees that Consultant does not have control over third party decision makers, and therefore Consultant makes no representations, warranties or guarantees that it can achieve any particular results. Consultant, however, shall act in good faith toward the performance of its duties described above. Section 11. Prior Agreements: There are no prior agreements between the parties, and this Agreement represents the sole and only agreement between them. This Agreement may only be modified by a writing signed by both parties. Section 12. GovLwrwnin L211: This Agreement shall be deemed to be a contract made under the laws of the State of California and for all purposes shall be construed in accordance with the laws of said State. Section 13. Attorneys Fees: The prevailing party in any action filed that arises out of this Agreement shall be entitled to recoup their reasonable attorney's fees and costs from the other party. Section 14. Notices: All notices will be sent via certified mail or overnight courier such as Federal Express, to: Consultant at: Del Sol Solutions, LLC 1037 Edanruth Avenue La Puente, CA Client at: City of Baldwin Park 14403 E. Pacific Ave.. Baldwin Park, CA Section 15. Termination: This Agreement may be terminated by either party for any reason not in violation of federal and/or California State law upon thirty (30) days written notice to the other party. Client shall compensate Consultant for all services rendered prior to the date of termination. There shall be no liquidated damages in the event of termination under this provision. IN WITNESS THEREOF, this Agreement is executed on the dates set forth below and effective on the date first set forth above. "CONSULTANT" "CLIENT" Del Sol Solutions, LLC City of Baldwin Park (A California Limited Liability Company) i3Y Paul Solano, President/CEO Printed Name -3- STAFF REPORT o- UBOF THE SIAN GASR IE L, � VALLEY �rc� �06 ✓ ITEM NO. 16 TO: Honorable Mayor and Members of the City Council FROM: Robert Nacionales Tafoya, City Attorney�•, / DATE: SEPTEMBER 21, 2016 Y SUBJECT: PARLIAMENTORY PROCEDURE RULES TO BE CONSIDERED BY THE CITY COUNCIL SUMMARY Baldwin Park does not currently have any formally adopted rules for parliamentary procedure at City Council meetings. As a result, some confusion has arose regarding the rules and procedures at City Council meetings. The Mayor directed the City Attorney to come up with options for parliamentary procedures at the Baldwin Park City Council meetings. FISCAL IMPACT Adopting formal parliamentary procedures for the Baldwin Park City Council meetings will have no fiscal impact. RECOMMENDATION Staff recommends that the City Council select from one of the following options: 1. Adopt Robert's Rules of Order as the official parliamentary procedures for all City Council meetings; 2. Adopt Rosenberg's Rules of Order as the official parliamentary procedures for all City Council meetings; 3. Direct the City Attorney to look for additional rules or draft a set of rules to use as the official parliamentary procedure rules for the City of Baldwin Park. LEGAL REVIEW The City Attorney has reviewed this Staff Report as to form and content. BACKGROUND The City does not have any formal written rules of procedure for its City Council meetings. The City of Baldwin Park has been operating based on custom and practice at the City Council meetings. The custom and practice of the city has been to make all votes majority votes unless otherwise required by State law. For example, California law requires a 2/3 votes for emergency items. Further, the custom and practice of the city has been to give broad discretion to the presiding officer of the Council in carrying out procedural decisions. Recently, several issues came up regarding parliamentary procedures at the City Council meeting. One issue raised was the procedure for properly removing a citizen from a City Council meeting. Other issues that came up recently include how and when to close debate and how and when to make substitute motions, among other issues. Because these issues have come up, the City Council gave direction to the City Attorney to bring back some options regarding formal written rules for parliamentary procedure. ATTACHMENTS 1) Robert's Rules of Order 2) Rosenberg's Rules of Order ROBE R rpS RULES OF ORDSER What are Robert's Rules of Order? The first edition of the book was published in February, 1876 by U.S. Army Major Henry Martyn Robert. Its procedures were loosely modeled after those used in the United States House of Representatives. Robert wrote Robert's Rules of Order after presiding over a church meeting and discovering that delegates from different areas of the country did not agree about proper procedure, The book is now in its 10th edition; Robert's Rules of Order Newly Revised (RONR). Robert's Rules of Order provides applicable rules governing key matters of meeting and general procedures, including: Establishing a Constitution and Bylaws for your student organization. Structure of the meeting Agenda and debate. Motions; including making, seconding, debating, modifying and amending motions. Sufficient majority and simple majority and which decisions are appropriate to them,. Establishment of a quorum, Definition of membership. Voting rights of presiding officer and voting procedures. AN OUTLINE OF BASIC PARLIAMENTARY PROCEDURE Prepared by Douglas N. Case Parliamentary Authority: Robert's Rules of Order, Newly Revised, Tenth Edition, 2001, I. Rules Governing an Organization State and Federal Law - governing corporations, tax-exempt organizations, public legislative bodies, etc. Articles of Incorporation - applicable to corporations Governing Documents of Parent Organizations - applicable to chapters, affiliates, etc. of larger organizations D. Local Constitution and Bylaws - defines the organization's basic structure and fundamental rules. Normally requires a 2/3 vote and prior notice for amendment and are not subject to suspension. E. Standing Rules - operating procedures consistent with all of the above. Normally can be amended by majority vote at any business meeting and can be suspended. F. Rules of Order - parliamentary authority, superseded by any of the above that conflict. Precedent and Custom - apply when there are no written rules governing a situation, SAN DIEGO STATE 1 UNIVERSITY SI)SU Student Affairs. Bridges to Surcess Student Activities and Campus Life D. Purposes of Parliamentary Procedure Ensure majority rule Protect the rights of the minority, the absentees and individual members Provide order, fairness and decorum Facilitate the transaction nybusiness and expedite meetings Ill. Basic Principles ofParliamentary Procedure All members have equal rights, privileges and obligations. A quorum must be present for the group to act — if the bylaws of the organization do not establish a qunrum, the general m|u is that umajority ofthe entire membership must be present iuorder »o transact business. Pu|| and free discussion of every motion ioobasic right. Only one question ututime may be considered, and only one person may have the floor ouany one time. Members have a right to know what the immediately pending question is and to have it restated before a vote iotaken. No person can speak until recognized bythe chair. Personal remarks are always out oyorder. • majority decides uquestion except when basic rights oymembers are involved. • two-thirds vote is required for any motion that deprives o member of rights in any vvnY (e.g., cutting off dcbuto). Silence gives consent. Those who do not vote allow the decision to be made by those who do vote. The chair should always remain impartial. IV. Typical Order of Business A. Call toOrder B. Opening Exercises, ifapplicable C. Roll Call/Determination nfaQuorum D. Adoption oythe Agenda E. Reading and Approval nfthe Minutes ofthe Previous Meeting P. Reports nfOfficers G. Reports ofStanding Committees B. Reports nfSpecial (Ad hoe) Committees }. Special Orders J. Unfinished Business and General Orders K. New Business L. Program, ifapplicable M. Announcements N. "Good ofthe Order" 0. Adjournment V. Role nfthe Presiding Officer A. Remain impartial during debate - the presiding offimx must relinquish the chair in order to debate the merits ofumotion B. Vote only to create or break a de (or 2B for matters requiring a 28 vote) — exception: the presiding officer may vote onany vote hyballot C. Determine that oquorum is present before transacting business D. lounduuo hoxioeno in proper order E. Recognize speakers P. Determine ifomotion ioinorder G. Keep discussion germane tothe pending motion B. Maintain order l. Put motions touvote and announce results J. Employ unanimous consent (general consent) when appropriate VI General Procedure for Handling xMotion A. Amember normally must obtain the floor hybeing recognized bythe chair. B. Member makes amotion. Before the motion is restated by the chair, any member can rise, without waiting to be recognized, and suggest a modification of the wording to clarify the motion. The maker of the motion can choose to accept or reject the modified wording (does not require a second). If the motion is in order, the chair will restate the motion and open debate (if the motion is debatable). The maker of a motion has the right to speak first in debate. Debate is closed when: 1. Discussion has ended, or 2. A two-thirds vote closes debate ("Previous Question") H. The chair restates the motion, and if necessary clarifies the consequences of affirmative and negative votes. I. The chair calls for a vote. J. The chair announces the result. K. Any member may challenge the chair's count by demanding a "Division of the Assembly." VII. General Rules of Debate A. No members may speak until recognized by the chair. B. All discussion must be relevant to the immediately pending question. C. No member may speak a second time until every member who wishes to speak has had the opportunity to do so. D. No member can speak more than twice to each motion. E. No member can speak more than ten minutes. F. All remarks must be addressed to the chair — no cross debate is permitted, G. It is not permissible to speak against one's own motion (but one can vote against one's own motion). H. Debate must address issues not personalities — no one is permitted to make personal attacks or question the motives of other speakers. 1, The presiding officer must relinquish the chair in order to participate in debate and cannot reassume the chair until the pending main question is disposed of. J. When possible, the chair should let the floor alternate between those speaking in support and those speaking in opposition to the motion. K. When a large number of people wish to speak to a motion it may be advisable for the chair to make a speakers' list. L. Members may not disrupt the assembly. M. Rules of debate can be changed by a two-thirds vote. VIII. Motions in Ascending Order of Precedence Only one main motion may be on the floor at a time, but more than one secondary motion may be on the floor. When any of the motions on the following list is the immediately pending motion (i.e., the last motion made), any motion listed below it on the list can be made at that time and any motion above it on the list cannot be made at that time. Pending motions must be disposed of in descending order of precedence. A. Main Motion - introduces business to the assembly for its consideration, A main motion can only be made when no other motion is pending. A main motion yields to privileged, subsidiary and incidental motions. B. nbsidiaa �Mofioni - change or affect how the main motion is handled (voted on before the main motion) I . Post )otle Indefinitely - made when the assembly does not want to take a position on the main question. Its adoption kills the main motion for the duration of the session and avoids a direct vote on the question. It is useful in disposing of a poor motion that cannot be either adopted or expressly rejected without possibly undesirable consequences. Unlike other subsidiary motions, debate on the motion to postpone indefinitely can go into the merits of the main motion. 2. Amend - changes the wording of the main motion before it is voted upon. An amendment must be germane to the main motion. Its acceptance does not adopt the motion thereby amended; that motion remains pending in its modified form. Rejection of an amendment leaves the pending motion worded as it was before the amendment was offered. An amendment can: delete words, phrases, sentences or paragraphs; strike out words, phrases or sentences and insert new ones; add words, phases, sentences or paragraphs; or substitute entire paragraph(s) or the entire text of the motion and insert another. When an entire motion is substituted for another, the chair must first call for a vote on the Motion to Substitute to determine the advisability of substituting a new motion. If the Motion to Substitute passes, the chair then throws the Substitute Motion open to debate. The Substitute Motion in turn must be voted upon, and is subject to amendment. Note: There is no provision in Robert's Rules fora jnf. " The only way a motion can be modified without a vote, after it has been stated by the Chair, is with the unanimous consent of the members present. 3. ),secondary Amendment - An amendment can be offered to an amendment (amendment of the second order). Amendments of the third order are not permitted. 4. Refer (Lommitl - sends a pending motion to a standing committee, or to an ad hoe s 11 pecial) committee to be appointed or elected, for consideration. The motion to refer may include instructions to investigate, recommend, or take action, and may specify the composition of the committee. 5. Polq)o1le, De rill ltebl _J Host aornc. to a (,',ertain Thne) - delays action until a certain time specified in the motion (not beyond the next regular business meeting). 6. 11,urnit or Extend Debate - is used (1) to reduce or increase the number or length of speeches permitted or (2) to require that debate be closed at a specified time. It requires a two-thirds vote. 7. Previous Ouestion, LILI load —the_gestLoso - immediately closes debate if passed, _Q Requires a second and a two-thirds vote. 8. Lay on the Table - enables the assembly to lay the pending question aside lernnorarily when something else of immediate urgency has arisen. It is not debatable. A motion to lay on the table is out of order if the evident intent is to avoid further consideration of the motion. Frequently when one indicates a desire "to table" a motion, the correct motion is either to Postpone Indefinitely or Postpone Definitely. C, do not relate to the pending business but have to deal with urgent matters which, without debate, must be considered immediately. I, C'nfl for the ()rtlemsof tile 11)I - requires the assembly to conform to the agenda or to take up a general or special order that is due to come up at the time ("time certain"), unless two-thirds of those voting wish to do otherwise, A member can interrupt a speaker to call for the orders of the day, 2. Itaise a Ovicstion - permits a request or main mo _!Lf Privilege tion relating to the rights and privileges of the assembly or any of its members. Examples include requests relating to members' ability to hear a speaker or a request to go into "executive session" (closed session). A member may interrupt a speaker to raise a question of privilege, 3. Recess - used to request an intermission which does not close the meeting. 4. Afflu orn - used to close the meeting immediately. Not debatable. j__ 5. Fix the Time t!2_.!VI1iCIJ to Atrourn - sets the time, and sometimes the place, for another meeting ("adjourned meeting") before the next regular business meeting to continue business of the session. ix. Inciden I a] Moil ions (Questions of procedure that arise out of other motions and must be considered before the other motion) A Point of Order - used when a member believes that the rules of the assembly are being violated, thereby calling on the chair for a ruling and enforcement of the rules. A member can interrupt a speaker to raise a point of order, B, Appeal - used to challenge the chair's ruling on a question of parliamentary procedure. A member can interrupt a speaker to appeal from the decision of the chair, C. Suspend the Rules - used to make a parliamentary rule or special rule of an organization temporarily inoperative. The motion cannot be applied to the constitution and bylaws unless those documents include specific provisions for suspension. Normally requires a two-thirds vote. D. Withdraw - permits the maker of a motion to remove it from deliberation after the motion has been stated by the chair. If there is not unanimous consent, the motion is debated and voted upon. E. Point of Information - requests to the chair, or through the chair to another officer or member, to provide information relevant to the business at hand. A point of information must be in the form of a question. A request for information regarding parliamentary procedure or the organization's rules bearing on the business at hand is referred to as a F. Obiection it) the Consideration of a_Au �,sflon - suppresses business that is irrelevant or inappropriate and undesirable to be discussed. The objection must be made immediately (acceptable to interrupt a speaker). Does not require a second, is not debatable, and requires a two-thirds vote opposed to consideration in order to pass. G. Division or a.Qpestion - divides a motion containing two or more provisions that can stand alone so that each provision can be considered and voted upon separately. Not debatable. H. ffivision of the Assernbly - used to demand a rising vote to verify the vote count. The motion can be made without obtaining the floor, does not require a second, is not debatable, and does not require a vote. X. Main Motions That Bring a Question Back Before the Assembly A. Take from the Table - resumes consideration of a motion laid on the table earlier in the same session or in the previous session. Not debatable. B. Reconsider - reopens a motion to debate that has already been voted upon in the same session. The motion to reconsider can only be made by a member who voted on the prevailing side. It suspends action on the motion to which it is applied until it has been decided. It cannot be postponed beyond the next regular business session. C. Rescind (Annul or Rcge-Lil) or Asuend Something Pr eviousl Adopted - repeals or amends a motion for which it is too late to reconsider, Normally requires a two-thirds vote of those present or a majority vote or the entire membership; however, if previous notice has been given then only a majority vote of those present is required. A motion to rescind cannot be applied to action that cannot be reversed. X1. Voting A. Majority vote - defined as more than half of the votes cast by those present and voting (i.e., excluding abstentions) unless the organization's rules specify otherwise (e.g., majority of those present, or majority of the entire membership) B. Two-thirds vote - defined as at least two-thirds of those present and voting, unless otherwise specified by the organization's rules. Examples of motions that require a two-thirds vote: to close, limit, or extend debate; to suspend the rules; to amend the constitution and bylaws; to close nominations; to remove an officer or expel a member; or to object to the consideration of a motion. C. Voting by the Chair - except when there is a ballot vote, the chair only votes when his/her vote would affect the result. D. Methods of Voting 1. Voice vote - method normally used 2. Show of hands or rising vote - used to verify an inconclusive voice vote or on motions requiring a two-thirds vote 3. Ballot - normally used for election of officers and when ordered by a majority vote 4. Roll call vote - used when it is desired to have a record of how each member voted. Can be ordered by a majority vote unless the organization's bylaws specify otherwise. E. Proxy voting is prohibited unless specifically provided for in the charter or bylaws. Recommended Books Robert's Rules of Order, Newly Revised, Tenth Edition, 2000 Robert's Rules of Order, Newly Revised, In Brief, 2004 The Complete Idiot's Guide to Robert's Rules, Nancy Sylvester, 2004 Robert's Rules for Dummies, C. Alan Jennings, 2004 Recommended Web Sites www.robertsrules.com pari iamentarians.org www.ruiesonline.com www,parlipro,org Robert's Rules of Order - Summary Version Introduction to Robert's Rules of Order What Is Parliamentary Procedure? It is a set of rules for conduct at meetings that allows everyone to be heard and to make decisions without confusion. Why is Parliamentary Procedure Important? Because it's a time tested method of conducting business at meetings and public gatherings. It can be adapted to fit the needs of any organization. Today, Robert's Rules of Order newly revised is the basic handbook of operation for most clubs, organizations and other groups. So it's important that everyone know these basic rules! Organizations using parliamentary procedure usually follow a fixed order of business. Below is a typical example: 1. Call to order. 2. Roll call of members present. 3. Reading of minutes of last meeting. 4. Officer's reports. 5. Committee reports. 6. Special orders --- Important business previously designated for consideration at this meeting. 7. Unfinished business. 8. New business. 9. Announcements. 10. Adjournment. The method used by members to express themselves is in the form of moving motions. A motion is a proposal that the entire membership take action or a stand on an issue. Individual members can: 1. Call to order. 2, Second motions. 3. Debate motions. 4. Vote on motions. There are four Basic Types of Motions: 1. Main Motions: The purpose of a main motion is to introduce items to the membership for their consideration. They cannot be made when any other motion is on the floor, and yield to privileged, subsidiary, and incidental motions. 2. Subsidiary Motions: Their purpose is to change or affect how a main motion is handled, and is voted on before a main motion. 3. Privileged Motions: Their purpose is to bring up items that are urgent about special or important matters unrelated to pending business. 4. Incidental Motions: Their purpose is to provide a means of questioning procedure concerning other motions and must be considered before the other motion. How are Motions Presented? 1. Obtaining the floor a. Wait until the last speaker has finished. b. Rise and address the Chairman by saying, "Mr. Chairman, or Mr. President." c. Wait until the Chairman recognizes you. 2. Make Your Motion a. Speak in a clear and concise manner. b. Always state a motion affirmatively. Say, "I move that we ..." rather than, "I move that we do not..." c. Avoid personalities and stay on your subject. 3. Wait for Someone to Second Your Motion 4. Another member will second your motion or the Chairman will call for a second. 5. If there is no second to your motion it is lost. 6. The Chairman States Your Motion a. The Chairman will say, "it has been moved and seconded that we ..." Thus placing your motion before the membership for consideration and action. b. The membership then either debates your motion, or may move directly to a vote. c. Once your motion is presented to the membership by the chairman it becomes "assembly property", and cannot be changed by you without the consent of the members. 7. Expanding on Your Motion a. The time for you to speak in favor of your motion is at this point in time, rather than at the time you present it. b. The mover is always allowed to speak first. c. All comments and debate must be directed to the chairman. d. Keep to the time limit for speaking that has been established. e. The mover may speak again only after other speakers are finished, unless called upon by the Chairman. 8. Putting the Question to the Membership a. The Chairman asks, "Are you ready to vote on the question?" b. If there is no more discussion, a vote is taken. c. On a motion to move the previous question may be adapted. Voting on a Motion: The method of vote on any motion depends on the situation and the by-laws of policy of your organization. There are five methods used to vote by most organizations, they are: 1. By Voice -- The Chairman asks those in favor to say, "aye", those opposed to say "no". Any member may move for a exact count. 2. By Roll Call -- Each member answers "yes" or "no" as his name is called. This method is used when a record of each person's vote is required. 3. By General Consent -- When a motion is not likely to be opposed, the Chairman says, "if there is no objection ..." The membership shows agreement by their silence, however if one member says, "I object," the item must be put to a vote. 4. By Division -- This is a slight verification of a voice vote. It does not require a count unless the chairman so desires. Members raise their hands or stand. 5. By Ballot -- Members write their vote on a slip of paper, this method is used when secrecy is desired. There are two other motions that are commonly used that relate to voting. 1. Motion to Table -- This motion is often used in the attempt to "kill" a motion. The option is always present, however, to "take from the table", for reconsideration by the membership. 2. Motion to Postpone Indefinitely -- This is often used as a means of parliamentary strategy and allows opponents of motion to test their strength without an actual vote being taken. Also, debate is once again open on the main motion. Parliamentary Procedure is the best way to get things done at your meetings. But, it will only work if you use it properly. 1. Allow motions that are in order. 2. Have members obtain the floor properly, 3. Speak clearly and concisely. 4. Obey the rules of debate, Most importantly, BE COURTEOUS. For Fair and Orderly Meetings & Conventions Provides common rules and procedures for deliberation and debate in order to place the whole membership on the same footing and speaking the same language. The conduct of ALL business is controlled by the general will of the whole membership - the right of the deliberate majority to decide. Complementary is the right of at least a strong minority to require the majority to be deliberate - to act according to its considered judgment AFTER a full and fair "working through" of the issues involved. Robert's Rules provides for constructive and democratic meetings, to help, not hinder, the business of the assembly. Under no circumstances should "undue strictness" be allowed to intimidate members or limit full participation. The fundamental right of deliberative assemblies requires all questions to be thoroughly discussed before taking action! The assembly rules - they have the final say on everything! Silence means consent! • Obtain the floor (the right to speak) by being the first to stand when the person speaking has finished; state Mr/Madam Chairman. Raising your hand means nothing, and standing while another has the floor is out of order! Must be recognized by the Chair before speaking! • Debate cannot begin until the Chair has stated the motion or resolution and asked "are you ready for the question?" If no one rises, the chair calls for the vote! • Before the motion is stated by the Chair (the question) members may suggest modification of the motion; the mover can modify as he pleases, or even withdraw the motion without consent of the seconder; if mover modifies, the seconder can withdraw the second. • The "immediately pending question" is the last question stated by the Chair! Motion/Resolution - Amendment - Motion to Postpone • The member moving the "immediately pending question" is entitled to preference to the floor! • No member can speak twice to the same issue until everyone else wishing to speak has spoken to it once! • All remarks must be directed to the Chair. Remarks must be courteous in language and deportment - avoid all personalities, never allude to others by name or to motives! The Rules The agenda and all committee reports are merely recommendations! When presented to the assembly and the question is stated, debate begins and changes occur! • Point of Privilege: Pertains to noise, personal comfort, etc. - may interrupt only if necessary! • Parliamentary Inquiry: Inquire as to the correct motion - to accomplish a desired result, or raise a point of order • Point of Information: Generally applies to information desired from the speaker: "I should like to ask the (speaker) a question." • Orders of the Day (Agenda): A call to adhere to the agenda (a deviation from the agenda requires Suspending the Rules) • Point of Order: Infraction of the rules, or improper decorum in speaking. Must be raised immediately after the error is made • Main Motion: Brings new business (the next item on the agenda) before the assembly • Divide the Question: Divides a motion into two or more separate motions (must be able to stand on their own) • Consider by Paragraph: Adoption of paper is held until all paragraphs are debated and amended and entire paper is satisfactory; after all paragraphs are considered, the entire paper is then open to amendment, and paragraphs may be further amended. Any Preamble cannot be considered until debate on the body of the paper has ceased. • Amend: Inserting or striking out words or paragraphs, or substituting whole paragraphs or resolutions • Withdraw/Modify Motion: Applies only after question is stated; mover can accept an amendment without obtaining the floor • Commit /Refer/Recommit to Committee: State the committee to receive the question or resolution; if no committee exists includes size of committee desired and method of selecting the members (election or appointment). • Extend Debate: Applies only to the immediately pending question; extends until a certain time or for a certain period of time • Limit Debate: Closing debate at a certain time, or limiting to a certain period of time • Postpone to a Certain Time: State the time the motion or agenda item will be resumed • Object to Consideration: Objection must be stated before discussion or another motion is stated • Lay on the Table: Temporarily suspends further consideration/action on pending question; may be made after motion to close debate has carried or is pending • Take from the Table: Resumes consideration of item previously "laid on the table" - state the motion to take from the table • Reconsider: Can be made only by one on the prevailing side who has changed position or view • Postpone Indefinitely: Kills the question/resolution for this session - exception: the motion to reconsider can be made this session • Previous Question: Closes debate if successful - may be moved to "Close Debate" if preferred • Informal Consideration: Move that the assembly go into "Committee of the Whole" - informal debate as if in committee; this committee may limit number or length of speeches or close debate by other means by a 2/3 vote. All votes, however, are formal. • Appeal Decision of the Chair: Appeal for the assembly to decide - must be made before other business is resumed; NOT debatable if relates to decorum, violation of rules or order of business • Suspend the Rules: Allows a violation of the assembly's own rules (except Constitution); the object of the suspension must be specified Taken from: bt m www.robertsrul s.orL It Attachment #2 ules, of Order erg's R REVISED 2011 Simple Rules of Parliamentary Procedure for the 21st Century By Judge Dave Rosenberg 1, F A G IJ E* C I T t F S I "I i 11 .. .. I I, ,"I'll, LLLLLLLLLLLLLL I I r 1111 , ifp-fi)r all C21if*rtig,7iis- VISION To be recognized and respected as the leading advocate for the common interests of California's cities. Established in 1898, the League of California Cities is a member organization that represents California's incorporated cities. The League strives to protect the local authority and automony of city government and help California's cities effectively serve their residents. In addition to advocating on cities' behalf at the state capitol, the League provides its members with professional development programs and information resources, conducts education conferences and research, and publishes Western City magazine. 0 2011 League of California Cities. All rights reserved. Dave Rosenberg is a Superior Court Judge in Yolo County, He has served as presiding judge of his court, and as presiding judge of the Superior Court Appellate Division. He also has served as chair of the Trial Court Presiding Judges Advisory Committee (the committee composed of all 58 California presiding judges) and as an advisory member of the California Judicial Council. Prior to his appointment to the bench, Rosenberg was member of the Yolo County Board of Supervisors, where he served two terms as chair. Rosenberg also served on the Davis City Council, including two terms as mayor. He has served on the senior staff of two governors, and worked for 19 years in private law practice. Rosenberg has served as a member and chair of numerous state, regional and local boards. Rosenberg chaired the California State Lottery Commission, the California Victim Compensation and Government Claims Board, the Yolo-Solano Air Quality Management District, the Yolo County Economic Development Commission, and the Yolo County Criminal justice Cabinet. For many years, he has taught classes on parliamentary procedure and has served as parliamentarian for large and small bodies. M • About the AWhot ,,.„,.„.. ......... __.... , .... „,„,,, H Introduction ..,,.....,.„.,.,.„,. ........ 2 Establishing a Quorum.,, „.., „ ... ,..... ,.. ,.......2 TheRole of the Chair,,„..„.__ ... ................. ........ _.__... - .... ,,....... ___ ............., __......2 The Basic Format for an Agenda Item Discussion..._ ............. — .... .,,,,.„,,„,,,„„„„.,,____2 Motions in General. ................, , ,,.,.3 The Three Basic Motions.... .,. ,. .................... .. ,,..., 3 Multiple Motions Before the Body ,....,... .. ..... 4 To Debate or Not to Debate...— .... 4 Majority and Super -Majority Votes__.. .....,,, ,..,,,,.5 CountingVotes ............. . .....— „....,...„ ..,. ......... ,..,.....,5 TheMotion to Reconsider., , ,,.,. ... .... ,,,„........... 6 Courtesy and Decorum ... ...., .... ,,,., .,. ,...., „....„..,.,. „. Special Notes About Public Input ....___ ...,,,,.. „..,.,,,.7 0 INTRODUCTION The rules of procedure at meetings should be simple enough for most people to understand. Unfortunately, that has not always been the case. Virtually all clubs, associations, boards, councils and bodies follow a set of rules — Robert's Rules of Order — which are embodied in a small, but complex, book. Virtually no one I know has actually read this book cover to cover, Worse yet, the book was written for another time and for another purpose. If one is chairing or running a parliament, then Roberts Rules of Order is a dandy and quite useful handbook for procedure in that complex setting, On the other hand, if one is running a meeting of say, a five -member body with a few members of the public in attendance, a simplified version of the rules of parliamentary procedure is in order. Hence, the birth of Rosenberg's Rules of Order. What follows is my version of the rules of parliamentary procedure, based on my decades of experience chairing meetings in state and local government. These rules have been simplified for the smaller bodies we chair or in which we participate, slimmed down for the 21st Century, yet retaining the basic tenets of order to which we have grown accustomed. Interestingly enough, Rosenberg's Rules has found a welcoming audience. Hundreds of cities, counties, special districts, committees, boards, commissions, neighborhood associations and private corporations and companies have adopted Rosenberg's Rules in lieu of Robert's Rules because they have found them practical, logical, simple, easy to learn and user friendly. This treatise on modern parliamentary procedure is built on a foundation supported by the following four pillars: 1. Rides should establish order. The first purpose of rules of parliamentary procedure is to establish a framework for the orderly conduct of meetings. 2. Rules should be clear. Simple rules lead to wider understanding and participation. Complex rules create two classes: those who understand and participate; and those who do not fully Understand and do not fully participate. 3. Rules should be user friendly. That is, the rules must be simple enough that the public is invited into the body and feels that it has participated in the process. 4. Rides should enforce the will of the majority while protecting the rights of the minority. The ultimate purpose of rules of procedure is to encourage discussion and to facilitate decision making by the body, In a democracy, majority rules. The rules must enable the majority to express itself and fashion a result, while permitting the minority to also express itself, but not dominate, while fully participating in the process. MINE I'M IMMIIMMU,�,# 11 The starting point for a meeting is the establishment of a quorum. A quorum is defined as the minimum number of members of the body who must be present at a meeting for business to be legally transacted. The default rule is that a quorum is one more than half the body. For example, in a five -member body a quorum is three. When the body has three members present, it can legally transact business. If the body has less than a quorum of members present, it cannot legally transact business. And even if the body has a quorum to begin the meeting, the body can lose the quorum during the meeting when a member departs (or even when a member leaves the dais). When that occurs the body loses its ability to transact business until and unless a quorum is reestablished. The default rule, identified above, however, gives way to a specific rule of the body that establishes a quorum. For example, the rules of a particular five -member body may indicate that a quorum is four members for that particular body. The body must follow the rules it has established for its quorum. In the absence of such a specific rule, the quorum is one more than half the members of the body. The Role of the Chair While all members of the body should know and understand the rules of parliamentary procedure, it is the chair of the body who is charged with applying the rules of conduct of the meeting. The chair should be well versed in those rules. For all intents and purposes, the chair makes the final ruling on the rules every time the chair states an action. In fact, all decisions by the chair are final unless overruled by the body itself. Since the chair runs the conduct of the meeting, it is usual courtesy for the chair to play a less active role in the debate and discussion than other members of the body. This does not mean that the chair should not participate in the debate or discussion, To the contrary, as a member of the body, the chair has the full right to participate in the debate, discussion and decision-making of the body. What the chair should do, however, is strive to be the last to speak at the discussion and debate stage. The chair should not make or second a motion unless the chair is convinced that no other member of the body will do so at that point in time, Mlgpuffl%r� Formal meetings normally have a written, often published agenda. Informal meetings may have only an oral or understood agenda, In either case, the meeting is governed by the agenda and the agenda constitutes the body's agreed-upon roadmap for the meeting. Each agenda item can be handled by the chair in the following basic format; First, the chair should clearly announce the agenda item number and should clearly state what the agenda item subject is, The chair should then announce the format (which follows) that will be followed in considering the agenda item. Second, following that agenda format, the chair should invite the appropriate person or persons to report on the item, including any recommendation that they might have. The appropriate person or persons may be the chair, a member of the body, a staff person, or a committee chair charged with providing input on the agenda item. Third, the chair should ask members of the body if they have any technical questions of clarification. At this point, members of the body may ask clarifying questions to the person or persons who reported on the item, and that person or persons should be given time to respond, Fourth, the chair should invite public comments, or if appropriate at a formal meeting, should open the public meeting for public input, If numerous members of the public indicate a desire to speak to the subject, the chair may limit the time of public speakers. At the conclusion of the public comments, the chair should announce that public input has concluded (or the public hearing, as the case may be, is closed). Fifth, the chair should invite a motion. The chair should announce the name of the member of the body who makes the motion. Sixth, the chair should determine if any member of the body wishes to second the motion, The chair should announce the name of the member of the body who seconds the motion. It is normally good practice for a motion to require a second before proceeding to ensure that it is not just one member of the body who is interested in a particular approach, However, a second is not an absolute requirement, and the chair can proceed with consideration and vote on a motion even when there is no second. This is a matter left to the discretion of the chair. Seventh, if the motion is made and seconded, the chair should make sure everyone understands the motion. This is done in one of three ways: 1. The chair can ask the maker of the motion to repeat it; 2. The chair can repeat the motion; or 3. The chair can ask the secretary or the clerk of the body to repeat the motion. Eighth, the chair should now invite discussion of the motion by the body. If there is no desired discussion, or after the discussion has ended, the chair should announce that the body will vote on the motion. If there has been no discussion or very brief discussion, then the vote on the motion should proceed immediately and there is no need to repeat the motion. If there has been substantial discussion, then it is normally best to make sure everyone understands the motion by repeating it. Ninth, the chair takes a vote. Simply asking for the "ayes" and then asking for the "nays" normally does this. If members of the body do not vote, then they "abstain." Unless the rules of the body provide otherwise (or unless a super majority is required as delineated later in these rules), then a simple majority (as defined in law or the rules of the body as delineated later in these rules) determines whether the motion passes or is defeated. Tenth, the chair should announce the result of the vote and what action (if any) the body has taken, In announcing the result, the chair should indicate the names of the members of the body, if any, who voted in the minority on the motion. This announcement might take the following form: "The Motion passes by a vote of 3-2, with Smith and Jones dissenting. We have passed the motion requiring a 10 -day notice for all future meetings of this body." 05 no "ITIM rlyff M. = I Motions are the vehicles for decision making by a body. It is usually best to have a motion before the body prior to commencing discussion of an agenda item. This helps the body focus. Motions are made in a simple two-step process. First, the chair should recognize the member of the body. Second, the member of the body makes a motion by preceding the member's desired approach with the words "I move ... " A typical motion might be: "I move that we give a 10 -day notice in the future for all our meetings." The chair usually initiates the motion in one of three ways: I. Inviting the members of the body to make a motion, for example, "A motion at this time would be in order." 2. Suggesting a motion to the members of the body, "A motion would be in order that we give a 10 -day notice in the future for all our meetings." 3. Making the motion. As noted, the chair has every right as a member of the body to make a motion, but should normally do so only if the chair wishes to make a motion on an item but is convinced that no other member of the body is willing to step forward to do so at a particular time, The Three Basic Motions There are three motions that are the most common and recur often at meetings: The basic motion. The basic motion is the one that puts forward a decision for the body's consideration. A basic motion might be: "I move that we create a five -member committee to plan and put on our annual fundraiser." The motion to amend. If a member wants to change a basic motion that is before the body, they would move to amend it. A motion to amend might be: "I move that we amend the motion to have a 10 -member committee." A motion to amend takes the basic motion that is before the body and seeks to change it in some way, The substitute motion. If a member wants to completely do away with the basic motion that is before the body, and put a new Motion before the body, they would move a substitute motion. A substitute motion might be: "I move a substitute motion that we cancel the annual fundraiser this year.' "Motions to amend" and "substitute motions" are often confused, but they are quite different, and their effect (if passed) is quite different. A motion to amend seeks to retain the basic motion on the floor, but modify it in some way. A substitute motion seeks to throw out the basic motion on the floor, and substitute a new and different motion for it. The decision as to whether a motion is really a "motion to amend" or a "substitute motion" is left to the chair. So if a member makes what that member calls a "motion to amend," but the chair determines that it is really a "substitute motion," then the chair's designation governs. A "friendly amendment" is a practical parliamentary tool that is simple, informal, saves time and avoids bogging a meeting down with numerous formal motions. It works in the following way: In the discussion on a pending motion, it may appear that a change to the motion is desirable or may win support for the motion from some members. When that happens, a member who has the floor may simply say, "I want to suggest a friendly amendment to the motion." The member suggests the friendly amendment, and if the maker and the person who seconded the motion pending on the floor accepts the friendly amendment, that now becomes the pending motion on the floor. If either the maker or the person who seconded rejects the proposed friendly amendment, then the proposer can formally move to amend. =a There can be up to three motions on the floor at the same time. The chair can reject a fourth motion until the chair has dealt with the three that are on the floor and has resolved them. This rule has practical value. More than three motions on the floor at any given time is confusing and unwieldy for almost everyone, including the chair. When there are two or three motions on the floor (after motions and seconds) at the same time, the vote should proceed first on the last motion that is made. For example, assume the first motion is a basic ,,motion to have a five -member committee to plan and put on our annual fundraiser." During the discussion of this motion, a member might make a second motion to "amend the main motion to have a 10 -member committee, not a five -member committee to plan and put on our annual fundraiser."And perhaps, during that discussion, a member makes yet a third motion as a "substitute motion that we not have an annual fundraiser this year." The proper procedure would be as follows: First, the chair would deal with the third (the last) motion on the floor, the substitute motion. After discussion and debate, a vote would be taken first on the third motion. If the substitute motion passed, it would be a substitute for the basic motion and would eliminate it. The first motion would be moot, as would the second motion (which sought to amend the first motion), and the action on the agenda item would be completed on the passage by the body of the third motion (the substitute motion). No vote would be taken on the first or second motions. Second, if the substitute motion failed, the chair would then deal with the second (now the last) motion on the floor, the motion to amend. The discussion and debate would focus strictly on the amendment (should the committee be five or 10 members). If the motion to amend passed, the chair would then move to consider the main motion (the first motion) as amended. If the motion to amend failed, the chair would then move to consider the main motion (the first motion) in its original format, not amended. Third, the chair would now deal with the first motion that was placed on the floor. The original motion would either be in its original format (five -member committee), or if amended, would be in its amended format (10 -member committee). The question on the floor for discussion and decision would be whether a committee should plan and put on the annual fundraiser. The basic rule of motions is that they are subject to discussion and debate. Accordingly, basic motions, motions to amend, and substitute motions are all eligible, each in their turn, for full discussion before and by the body, The debate can continue as long as members of the body wish to discuss an item, subject to the decision of the chair that it is time to move on and take action. There are exceptions to the general rule of free and open debate on motions. The exceptions all apply when there is a desire of the body to move on. The following motions are not debatable (that is, when the following motions are made and seconded, the chair must immediately call for a vote of the body without debate on the motion): Motion to adjourn. This motion, if passed, requires the body to immediately adjourn to its next regularly scheduled meeting. It requires a simple majority vote. Motion to recess. This motion, if passed, requires the body to immediately take a recess. Normally, the chair determines the length of the recess which maybe a few minutes or an hour. It requires a simple majority vote. Motion to fix the time to adjourn. This motion, if passed, requires the body to adjourn the meeting at the specific time set in the motion. For example, the motion might be: "I move we adjourn this meeting at midnight," It requires a simple majority vote, Motion to table, This motion, if passed, requires discussion of the agenda item to be halted and the agenda item to be placed on "hold." The motion can contain a specific time in which the item can come back to the body, "I move we table this item until our regular meeting in October." Or the motion can contain no specific time for the return of the item, in which case a motion to take the item off the table and bring it back to the body will have to be taken at a future meeting. A motion to table an item (or to bring it back to the body) requires a simple majority vote. Motion to limit debate. The most common form of this motion is to say, "I move the previous question" or "I move the question" or "I call the question" or sometimes someone simply shouts out "question.' As a practical matter, when a member calls out one of these phrases, the chair can expedite matters by treating it as a "request" rather than as a formal motion. The chair can simply inquire of the body, "any further discussion?" If no one wishes to have further discussion, then the chair can go right to the pending motion that is on the floor. However, if even one person wishes to discuss the pending motion further, then at that point, the chair should treat the call for the "question" as a formal motion, and proceed to it. When a member of the body makes such a motion ("I move the previous question"), the member is really saying: "I've had enough debate. Let's get on with the vote.' When such a motion is made, the chair should ask for a second, stop debate, and vote on the motion to limit debate. The motion to limit debate requires a two-thirds vote of the body. NOTE: A motion to limit debate could include a time limit. For example: "I move we limit debate on this agenda item to 15 minutes," Even in this format, the motion to limit debate requires a two thirds vote of the body. A similar motion is a motion to object to consideration of an item, This motion is not debatable, and if passed, precludes the body from even considering an item on the agenda. It also requires a two-thirds vote. Majority and Super Majority Votes In a democracy, a simple majority vote determines a question. A tie vote means the motion fails. So in a seven -member body, a vote of 4-3 passes the motion. A vote of 3-3 with one abstention means the motion fails. If one member is absent and the vote is 3-3, the motion still fails. All motions require a simple majority, but there are a few exceptions. The exceptions come up when the body is taking an action which effectively cuts off the ability of a minority of the body to take an action or discuss an item. These extraordinary motions require a two-thirds majority (a super majority) to pass: Motion to limit debate. Whether a member says, "I move the previous question," or "I move the question," or "I call the question," or "I move to limit debate," it all amounts to an attempt to cut off the ability of the minority to discuss an item, and it requires a two-thirds vote to pass. Motion to close nominations. When choosing officers of the body (such as the chair), nominations are in order either from a nominating committee or from the floor of the body. A motion to close Dominations effectively cuts off the right of the minority to nominate officers and it requires a two-thirds vote to pass. Motion to object to the consideration of a question. Normally, such a motion is unnecessary since the objectionable item can be tabled or defeated straight up, However, when members of a body do not even want an item on the agenda to be considered, then such a motion is in order, It is not debatable, and it requires a two-thirds vote to pass, Motion to suspend the rules. This motion is debatable, but requires a two-thirds vote to pass. If the body has its own rules of order, conduct or procedure, this motion allows the body to suspend the rules for a particular purpose, For example, the body (a private club) might have a rule prohibiting the attendance at meetings by non -club members. A motion to suspend the rules would be in order to allow a non -club member to attend a meeting of the club on a particular date or on a particular agenda item, Counting Votes The matter of counting votes starts simple, but can become complicated. Usually, it's pretty easy to determine whether a particular motion passed or whether it was defeated. If a simple majority vote is needed to pass a motion, then one vote more than 50 percent of the body is required. For example, in a five -member body, if the vote is three in favor and two opposed, the motion passes. If it is two in favor and three opposed, the motion is defeated, If a two-thirds majority vote is needed to pass a motion, then how many affirmative votes are required? The simple rule of thumb is to count the "no" votes and double that count to determine how many "yes" votes are needed to pass a particular motion, For example, in a seven -member body, if two members vote "no" then the "yes" vote of at least four members is required to achieve a two-thirds majority vote to pass the motion. What about tie votes? In the event of a tie, the motion always fails since an affirmative vote is required to pass any motion. For example, in a five -member body, if the vote is two in favor and two opposed, with one member absent, the motion is defeated. Vote counting starts to become complicated when members vote "abstain" or in the case of a written ballot, cast a blank (or unreadable) ballot. Do these votes count, and if so, how does one count them? The starting point is always to check the statutes. In California, for example, for an action of a board of supervisors to be valid and binding, the action must be approved by a majority of the board. (California Government Code Section 25005,) Typically, this means three of the five members of the board must vote affirmatively in favor of the action. A vote of 2-1 would not be sufficient, A vote of 3-0 with two abstentions would be sufficient. In general law cities in California, as another example, resolutions or orders for the payment of money and all ordinances require a recorded vote of the total members of the city council. (California Government Code Section 36936.) Cities with charters may prescribe their own vote requirements, Local elected officials are always well-advised to consult with their local agency counsel on how state law may affect the vote count. After consulting state statutes, step number two is to check the rules of the body. If the rules of the body say that you count votes of "those present" then you treat abstentions one way. However, if the rules of the body say that you count the votes of those "present and voting," then you treat abstentions a different way. And if the rules of the body are silent on the subject, then the general rule of thumb (and default rule) is that you count all Votes that are "present and voting," Accordingly, under the "present and voting" system, you would NOT count abstention votes on the motion. Members who abstain are counted for purposes of determining quorum (they are "present"), but you treat the abstention votes on the motion as if they did not exist (they are not "voting"). On the other hand, if the rules of the body specifically say that you count votes of those "present" then you DO count abstention votes both in establishing the quorum and on the motion. In this event, the abstention votes act just like "no" votes. How does this work in practice? Here are a few examples. Assume that a five -member city council is voting on a motion that requires a simple majority vote to pass, and assume further that the body has no specific rule on counting votes. Accordingly, the default rule kicks in and we count all votes of members that are "present and I voting.' If the vote on the motion is 3-2, the motion passes. If the motion is 2-2 with one abstention, the motion fails, Assume a five -member city council voting on a motion that requires a two-thirds majority vote to pass, and further assume that the body has no specific rule on counting votes. Again, the default rule applies If the vote is 3-2, the motion fails for lack of a two-thirds majority. If the vote is 4-1, the motion passes with a clear two-thirds majority. A vote of three "yes," one "Do" and one "abstain" also results in passage of the motion. Once again, the abstention is counted only for the purpose of determining quorum, but on the actual vote on the motion, it is as if the abstention vote never existed — so an effective 3-1 vote is clearly a two-thirds majority vote. Now, change the scenario slightly. Assume the same five -member city council voting on a motion that requires a two-thirds majority vote to pass, but now assume that the body DOES have a specific rule requiring a two-thirds vote of members "present:' Under this specific rule, we must count the members present not only for quorum but also for the motion. In this scenario, any abstention has the same force and effect as if it were a "no" vote. Accordingly, if the votes were three "yes," one "no" and one "abstain," then the motion fails. The abstention in this case is treated like a "no" vote and effective vote of 3-2 is not enough to pass two-thirds majority muster. Now, exactly how does a member cast an "abstention" vote? Any time a member votes "abstain" or says, "I abstain," that is an abstention. However, if a member votes "present" that is also treated as an abstention (the member is essentially saying, "Count me for purposes of a quorum, but my vote on the issue is abstain.") In fact, any manifestation Of intention not to vote either "yes" or "no" on #* r- hf- writteA'r,?JIQ,ts gre c?.vt, a �17,Ak Qr unw.aizble �01;*t is couvei, V.s gA qbstention as well, Can a member vote "absent" or "count me as absent?" Interesting question. The ruling on this is up to the chair, The better approach is for the chair to count this as if the member had left his/her chair and is actually "absent." That, of course, affects the quorum. However, the chair may also treat this as a vote to abstain, particularly if the person does not actually leave the dais. There is a special and unique motion that requires a bit of explanation all by itself-, the motion to reconsider. A tenet of parliamentary procedure is finality. After vigorous discussion, debate and a vote, there must be some closure to the issue. And so, after a vote is taken, the matter is deemed closed, subject only to reopening if a proper motion to consider is made and passed. A motion to reconsider requires a majority vote to pass like other garden-variety motions, but there are two special rules that apply only to the motion to reconsider. First, is the matter of timing. A motion to reconsider must be made at the meeting where the item was first voted upon. A motion to reconsider made at a later time is untimely. (The body, however, can always vote to suspend the rules and, by a two-thirds majority, allow a motion to reconsider to be made at another time.) Second, a motion to reconsider may be made only by certain members of the body. Accordingly, a motion to reconsider maybe made only by a member who voted in the majority on the original motion. If such a member has a change of heart, he or she may make the motion to reconsider (any other member of the body — including a member who voted in the minority on the original motion — may second the motion). If a member who voted in the minority seeks to make the motion to reconsider, it must be ruled out of order. The purpose of this rule is finality. If a member of brought back to the body again and again, which would defeat the purpose of finality. If the motion to reconsider passes, then the original matter is back be discussed and debated as if it were on the floor for the first time. ZMMM�4� The rules of order are meant to create an atmosphere where the members of the body and the members of the public can attend to business efficiently, fairly and with full participation. At the same time, it is up to the chair and the members of the body to maintain common courtesy and decorum. Unless the setting is very informal, it is always best for only one person at a time to have the floor, and it is always best for every speaker to be first recognized by the chair before proceeding to speak. The chair should always ensure that debate and discussion of an agenda item focuses on the item and the policy in question, not the personalities of the members of the body. Debate on policy is healthy, debate on personalities is not. The chair has the right to cut off discussion that is too personal, is too loud, or is too crude. Debate and discussion should be focused, but free and open. In the interest of time, the chair may, however, limit the time allotted to speakers, including members of the body. Can a member of the body interrupt the speaker? The general rule is "no." There are, however, exceptions, A speaker maybe interrupted for the following reasons: Privilege. The proper interruption would be, "point of privilege." The chair would then ask the interrupter to "state your point! Appropriate points of privilege relate to anything that would interfere with the normal comfort of the meeting. For example, the room may be too hot or too cold, or a blowing fan might interfere with a person's ability to hear. Order. The proper interruption would be, "point of order:' Again, the chair would ask the interrupter to "state your point." Appropriate points of order relate to anything that would not be considered appropriate conduct of the meeting. For example, if the chair moved on to a vote on a motion that permits debate without allowing that discussion or debate. Appeal. If the chair makes a ruling that a member of the body disagrees with, that member may appeal the ruling of the chair. If the motion is seconded, and after debate, if it passes by a simple majority vote, then the ruling of the chair is deemed reversed, Call for orders of the day. This is simply another way of saying, "return to the agenda," If a member believes that the body has drifted from the agreed-upon agenda, such a call maybe made. It does not require a vote, and when the chair discovers that the agenda has not been followed, the chair simply reminds the body to return to the agenda item properly before them. If the chair fails to do so, the chair's determination may be appealed, Withdraw a motion. During debate and discussion of a motion, the maker of the motion on the floor, at any time, may interrupt a speaker to withdraw his or her motion from the floor. The motion is immediately deemed withdrawn, although the chair may ask the person who seconded the motion if he or she wishes to make the motion, and any other member may make the motion if properly recognized. The rules outlined above will help make meetings very public - friendly. But in addition, and particularly for the chair, it is wise to remember three special rules that apply to each agenda item: Ride One: Tell the public what the body will be doing, Rule Two: Keep the public informed while the body is doing it. Me Three: When the body has acted, tell the public what the body did, 01 I'AHr�(4UIJIA 1400 K Street, Sacramento, CA 95814 (916) 658-8200 1 Fax(916)658-8240 www.cacities.org $10 a 2011 League of California Cities. All rights reserved. ZRIGEMMMMM= ;�L012MIDIVI ILI 1]e1:7 7 FINANCE AUTHORITY MMM NOTICE IS HEREBY GIVEN THAT the scheduled meeting of September 21, 2016, as noted above is hereby cancelled due to Lack of Business. The next Regular meeting of the Baldwin Park Finance Authority will be held on Wednesday, October 19, 2016. I, Alejandra Avila, City Clerk of the City of Baldwin Park hereby certify that, under penalty of perjury under the laws of the State of California, the foregoing Notice of Cancellation was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 15th day of September, 2016. Alejandra Avila City Clerk CITY OF BALDWIN PARK HOUSING AUTHORITY NOTICE IS HEREBY GIVEN THAT the scheduled meeting of September 21, 2016, as noted above is hereby cancelled due to Lack of Business. The next Regular meeting of the Baldwin Park Housing Authority will be held on Wednesday, October 19, 2016. I, Alejandra Avila, City Clerk of the City of Baldwin Park hereby certify that, under penalty of perjury under the laws of the State of California, the foregoing Notice of Cancellation was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 15th day of September, 2016. zlejeindra Avila City Clerk