LOS BanosB. Conference with Legal Counsel - Initiation of Litigation; Pursuant to Subdivision (b) ofSection 54956.9 ofthe Government Code; Two (2) Cases. 2 CALL TO ORDER 3 PLEDGE OF

LOS BanosAt the Crossroads of California

www.losbanos.org

AGENDAJOINT

CITY COUNCIL ANDREDEVELOPMENT AGENCY MEETING

CITY HALL COUNCIL CHAMBERS520 J Street

Los Banos, California

DECEMBER 2, 2009

If you require special assistance to attend or participate In this meeting, please call theCity Clerk's Office @ (209) 827-7000 at least 48 hours prior to the meeting.

The City of Los Banos complies with the Americans with Disabilities Act (ADA) of 1990.* * * * * * * ** * * * * * * *

Si requiere asistencia especial para atender 0 participar en esta junta por favor lIame a la oficinade la Secretaria de la ciudad al (209) 827-7000 a 10 menos de 48 horas previas de la junta.

La Cuidad de Los Banos cumple can la Acta de Americanos can Deshabilidad (ADA) de 1990.

Any writings or documents provided to a majority of the City Council / Redevelopment Agencyregarding any item on this agenda will be made available for public inspection at the meeting

and in the City Clerk's office located at City Hall, 520 J Street, Los Banos, Californiaduring normal business hours. In addition, such writings and documents may be posted

on the City's website at www.losbanos.org.* * * * * * * ** * * * * * * *

Cualquier escritura a los documentos proporcionaron a una mayoria de la City Council / RedevelopmentAgency con respecto a cualquier articulo en este orden del dia sere hecho disponible para la

inspecci6n publica en la reunion y en la oficina del City Clerk del City Hall, 520 J Street, Los Banos,California durante horas de oficina normales. Ademes, tales escrituras y los documentos

pueden ser anunciados en el website de la Ciudad en www.losbanos.ora.

1 CLOSED SESSION 5:30 PM(Members of the public may address the City Council/Redevelopment Agency onthe following closed session items Speakers are limited to a five (5) minutepresentation. Detailed guidelines are posted on the Council Chamber informationaltable.)

A. Conference with Labor Negotiators, Pursuant to Government Code Section54957.6, Agency Designated Representatives City Manager Rath, CityAttorney Vaughn, Human Resources Director Mallonee, Legal Counsel Tuffo,Interim Police Chief Knapp, Fire Chief Guintini, Brent Kuhn, Vavrinek, Trine, Day& Co. LLP; Employee Organizations Los Banos Police Officers Association(LBPOA), Los Banos Police Sergeants Association (LBPSA), Los Banos PoliceDispatchers/Community Services Officers Association (LBPDCSOA), Los BanosFire Fighters Association (LBFFA)

Los Banos City Council / Redevelopment Agency Agenda - December 2, 2009 Page 1 of4

B. Conference with Legal Counsel - Initiation of Litigation; Pursuant to Subdivision(b) of Section 54956.9 of the Government Code; Two (2) Cases.

2 CALL TO ORDER

3 PLEDGE OF ALLEGIANCE

7:00 PM

4 ROLL CALL (City Council and Redevelopment Agency Board Members)

Faria _, Sousa _, Stone _' Villalta _, Jones _

5 CONSIDERATION OF APPROVAL OF AGENDA.

6 PRESENTATIONS

A. Proclamation Recognizing Nikki Kimport! March of Dimes

B Proclamation Recognizing the Los Banos High School Tigers Varsity Girls WaterPolo Team

C. Proclamation Recognizing the Los Banos High School Tigers Varsity FootballTeam

7 PUBLIC FORUM (Members of the public may address the City Council !Redevelopment Agency Members on any item of public interest that is within thejurisdiction of the City Council! Redevelopment Agency; includes agenda and nonagenda items. No action will be taken on non-agenda items. Speakers are limited toa five (5) minute presentation. Detailed guidelines are posted on the CouncilChamber informational table.)

8 CONSIDERATION OF APPROVAL OF CONSENT AGENDA. (Items on the ConsentAgenda are considered to be routine and will be voted on in one motion unlessremoved from the Consent Agenda by a City Council ! Redevelopment AgencyMember)

A. Check Registerfor #118964 - #119127 in the Amount of $1 ,769,88357

Recommendation. Approve the check register as submitted.

B Minutes for the October 7,2009 City Council! Redevelopment Agency Meeting

RecommendatIOn Approve the mmutes as submitted.

C Public Safety Tower License Agreement By and Between the City of Los Banosand the County of Merced to Allow Merced County Emergency Medical Servicesuse of the Tower Located at Fire Station No 1, 333 t h Street, for a Period ofTwo (2) Years at no Cost to the City

RecommendatIOn Adopt the agreement as submitted and authorize the City Manager toexecute the document.

Los Banos City Council! Redevelopment Agency Agenda - December 2, 2009 Page 2of4

D. City Council Resolution No. 5193 - Approving Closure of Non-Essential CityOffices on Thursday, December 24, 2009

Recommendation Adopt the resolution as submitted.

E City Council Resolution No. 5194 - Requesting Employment Extension PerCalifornia Government Code Section 21221(H) for Interim Police Chief Mark BKnapp.

RecommendatIOn Adopt the resolution as submitted.

F. City Council Resolution No. 5195 - Consenting to the Approval by the LosBanos Redevelopment Agency of a Second Amendment to Disposition andDevelopment/Affordable Housing Agreement By and Between the Agency andWard Road Apartments, II, L.P , a California Limited Partnership


G. Redevelopment Agency Resolution No. 2009-14 - Approving SecondAmendment to Disposition and Development/Affordable Housing Agreement Byand Between the Agency and Ward Road Apartments, II, L.P., a CaliforniaLimited Partnership


9 CONSIDERATION OF APPROVAL OF CITY COUNCIL RESOLUTION NO 5196IN SUPPORT OF THE LOCAL TAXPAYER, PUBLIC SAFETY ANDTRANSPORTATION PROTECTION ACT OF 2010

Recommendation Receive staff report and adopt the resolution as submitted.

10 CONSIDERATION OF APPROVAL OF CITY COUNCIL RESOLUTION NO 5197AUTHORIZING THE CITY OF LOS BANOS TO PARTICIPATE EQUALLY WITHCENTRAL CALIFORNIA IRRIGATION DISTRICT (CCID) IN A GROUNDWATERSTUDY IN THE AMOUNT OF $39,000

Recommendation. Receive staff report and adopt the resolutIOn as submitted.

11 CONSIDERATION OF APPROVAL OF CITY COUNCIL RESOLUTION NO 5198APPROVING A SECURED IMPACT FEE DEFERRAL AGREEMENT BETWEENTHE CITY OF LOS BANOS AND COURT OF FOUNTAINS LLC, ANDAUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT ANDRELATED INSTRUMENTS

Recommendation Receive staff report and adopt the resolution as submitted or provide furtherdirectIOn

12 CONSIDERATION OF APPROVAL OF CITY COUNCIL RESOLUTION NO 5199ESTABLISHING COUNCIL POLICY FOR MEETING RULES OF ORDER,PROCEDURE, DEBATE AND DECORUM

Recommendation Receive staff report and adopt the resolution as submitted or provide furtherdirection

Los Banos City Council! Redevelopment Agency Agenda - December 2, 2009 Page 30f4

13 COUNCIL MEMBER AGENDA REQUESTS (To see if there is a majority consensusto have staff expend time on the issue and to hear it at a future meeting)

A. Consider Request from Mayor Jones to Discuss Formation of a Committee toName the Community Center and Designate a Council Member to serve as theChairperson

RecommendatIOn Direction from the City Council on how to proceed.

B- Consider Request from Council Member Villalta to Have Staff Review the WaterUtility Resolutions

Recommendation- Direction from the City Council on how to proceed.

14 REDEVELOPMENT AGENCY UPDATE.

15 ADVISEMENT OF PUBLIC NOTICES (Two Reports)

16 CITY MANAGER / EXECUTIVE DIRECTOR REPORT

17 CITY COUNCIL / REDEVELOPMENT AGENCY MEMBER REPORTS

A. Joe Sousa

B Elizabeth Stone

C Mike Villalta

D Tom Faria

E. Mayor Tommy Jones

18 MISCELLANEOUS INFORMATION IN CITY COUNCIL PACKET, NO ACTIONNECESSARY

19 ADJOURNMENT

I hereby certify under penalty of perjury under the laws of the State of California. that the foregoingagenda was posted on the City Hall bulletin board not less than 72 hours prior to the meeting

Dated this 25th day of November 2009

Los Banos City Council / Redevelopment Agency Agenda - December 2, 2009 Page 4 of4

CK #118964 - #119127 12/2/09Bank ReconciliationChecks By Date

$1,769,883.57

11/2412009 - 8:20 AM

User: jdemel0

Cleared and Not Cleared Checks

Check No Check Date Name Comment ModuleVoid Clear Date Amount

118964 11/13/2009 Anthony Gomes Electric Service AP 89.97118965 11/13/2009 AT&T AP 58.32118966 11/13/2009 AT&T AP 451.09118967 11/13/2009 AT&T AP 15.63118968 11/1312009 AT&T AP 66.34118969 11/13/2009 Bruce's Tire Inc AP 98.00118970 11/13/2009 Comcast AP 127.27118971 11/13/2009 City ofLos Banos Utility AP 25,631.89118972 11/13/2009 Cummins West, Inc. AP 624.00118973 11/13/2009 Docs Towing & Transport, Inc. AP 231.25118974 11/13/2009 Don's Mobile Glass AP 40.00118975 11/1312009 Dept ofMotor Vehicles AP 338.71118976 11/1312009 Environmental Remediation Grou AP 2,302.46118977 11/1312009 ES Harris Group Inc. AP 240.00118978 11/1312009 Ferrellgas, Inc. AP 21.15118979 11/1312009 Gordon's Truck & Equipment Rep AP 87.00118980 11/13/2009 Habitat for Humanity Westside AP 5,000.00118981 11/13/2009 Heppner Precision Machine AP 5,008.33118982 11/13/2009 Hilton San Francisco AP 762.83118983 11/1312009 Home Depot AP 159.08118984 11/13/2009 Ikon Office Solutions, Inc. AP 457.49118985 11/13/2009 Los Banos Chamber Of AP 825.00118986 11/13/2009 Lowe's AP 1,082.89118987 11/13/2009 Maze & Associates AP 5,710.00118988 11/13/2009 Ivan Mendez AP 348.03118989 11/13/2009 Merced Sun Star AP 100.85118990 11/13/2009 Met Life AP Void 719.76118991 11/13/2009 Michael Bradman Associates AP 6,300.00118992 11/1312009 OnTrac AP 13.44118993 11/13/2009 Pinnacle Medical Group AP 26.00118994 11/13/2009 Precision Inspection Co., Inc. AP 712.50118995 11/13/2009 Beverly Prior Architects Inc AP 46,751.49118996 11/13/2009 Sherwin Williams Co AP 135.56118997 11/13/2009 Merced County Solid Waste Div. AP 3,514.71118998 11/1312009 Stonecreek Properties AP 968,177.02118999 11/13/2009 EliaGrande AP 17.71119000 11/13/2009 PMZ Real Estate, Trini Haro AP 49.17119001 11/13/2009 Jerry Witt AP 14.39119002 11/13/2009 Mitchell & Monique Medina AP 100.00119003 11/13/2009 Martha Warren/Gifford AP 13.32119004 11/13/2009 Israel and Yo1and Jacquez AP 1.95119005 11/13/2009 Sonya Knox AP 13.32119006 11/13/2009 Daniel & Christina Morrison AP 15.30119007 11/13/2009 Walter & Veronica Lino AP 70.00119008 11/13/2009 Verizon Wireless AP 90.02119009 11/13/2009 Carol M. Warren AP 40.00119010 11/13/2009 Windecker Inc AP 7,388.32119011 11/17/2009 Air Petro Corp AP 16,945.83119012 11/17/2009 Allied Waste Services #917 AP 221,198.76119013 11/1712009 Habitat for Humanity Westside AP 60,818.00

BR - Checks by Date (11/2412009 - 8:20 AM) Page


119014 11117/2009 Costco AP 345.41119015 1111712009 Precision Inspection Co., Inc. AP 25,742.99119016 11117/2009 Spriggs Inc AP 578.96119017 11117/2009 State Controller's Office AP 104.00119018 11119/2009 Aflac-Customer Service AP 212.75119019 11119/2009 Aflac-Customer Service AP 279.65119020 11/19/2009 Aflac-Customer Service AP 70.00119021 11119/2009 Aflac-Customer Service AP 159.42119022 11119/2009 Allstate Insurance Co AP 546.00119023 11119/2009 Bank ofAmerica AP 101,749.82119024 11119/2009 Bank ofAmerica AP 2,925.96119025 11119/2009 Bank ofAmerica AP 17,077.73119026 1111912009 Comcast AP 104.70119027 1111912009 Employment Developmt Dept AP 10,295.00119028 1111912009 Hartford Life Ins Co AP 6,005.25119029 11119/2009 Hartford Life Ins Co AP 44.62119030 11119/2009 ICMA-RC Headquarters AP Void 50.00119031 11119/2009 Los Banos Fitness & AP 578.00119032 11119/2009 Los Banos Police Assn AP 1,560.50119033 11119/2009 Gloria Mendonca AP 96.27119034 1111912009 Merced County Sheriff AP 100.00119035 11119/2009 Office Equipment Fin Serv AP 274.82119036 1111912009 Nationwide Retiremt Solut AP 1,610.00119037 11119/2009 PERS Long Term Care AP 362.64119038 11/19/2009 Professional Fire Fighter AP 325.00119039 11119/2009 Merced County Solid Waste Div. AP 65,729.41119043 11119/2009 State Disbursement Unit AP 197.00119044 11119/2009 State Disbursement Unit AP 814.00119045 11119/2009 State Disbursement Unit AP 375.00119046 1111912009 State Disbursement Unit AP 168.00119047 11119/2009 State Disbursement Unit AP 212.00119048 11/19/2009 State Disbursement Unit AP 174.00119049 11/19/2009 State Disbursement Unit AP 700.00119050 11119/2009 State Disbursement Unit AP 45.30119051 11119/2009 State Disbursement Unit AP 208.50119052 11119/2009 Law Offices of William A Vaugh AP 7,066.75119053 11119/2009 Windecker Inc AP 12,399.74119054 1111912009 Windecker Inc AP 2,419.18119055 11123/2009 A & A Electrical Service AP 182.47119056 11123/2009 A & A Portables Inc AP 205.611'19057 1112312009 Abbott & Kindermann, LIp AP 2,373.77119058 11123/2009 ABS Presort Inc AP 4,456.45119059 11123/2009 Ameripride Valley Uniform Serv AP 989.68119060 1112312009 American Self Storage AP 1,800.00119061 11123/2009 Anthony Gomes Electric Service AP 520.06119062 11123/2009 Aramark Uniform Ser Inc AP 1,873.93119063 11/2312009 AT&T Long Distance AP 4.80119064 11/23/2009 AT&T AP 16.17119065 1112312009 AT&T AP 81.85119066 11123/2009 AT&T AP 15.29119067 11123/2009 AT&T AP 17.05119068 11123/2009 AT&T AP 15.58119069 11123/2009 AT&T AP 453.36119070 1112312009 AT&T AP 487.62119071 1112312009 AT&T AP 235.95119072 11123/2009 AT&T AP 102.57119073 11/23/2009 AT&T AP 14.15119074 1112312009 AT&T AP 15.33119075 11123/2009 AT&T AP 15.58119076 11123/2009 AT&T AP 15.59119077 1112312009 AT&T AP 15.58119078 1112312009 Auto Zone Commercial AP 81.55

BR - Checks by Date (11/24/2009 - 8:20 AM) Page 2


119079 11123/2009 City ofMerced Police Departme AP 808.Q7119080 11123/2009 Robert Bettencourt AP 325.00119081 1112312009 BJ's Consumers Choice AP 90.00119082 11123/2009 Borelli Real Estate Service AP 90.00119083 11123/2009 Brinks Inc. AP 598.90119084 11123/2009 Broadview Security, Inc. AP 55.99119085 11123/2009 Bruce's Tire Inc AP 3,215.95119086 11123/2009 BSK Analytical Laboratories AP 1,245.00119087 11123/2009 Ca Dept of Justice AP 2,067.00119088 11123/2009 Cal Traffic AP 2,548.44119089 11123/2009 Cannon Associates Inc AP 677.50119090 11123/2009 CCAC AP 235.00119091 1112312009 Centro Print Solutions AP 375.44119092 1112312009 City ofRipon AP 20.00119093 11123/2009 Comcast AP 99.95119094 1112312009 Construction Testing & Enginee AP 13,930.00119095 1112312009 Marcelino Cortez AP 20.00119096 1112312009 Credit Bureaus ofMerced AP 45.00119097 11123/2009 CSKProshop AP 858.53119098 11/23/2009 LN Curtis & Sons AP 983.97119099 11/2312009 City ofLos Banos ** AP 41,279.69119100 11/23/2009 Dell Marketing L P AP 961.53119101 1112312009 Deluxe Cleaners AP 382.00119102 11123/2009 Dept. of Industrial Relations AP 140.00119103 11123/2009 Electrical Distributors Co. AP 60.36119104 1112312009 Excalibur Elevator Inc AP 2,131.67119105 1112312009 Lucille L Mallonee AP 88.00119106 11123/2009 Sonya Silva AP 50.00119107 11123/2009 Jana Sousa AP 88.00119108 11123/2009 US Bank Corp Pymt System AP 11,142.71119109 11123/2009 Laura Gonzalez AP 28.63119110 11/23/2009 Ignacio & Celia Alonzo AP 37.49119111 1112312009 Lynn Lewis AP 23.70119112 11123/2009 London Properties, Rick Hoff AP 24.61119113 1112312009 Melissa Luna AP 15.83119114 1112312009 Nadege Joseph AP 15.83119115 1112312009 Jaime Grissom AP 44.93119116 1112312009 David & Bernadette Pipal AP 26.58119117 11123/2009 Tseng Kung AP 16.87119118 11123/2009 Jamie Nava AP 53.51119119 11/23/2009 Bobbie Jo Chapa AP 61.60119120 1112312009 Elizabeth Ocegueda AP 72.41119121 11123/2009 Comcast AP 277.39119122 1112312009 Ty & Audra Cotta AP 64.36119123 1112312009 John Georgiou AP 452.21119124 11123/2009 James & Kristi Bryan AP 141.80119125 11123/2009 VFW & Legion AP 1,045.99119126 11123/2009 Westamerica Bank - Cafeteria P AP 12,495.65119127 11123/2009 Westamerica Bank - Cafeteria P AP 12,437.73

Total for Valid Checks: 1,769,883.57

Break in Check Sequence due to the followingCheck # 119040-119042 (manually voided blank checks)

BR - Checks by Date (1112412009 - 8:20 AM)

Total Valid Checks:Total Void Checks:

Total Checks:

Page

1592

161

3

CITY OF LOS BANOSCITY COUNCIL I REDEVELOPMENT AGENCY MEETING MINUTES

OCTOBER 7, 2009

ACTION MINUTES - These minutes are prepared to depict action takenfor agenda items presented to the City Council. For greater detail of thismeeting refer to the electronic media (CD and/or audio) kept as apermanent record.

CALL TO ORDER: Mayor Jones called the Adjourned City Council/RedevelopmentAgency Meeting to order at the hour of 6:33 p.m.

ROLL CALL - MEMBERS OF THE CITY COUNCIL I REDEVELOPMENT AGENCYPRESENT: Joe Sousa, Elizabeth Stone, Mike Villalta, and Tommy Jones; ABSENT:Tom Faria (arrived at 6:58 p.m.)

CITY COUNCIL WORKSHOP - MERCED COUNTY ASSOCIATION OFGOVERNMENTS (MCAG) REGIONAL TRANSPORTATION PLAN (RTP)

Matt Fell, MCAG Senior Planner, facilitated the workshop and spoke regarding the ongoing transportation crisis, being under funded for at least two decades, State budgetwoes, the need to plan ahead, and RTPs being done every 3-4 years.

Informational workshop only; no action taken.

ADJOURNMENT. The meeting was adjourned at 7:00 p.m.

CALL TO ORDER: Mayor Jones called the City Council/Redevelopment AgencyMeeting to order at the hour of 7:01 p.m.

PLEDGE OF ALLEGIANCE. Interim Police Chief Knapp led the pledge of allegiance.

ROLL CALL - MEMBERS OF THE CITY COUNCIL I REDEVELOPMENT AGENCYPRESENT: Tom Faria, Joe Sousa, Elizabeth Stone, Mike Villalta, and Tommy Jones.

STAFF MEMBERS PRESENT: City Manager Rath, City Attorney Vaughn,Administrative Clerk IIDeputy City Clerk Ascencio, Fire Chief Guintini, Interim PoliceChief Knapp, Public Works Director/City Engineer Fachin, Planning Director Fitzgerald,Redevelopment Agency Director Post, Information Technology Director Spalding, andInformation Technology Technician Parsad.

CONSIDERATION OF APPROVAL OF AGENDA: Motion by Faria, seconded by Stoneto approve the agenda as submitted. The motion carried by the affirmative action of allCity Council/ Redevelopment Agency Members present.

Mayor Jones invited Merced County District 5 Supervisor Jerry O'Banion and City ofDos Palos Mayor Michael Burns forward and spoke of his appreciation of theirsportsmanship and the duo being class acts regarding the Dos Palos High School vs.Los Banos High School football game. Supervisor O'Banion congratulated the LosBanos Tigers on their win and spoke of looking forward to the future and putting a DosPalos Broncos sweatshirt on Mayor Jones. City of Dos Palos Mayor Burns spoke of theLos Banos Tigers being the better team this year.

PUBLIC FORUM: MEMBERS OF THE PUBLIC MAY ADDRESS THE COUNCIL ONANY ITEM OF PUBLIC INTEREST THAT IS WITHIN THE JURISDICTION OF THECITY; INCLUDES AGENDA AND NON-AGENDA ITEMS. NO ACTION WILL BETAKEN ON NON-AGENDA ITEMS. SPEAKERS ARE LIMITED TO A FIVE (5)MINUTE PRESENTATION. DETAILED GUIDELINES ARE POSTED ON THECOUNCIL CHAMBER INFORMATIONAL TABLE. CARYN COX, Los Banos, readfrom a prepared statement and spoke of Mr. Faria's classroom door at Los Banos HighSchool being vandalized, and police report on the embezzlement case; GENE FORTE,Los Banos, spoke of the Falasco family and his family being friends and didn'tdisrespect the Robert M Falasco Justice Center here in Los Banos, Judge Dohertyretiring and had been treated badly by him, search warrants regarding the Mary AnnJones embezzlement case, being locked out of the public defenders office and being aconflict of interest in representing him, respects Supervisor Jerry O'Banion, and feelslike he is owed an apology; BOB HART, Los Banos, spoke of failed financials, CityManager not having an education, encouraged people to turn out for the City Councilmeetings and voice their displeasure, spoke furthermore of wrong thinking, restoringtrust, the need for transparency, City must provide financial reports quarterly from eachdivision, expenditures, suggestions, angst wouldn't be needed if the City Managerwould have implemented the quarterly reporting, and inquired how many keys are in thevault today; NYDIA ROSA, Los Banos, received absentee voting ballots, reminded allthat each vote is important, repeated it in Spanish, spoke of hate and being sad thathas been instigated, being infuriated that someone tried to poison the Mayor's dog, andhad spoken to a former City Manager and says the buck stops here with City ManagerRath; GENEVA BRETT, Los Banos, spoke of local bathtub races, gave kudos to KathyBallard, Tara Brennan, and Rhonda Lowe, thanked all who participated in the streetfair, thanked everyone who voted for her as Co-President, Chamber of Commercedoing fabulous things this year, ribbon cutting at Takoolu's on October 20, 2009 at11 :30 a.m. and at Verizon on October 23,2009 at 1:00 p.m., Sport and Rehab PhysicalTherapy hosting a mixer on October 22,2009, American Cancer Society Relay for Lifekick-off Rally October 8, 2009 at 6:30 p.m. at Methodist Church, announced a newworld champion: 15 year old "Deadly Red" and encouraged everyone to read the sportssection of the Los Banos Enterprise, reminded everyone that the world is watching usand the need to be a place that invites people to come here, and asked that everyoneplease say things the best way they can with respect and dignity; LUISA BOUNDS, LosBanos, spoke to Council Member Faria and Ms. Cox regarding vandalism at Los BanosHigh School, some people being evil, and being tired of people acting like saints whenthey are racists; KENT SANDHAGEN, Los Banos, spoke of the need for help withabolishing graffiti, has the paint but needs volunteers, and the need for people who do

graffiti to get caught and go to jail; NORM DONOVAN, Los Banos, spoke of anopportunity he had to attend a seminar in Fresno about the high-speed rail, Fresnomaking a big push to get that maintenance center, and the need for Merced Countycitizens to write to get it here; DENNIS FAUCHIER, Los Banos, requested that Councilpull agenda item 7E - Waiver of Business License Fee for Unification of Cultural Arts toget some understanding regarding non-profits having to obtain business licenses.

No one else came forward to speak and the public forum was closed.

CONSIDERATION OF APPROVAL OF CONSENT AGENDA. Council Member Villaltarequested to pull Item 7E - Waiver of Business License Fee for Unification of CulturalArts for discussion only.

City Manager Rath spoke regarding Item 7E - Waiver of Business License Fee forUnification of Cultural Arts and the reason it was presented to Council.

Motion by Stone, seconded by Sousa to approve the consent agenda as follows:Check Register for #117776 - #118192 in the Amount of $2,732,272.22; Minutes for theAugust 19, 2009 City Council I Redevelopment Agency Meeting; Street ClosureRequest from Los Banos Fellowship of Believers to Close Off H Street, between 5th andi h Streets, in front of the Henry Miller Plaza from 4:00 p.m. to 8:00 p.m. on Saturday,October 31, 2009 for the Annual Harvest of Fun; Street Usage Request for the TakeBack the Night March from Pacheco Park to City Hall & Street Closure Request for theDomestic Violence Awareness Rally Being Held in Front of City Hall on Thursday,October 22, 2009 at 6:00 p.m.; Waiver of Business License Fee for Unification ofCultural Arts; City Council Resolution No. 5176 - Approving the Form and Authorizingthe Execution and Delivery of a Purchase and Sale Agreement and Related Documentswith Respect to the Sale of the Seller's Proposition 1A Receivable from the State; andDirecting and Authorizing Certain Other Actions in Connection Therewith;Redevelopment Agency Resolution No. 2009-10 - Finding and Determining that theLos Banos Redevelopment Agency and Administrative Expense to be Funded from theLow and Moderate Income Housing Fund are Necessary for the Production,Improvement or Preservation of the County's Supply of Low and Moderate IncomeHousing. The motion carried by the affirmative action of all City Council IRedevelopment Agency Members present.

CONSIDERATION OF ADOPTION OF REDEVELOPMENT AGENCY RESOLUTIONNO. 2009-11 - APPROVING THE RENTAL AND DISPOSITION AGREEMENTBETWEEN THE AGENCY AND THE BECKER FAMILY LIVING TRUST REGARDING511 FEET OF REDEVELOPMENT AGENCY PROPERTY LOCATED AT THECORNER OF MERCEY SPRINGS & PACHECO BOULEVARD. RedevelopmentAgency Director Post presented the staff report, noting that the City cannot financiallyassist and this being a way new creative way to assist businesses and enhancementwithout having a cost to the City.

Motion by Sousa, seconded by Faria to adopt Redevelopment Agency Resolution No.2009-11 - Approving the Rental and Disposition Agreement between the Agency andthe Becker Family Living Trust Regarding 511 Feet of Redevelopment Agency PropertyLocated at the Corner of Mercey Springs & Pacheco Boulevard. The motion carried bythe affirmative action of all City Council/Redevelopment Agency Members present.

CONSIDERATION OF AUTHORIZATION FOR THE CITY MANAGER TO EXECUTEAN ENGAGEMENT LETTER WITH VAVRINEK, TRINE, DAY & CO., LLP FORFINANCIAL AND ACCOUNTING SERVICES IN RELATION TO THE CHIEFFINANCIAL OFFICER RESPONSIBILITIES. City Manager Rath presented the report,noting that the City is in need of these services and is currently working close with Maze& Associates and an audit committee.

Council Member VillaIta inquired as to where we are with the search for a ChiefFinancial Officer

City Manager Rath spoke of the recruitment process in relations to this position.

Motion by Stone, seconded by Sousa to authorize the City Manager to execute anengagement letter with Vavrinek, Trine, Day & Co., LLP for financial and accountingservices in relation to the Chief Financial Officer Responsibilities. The motion carriedby the affirmative action of all City Council/Redevelopment Agency members present.

CONSIDERATION OF FILLING VACANT CITY TREASURER POSITION BYAPPOINTMENT OR CALL FOR SPECIAL ELECTION. City Attorney Vaughnpresented the report, noting that the resignation of City Treasurer Melinda Wall waseffective September 30, 2009 and the term would be expiring November 2010.

There was Council Member and City Attorney discussion regarding the appointingprocess, the monthly stipend, qualifications being determined by the Council, beingbound by this structure as a general law city, and the possibility of appointing someonewho is in the department and is familiar with it now.

Motion by Jones, seconded by VillaIta to fill the vacant City Treasurer position byappointment by accepting applications and letters of interest until 5:00 p.m. on October16, 2009, then opening up for nominations at the next regularly scheduled City CouncilMeeting on October 21, 2009 and then vote. The motion carried by the following rollcall vote: AYES: Faria, Stone, Villalta, Jones; NOES: Sousa; ABSENT: none.

COUNCIL MEMBER AGENDA REQUESTS. (TO SEE IF THERE IS A MAJORITYCONSENSUS TO HAVE STAFF EXPEND TIME ON THE ISSUE AND TO HEAR IT ATA FUTURE MEETING.) - CONSIDER REQUEST FROM COUNCIL MEMBERVILLALTA TO DISCUSS HAVING COUNCIL MEMBER INVOLVEMENT IN THECHIEF FINANCIAL OFFICER HIRING PROCESS. Council Member Villalta spoke ofbeing on the audit committee with Council Member Faria, being impressed with auditorsand felt they were inclusive in the process, being at the point of hiring a Chief Financial

Officer, would like to be on the interview committee after narrowing down theapplications for the Chief Financial Officer, having worked in the past with the LosBanos Unified School District and allowing board members to sit in on the hiring ofpersonnel, enhancement of the process and offering another area of expertise.

There was Council Member concern regarding the need to be careful of power thatCouncil Members have, what they are and aren't responsible for, not wanting personnelissues to become political, setting dangerous precedents, not being prudent to giveCouncil more power than what is granted by law, unraveling of organization, the need tokeep organization in chain of command as it should, and keeping things professional.

Motion by Villalta, seconded by Faria to add Council Member Involvement in the hiringprocess of the Chief Financial Officer position to the agenda for the next regularlyscheduled City Council Meeting on October 21,2009. The motion failed by the followingroll call vote: AYES: Faria, Villalta; NOES: Sousa, Stone, Jones; ABSENT: none.

Council Member VillaIta stated that he would not serve on the audit committee withouthaving input and verbally gave his immediate resignation from the audit committee.

REDEVELOPMENT AGENCY UPDATE. Redevelopment Agency Director Post spokeregarding Neighborhood Stabilization Program funding, having met with realtors andlenders throughout the past couple weeks, the Redevelopment Plan ImplementationPlan, "incubator" being a new buzzword, Merced Community College having a globalmarket class and would like to bring it to Los Banos, first walkabout of the communitycenter and thanked those who attended.

There was Council Member and staff discussion regarding working with the Chamber ofCommerce for marketing new business hours to incorporate commuters and farmersmarkets on Thursday nights.

ADVISEMENT OF PUBLIC NOTICES (One Report). Planning Director Fitzgeraldreported that there will be a Public Hearing held at the Planning Commission Meetingon October 14, 2009 at 7:00 p.m. to consider Site Plan Review #2009-02 andassociated Mitigated Negative Declaration for the development of a double drive-thrufast food Rally's Restaurant.

CITY MANAGER I EXECUTIVE DIRECTOR REPORT. City Manager Rath reported ofMaze & Associates working well with the City, looking at cash handling andmanagement procedures, suggested that we invite a representative from Maze &Associates to attend the City Council meeting on November 4, 2009 to present thewhole report and be available for questions, making improvements on utility billingaccounts, implementation of electronic meter reading system, and water allotment.

There was Council Member and City Attorney discussion regarding water allotment andoverage charges, average days meter is read, and the need for customers to contactthe Finance Department with their questions.

CITY COUNCIL I REDEVELOPMENT AGENCY MEMBER REPORTS.

JOE SOUSA: Spoke of the water issue; thanked those who attended the tour of thecommunity center project; happiness to see the progress; the local FFA chapter goingto the FFA national convention October 21-28, 2009 including Jonathan Cotta who willbe noticed for Ag Mechanics and Gene Lieb, Jr. and Tiffany Henderson who will bereceiving the American Farmer Award and wished luck to all of them; FFA rigatonidinner on October 19, 2009, having been accused of calling people names and askedfor honesty when people approach the podium to speak, quarterly report beingavailable to council and anyone who requests, Measure A being vital to this community,thanked Ms. Cox for filing a report against him with the Fair Political PracticesCommission (FPPC) and read a letter that he received from the FPPC that informedMs. Cox that he did not violate the provisions of the Political Reform Act.

ELIZABETH STONE: Spoke of the community center tour and events having alreadybeen booked, horseshoe tournament at Los Banos Junior High on October 10 & 11,2009 at 10:00 a.m., Friends of the Library meeting at on October 14,2009 at 7:00 p.m.,March of Dimes event on November 7,2009 from 12:00 p.m. to 9:00 p.m. at the footballstadium, Annual Harvest Fest at Miller & Lux on November 20, 2009 from 10:00 a.m. 2:00 p.m.

MIKE VILLALTA: Spoke of the street fair being a huge success as well as the rotarybreakfast, water overage charges, importance of reducing the amount of residual wasteand recyclables that go to the dump, and the need for all take an active part inrecycling.

TOM FARIA: Spoke of being thankful for those who shared their compassion with theloss of his father, High School choir will have a fall concert on October 14, 2009 in themultipurpose room, having voted against building the community center but a majorityof City Council felt it was in the budget and important for everyone to support it, andsuggested a permanent recognition of veterans in that facility.

MAYOR TOMMY JONES: Spoke of the Take Back the Night event on October 22,2009 and encouraged everyone to attend, thanked the Los Banos High School Tigerfootball team and asked everyone to support them, gang prevention program meetingwith Interim Police Chief Knapp, the community center tour, Congressman Cardoza'sBlue Dog Bash at the Fairgrounds on October 10, 2009, importance of Measure A andthe need for community support.

CLOSED SESSION - CONFERENCE WITH LEGAL COUNSEL - INITIATION OFLITIGATION; PURSUANT TO SUBDIVISION (B) OF SECTION 54956.9 OF THEGOVERNMENT CODE; THREE (3) CASES. Informational itemonly, no action taken.

ADJOURNMENT. The meeting was adjourned at 9:52 p.m. to Tuesday, October 13,2009 at 4:30 p.m. to Attend a City Council Workshop on the Los Banos Redevelopment

Agency Five (5) Year Implementation Plan Being Held in the Police Annex, 535 JStreet, Los Banos, California by the affirmative action of all CityCouncil/Redevelopment Agency members present.

APPROVED:

Tommy Jones, Mayor

ATTEST:

Sandra B. Ascencio, Deputy City Clerk

..

TO:

FROM:

DATE:

Agenda Staff Report

Mayor & City Council Members

Chet Guintini, Fire Chief"

December 2, 2009

SUBJECT: Public Safety Tower License Agreement

TYPE OF REPORT:

Recommendation:

Consent Agenda

Approve the attached agreement as submitted.

Background:

The Fire Department constructed a telecommunications tower with Department ofHomeland Security Grant funding to improve Interoperable Communications withinMerced County. The tower is located at Fire Station No.1, 333 1h Street. TheAgreement allows Merced County EMS use of the tower at no cost to the City. Andallow Merced County to install and maintain radio equipment and antennas. It is amutual beneficial to both parties and the citizens of Los Banos and Merced County byimproving communications on the west side of the County.

The City Attorney has reviewed and approved the agreement.

Fiscal Impact:

No Fiscal Impact.

Reviewed by:

Attachments:

Public Safety Tower License Agreement

PUBLIC SAFETY TOWER LICENSE AGREEMENT

THIS LICENSE AGREEMENT is made and entered into this __day of _

2009, by and between the CITY OF LOS BANOS, a municipal corporation, hereinafter referred

to as the "CITY," and the COUNTY OF MERCED, a political subdivision of the State of

California, hereinafter referred to as "LICENSEE".

RECITALS:

WHEREAS, the CITY has constructed a public safety telecommunications tower with the

use of Department of Homeland Security Grant funding to improve Interoperable

Communications within Merced County on the property identified as 333 7TH Street, Los Banos,

California, the site of Los Banos Fire Station Number One.

WHEREAS, The LICENSEE desires to use a portion of the public safety

telecommunications tower for the purpose of establishing, operating and maintaining a radio

antenna and receiver.

WHEREAS, CITY has determined that it is in the CITY'S best interest to permit the

LICENSEE to use the public safety telecommunications tower located on the property to provide

enhanced public safety for the citizens of Los Banos and Merced County;

WHEREAS, CITY desires to grant a license to use the public safety telecommunications

tower located on the property to the LICENSEE pursuant to the terms and conditions of this

License Agreement and LICENSEE desires to accept such license.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other

good and valuable consideration exchanged between the parties, receipt of which is hereby

acknowledged, the undersigned parties agree as follows:

1

1. DESCRIPTION - CITY does hereby grant the LICENSEE a non exclusive

license during the term of this Agreement to install, operate and maintain the LICENSEE'S

telecommunications equipment, as described herein, on CITY'S public safety

telecommunications tower and communications shelter situated at 333 7TH Street, Los Banos,

California, the site of Los Banos Fire Station Number One, ''the premises", for the purpose of

establishing, operating and maintaining a radio antenna and receiver as provided herein:

a. One (1) space in the location as shown on Exhibit "A", attached hereto and made

a part hereofby reference.

b. One (1) antenna-mounting position as shown on Exhibit "B", attached hereto and

made a part hereofby reference.

c. The use (whenever possible) of the existing 150MHz Radio Frequency Combiner

to eliminate the needless duplication oflike antennas.

2. USE - LICENSEE shall use the premises only for the purpose of installing,

maintaining, repairing and operating the equipment as shown on Exhibit "C" attached hereto and

made a part ofhereofby reference for the radio antenna and receiver, and for no other purpose or

purposes whatsoever. The license granted under this Agreement only permits the LICENSEE to

construct and operate that equipment identified and described in Exhibit C. By its entrance into

this Agreement, the LICENSEE warrants and agrees that only that equipment identified in

Exhibit C will be operated on the premises, and ifLICENSEE desires to replace its equipment or

make greater use of the premises by adding additional equipment, the LICENSEE must first

obtain the written consent from CITY.

3. TERM AND TERMINATION - The term of this Agreement shall be for a period

of two (2) years commencing on the date first entered above. However, this Agreement or any

2

part thereof may be terminated by the CITY or LICENSEE at any time by giving the other party

ninety (90) days prior written notice.

4 RENEWAL - Upon the expiration of the initial term or any additional term, this

Agreement will be renewed for an additional one year term, subject to all terms and conditions

contained herein, unless either CITY or LICENSEE advise the other to the contrary by giving

prior written notice at least ninety (90) days before the expiration of the initial or extended term.

5. RENT - This Agreement is in keeping with the original purpose of the

Department of Homeland Security grant approval to construct said Public Safety

Communications Tower. There will be no rent collected for the use of said tower and

communications shelter during the initial term ofthis Agreement.

6. VACATING - LICENSEE shall, prior to or on the last day of the term or earlier

termination ofthis Agreement, cease operation ofand remove all equipment or facilities installed

as provided herein and vacate the tower and shelter premises. Any equipment of LICENSEE

remaining after termination of this Agreement, without permission of CITY, shall become the

property of CITY and may be used or disposed ofas determined by CITY.

7. NOTICES - Any and all notices between either party under the terms of this

agreement or by law shall be in writing and shall be deemed to be duly given if served when

personally delivered or deposited into the United States mail, with postage prepaid, registered,

and addressed to the respective addresses stated as follows:

City ofLos BanosATTN: Fire Department333 7th StreetLos Banos, Ca 93635

3

County ofMercedEMSAgenc~

260 East 15t StreetMerced, CA 95340

8. INSTALATION OF EQUIPMENT - Prior to installation of any equipment on the

on the premises, LICENSEE shall submit to CITY a detailed plan showing the method of

installation of all equipment. Said plan shall be approved in writing by CITY prior to

commencement of any installation. In addition, LICENSEE shall submit a Radio Interference

Study by a licensed radio contractor indicating that the proposed installation of radio equipment

will not interfere with any existing radio systems.

LICENSEE agrees to be responsible for any damage caused to the premises, or other

CITY property, which may be caused by LICENSEE or any of its agents or representatives. The

CITY agrees to permit the LICENSEE or its agents to enter said premises at any reasonable time

to inspect same. LICENSEE further agrees to comply with all State laws, local ordinances or

other governmental regulations which may be required by the proper authorities.

9. ASSIGNMENT OF LICENSE - The parties hereby each bind themselves, their

successors and assigns with respect to all covenants and conditions under this Agreement.

Without the prior written review and approval from CITY, the LICENSEE shall not assign or

transfer its interest or obligations under this Agreement, provide radio equipment for the use of

others, or cause or permit any change of any equipment installed in such premises, including

increased power outputs or changes in the use ofthe following frequencies:

TRANSMIT: 150.775 & 155.625

RECEIVE: 154.310 & 154.815

10. ACCESS - CITY agrees that LICENSEE shall have restricted access to the

premises for the purpose of installing, repairing, removing, replacing and maintaining said

equipment. LICENSEE will permit only authorized engineers, employees or properly authorized

contractors of LICENSEE, Federal Communications Commission (F.C.c.) inspectors, or persons

4

under their supervision to enter said premises. LICENSEE authorized technicians must contact

the CITY, provide authorized LICENSEE identification and sign permission ledger prior to entry

and when exiting the equipment site.. LICENSEE must assure that any technicians or contractors

used by LICENSEE must provide the CITY a copy of contractors liability insurance prior to the

beginning of any work to tower or shelter. CITY further agrees to exercise firm control over the

people requiring access to the facilities installed by LICENSEE at this location, and ensure by

prior notice and training to these people that they are entering an area that may contain radio

frequency radiation.

11. MAINTENANCE OF EQUIPMENT. - LICENSEE shall, at its own expense,

maintain its equipment on or attached to the telecommunications tower and in the shelter in a

safe condition and in good repair, and in a manner suitable to CITY so as not to conflict with the

use of the premises by CITY, or by any others using the premises.

12. SPACE REALLOCATION - No priority or other rights shall attach to the use of

space in CITY building or on said site. CITY shall have the right at any time upon giving notice

thereof to reassign or reallocate the amount or location of spaces for communication equipment

for the use of LICENSEE or CITY. Should space be required for a public agency or if a

frequency incompatibility that is not completely corrected as provided hereunder, occurs the

LICENSEE who last began occupancy at said location will have their agreement terminated and

must immediately vacate the site.

13. ELIMINATION OF INTERFERENCE - In the event LICENSEE'S installation,

or operations, in any way hinders, obstructs, or interferes with, the radio or electronic equipment

of the CITY, or any tenant presently occupying space at said site, LICENSEE shall, at its sole

cost and expense, upon receipt of written notification, forthwith cease the interfering installation

5

or operation. Any costs incurred by the CITY isolating said interference and determined to be a

result of LICENSEE'S radio, electronic or antenna systems will be reimbursed to the CITY

within 30 days upon receipt of billing or this Agreement may be terminated by CITY. If such

hindrance, interference or obstruction does not fully cease immediately after receipt by

LICENSEE from CITY of the notification of the existence thereof, CITY shall have the right to

order cessation of LICENSEE'S equipment as may be necessary to continuously eliminate said

interference. In the event of LICENSEE'S inability or refusal to eliminate such interference the

CITY will immediately terminate this agreement and evict LICENSEE. Any interference of the

LICENSEE'S electronic equipment during an emergency incident will require immediate

cessation of operation, transmission or further use of LICENSEE'S equipment. Failure to do so

immediately after being notified of such interference will be grounds for immediate cancellation

of the Agreement and immediate eviction.

14. COMPLIANCE WITH CODES AND STANDARDS - Installations and

operations by LICENSEE in connection with this agreement shall meet with all applicable rules

and regulations of the Federal Communications Commission (F.C.C.), Federal Aviation Agency

(F.A.A.), and all applicable codes and regulations ofthe city, county and state concerned.

LICENSEE must post at equipment site a current copy of any and alllicense(s) and/or

permit(s) to operate equipment and frequencies that may be required by federal, state or local

regulatory agencies. A copy oflicense(s) and/or permit(s) must be provided to CITY.

LICENSEE shall label all equipment installed with LICENSEE'S name.

15. RADIO FREQUENCY EXPOSURE NOTICE. CITY and other third parties

have installed radio communication equipment atop the Communications Tower that generate

Radio Frequency levels that may exceed OHSA ranges for personnel working in the area.

6

LICENSEE acknowledges by signing this agreement that LICENSEE is aware of this notice by

CITY. LICENSEE agrees that its personnel, technicians or contract workers that access the

CITY'S equipment shelter have been notified and trained to comply with OSHA and F.C.C.

standards for Radio Frequency Exposure.

CITY assumes no responsibility for the licensing, operation and/or maintenance of

LICENSEE'S equipment. CITY has the responsibility to carry out the terms of its F.C.C.license

with respect to tower light observation and notification to F.A.A.

16. INSURANCE. LICENSEE shall, at its own cost and expense, procure and

maintain during the entire term of this lease public liability insurance and premises damage

insurance insuring CITY against loss or liability caused by or connected with LICENSEE's

occupation and use of the premises under this lease in amounts not less than:

(a) $1,000,000 for injury to or death of one or more persons as a result of anyone

accident or incident; and

(b) $1,000,000 for damage to or destruction of any property of others.

The insurance required under this section shall be issued by a responsible insurance

company or companies authorized to do business in California and shall be in a form reasonably

satisfactory to CITY. LICENSEE shall within 10 days of the date of this lease, deposit with

CITY a certificate showing that insurance to be in full force and effect. Each of the insurance

policies shall be in a form reasonably satisfactory to CITY and shall carry an endorsement that,

before changing or canceling any policy, the issuing insurance company shall give CITY at least

30 days' prior written notice. Duplicate originals or certificates of all such insurance policies

shall be delivered to CITY.

7

The insurance required under this section, including the deductible, may be maintained as

part of or in conjunction with any other insurance coverage carried by LICENSEE and may be

maintained in the form ofself-insurance or liability pooling agreements.

LICENSEE shall require any technicians or contractors used by LICENSEE to provide

the CITY a copy of contractors liability insurance prior to the beginning of any work on the

premises.

CITY shall be under no obligation to keep the improvements which are constructed or

installed by LICENSEE under the provisions of this Agreement insured against fire or casualty

and LICENSEE will make no claim of any nature against CITY by reason of any damage to the

business or property of LICENSEE in the event of damage or destruction by fire or other cause,

arising other than from or out of sole negligence or willful misconduct ofagents or employees of

CITY in the course oftheir employment.

17. INDEMNIFICAnON AND HOLD HARMLESS - LICENSEE shall defend,

indemnify, and hold harmless CITY, its principals, officers, employees, agents, and volunteers

from and against any claims, losses, injuries, suits, or judgments and from any and all liability

for any and all claims, losses, injuries, suits, or judgments filed or brought by any and all persons

(including, without limitation, attorney's fees, disbursements and court costs) because of, arising,

from or resulting from, or in connection with the conduct by LICENSEE on, or about the

premises, or because of or arising from any negligent and or willful act or omission, its

principals, officers, agents, employees, volunteers, contractors, or subcontractors, or in any way

connected with the premises or with any improvements or personal property on the premises, or

some condition of the premises or some building or improvement on the premises. The

obligation of LICENSEE imposed by this paragraph shall not apply to any claims, losses,

8

injuries, suits, actions, or judgments, or any liability for any claim, loss, injury, suit, action or

judgment solely attributable to one or more negligent acts or omissions, or to willful or

intentional misconduct of CITY, its principals, officers, agents, employees, volunteers or

subcontractors.

18. POWER INTERRUPTION - CITY will not be responsible to LICENSEE for any

monetary loss and/or damage to antennas, transmitters or any other equipment installed by

LICENSEE that may result from the loss ofelectrical power to the equipment site.

19. VENUE/GOVERNING LAW - Venue for any action arising out of or relating to

this agreement shall only be in Merced County, California. The rights and obligations of the

parties and all interpretation and performance of this Agreement shall be governed in all respects

by the laws ofthe State ofCalifornia.

20. MODIFICATION - Any matters of this Agreement may be modified from time to

time by the written consent ofall the parties without, in any way, affecting the remainder.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed

as of the day and year first above written.

[signature page begins on next page]

9

COUNTY OF MERCED

Chairperson, Board of Supervisors

ATTEST:

Board Clerk

APPROVED AS TO FORM:

County Counsel

CITY OF LOS BANOS

Tommy Jones, Mayor

ATTEST:

Lucille L. Mallonee, City Clerk


William A. VaughnCity Attorney

[signature page]

10

TO:

FROM:

DATE:

Agenda Staff Report


Lucy Mallonee, CMC ..fJt'City Clerk/Human Resources Director

December 2,2009

SUBJECT: Closure of Non-Essential City Offices

TYPE OF REPORT:

Recommendation:

Consent Agenda

Approve closure on non-essential City offices on Christmas Eve, Thursday, December24,2009.

Background:

City policy provides a paid holiday to City employees for Christmas Day; however, theday before this holiday is a regular business day for staff. With Christmas Day falling ona Friday, it is reasonably certain that the preceding Thursday will be an exceptionallyslow business day. Thus, it is a good opportunity to close all non-essential functions inan effort to realize energy cost savings.

Discussion:

Under this scenario, all offices located at 520 J Street, 411 Madison Avenue, 830 6th

Street, and 1015 F Street would be closed on Thursday, December 24, 2009. All nonessential functions outside of these offices would also be closed and departmentsreducing staff in other areas to only that necessary for the provision of essentialservices.

Employees affected by the closures may utilize accrued leave balances such asVacation and Compensatory Time Off (CTO) which is accrued by overtime eligibleemployees in lieu of accepting actual cash payment for overtime. As a result, the Citymay realize some savings by reducing the long-term liability associated with theseaccrued leaves.

Fiscal Impact:

The City will realize cost savings through reduced energy usage on the businessclosure day. The energy savings are unknown at this time.

ath, City Manager

LM:js

Attachments:Resolution

RESOLUTION NO. __

A RESOLUTION OF THE CITY COUNCIL OF THECITY OF LOS BANOS APPROVING CLOSURE OFNON-ESSENTIAL CITY OFFICES ON THURSDAY,DECEMBER 24, 2009

WHEREAS, the City Manager has approved staff's recommendation to closenon-essential City offices on Thursday, December 24, 2009 allowing employees toutilize accrued leave balances such as Vacation, or Compensatory Time Off (CTO).

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of LosBanos does hereby approve the closure of all non-essential City offices on Thursday,December 24,2009.

BE IT FURTHER RESOLVED that employees may utilize accrued leavebalances such as Vacation, or Compensatory Time Off (CTO).

The foregoing Resolution was introduced at a regular meeting of the City Councilof the City of Los Banos held on the 2nd day of December 2009, by Council Member__ who moved its adoption, which motion was duly seconded by Council Member__ and the Resolution adopted by the following vote:

AYES:NOES:ABSENT:

APPROVED:

Tommy Jones, Mayor

ATTEST:


TO:

FROM:

DATE:

Agenda Staff Report

~r & City Council Members

~th, City Manager

December 2, 2009

SUBJECT: Part-Time Employment Extension Request for Mark B. Knapp, InterimPolice Chief

TYPE OF REPORT: Consent Agenda

Recommendation: Approve the resolution as submitted.

Discussion: Mark B. Knapp, retired City of Los Banos Police Chief, was hiredpart-time on July 13, 2009 to serve as Interim Police Chief while the City isrecruiting for a new Chief of Police. Since Mr. Knapp is a CalPERS retiree,California Government Code Section 21221(h) only allows him to work up to 960hours per fiscal year, unless a one-time extension is authorized by the CityCouncil and CalPERS - in no case could Mr. Knapp's part-time service exceedtwelve months.

In December 2009, it is expected that Mr. Knapp will reach the maximum number ofhours that he may work as a part-time employee but since we are still in the recruitingprocess for a Chief of Police we will need him to stay on a little bit longer. We anticipatefilling the Chief of Police position by April 2010.

Fiscal Impact: There are sufficient funds in the Police Department budget tocover Mr. Knapp's payroll expense, 6 months =$66,537.60.

Attachments: Resolution

SR/lm

RESOLUTION NO. __

A RESOLUTION OF THE CITY COUNCIL OF THECITY OF LOS BANOS REQUESTINGEMPLOYMENT EXTENSION PER CALIFORNIAGOVERNMENT CODE SECTION 21221 (h)

WHEREAS, Mark B. Knapp, 4303, retired from the City of Los Banos in theposition of Police Chief effective December 31, 2006; and

WHEREAS, the City of Los Banos appointed Mark B. Knapp to the position ofInterim Police Chief under California Government Code section 21221(h), a positiondeemed to be of limited duration and requiring specialized skills, effective July 13,2009; and

WHEREAS, Mark B. Knapp is expected to reach his maximum of 960 hours thisfiscal year on or about December 31,2009; and

WHEREAS, Mark B. Knapp possesses specific knowledge and skills that makeshis return important for the continuity of services of the Los Banos Police Department.

THEREFORE, BE IT RESOLVED that the City of Los Banos formally requeststhat the CalPERS Board of Aministration approve an extension in accordance withGovernment Code section 21221(h) for the temporary employment of Mark B. Knappfor 960 additional hours or through June 30, 2010.


AYES:NOES:ABSENT:

APPROVED:

Tommy Jones, MayorATTEST:


TO:

FROM:

DATE:

Agenda Staff Report

Mayor & City Council MembersChairman & Redevelopment Agency Members

Elaine Post, RDA Director

December 2, 2009

SUBJECT: Second Amendment to Disposition and Development/Affordable HousingAgreement with Ward Road Apartments, II, L.P.; related subordinationagreements with Citibank, N.A. and California Bank &Trust

TYPE OF REPORT:

Recommendation:

Consent Agenda

Adopt Resolutions of the Agency and the City Council approving the SecondAmendment and the subordination agreements with Citibank, N.A. and California Bank&Trust.

Background:

Ward Road Apartments, II, L.P., a California limited partnership (the "Developer") andthe Agency entered into an agreement, entitled Disposition and Development/AffordableHousing Agreement, dated as of September 19, 2007 ("the Original Agreement"). TheOriginal Agreement provided that the Developer acquire lease from the Agency certainland located on an approximately 5 acre parcel located approximately .25 miles south ofPacheco Boulevard and west of Ward Road, as more particularly described in theOriginal Agreement (the "Site") and to construct an SO-unit apartment project at the Site(the "Project"). The Original Agreement called for the Developer to obtain privatefinancing to defray the cost of constructing the improvements required under theOriginal Agreement (the "Improvements"), for the Developer to obtain additionalfinancial support in the form of proceeds from the marketing of 9% tax credits as

DOCSOC/1378634v1/024012-0016

described in Section 42 of the Internal Revenue Code ("9% Housing Credits") andcredits applicable toward state income taxes imposed by the State of California inconnection with the production of affordable housing ("State Housing Tax Credits" and,together with 9% Housing Credits, "Tax Credits"), and funding from the Federal HomeLoan Bank's AHP Program (the "AHP Program") in the amount of Seven HundredTwenty Thousand Dollars ($720,000). The Original Agreement called for the Agency tolease the Site to the Developer for rent of$1 per year. In determining the content of anagenda report, keep in mind that each report should be self-explanatory, thereby notrequiring Council Members to rely on their memories of past actions on the subject.Previous agenda reports may be referenced if the main points and subsequent actionare contained in the current report; do not reference a previous report in lieu ofsummarizing the issues and resulting action.

The Developer subsequently requested that the Agency amend certain terms of theOriginal Agreement; as a result, and upon consideration of the Developer's proposals,the Agency approved a First Amendment to Disposition and Development/AffordableHousing Agreement (the "First Amendment", and, together with the Original Agreement,the "Existing Agreement" on February 4, 2009). In connection with the FirstAmendment, the Agency agreed to loan to the Developer the sum of $1,300,000 (the"Agency Loan" and the "Agency Loan Amount"); such amount was to be paid to the Cityto cover certain City fees associated with the Project. The Agency Loan was to beevidenced by a promissory note with payment secured by a deed of trust.

Discussion:

In the course of implementing the Project; the Developer has obtained a preliminaryreservation of tax credits and has further obtained a revised and increased commitmentfor $1,000,000 (the "Revised AHP Amount") in moneys from the AHP Program. TheDeveloper has also obtained a commitment for a loan of approximately $10,700,000(the "Citibank Loan") to defray certain costs of development of the Project from Citibank,N.A. ("Citibank"). Citibank requires that, as a condition of making the Citibank Loan, itsloan to the Project, that the Agency execute a subordination agreement with Citibank inform submitted herewith (the "Citibank Subordination Agreement") under which theAgency will subordinate its deed of trust securing payment of the Agency Loan to adeed of trust securing payment under the Citibank Loan. The Citibank SubordinationAgreement provides that the affordability covenants to be recorded as to the propertywill be senior to the lien of the Citibank Loan.

While arranging for financing for development of the Site, the Developer has receivedcomments from tax credit investors and Citibank requesting that certain provisions ofthe Existing Agreement be amplified or amended. In connection therewith, theDeveloper has proposed that the Developer and the Agency approve an agreemententitled "Second Amendment to Disposition and Development/Affordable HousingAgreement" in the form submitted herewith (the "Second Amendment").

DOCSOC/1378634vl/024012-0016

Under the Second Amendment, the number of units to be developed, the affordabilitylevels and the use of a ground lease remain unaltered. Aside from several edits of atechnical nature, some of the salient changes are: a) interest on the Agency Loan willbe at 5% (the stated interest rate under the Original Agreement was 3%); b) therequired covenant period (for affordability) is increased to 75 years; c) mechanics fordisbursement of the Agency Loan are included; and d) the maturity date of the AgencyLoan is modified to 50 years (an earlier maturity than provided under the ExistingAgreement).

In connection with the infusion of the Revised AHP Amount, California Bank &Trust (the"AHP Bank"), the lending institution funding the Revised AHP Amount, the Developerhas indicated that the AHP Bank is prepared to enter into an agreement dated as ofDecember 1, 2009 entitled "Subordination Agreement" with the Developer and theAgency, in the form submitted herewith (the "AHP Subordination Agreement");

Fiscal Impact:

There are no new financial commitments made under the Second Amendment; theAgency remains responsible to make a loan in the amount of $1,300,000 (which will beused to defray certain City fees). The source of funds remains moneys from theAgency's low- and moderate-income housing fund.

ath, City Manager

Attachments:

Resolution for the City CouncilResolution for the Redevelopment AgencySecond Amendment with Exhibits A-FAHP Subordination AgreementCitibank Subordination Agreement

DOCSOC/1378634vl1024012-0016

CITY OF LOS BANOS

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LOS BANOS CONSENTING TOTHE APPROVAL BY THE LOS BANOS REDEVELOPMENT AGENCY OF A SECONDAMENDMENT TO DISPOSITION AND DEVELOPMENT/AFFORDABLE HOUSINGAGREEMENT BY AND BETWEEN THE AGENCY AND WARD ROAD APARTMENTS, II,L.P., A CALIFORNIA LIMITED PARTNERSHIP

WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize anddirect the Los Banos Redevelopment Agency (the "Agency") to expend a certain percentage of all taxeswhich are allocated to the Agency pursuant to Section 33670 for the purposes of increasing, improvingand preserving the community's supply of low and moderate income housing available at affordablehousing cost to persons and families oflow- and moderate-income, lower income, and very low income;

WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate IncomeHousing Fund (the "Housing Fund");

WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out itsaffordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of verylow income and lower income households, or persons and families of low or moderate income, to theextent those households cannot obtain housing at affordable costs on the open market, and to providefinancial assistance for the construction and rehabilitation of housing which will be made available at anaffordable housing cost to such persons;

WHEREAS, pursuant to Section 33413(b), the Agency is required to ensure that at least 15percent of all new and substantially rehabilitated dwelling units developed within a project area under thejurisdiction of the Agency by private or public entities or persons other than the Agency shall be availableat affordable housing cost to persons and families of low or moderate income;

WHEREAS, Ward Road Apartments, II, L.P., a California limited partnership (the "Developer")and the Agency entered into an agreement, entitled Disposition and Development!Affordable HousingAgreement, dated as of September 19, 2007 ("the Original Agreement"). The Original Agreementprovided that the Developer acquire lease from the Agency certain land located on an approximately 5acre parcel located approximately .25 miles south of Pacheco Boulevard and west of Ward Road, as moreparticularly described in the Original Agreement (the "Site") and to construct an 80-unit apartment projectat the Site (the "Project");

WHEREAS, the Original Agreement called for the Developer to obtain private financing todefray the cost of constructing the improvements required under the Original Agreement (the"Improvements"), for the Developer to obtain additional fmancial support in the form of proceeds fromthe marketing of 9% tax credits as described in Section 42 of the Internal Revenue Code ("9% HousingCredits") and credits applicable toward state income taxes imposed by the State of California inconnection with the production of affordable housing ("State Housing Tax Credits" and, together with 9%Housing Credits, "Tax Credits"), and funding from the Federal Home Loan Bank's AHP Program (the"AHP Program") in the amount of Seven Hundred Twenty Thousand Dollars ($720,OOO)(the "OriginalAHP Amount");

WHEREAS, the Developer subsequently proposed that certain dates for performance as set forthin the Original Agreement be amended; in connection therewith, the Agency and the Developer entered

DOCSOC/1378577v3/024012-0016

into a First Amendment to Disposition and Development!Affordable Housing Agreement dated as ofFebruary 4, 2009 (the "First Amendment" and, together with the Original Agreement, the "ExistingAgreement");

WHEREAS, the Developer has obtained a preliminary reservation for Tax Credits and hasreceived a commitment for funding in the amount of One Million Dollars ($I,OOO,OOO)(the "Revised AHPAmount") in moneys from the AHP Program;

WHEREAS, in connection with the infusion of the Revised AHP Amount, California Bank &Trust, the lending institution funding the Revised AHP Amount, is prepared to enter into an agreementdated as of December 1, 2009 entitled "Subordination Agreement" with the Developer and the Agency, inthe form submitted herewith (the "AHP Subordination Agreement");

WHEREAS, in the course of finalizing arrangements for financing of the development of the Siteunder the Existing Agreement, the Developer has received comments from tax credit investors and aninstitutional lender requesting that certain provisions of the Existing Agreement be amplified or amended.In connection therewith, the Developer has proposed that the Developer and the Agency approve anagreement entitled "Second Amendment to Disposition and Development!Affordable HousingAgreement" in the form submitted herewith (herein, the "Second Amendment" and, together with theOriginal Agreement and the First Amendment as amended thereby, the "Amended Agreement");

WHEREAS, the Amended Agreement includes affordability covenants to be recorded as to thesubject property, which are to be enforceable by each of the Agency and the City (the "Agency DeveloperCC&Rs");

WHEREAS, the Developer has obtained a commitment from Citibank, N.A. ("Citibank") to loanapproximately Ten Million Seven Hundred Thousand Dollars ($10,700,000)(the "Citibank Loan") tofinance costs of developing the Project, with the' proviso that the Agency agree to subordinate theAgency's loan (in the amount of $1,300,000) to the Citibank Loan pursuant to a subordination agreementby and among the Developer, the Agency and Citibank in the form submitted herewith (the "CitibankSubordination Agreement"). The Agency Developer CC&Rs will be senior to the lien securing theCitibank Loan;

WHEREAS, the Project is located within the project area of the Los Banos RedevelopmentProject (the "Project Area" and the "Redevelopment Project", respectively) and the acquisition,construction and operation of the Project pursuant to the Amended Agreement would benefit the ProjectArea by providing affordable housing for persons who currently live and work within the Project Area;

WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and Safety CodeSection 33490, which sets forth the objective of providing housing to satisfy the needs and desires ofvarious constituent elements of the community;

WHEREAS, the Amended Agreement furthers the goals of the Agency set forth in theImplementation Plan as it will facilitate the creation of affordable housing which will serve the residentsof the neighborhood and the City and provide for a community facility as described in the AmendedAgreement;

WHEREAS, the Agency has previously found and determined that the Project is not a "low renthousing project" within the meaning of Article XXXIV of the State Constitution, and that the assistanceto be provided pursuant to the Agreement does not constitute development, construction or acquisition ofa low-rent housing project within the meaning of Article XXXIV of the State Constitution;

2DOCSOC/1378577v3/024012-0016

WHEREAS, the Agency has duly considered all terms and conditions of the proposed Agreementand believes that the Agreement is in the best interests of the Agency and the City and the health, safety,and welfare of its residents, and in accord with the public purposes and provisions of applicable State andlocal law requirements;

WHEREAS, pursuant to Section 33433 of the Community Redevelopment Law (CaliforniaHealth and Safety Code Section 33000, et seq.), following a duly-noticed public hearing, the Agency andthe Council previously determined that: the lease of the Site pursuant as provided under the OriginalAgreement will assist in the elimination of blight, and the consideration for such lease is not less than thefair market (lease) value or fair reuse (lease) value of the Site in accordance with the covenants andconditions governing the lease of the Site and improvement costs required thereof, as well as theparticular uses to be conducted by the Developer at the Site, and the lease under the terms and conditionsset forth in the Original Agreement is consistent with the implementation plan which has been adopted bythe Agency for the Redevelopment Project. The economic return to the Agency is not altered by theSecond Amendment;

WHEREAS, all actions required by all applicable law with respect to the proposed SecondAgreement have been taken in an appropriate and timely manner;

WHEREAS, the Agency and the City Council have duly considered all of the terms andconditions of the proposed Agreement and believes that the redevelopment of the Site pursuant to theAgreement is in the best interests of the City of Los Banos and the health, safety, and welfare of itsresidents, and in accord with the public purposes and provisions of applicable state and local laws andrequirements.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LOS BANOS DOESRESOLVE AS FOLLOWS:

Section 1. The City Council hereby finds that the use of funds from the Agency's Low andModerate Income Housing Fund pursuant to the Amended Agreement will be of benefit to the ProjectArea for the reasons set forth above.

Section 2. The City Council finds and determines that each and every statement set forth in thepreceding Recitals is true and correct.

Section 3. The City Council authorizes the Mayor and/or the City Manager to execute the AgencyDeveloper CC&Rs.

Section 4. The City Council finds and determines that, based upon substantial evidence provided inthe record before it, the consideration for the Agency's disposition of the Site by lease pursuant to theterms and conditions of the Amended Agreement is not less than the fair reuse (lease) value at the use andwith the covenants and conditions and development costs authorized by the Amended Agreement.

Section 5. The City Council hereby finds and determines that the disposition of a leasehold interestin the Site by the Agency pursuant to the Amended Agreement will eliminate blight within the ProjectArea by providing for the proper reuse and redevelopment of a portion of the Project Area which wasdeclared blighted.

Section 6. The City Council hereby finds and determines that the Amended Agreement is consistentwith the provisions and goals of the Implementation Plan.

3DOCSOC/1378577v3/024012-0016

Section 7. The City Council hereby consents to the approval by the Agency of the AmendedAgreement, the AHP Subordination Agreement and the Citibank Subordination Agreement insubstantially the form presented to the City Council, subject to such revisions as may be made by theExecutive Director of the Agency or his designee. The City Council agrees and acknowledges that theExecutive Director of the Agency will be authorized by the Agency to make revisions to the AmendedAgreement which do not materially or substantially increase the Agency's obligations thereunder ormaterially or substantially change the uses or development permitted on the Site, to sign all documents, tomake all approvals and take all actions necessary or appropriate to carry out and implement the AmendedAgreement and to administer the Agency's obligations, responsibilities and duties to be performed underthe Amended Agreement and related documents.

APPROVED AND ADOPTED this 2nd day of December, 2009.

By:__-'-- _Tommy Jones, Mayor

ATTEST:

Lucille Mallonee, City Clerk

4DOCSOC/1378577v3/024012-0016

STATE OF CALIFORNIACOUNTY OF MERCEDCITY OF LOS BANOS

)))

I, Lucille Mallonee, City Clerk of the City of Los Banos, do hereby certifY that the foregoing ResolutionNo. __ was introduced and adopted at a regular meeting provided by law of the City Council of theCity of Los Banos held on the 2nd day of December, 2009, by the following vote of the members thereof:

AYES:NOES:ABSENT:ABSTAIN:

COUNCIL MEMBERS:COUNCIL MEMBERS:COUNCIL MEMBERS:COUNCIL MEMBERS:

DOCSOC/1378577v3/024012-0016

LOS BANOS REDEVELOPMENT AGENCY

RESOLUTION NO.

A RESOLUTION OF THE LOS BANOS REDEVELOPMENT AGENCY APPROVING ASECOND AMENDMENT TO DISPOSITION AND DEVELOPMENT/AFFORDABLE HOUSINGAGREEMENT BY AND BETWEEN THE AGENCY AND WARD ROAD APARTMENTS, II,L.P., A CALIFORNIA LIMITED PARTNERSHIP

WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize anddirect the Los Banos Redevelopment Agency (the "Agency") to expend a certain percentage of all taxeswhich are allocated to the Agency pursuant to Section 33670 for the purposes of increasing, improvingand preserving the community's supply of low and moderate income housing available at affordablehousing cost to persons and families of low- and moderate-income, lower income, and very low income;

WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate IncomeHousing Fund (the "Housing Fund");

WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out itsaffordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of verylow income and lower income households, or persons and families of low or moderate income, to theextent those households cannot obtain housing at affordable costs on the open market, and to providefinancial assistance for the construction and rehabilitation of housing which will be made available at anaffordable housing cost to such persons;

WHEREAS, pursuant to Section 33413(b), the Agency is required to ensure that at least 15percent of all new and substantially rehabilitated dwelling units developed within a project area under thejurisdiction of the Agency by private or public entities or persons other than the Agency shall be availableat affordable housing cost to persons and families of low or moderate income;

WHEREAS, Ward Road Apartments, II, L.P., a California limited partnership (the "Developer")and the Agency entered into an agreement, entitled Disposition and Development!Affordable HousingAgreement, dated as of September 19, 2007 ("the Original Agreement"). The Original Agreementprovided that the Developer acquire lease from the Agency certain land located on an approximately 5acre parcel located approximately .25 miles south of Pacheco Boulevard and west of Ward Road, as moreparticularly described in the Original Agreement (the "Site") and to construct an 80-unit apartment projectat the Site (the "Project");

WHEREAS, the Original Agreement called for the Developer to obtain private financing todefray the cost of constructing the improvements required under the Original Agreement (the"Improvements"), for the Developer to obtain additional financial support in the form of proceeds fromthe marketing of 9% tax credits as described in Section 42 of the Internal Revenue Code ("9% HousingCredits") and credits applicable toward state income taxes imposed by the State of California inconnection with the production of affordable housing ("State Housing Tax Credits" and, together with 9%Housing Credits, "Tax Credits"), and funding from the Federal Home Loan Bank's AHP Program (the"AHP Program") in the amount of Seven Hundred Twenty Thousand Dollars ($720,000)(the "OriginalAHP Amount");

WHEREAS, the Developer subsequently proposed that certain dates for performance as set forthin the Original Agreement be amended; in connection therewith, the Agency and the Developer enteredinto a First Amendment to Disposition and Development!Affordable Housing Agreement dated as of

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..

February 4, 2009 (the "First Amendment" and, together with the Original Agreement, the "ExistingAgreement");

WHEREAS, the Developer has obtained a preliminary reservation for Tax Credits and hasreceived a commitment for funding in the amount of One Million Dollars ($I,OOO,OOO)(the "Revised AHPAmount") in moneys from the AHP Program;

WHEREAS, in connection with the infusion of the Revised AHP Amount, California Bank &Trust, the lending institution funding the Revised AHP Amount, is prepared to enter into an agreementdated as of December 1,2009 entitled "Subordination Agreement" with the Developer and the Agency, inthe form submitted herewith (the "AHP Subordination Agreement");

WHEREAS, in the course of finalizing arrangements for financing of the development of the Siteunder the Existing Agreement, the Developer has received comments from tax credit investors and aninstitutional lender requesting that certain provisions of the Existing Agreement be amplified or amended.In connection therewith, the Developer has proposed that the Developer and the Agency approve anagreement entitled "Second Amendment to Disposition and Development/Affordable HousingAgreement" in the form submitted herewith (herein, the "Second Amendment" and, together with theOriginal Agreement and the First Amendment as amended thereby, the "Amended Agreement");

WHEREAS, the Amended Agreement includes affordability covenants to be recorded as to thesubject property, which are to be enforceable by each of the Agency and the City (the "Agency DeveloperCC&Rs");

WHEREAS, the Developer has obtained a commitment from Citibank, N.A. ("Citibank") to loanapproximately Ten Million Seven Hundred Thousand Dollars ($JO,700,000)(the "Citibank Loan") tofinance costs of developing the Project, with the proviso that the Agency agree to subordinate theAgency's loan (in the amount of$I,300,000) to the Citibank Loan pursuant to a subordination agreementby and among the Developer, the Agency and Citibank in the form submitted herewith (the "CitibankSubordination Agreement"). The Agency Developer CC&Rs will be senior to the lien securing the fl

Citibank Loan; .

WHEREAS, the Project is located within the project area of the Los Banos RedevelopmentProject (the "Project Area" and the "Redevelopment Project", respectively) and the acquisition,construction and operation of the Project pursuant to the Amended Agreement would benefit the ProjectArea by providing affordable housing for persons who currently live and work within the Project Area;

WHEREAS, the Agency has adopted an Implementation Plan pursuant to Healtb. and Safety CodeSection 33490, which sets forth the objective of providing housing to satisfy the needs and desires ofvarious constituent elements of the community;

WHEREAS, the Amended Agreement furthers the goals of the Agency set forth in theImplementation Plan as it will facilitate the creation of affordable housing which will serve the residentsof the neighborhood and the City and provide for a community facility as described in the AmendedAgreement;

WHEREAS, the Agency has previously found and determined that the Project is not a "low renthousing project" within the meaning of Article XXXIV of the State Constitution, and that the assistanceto be provided pursuant to the Agreement does not constitute development, construction or acquisition ofa low-rent housing project within the meaning of Article XXXIV of the State Constitution;

2DOCSOCI1239804v5/024012-0016

WHEREAS, the Agency has duly considered all tenns and conditions of the proposed Agreementand believes that the Agreement is in the best interests of the Agency and the City and the health, safety,and welfare of its residents, and in accord with the public purposes and provisions of applicable State andlocal law requirements;

WHEREAS, pursuant to Section 33433 of the Community Redevelopment Law (CaliforniaHealth and Safety Code Section 33000, et seq.), following a duly-noticed public hearing, the Agency andthe Council previously detennined that: the lease of the Site pursuant as provided under the OriginalAgreement will assist in the elimination of blight, and the consideration for such lease is not less than thefair market (lease) value or fair reuse (lease) value of the Site in accordance with the covenants andconditions governing the lease of the Site and improvement costs required thereof, as well as theparticular uses to be conducted by the Developer at the Site, and the lease under the tenns and conditionsset forth in the Original Agreement is consistent with the implementation plan which has been adopted bythe Agency for the Redevelopment Project. The economic return to the Agency is not altered by theSecond Amendment;

WHEREAS, all actions required by all applicable law with respect to the proposed SecondAgreement have been taken in an appropriate and timely manner;

WHEREAS, the Agency and the City Council have duly considered all of the tenns andconditions of the proposed Agreement and believes that the redevelopment of the Site pursuant to theAgreement is in the best interests of the City of Los Banos and the health, safety, and welfare of itsresidents, and in accord with the public purposes and provisions of applicable state and local laws andrequirements.

NOW, THEREFORE, THE LOS BANOS REDEVELOPMENT AGENCY DOES RESOLVEAS FOLLOWS:

Section 1. The Agency hereby finds that the use of funds from the Agency's Low and ModerateIncome Housing Fund pursuant to the Amended Agreement will be of benefit to the Project Area for thereasons set forth above.

Section 2. The Agency finds and detennines that each and every statement set forth in the precedingRecitals is true and correct.

Section 3. The Agency authorizes each of the Chainnan and/or the Executive Director to executeeach of the AHP Subordination Agreement and the Citibank Subordination Agreement.

Section 4. The Agency finds and detennines that, based upon substantial evidence provided in therecord before it, the consideration for the Agency's disposition of the Site by lease pursuant to the tennsand conditions of the Amended Agreement is not less than the fair reuse (lease) value at the use and withthe covenants and conditions and development costs authorized by the Amended Agreement.

Section 5. The Agency hereby finds and detennines that the disposition of a leasehold interest in theSite by the Agency pursuant to the Amended Agreement will eliminate blight within the Project Area byproviding for the proper reuse and redevelopment of a portion of the Project Area which was declaredblighted.

Section 6. The Agency hereby finds and detennines that the Amended Agreement is consistent withthe provisions and goals of the Implementation Plan.

3DOCSOC/1239804v5/024012-0016

Section 7. The Agency hereby approves the Amended Agreement in substantially the formpresented to the Agency, subject to such revisions as may be made by the Executive Director of theAgency or his designee. The Executive Director of the Agency is hereby authorized to execute theSecond Agreement (including without limitation all attachments thereto) on behalf of the Agency. Acopy of the Second Amendment when executed by the Agency shall be placed on file in the office of theSecretary of the Agency.

Section 8. The Executive Director of the Agency (or his designee) is hereby authorized, on behalf ofthe Agency, to make revisions to the Amended Agreement which do not materially or substantiallyincrease the Agency's obligations thereunder or materially or substantially change the uses ordevelopment permitted on the Site, to sign all documents, to make all approvals and take all actionsnecessary or appropriate to carry out and implement the Amended Agreement and to administer theAgency's obligations, responsibilities and duties to be performed under the Amended Agreement andrelated documents.

APPROVED AND ADOPTED this 2nd day of December, 2009.

By: _Tommy Jones, Chairman

ATTEST:

Lucille Mallonee, Secretary

4DOCSOC/1239804v5/024012-0016

STATE OF CALIFORNIACOUNTY OF MERCEDCITY OF LOS BANOS

)))

I, Lucille Mallonee, Secretary of the Los Banos Redevelopment Agency, do hereby certify that theforegoing Resolution No. __ was introduced and adopted at a regular meeting provided by law of theLos Banos Redevelopment Agency held on the 2nd day of December, 2009, by the following vote of themembers thereof:

AYES:NOES:ABSENT:ABSTAIN:

AGENCY MEMBERS:AGENCY MEMBERS:AGENCY MEMBERS:AGENCY MEMBERS:

DOCSOCI1239804v5/024012-0016

Recording Requested ByAnd When Recorded Mail To:

Los Banos Redevelopment Agency520 J. StreetLos Banos, California 93635Attention: Redevelopment Manager

Space Above For Recorder's Use

SUBORDINATION AGREEMENT(Affordable Housing - California)

NOTICE: THIS SUBORDINATION AGREEMENT RESULTS INTHE LIEN OF A DEED OF TRUST ON THE PROPERTYBECOMING SUBJECT TO AND OF LOWER PRIORITY THANTHE LIEN OF SOME OTHER OR LATER SECURITYINSTRUMENT.

This Subordination Agreement (this "Subordination Agreement") is dated for referencepurposes as of December 1,2009, by WARD ROAD APARTMENTS, II, L.P., a California limitedpartnership (the "Borrower"), LOS BANOS REDEVELOPMENT AGENCY, a public bodycorporate and politic duly formed and existing under the Constitution and laws of the State ofCalifornia ("Ground Lessor") and CALIFORNIA BANK & TRUST, N.A., a national bankingassociation (the "Junior Lender"), in favor of Ground Lessor, and its successors and assigns, inGround Lessor's capacity as the lender of the sum of$I,300,000 (the "Senior Lender").

Factual Background

A.hereto.

Ground Lessor is fee owner of that real property (the "Site") described in Exhibit A

B. Borrower is the owner of a leasehold interest in the Site, certain real property and afee interest in the improvements located thereon (which leasehold interest is referred to herein as the"Property") more particularly described on Exhibit B attached hereto.

C. CITIBANK, N.A. (the "Bank") will make a loan in the aggregate principal amount ofTen Million Seven Hundred Eighty Thousand Eight Hundred and No/lOOth Dollars ($10,780,800.00)pursuant to that certain Construction Loan Agreement (the "Bank Loan Agreement") dated as of[December 1, 2009], by and between Borrower and the Bank, the proceeds of the Bonds will beloaned (the "Senior Loan") by the Bank to Borrower to finance a portion of the costs of constructingan affordable housing apartment project (the "Project") on the Property.

D. Additional funding for the Project is being provided by a loan (the "Agency Loan")by the Senior Lender in the original principal amount of One Million Three Hundred ThousandDollars ($1,300,000.00). The Agency Loan is evidenced by a promissory note by Borrower to SeniorLender (the "Agency Note") substantially in the form prescribed by that certain agreement, entitledDisposition and Development/Affordable Housing Agreement, dated as of September 19, 2007 byand between the Borrower and the Ground Lessor (the "Original Agreement"), as amended by thatcertain agreement entitled First Amendment to Disposition and Development/Affordable Housing

1DOCSOC/1377379v3/024012-0016

Agreement, dated as of February 4, 2009 (the "First Amendment"), as amended by that certainSecond Amendment to disposition and Development!Affordable Housing Agreement by and betweenBorrower and Ground Lessor dated as of December 1, 2009 (the "Second Amendment", and,together with the Original Agreement and the First Amendment as amended thereby, the "AmendedAgreement"), and, particularly as provided in Exhibit "A" to the Second Amendment. The AgencyNote shall be secured by a deed of trust, substantially in the form of Exhibit "C" to the SecondAmendment (the "Senior Deed of Trust") as provided under the Amended Agreement. The SeniorDeed of Trust is to be recorded in the Official Records of the County of Merced (the "OfficialRecords") substantially concurrently herewith.

E. The Borrower and the Agency have authorized the execution and recording ofrecordable covenants substantially in the form prescribed by Exhibit "F" to the Second Amendment(the "Covenants"), which Covenants are expected to be recorded of even date herewith.

F. Junior Lender agreed to make a loan to Borrower in the principal amount of OneMillion and No/lOOs Dollars ($1,000,000) (the "Subordinated Loan"). The Subordinated Loan willbe made pursuant to that certain AHP Loan Agreement ("Subordinated Loan Agreement") dated asof January 1, 2007, executed by and between Junior Lender and Borrower and is evidenced by apromissory note (the "Subordinated Note"), dated as of November 1,2009, made by Borrower to theorder of Junior Lender. The Subordinated Note will be secured by a deed of trust (the "SubordinatedDeed of Trust"), to be recorded in the Official Records substantially concurrently herewith, andencumbering the Property. The Subordinated Loan Agreement, the Subordinated Note, theSubordinated Deed of Trust and all other documents which evidence, guaranty, secure, or otherwisepertain to the Subordinated Loan, are collectively referred to herein as the "SubordinatedDocuments" or "Subordinated Loan Documents."

G. It is a condition to Senior Lender's consent to Borrower's execution and delivery ofthe Subordinated Loan Documents and the Ground Lease that (i) the Senior Deed of Trustunconditionally be and remain at all times a lien, claim, and charge upon the Propertyunconditionally prior and superior to the liens, claims, and charges of the Subordinated Deed ofTrust, (ii) the Subordinated Loan and Subordinated Loan Documents shall, at all times and in allrespects, be wholly subordinate and inferior in claim and right to the Senior Loan and Senior LoanDocuments, and (iii) the Covenants.

H. It is to the mutual benefit of the parties that Senior Lender consent to the executionand delivery of the Subordinated Deed of Trust and the other Subordinated Loan Documents, andJunior Lender is willing that each of the Covenants and the Senior Deed of Trust constitute a lien,claim, and charge upon the Property unconditionally prior and superior to the liens, claims, andcharges of the Subordinated Deed of Trust, and that the Subordinated Loan and Subordinated LoanDocuments shall, at all times and in all respects, be wholly subordinate and inferior in claim and rightto the Senior Loan and Senior Loan Documents and to the Covenants.

Agreement

1. Subordination. The Senior Deed of Trust, and any and all renewals, modifications,extensions, or advances thereunder or secured thereby (including interest thereon), and the Covenantsare unconditionally and will remain at all times, a lien, claim, or charge on the Property prior andsuperior to the Subordinated Deed of Trust and other Subordinated Documents. The SubordinatedLoan and Subordinated Documents shall, at all times and in all respects, be wholly subordinate and

2DOCSOC/1377379v3/024012-0016

inferior in claim and right to the Covenants, the Senior Loan and Senior Loan Documents, and allclaims, rights and remedies therefor are hereby subordinated and made subsequent and inferior to theCovenants, the Senior Loan and Senior Loan Documents and any claims, rights, and remedies arisingout of, or in connection therewith.

2. Acknowledgements and Agreements of Junior Lender. Junior Lender declares,acknowledges, and agrees that:

2.1 Senior Lender would not consent to the execution and delivery of theSubordinated Loan Documents without this Subordination Agreement;

2.2 Junior Lender consents to all provisions of the Covenants, the Senior Deed ofTrust and the Senior Loan Documents;

2.3 In making disbursements, Senior Lender is under no obligation or duty to, norhas Senior Lender represented that it will, see to the application of the Senior Loan proceeds; and

2.4 Junior Lender intentionally and unconditionally waives, relinquishes,subjects, and subordinates the liens, claims, and charges of the Covenants, the SubordinatedDocuments, and all present and future indebtedness and obligations secured thereby, in favor of theSenior Loan Documents and the lien, claim, and charge upon the Property of the Covenants, theSenior Deed of Trust, and understands that in reliance upon, and in consideration of, this waiver,relinquishment, subjection, and subordination, specific loans and advances are being and will bemade and, as part and parcel thereof, specific monetary and other obligations are being and will beentered into, that would not be made or entered into but for Senior Lender's reliance upon thiswaiver, relinquishment, subjection, and subordination.

3. Notices.

3.1 Junior Lender agrees to give Senior Lender copies of all notices of defaultunder the Junior Documents.

3.2 All notices given under this Subordination Agreement must be in writing andwill be served effectively upon delivery, or if mailed, upon the first to occur of receipt or theexpiration of forty-eight (48) hours after deposit in certified United States mail, postage prepaid, sentto the party at its address appearing below. Any party may change those addresses by notice to allother parties.

4. Integration; No Waiver. This Subordination Agreement is the whole and onlyagreement with regard to the subordination of the liens, claims, and charges of the SubordinatedDocuments to the Senior Loan Documents. This Subordination Agreement may not be modified oramended except by a written agreement signed by the parties. No waiver shall be deemed to be madeby Senior Lender of any of its rights hereunder unless the same shall be in writing signed on behalfof Senior Lender, and each such waiver, if any, shall be a waiver only with respect to the specificmatter or matters to which the waiver relates and shall in no way impair the rights of Senior Lenderor the obligations of Borrower to Senior Lender in any other respect at any other time.

5. Successors and Assigns. This Subordination Agreement is binding on and inures tothe benefit of the legal representatives, successors and assigns of the parties. Senior Lender's

3DOCSOC/1377379v3/024012-0016

successors and assigns include Permanent Lender (as defined in the Senior Loan Agreement) and anyfinancial institution which may now, or hereafter, purchase, or participate in, the Senior Loan or anypart of the Senior Loan. Notice of acceptance of this Subordination Agreement is hereby waived andthis Subordination Agreement shall be binding upon the Junior Lender, its legal representatives,successors, and assigns, as the case may be, it being understood and agreed, however, that, unlessotherwise agreed in writing by Senior Lender, no assignment of the Subordinated Documents, or anypart thereof, shall be made without the prior written consent of the Senior Lender.

6. Creditor's Rights. Junior Lender agrees not to commence or join with any othercreditor of Borrower in commencing any bankruptcy, reorganization, or insolvency proceedingsagainst the Borrower without the prior written consent of Senior Lender.

7. Attorneys' Fees and Costs. If any party to this Subordination Agreement brings anaction to interpret or enforce its rights under this Subordination Agreement, the prevailing party willbe entitled to recover its costs and reasonable attorneys' fees as awarded in the action.

8. Governing Law. This Subordination Agreement is governed by the laws of the Stateof California, without regard to the choice of law rules of that state.

9. Counterparts. This Subordination Agreement may be executed in counterparts, andall counterparts constitute but one and the same document.

4DOCSOC/1377379v3/024012-0016

NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICHALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAINA LOAN, A PORTION OF WHICH MAYBE EXPENDED FOR PURPOSES OTHER THANIMPROVEMENT OF THE PROPERTY.

"JUNIOR LENDER"

CALIFORNIA BANK & TRUST, N.A.,a national banking association

By: _Name:._--------------Title:._---------------

Address for Notices:

California Bank & Trust, N.A.115 Via Pico PlazaSan Clemente, CA 92672Attn: Elsa Monte

S-1DOCSOC/1377379v3/0240 12-0016

DOCSOC/1377379v3/024012-0016

"GROUND LESSOR AND SENIOR LENDER"

LOS BANOS REDEVELOPMENT AGENCY,a public body corporate and politic

By: _Name: _Title: _

Address for Notices to Ground Lessor and SeniorLender:

Los Banos Redevelopment Agency520 J. StreetLos Banos, California 93635Attn: Redevelopment Manager

S-2

DOCSOC/1377379v3/024012-0016

..

"BORROWER"

WARD ROAD APARTMENTS, II, L.P.,a California limited partnership

By Corporation for Better Housing,a California non-profit public benefitcorporation,its General Partner

By: _David Sclafani,Senior Vice President

Address for Notices to Borrower:

Ward Road Apartments, II, L.P.c/o Corporation for Better Housing15303 Ventura Boulevard, Suite 1100Sherman Oaks, California 91403Attn: Mr. David Sclafani

S-3

EXHIBIT A

Legal Description of the Site

THAT CERTAIN REAL PROPERTY LOCATED IN THE CITY OF LOS BANOS, COUNTY OFMERCED, STATE OF CALIFORNIA, DESCRlBED AS FOLLOWS:

PARCEL A:

PARCEL 3 OF PARCEL MAP NO. 2007-11, ACCORDING TO THE MAP THEREOFRECORDED DECEMBER 14,2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

EXCEPTING THEREFROM ALL MINERALS AND MINERAL RlGHTS, INTEREST ANDROYALTIES, INCLUDING WITHOUT LIMITATION, ALL OIL, GAS AND OTHERHYDROCARBON SUBSTANCES, AS WELL AS METALLIC OR OTHER SOLID MINERALSOF WHATEVER KIND OR CHARACTER, WHETHER NOW KNOWN OR HEREAFTERDISCOVERED, IN AND UNDER THE LAND BELOW A DEPTH OF 500 FEET UNDER THESURFACE WITHOUT REGARD TO THE MANNER IN WHICH THE SAME MAYBEPRODUCED OR EXTRACTED FROM THE LAND, BUT WITHOUT ANY RlGHT TO ENTERUPON OR THROUGH THE SURFACE DOWN TO 500 FEET BELOW THE SURFACE TOEXTRACT, DRlLL, EXPLORE OR OTHERWISE EXPLOIT SUCH MINERALS OR MINERALRlGHTS AND WITHOUT ANY RlGHT TO REMOVE OR IMPAIR LATERAL OR SUBJACENTSUPPORT.

PARCELB:

A NON-EXCLUSIVE EASEMENT FOR PEDESTRlAN AND VEHICULAR CIRCULATION,ACCESS, INGRESS AND EGRESS, PUBLIC UTILITIES AND INCIDENTAL PURPOSES, ON,OVER AND THROUGH THAT PORTION OF PARCELS 1 AND 2 DESIGNATED AS "ACCESSEASEMENT FOR THE BENEFIT OF PARCELS 1,2, AND 3" ON PARCEL MAP NO. 2007-11RECORDED DECEMBER 14,2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

APN: 083-100-083

EXHIBIt ADOCSOC/1377379v3/024012-0016

EXHIBITB

Legal Description of the Property

That interest of Borrower under a Ground Lease dated as of December 1,2009 (the "Ground Lease")by and between the Ground Lessor (as ground lessor) and the Borrower (as ground lessee) as to thatcertain real property located in the City of Los Banos, County of Merced, State of Califomia,described as follows:

EXHIBITBDOCSOC/1377379v3/024012-0016

ACKNOWLEDGMENT

State of California

County of _

On , 2009 before me, , Notary Public inand for said State and County, personally appearedpersonally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/theyexecuted the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) onthe instrument the person(s), or the entity upon behalf of which the person(s) acted, executed theinstrument.

WITNESS my hand and official seal.

Signature (Seal)

DOCSOC/1377379v3/024012-0016

State of California

County of _

On , 2009 before me, , Notary Public inand for said State and County, personally appearedpersonally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/theyexecuted the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) onthe instrument the person(s), or the entity upon behalf of which the person(s) acted, executed theinstrument.


Signature (Seal)

DOCSOC/1377379v3/024012-0016

WHEN RECORDED MAIL TO:

DLA Piper US LLP550 South Hope StreetSuite 2300Los Angeles, California 90071Attention: Mark L. Nelson, Esq.

(SPACE ABOVE FOR RECORDER'S USE)

SUBORDINATION AGREEMENT(Los Banos Redevelopment Agency)

NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE ESTATES IN THEPROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OFSOME OTHER OR LATER SECURITY INSTRUMENT.

THIS SUBORDINATION AGREEMENT ("Agreement") is made as ofDecember_, 2009, by and among WARD ROAD APARTMENTS, II, L.P., a Californialimited partnership ("Developer"), LOS BANOS REDEVELOPMENT AGENCY, a public bodycorporate and politic, as Ground Lessor (in such capacity, "Ground Lessor"), LOS BANOSREDEVELOPMENT AGENCY, a public body corporate and politic, as junior lender (in suchcapacity, "Junior Lienholder"), and CITIBANK, N.A., a national banking association ("SeniorLienholder").

RECITALS

A. Ground Lessor owns a fee estate in that certain real estate moreparticularly described on Exhibit "A" ("Real Property"), and Borrower owns (i) a leaseholdestate in the Real Property; (ii) and a fee estate in (a) all improvements ("Improvements") now orhereafter located on such Real Property; and (b) that certain personal property more particularlydescribed in the Senior Loan Documents (the "Personal Property"; together with the RealProperty and the Improvements, the "Property").

B. The Ground Lessor has previously entered into that certain Dispositionand Development/Affordable Housing Agreement dated as of September 19, 2007, which wassubsequently amended by that certain First Amendment to Disposition andDevelopment/Affordable Housing Agreement dated as of February 4, 2009, and that certainSecond Amendment to Disposition and Development!Affordable Housing Agreement dated as ofDecember _,2009 (as amended, the "DDA"). In connection with the DDA, the GroundLessor has prepared an amended regulatory agreement, substantially in the form of AttachmentNo. 11 to the DDA (but including certain amendments mutually acceptable to the Developer, theGround Lessor and Senior Lienholder; as so amended, the "Amended Regulatory Agreement").

C. Each of the documents listed on Exhibit "B" together with all otherdocuments and materials entered into with Junior Lienholder with respect to the Property shall bereferred to collectively as the "Junior Obligation Documents".

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D. As used herein, the term "Junior Obligations" means any and allindebtedness, claims, debts, liabilities or other obligations from Developer to Junior Lienholderunder the Junior Obligation Documents, together with all costs and expenses, includingattorneys' fees, of collection thereof, whether the same accrues or is incurred before or after thecommencement of any bankruptcy case by or against Developer.

E. Pursuant to that certain Construction Loan Agreement (the "Senior LoanAgreement") dated as of December _,2009, by and between Developer and SeniorLienholder, Senior Lienholder will be making a loan (the "Senior Loan") to Developer in theamount ofTen Million Seven Hundred Thousand and No/lOOth Dollars ($10,700,000) to financea portion of the costs of constructing an affordable housing apartment project (the "Project") onthe Property. Developer's obligations to Senior Lienholder under the Senior Loan Agreementare secured by, among other things, that certain Multifamily Deed of Trust, Assignment of Rents,Security Agreement and Fixture Filing, dated as of even date herewith and being recorded in theOfficial Records of the County of Merced ("Official Records") substantially concurrentlyherewith, made by Developer for the benefit of Senior Lienholder ("Senior Deed of Trust"). TheSenior Deed of Trust, the Senior Loan Agreement, all other "Loan Documents" described in theSenior Loan Agreement are hereinafter collectively referred to as the "Senior Loan Documents".

F. As used herein, the term "Senior Lienholder Indebtedness" means any andall indebtedness, claims, debts, liabilities or other obligations from Developer to SeniorLienholder under the Senior Loan Documents, together with all interest accruing thereon and allcosts and expenses, including attorneys' fees, of collection thereof, whether the same accrues oris incurred before or after the commencement of any bankruptcy case by or against Developer.

G. Pursuant to the Senior Deed of Trust and the other Senior LoanDocuments, Developer is not entitled to further encumber the Property without the prior writtenconsent of Senior Lienholder, which consent may be withheld in Senior Lienholder's solediscretion.

H. It is a condition precedent to Senior Lienholder to entering into the SeniorLoan Documents and permitting the recordation of any of the Junior Obligation Documents that(l) the Senior Deed of Trust and the other Senior Loan Documents be and remain at all times alien or charge upon the Property, prior and superior to the liens or charges ofthe JuniorObligation Documents, and (2) Junior Lienholder will specifically subordinate the liens orcharges of the Junior Obligation Documents to the lien or charge of the Senior Deed of Trust andthe other Senior Loan Documents.

1. Junior Lienholder is willing that the Senior Deed of Trust shall constitute alien or charge upon the Property which is prior and superior to the liens or charges ofthe JuniorObligation Documents subject to the terms and conditions of this Agreement; provided that theAmended Regulatory Agreement shall be prior and senior to the Senior Loan Documents and theobligations represented thereby. The parties hereto enter into this Agreement for the purposesset forth in these Recitals.

J. Capitalized terms used herein and not otherwise defined shall have themeanings set forth for them in the Senior LoanAgreement.

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..

AGREEMENT

NOW, THEREFORE, in consideration of the mutual benefits accruing to theparties hereto and other valuable consideration, the receipt and sufficiency of whichconsideration is hereby acknowledged, and in order to induce Senior Lienholder to make the"Loan" described in the Loan Agreement, it is hereby declared, understood, and agreed asfollows:

1. Subordination. The Senior Deed of Trust in favor of Senior Lienholder, and allamendments, modifications, extensions and renewals thereof, shall unconditionally be andremain at all times a lien or charge on the Property prior and superior to the lien or charge of theJunior Obligation Documents. Junior Lienholder intentionally and unconditionally waives,relinquishes and subordinates the lien or charge of the Junior Obligation Documents in favor ofthe lien or charge upon said land of the Senior Deed of Trust in favor of Senior Lienholder, andunderstand that in reliance upon and in consideration of this waiver, relinquishment andsubordination, specific loans and advances are being and will be made and, as part and parcelthereof, specific monetary and other obligations are being and will be entered into which wouldnot be made or entered into but for said reliance upon this waiver, relinquishment andsubordination. Notwithstanding the foregoing, the Senior Deed of Trust and the Senior LoanDocuments shall be junior and subject to the Amended Regulatory Agreement.

2. Only Agreement Regarding Subordination. This Agreement shall be the wholeand only agreement with regard to the subordination of the lien or charge of the JuniorObligation Documents to the lien or charge of the Senior Deed of Trust and shall supersede andcancel, but only insofar as would affect the priority between said deeds of trust and saidcovenants, conditions and restrictions, any prior agreements as to such subordination, including,but not limited to, those provisions, if any, contained in the Junior Obligation Documents whichprovide for the subordination of the lien or charge thereof to another deed or deeds of trust or toanother mortgage or mortgages.

3. Loan Disbursements. In making disbursements pursuant to any of the SeniorLoan Documents, Senior Lienholder is under no obligation or duty to, nor has Senior Lienholderrepresented that it will, see to the application of such proceeds by the person or persons to whomSenior Lienholder disburses such proceeds, and any application or use of such proceeds forpurposes other than those provided for in such Senior Loan Document(s) shall not defeat thesubordination herein made in whole or in part.

4. Consent and Approval. Junior Lienholder has received the Senior LoanDocuments and consent to the subordination of the Junior Obligation Documents thereto. Nodecision by Junior Lienholder to review or not review the Senior Loan Documents, including butnot limited to the disbursement provisions contained therein, shall impair or otherwise limit theenforceability of this Subordination Agreement.

5. Other Agreements. Junior Lienholder and Developer declare, agree, andacknowledge that:

-3-WEST121835840.2

5.1 Subordination ofIndebtedness. Any and all Junior Obligations are herebysubordinated and subject to any and all Senior Lienholder Indebtedness, as set forth herein.

5.2 Permitted Payments. Developer may make payments under the JuniorObligation Documents, if required, as long as all payments under the Senior Deed of Trust andthe other Senior Loan Documents are current and not delinquent or in arrears, and no default orEvent of Default has occurred under the Senior Loan Documents ("Permitted Payments").

5.3 Payment Subordination. Except for any Permitted Payments, (a) all of theSenior Lienholder Indebtedness now or hereafter existing shall be first paid in full by Developerbefore any payment shall be made by Developer on the Junior Obligations, and (b) this priorityof payment shall apply at all times until all of the Senior Lienholder Indebtedness has beenrepaid in full. In the event of any assignment by Developer for the benefit ofDeveloper'screditors, or any bankruptcy proceedings instituted by or against Developer, or the appointmentof any receiver for Developer or Developer's business or assets, or of any dissolution or otherwinding up of the affairs of Developer or of Developer's business, and in all such casesrespectively, Developer's officers and any assignee, trustee in bankruptcy, receiver and otherperson or persons in charge are hereby directed to pay to Senior Lienholder the full amount ofthe Senior Lienholder Indebtedness before making any payments to Junior Lienholder due underthe Junior Obligations.

5.4 Return ofProhibited Payments. Except as otherwise expressly agreed toherein, if Junior Lienholder shall receive any payments or other rights in any property ofDeveloper in connection with the Junior Obligations in violation of this Agreement, suchpayment or property shall immediately be delivered and transferred to Senior Lienholder afternotice to Junior Lienholder.

5.5 Repayment of Senior Lienholder Indebtedness. This Agreement shallremain in full force and effect until all Senior Lienholder Indebtedness is fully repaid inaccordance with its terms and all of the terms of this Agreement have been complied with.

6. Senior Lienholder Agreements.

6.1 Senior Lienholder agrees that any foreclosure sale shall not extinguish oramend the Amended Regulatory Agreement. Senior Lienholder further agrees that it shall notcomplete a foreclosure sale of the Property or record a deed-in-lieu of foreclosure with respect tothe Property (each, a "Foreclosure Remedy") unless Junior Lienholder has first been given sixty(60) days written notice of the Event(s) of Default giving Senior Lienholder the right to completesuch Foreclosure Remedy, and unless Junior Lienholder has failed, within such sixty (60) dayperiod, to cure such Event(s) of Default; provided, however, that Senior Lienholder shall beentitled during such sixty (60) day period to continue to pursue all of its rights and remediesunder the Senior Loan Documents, including, but not limited to, acceleration of the Senior Loan(subject to any de-acceleration provisions specifically set forth in the Senior Loan Documents),commencement and pursuit of a judicial or non-judicial foreclosure (but not completion of theforeclosure sale), appointment of a receiver, enforcement of any guaranty (subject to any noticeand cure provisions contained therein), and/or enforcement of any other Senior Loan Document.In the event Senior Lienholder has accelerated the Senior Loan and Junior Lienholder cures all

-4-WEST121835840.2

Events of Default giving rise to such acceleration within the sixty (60) day cure period describedabove, such cure shall have the effect of de accelerating the Senior Loan; provided, however, thatsuch de acceleration shall not waive or limit any of Senior Lienholder's rights to accelerate theSenior Loan or exercise any other remedies under the Senior Loan Documents as to any future orcontinuing Events of Default. It is the express intent of the parties hereunder that SeniorLienholder shall have the right to pursue all rights and remedies except completion of aForeclosure Remedy without liability to Junior Lienholder for failure to provide timely notice toJunior Lienholder required hereunder, and that Senior Lienholder's liability hereunder shall beexpressly limited to actual and consequential damages to Junior Lienholder directly caused bySenior Lienholder's completion of a Foreclosure Remedy without Junior Lienholder receivingthe notice and opportunity to cure described above. Senior Lienholder shall give JuniorLienholder notice at the address set forth below or such other address as Junior Lienholder mayinstruct Senior Lienholder in writing from time to time:

Los Banos Redevelopment Agency520 J StreetLos Banos, California 93631Attention: Executive Director

6.2 Junior Lienholder shall also have the right, during the sixty (60) day cureperiod described in Section 6.1, above, to elect, by delivering irrevocable written notice("Election Notice") of its election to Senior Lienholder, to purchase the Loan from SeniorLienholder for a purchase price ("Senior Loan Purchase Price") equal to the sum of (i) theoutstanding principal balance of the Senior Loan on the Closing Date (as defined below), plus(ii) all accrued and unpaid interest on the Senior Loan through and including the Closing Date,plus (iii) all other accrued and unpaid fees, costs and expenses payable by Borrower under theSenior Loan Documents, plus (iv) all costs and expenses incurred by Senior Lienholder inconnection with the sale ofthe Senior Loan to Junior Lienholder. The sale of the Senior Loan bySenior Lienholder to Junior Lienholder under this Section shall be made (a) without recourse,representation or warranty by Senior Lienholder of any kind, express or implied, and (b) close onthe date ("Closing Date") which is fifteen (15) days after Junior Lienholder gives the ElectionNotice to Senior Lienholder. On the Closing Date, Junior Lienholder shall pay to SeniorLienholder, in immediately available funds and lawful monies of the United States of America,the Senior Loan Purchase Price. Junior Lienholder shall give Senior Lienholder the noticerequired under this Section 6.2 in accordance with the Senior Loan Agreement.

7. Bankruptcy Provisions. To the extent any payment under any Senior LoanDocument (whether by or on behalf of Developer, as proceeds of security or enforcement of anyright of set-off, or otherwise) is declared to be fraudulent or preferential, set aside or required tobe paid to a trustee, receiver or other similar party under the Bankruptcy Code or any federal orstate bankruptcy, insolvency, receivership or similar law, then if such payment is recovered by,or paid over to, such trustee, receiver or other similar party, the Senior Indebtedness or partthereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as ifsuch payment had not occurred.

8. Casualty Insurance and Condemnation Proceeds. In the event Senior Lienholdershall release, for the purposes of restoration of all or any part of the improvements, its right, title

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and interest in and to the proceeds under policies of insurance thereon, andlor its right, title andinterest in and to any awards, or its right, title and interest in and to other compensation made forany damages, losses or compensation for other rights by reason of a taking in eminent domain,Junior Lienholder shall simultaneously release (and hereby agrees that it shall be irrevocably andunconditionally deemed to have agreed to release) for such purpose all of Junior Lienholder'sright, title and interest, if any, in and to all such insurance proceeds, awards or compensation.Junior Lienholder agrees that the balance of such proceeds remaining after such restoration, orall of such proceeds in the event Senior Lienholder elects, in accordance with California law, notto release any such proceeds for any such restoration, shall be applied to the payment of amountsdue under the Senior Loan Documents until all such amounts have been paid in full, prior tobeing applied to the payment of any amounts due under the Junior Obligation Documents. IfSenior Lienholder holds such proceeds, awards or compensation and/or monitors thedisbursement thereof, Junior Lienholder agrees that Senior Lienholder may also elect, in its soleand absolute discretion, to hold and monitor the disbursement of such proceeds, awards andcompensation to which Junior Lienholder is or may be entitled. Nothing contained in thisAgreement shall be deemed to require Senior Lienholder, in any way whatsoever, to act for or onbehalf of Junior Lienholder or to hold or monitor any proceeds, awards or compensation in trustfor or on behalf of Junior Lienholder, and all or any of such sums so held or monitored may becommingled with any funds of Senior Lienholder.

9. Effect of Other Agreements. The relationship between Developer and SeniorLienholder under the Senior Loan Documents is, and shall at all times remain, solely that ofborrower and lender. Based thereon, Junior Lienholder acknowledges and agrees that SeniorLienholder neither undertakes nor assumes any fiduciary responsibility or other responsibility orduty to Developer or Junior Lienholder to guarantee or assist in Developer's or JuniorLienholder's performance under any of the agreements between those parties and other thirdparties, including without limitation the Junior Obligation Documents.

10. Miscellaneous. This Agreement may be executed in multiple counterparts and thesignature page(s) and acknowledgment(s) assembled into one original document for recordation,and the validity hereof shall not be impaired by reason of such execution in multiplecounterparts. This Agreement is to be governed according to the laws of California. In the eventof action, suit, proceeding or arbitration to enforce any term of this Agreement, the prevailingparty shall be entitled to recover from the non-prevailing party, as determined by the court orarbitrator, all of the prevailing party's costs and expenses, including without limitation attorneys'fees and expert witness fees, incurred by the prevailing party in connection therewith. TheAgreement shall inure to the benefit of, and the binding upon, the parties hereto and therespective successors and assigns.

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..

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of- ----- --{he dateand year first above written.------------- - -------------- - -- -

NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICHMAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TOOBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHERPURPOSES THAN IMPROVEMENT OF THE PROPERTY.

Date: December _, 2009

"JUNIOR LIENHOLDER"


By:Name: --------------Title:

S-lWEST121835840.2

WEST121835840.2

"GROUND LESSOR"


By:Name:

-------------Title:

S-2

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"DEVELOPER"


By Corporation for Better Housing, a Californianon-profit public benefit corporation,its General Partner

By:David Sclafani,Senior Vice President

S-3

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"SENIOR LIENHOLDER"

CITIBANK, N.A.,a national banking association

By:Alice Carr,Vice President

S-4

State of CaliforniaCounty of _

On -.:' 2009 before me _(here insert name and title of the officer)

personally appeared ____________________________________, whoproved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed tothe within instrument and acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or theentity upon behalf of which the person(s) acted, executed the instrument.

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


Signature _

(Seal)

ACKNOWLEDGMENT


(here insert name and title of the officer)On , 2009 before me, _

personallyappeared. ---,----____________________________________, whoproved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed tothe within instrument and acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or theentity upon behalf of which the person(s) acted, executed the instrument.

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


Signature _

(Seal)

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ACKNOWLEDGMENT------ -- - - - ----------- - --


On ,2009 before me _(here insert name and title of the officer)

personally appeared ____________________________________, whoproved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed tothe within instrument and acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or theentity upon behalf of which the person(s) acted, executed the instrument.

I certifY under PENALTY OF PERJURY under the laws of the State of California that the foregoingparagraph is true and correct.


Signature _

(Seal)

ACKNOWLEDGMENT


On ,2009 before me, _(here insert name and title of the officer)

personallyappeared. ____________________________________, whoproved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed tothe within instrument and acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or theentity upon behalf of which the person(s) acted, executed the instrument.

I certifY under PENALTY OF PERJURY under the laws of the State of California that the foregoingparagraph is true and correct.


Signature _

(Seal)

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EXHIBIT "A"

Legal Description.

REAL PROPERTY IN THE CITY OF LOS BANOS, COUNTY OF MERCED, STATE OFCALIFORNIA, DESCRIBED AS FOLLOWS:

Exhibit "A"WEST121835840.2

EXHIBIT "B"- -

Junior Obligation Documents

1. Promissory Note dated as of December _, 2009, made by Developer to the order ofJunior Lienholder, in the face principal amount of $1 ,300,000;

2. Deed of Trust with Assignment of Rents (Short Form), dated as of December _, 2009,by Developer for the benefit of Junior Lienholder, and recorded in the Official Recordssubstantially concurrently herewith;

3. Regulatory Agreement by and between Developer, Junior Lienholder and the City of LosBanos, and recorded in the Official Records substantially concurrently herewith; and

4. Disposition and Development/Affordable Housing Agreement dated as of September 19,2007 by and between Developer and Junior Lienholder, as amended that that certain FirstAmendment to Disposition and Development/Affordable Housing Agreement dated as ofFebruary 4, 2009 by and between Developer and Junior Lienholder, and as furtheramended by that certain Second Amendment to Disposition and Development/AffordableHousing Agreement dated substantially concurrently herewith.

Exhibit "B"WEST\21835840.2

SECOND AMENDMENT TO DISPOSITION AND DEVELOPMENT/AFFORDABLEHOUSING AGREEMENT

by and between the

LOS BANOS REDEVELOPMENT AGENCY

and

WARD ROAD APARTMENTS, II, L.P., a California limited partnership

DOCSOC/1376366v7/024012-0016

SECOND AMENDMENT TO DISPOSITION ANDDEVELOPMENT/AFFORDABLE HOUSING AGREEMENT

This SECOND AMENDMENT TO DISPOSITION ANDDEVELOPMENT/AFFORDABLE HOUSING AGREEMENT (the "Second Amendment"),dated, for identification purposes only, as of December 1, 2009 (the "Second Amendment Date"), isentered into by and between the LOS BANOS REDEVELOPMENT AGENCY, a public body,corporate and politic ("Agency") and WARD ROAD APARTMENTS, II, L.P., a California limitedpartnership ("Developer").

A. Agency is a California redevelopment agency acting under the California CommunityRedevelopment Law, Part 1 of Division 24 of the Health and Safety Code (the "RedevelopmentLaw").

B. The Agency and Developer entered into an agreement, entitled Disposition andDevelopment/Affordable Housing Agreement, dated as of September 19, 2007 ("the OriginalAgreement"), which provided for Developer (referred to therein as "Developer") to acquire andredevelop, for affordable rental housing purposes, certain real property described therein as the "Site"(capitalized terms not defined herein shall have the meanings set forth therefor in the OriginalAgreement). In implementation of the Original Agreement, the Developer obtained a preliminaryreservation for the Tax Credits. Developer has received certain requests by the tax credit investorthat various provisions of the Original Agreement be amended.

C. The Developer subsequently proposed that certain dates for performance as set forthin the Original Agreement be amended; in connection therewith, the Agency and the Developerentered into a First Amendment to Disposition and Development/Affordable Housing Agreementdated as of February 4, 2009 (the "First Amendment" and, together with the Original Agreement, the"Existing Agreement"). All terms used herein which are not otherwise defined shall have themeaning set forth in the Original Agreement as amended by the First Amendment.

D. In the course of finalizing arrangements for financing of the development of the Siteunder the Existing Agreement, the Developer has receipt comments from tax credit investorsrequesting that certain provisions of the Existing Agreement be amplified or amended; in connectiontherewith, the Developer has proposed that the Developer and the Agency approve this SecondAmendment. This Second Amendment, together with the Existing Agreement (as amended by thisSecond Amendment) shall be referred to as the "Amended Agreement." Except as amended by thisSecond Amendment, the Existing Agreement shall remain in full force and effect.

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, andconditions herein contained, the parties hereto agree as follows:

1. Capitalized terms shall have the meanings established under the Existing Agreementexcept to the extent expressly defined herein (in which case those capitalized terms shall have themeanings established therefor under this Second Amendment). Agency is a Californiaredevelopment agency acting under the California Community Redevelopment Law, Part 1 ofDivision 24 of the Health and Safety Code (the "Redevelopment Law").

DOCSOCI1376366v71024012-0016

2. Recital B of the Original Agreement is revised to read as follows: "TheR.edevelopment Plan tor the Los Banos-Redevelopment Project, sometimes referre-d to as the Project(herein, the "Redevelopment Project") was adopted by Ordinance No. 900 by the City Council of theCity of Los Banos and has been subsequently amended (as amended, the "Redevelopment Plan").The redevelopment project area for the Redevelopment Plan as so amended constitutes the "ProjectArea.""

3. In Section 1 of the Existing Agreement, the defined term of "Applicable InterestRate" is revised to read as follows: "Applicable Interest Rate" means the following rates: (a) as toamounts paid when due, five percent (5%) per annum, compounded annually and (b) as to amountsnot paid when due, the lesser of (i) seven percent (7%) per annum, compounded annually, and (ii) themaximum rate permitted by applicable law.

4. In Section 1, the defined term of "Affiliated Person" is deleted and replaced with thefollowing: "Affiliated Person" means, when used in reference to a specific person, any person thatdirectly or indirectly controls or is controlled by or under common control with the specified person,any person that is an officer or director of, a trustee of, or a general partner, managing member oroperator in, the specified person or of which the specified person is an officer, director, trustee,general partner or managing member, or any person that directly or indirectly is the beneficial owneroften percent (l0%) or more of any class of the outstanding voting securities of the specified person.

5. In Section 1 of the Existing Agreement, the defined term of "Asset Management Fee"is deleted and replaced with the following: "Asset Management Fee" means an asset managementfee and/or partnership management fee in the amount of Fifteen Thousand Dollars ($15,000) perYear (of which the first Ten Thousand Dollars [$10,000] shall be an allowable Operating Expensehereunder and of which the remaining Five Thousand Dollars [$5,000] will be paid by Lessee afterthe payment to Agency of the Agency's share of Residual Receipts for the corresponding Year).

6. In Section 1 of the Existing Agreement, the following defined terms are added:

"Agency Deed of Trust" or "Agency Capital Deed of Trust" means a deed of trust whichsecures payment under the Agency Note. The Agency Deed of Trust shall be substantially in theform of Exhibit "C" to the Second Amendment.

"Agency Note" or "Agency Capital Note" means a promissory note in the form ofExhibit "A" to the Second Amendment.

7. In Section 1, the definition of "Bank Deed of Trust" is revised to read as follows:"Bank Deed of Trust" means a deed of trust among an Approved Construction and/or PermanentLender, as beneficiary and the Developer and Agency as Trustor and First American Title Companyor another mutually acceptable title insurer as trustee, in connection with the loan provided by anApproved Construction and/or Permanent Lender to Developer.

8. In Section 1, the definition of "Date of Agreement" is revised to read as follows:"Date of Agreement" means September 19, 2007 (which is the date the Original Agreement wasapproved by the Agency).

9. In Section 1, the definition of "Development" is revised to read as follows:"Development" or "Project" means the new apartment complex and associated improvements as

2DOCSOC/1376366v7/024012-0016

required bythis Agreement to be: (i) constructed by the Developer_upon the Site, with related offsiteimprovements, as more particularly described in the Scope of Development, and (ii) operated as anaffordable housing complex without restriction on the basis of age in conformity with the AgencyLease, the Agency Developer CC&Rs and the Tax Credit Regulatory Agreement.

10. In Section 1, the definition of "Gross Revenues" is revised to read as follows:"Gross Revenues" means the total rental income and all other revenues or income received by theLessee or its successors or assigns in connection with the Development, including without limitationHousing Rent, laundry charges, payments in connection with Section 8 certificates, if any (includingpayments under such certificates that are in excess of the restricted rents provided for herein), cableincome, and interest earnings, but, except for any interest earned thereon, does not include: (i) theproceeds of the sale of Tax Credits to finance the Development; (ii) loan or refinancing proceeds(provided the refinancing is permitted by and is accomplished in accordance with the Agency Leaseand this Agreement); (iii) insurance proceeds applied to reconstruct or repair the Improvements; or(iv) proceeds from AHP.

11. In Section 1, the definition of "Leasehold Transfer" is revised to read as follows:"Leasehold Transfer" means the transfer of a leasehold interest to the Developer by the terms of theAgency Lease upon commencement of the Term of the Agency Lease.

12. In Section 1, the definition of "Maturity Date" is revised to read as follows:"Maturity Date" means the fiftieth (50th) anniversary of the Date of Agreement.

13. In Section 1, the definition of "Moderate Income Households" is revised to read asfollows: "Moderate Income Households" means households earning greater than eighty percent(80%) of Median Income but not greater than one hundred twenty percent (120%) of Median Incomepursuant to Health and Safety Code Section 50093.

14. In Section 1, the amount of the Operating Reserve is modified to be One HundredThirty-Four Thousand One Hundred Fifty-Eight Dollars ($134,158).

15. In Section 1, the following defined term is added: "Notice of AffordabilityRestrictions" means an instrument substantially in the form of Exhibit "D" to the SecondAmendment.

16. In Section 1, the definition of "Principals" is revised to read as follows: "Principals"means David Sclafani.

17. In Section 1, the definition of "Required Covenant Period" is revised to read asfollows: "Required Covenant Period" means a period of approximately seventy-five (75) years, asmore particularly set forth in the Agency Developer CC&Rs.

18. In Section 1, the definition of "Residual Receipts Portion" is revised to read asfollows: "Residual Receipts Portion" means an amount equal to fifty percent (50%) of ResidualReceipts for a corresponding Lease Year; provided that no such amount shall become payable untilall costs of the initial development of the Development (for which debt was incurred by theDeveloper) as incurred prior to the issuance of a certificate of occupancy by the City have beenrecovered, including for this purpose the deferred portion of the Developer Fee, have been recoveredin full.

3DOCSOC/1376366v7/024012-0016

19._ In Section 1.6.2, subsection (f) add thefollowing in lines 2, 4 and 9 after "the AgencyDeveloper CC&Rs": the Notice of Affordability Restrictions.

20. In Section 2.2, line 7, after "Agency Developer CC&Rs," insert: the Notice ofAffordability Restrictions.

21. In Section 2.2.6, in romanette (vi), replace the words "such other instruments" with:the Notice of Affordability Restrictions and such other instruments.

22. In Section 2.3, subsection (c), after "Agency Developer CC&Rs," insert: the Noticeof Affordability Restrictions.

23. In Section 2.4, following the last sentence, add the following: "In the event theAgency obtains a title insurance policy insuring its interest under the Agency Deed of Trust, thepremium for such lender's policy of title insurance shall be borne by the Agency. The condition oftitle as to such Agency Deed of Trust shall conform to Section 2.3 hereof excepting that the Deed ofTrust shall be subject to the lien securing a loan in the original principal amount of Ten MillionSeven Hundred Eighty Thousand Eight Hundred Dollars ($10,780,800) in favor ofCiticorp, N.A., asbeneficiary (the "Senior Loan").

24. In Section 3.1, add a subsection (i) as follows: (i) Title Insurance. The TitleCompany shall be prepared to issue an owner's title policy for the Developer (as to the leaseholdinterest under the Agency Lease) and a lender's policy of the insurance as to Agency's beneficialinterest under the Agency Deed of Trust in conformity with this Agreement.

25. Section 4.4.1 is added to the Existing Agreement, to read as follows: "4.4.1 AgencyLoan. The Agency will disburse to City, on behalf of the Developer, the sum of One Million ThreeHundred Thousand Dollars ($1,300,000) (the "Agency Loan Amount") to defray a portion of the feeschargeable by City in connection with the Development. The Agency will disburse the Agency LoanAmount to the City within ten (10) working days after the Agency approves the Second Amendmentbut not later than the funding of the Senior Loan.

"The Agency Loan will be evidenced by the Agency Note, payment of which shall besecured by the Agency Deed of Trust.

"The Agency Deed of Trust is to be recorded as to the leasehold interest of the Developerunder the Agency Lease and shall be subject to those matters listed in subparagraphs (a), (b), (c) and(d) of Section 2.3, and to a deed of trust securing the Senior Loan. The Senior Loan shall be seniorto the Agency Deed ofTrust but subject to the Agency Developer CC&Rs."

26. In Section 4.7, at the end of the text set forth in the Original Agreement, thefollowing is added: ''Notwithstanding anything contained herein to the contrary, the Developer shallnot indemnify the Agency for any claims arising from Agency's gross and active negligence or theAgency's willful misconduct so long as the loss alleged is not caused or contributed to by theDeveloper."

27. In Section 5.3.2, second paragraph, line 6, the date of May 15, 2009 is revised to thefollowing: May 15,2011.

4DOCSOC/1376366v7/024012-0016

28. Section 5.2.2 is revised to read as follows: "The Required Affordable Units shall bemaintained as rental units available at and rented to Very Low Income Households and LowerIncome Households throughout the Required Covenant Period, as more particularly set forth in theAgency Developer CC&Rs."

29. In Section 7.11, the first paragraph is revised to read as follows: "Except asotherwise set forth in Section 6.3 hereof, Section 7.11, and all subsections of this Section 7.11, shallapply to transfers prior to the Leasehold Transfer. Any transfers occurring or proposed after theLeasehold Transfer are subject to the provisions therefor of the Agency Developer CC&Rs. In theevent of conflict between the provisions of this Section 7.11 and the Agency Sublease (concerningtransfers of interest), the Agency Leasehold Transfer shall control."

30. In Section 7.11.1, the text is revised to read as follows: "The qualifications andidentity of the Developer are of particular concern to Agency. It is because of those qualificationsand identity that Agency has entered into this Agreement with the Developer. For the periodcommencing upon the date of this Agreement and until the end of the Required Covenant Period,except as otherwise set forth in Section 6.3 hereof, no voluntary or involuntary successor in interestof the Developer shall acquire any rights or powers under this Agreement, nor shall the Developermake any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease ofthe whole or any part of the Site or the Development thereon (excepting the rental Lease of Units toOccupants) without prior written approval ofAgency, except as expressly set forth herein."

31. In Section 7.11.2, the last paragraph is revised to read as follows: "In the event of aproposed assignment by Developer under subparagraphs 7.11.2 through 7.11.3, inclusive, Developeragrees that at least thirty (30) days prior to such assignment it shall give written notice to Agencyincluding a request for approval of such assignment and satisfactory evidence that the assignee hasassumed jointly with Developer the Obligations of this Agreement. In addition, no consent of theAgency shall be required in connection with the transfer of Developer's leasehold interest in the Sitethat occurs by foreclosure or deed in lieu of foreclosure of any Permitted Senior Lien to respectiveholder thereof or to their nominees or assignees exclusive of the Developer and CBH. Theprovisions of this Section 7.11.2 shall be limited by those transfers permitted in Section 6.3."

32. Section 8.2 is revised by adding, after the provision for notice to Developer (with theaddress therefor as set forth), the following: "(with a copy to): Alliant Asset ManagementCompany, LLC, 21600 Oxnard Street, Suite 1200, Woodland Hills, CA 91367, Attention ShawnHorwitz." (The Executive Director is authorized to insert a name upon receipt thereof from theDeveloper.)

33. That form of ground lease which appeared as Attachment No.6 to the OriginalAgreement is modified to conform to Exhibit B hereto (as modified, the "Agency Lease" or the"Lease").

34. That form of certificate of completion which appeared as Attachment No. 10 to theOriginal Agreement is modified to conform to Exhibit E hereto.

35. That form of Agency Developer CC&Rs which appeared as Attachment No. 11 to theOriginal Agreement is modified to conform to Exhibit F hereto.

5DOCSOC/1376366v7/024012-0016

..

36. In any instruments entered into implementing the Amended Agreement, theExecutive -Director rimy include reference to the Second Amendment (as well as the diiginalAgreement). The Executive Director may additionally update the legal description used ininstruments implementing the Amended Agreement to conform with such legal description as may beprovided or approved by the Title Company. The Executive Director will, in addition, incorporate areference to the corrected Required Covenant Period (of75 years) in the Agency Developer CC&Rs.

37. Developer reaffirms each and every representation and warranty as provided byDeveloper under the Original Agreement as to each of the Original Agreement, the First Amendmentand this Second Amendment. Each such representation and warranty by Developer shall be deemedto be an ongoing representation and warranty.

38. This Second Amendment is made for the purpose of setting forth rights andobligations of Developer and Agency, and no other person (except for the City) shall have any rightshereunder or by reason hereof.

39. The Original Agreement and the First Amendment, as modified hereby, shall remainin full force and effect.

40. This Second Amendment may be executed in counterparts.

41. None of the terms, covenants or conditions agreed upon in writing in the SecondAmendment, the Original Agreement or the First Amendment and other instruments between theparties to the Agency Lease with respect to obligations to be performed, kept or observed by Lesseeor Agency in respect to the Site or any part thereof, shall be deemed to be merged with the AgencyLease.

6DOCSOCI1376366v7/024012-0016

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to beexecuted as ofDecem.ber 1,2009. ......--

DEVELOPER:


By: Corporation for Better Housing, a Californianonprofit public benefit corporation, itsManaging General Partner

By: _David Sclafani

Its: Senior Vice President

AGENCY:

LOS BANOS REDEVELOPMENT AGENCY, apublic body, corporate and politic

By: _Stephen Rath, Executive Director

ATTEST:

Lucille MalloneeAgency Secretary

7DOCSOC/1376366v7/024012-0016

EXHIBIT"A"

AGENCY NOTE

PROMISSORY NOTE

December 1, 2009Los Banos, California

$1,300,000

FOR VALUE RECEIVED, the undersigned Ward Road Apartments, II, L.P., a CaliforniaLimited Partnership, ("Maker" or "Developer"), having its principal place of business at 15303Ventura Boulevard, Suite 1100, Sherman Oaks, California 91403, promises to pay to the order of theLOS BANOS REDEVELOPMENT AGENCY, a public body, corporate and politic ("Payee" or"Agency"), at 520 J Street, Los Banos, California 93635, or at such other place as the holder of thisNote from time to time may designate in writing, the principal sum of One Million Three HundredThousand Dollars ($1,300,000), as well as additional amounts described in Section 1 below, togetherwith interest on the unpaid principal amount of this Promissory Note ("Promissory Note") from timeto time outstanding at the "Applicable Interest Rate," as defined in that certain Disposition andDevelopment/Affordable Housing Agreement dated as of September 19, 2007 between the Makerand the Payee (the "Original Agreement") as amended by that certain First Amendment toDisposition and Development/Affordable Housing Agreement dated as of February 4,2009 betweenthe Maker and the Payee (the "First Amendment"), as amended by that certain Second Amendmentto Disposition and Development/Affordable Housing Agreement dated as of December 1, 2009between the Maker and the Payee (the "Second Amendment" and, together with the OriginalAgreement as amended by the First Amendment, the "Amended Agreement") (herein, the "InterestRate") in lawful money of the United States of America. This Promissory Note is being deliveredpursuant to the Amended Agreement. The loan evidenced by this Promissory Note shall be governedby such provisions of the Amended Agreement (including without limitation the attachments thereto)as shall be applicable. All capitalized terms used herein shall have the meanings set forth therefor inthe Amended Agreement. Interest shall accrue only on the amounts disbursed by the Agency underthe Amended Agreement and such additional amounts as may become payable under Section 1 ofthis Promissory Note.

1. Additional Amounts. The principal due under this Promissory Note shall beincreased by: (a) any "Reporting Amounts" (as defined in Section 6.6 of that certain ground lease byand between the Developer, as lessee, and the Agency, as lessor, dated as of December 1, 2009 (the"Agency Lease", as referenced in the Amended Agreement); (b) an amount equal to one hundredfifteen percent (115%) of the amounts paid by the Agency for insurance premiums or costs to repairand maintain the Development upon the failure by the "Lessee" (as defined in the Agency Lease) totimely and fully provide insurance at the times and for the amounts provided for in the AgencyLease; and (c) in the event an Audited Financial Statement shows an underpayment to the Agency offive percent (5%) or greater of the amount paid to the Agency for the corresponding Lease Year, theDeveloper shall pay to the Agency: (i) the Agency's costs (including accountant and consultant fees,attorneys' fees, and a reasonable estimation of the cost of staff time) incurred in connection with theAgency's audit of Lessee under Section 26.5 of the Agency Lease, and (ii) an amount equal totwenty-five percent (25%) of the shortfall.

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2. Payments of Principal and Interest. Payments hereunder shall be due and payable onthe seventy-fifth (75th) day following the last day of each "Lease Year" (as "Lease Year" is definedin the Agency Lease) is payable under said Agency Lease. This Promissory Note shall be payablefrom fifty percent (50%) of Residual Receipts. Payments to the Agency may, at the option of Payee,be accelerated and shall be due and payable hereunder in the event of the occurrence of any defaultunder the Amended Agreement, the Agency Deed of Trust, or the Agency Developer CC&R's.

Except in the event of a transfer of Developer's interest in the Site (or the Improvements)contrary to the provisions of the Amended Agreement (including without limitation the AgencyLease), the Maker's payments to Agency hereunder shall not be deemed in default hereunder so longas Maker makes payments to the Agency of fifty percent (50%) of Residual Receipts for thecorresponding Lease Year.

Notwithstanding anything to the contrary contained herein, to the extent not sooner paidhereunder, payment of all amounts accrued as of the maturity date which shall be the fiftieth (50th)anniversary of the Date of Agreement (herein, the "Maturity Date") shall be due and payable as ofthe Maturity Date.

3. Other Loan Documents. Repayment of this Promissory Note is secured by a deed oftrust (the "Deed of Trust") of this date executed by Maker for the benefit of Payee encumbering theproperty described in the Deed of Trust (the "Property").

4. Prepayment. Maker shall have the right to prepay amounts owing under thisPromissory Note at any time.

5. Due on Sale or Encumbrance. In the event of any Transfer (as defined below) of theProperty, or any portion thereof or interest therein, Payee shall have the absolute right at its option,without prior demand or notice, to declare all sums secured hereby immediately due and payable. Asused herein, the term "Transfer" means and includes the direct or indirect sale, transfer, conveyance,mortgage, further encumbrance, assignment, or other alienation of the Property, or any portionthereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, theexecution of any installment land sale contract, sales agreement or similar instrument affecting all ora portion of the Property, granting of an option to purchase any portion of or interest in the Propertyor any interest therein, or the lease of all or substantially all of the Property or of all or substantiallyall of the improvements located thereon. Transfer shall not include the sale, transfer, assignment,pledge, hypothecation or encumbrance by Developer's limited partner of its partnership interest tothe extent permitted by the Amended Agreement nor shall Transfer include the removal of anygeneral partner of Developer by the limited partner for cause and the replacement of such removedgeneral partner by another person or entity in accordance with the terms of the Developer'spartnership agreement to the extent permitted by the Amended Agreement. "Transfer" shall notinclude the leasing of individual Units on the Property so long as Trustor complies with theprovisions of the Agency Developer CC&Rs, the Agency Lease and the Amended Agreementrelating to such leasing activity. Failure of Beneficiary to exercise the option to declare all sumssecured hereby immediately due and payable upon a Transfer will not constitute waiver of the rightto exercise this option in the event of any subsequent Transfer.

A-2DOCSOC/1376366v7/024012-0016

6. Subordination to Multifamily Note. The Developer and the Payee each makes thefollowing representations an-a warranties to Citibank, N.A.:

"The indebtedness evidenced by this Promissory Note is and shall be subordinate in right ofpayment to the prior payment in full of the indebtedness evidenced by a promissory note ofeven date herewith in the original face principal amount of not to exceed $10,800,800 issuedby Ward Road Apartments, II, L.P. and payable to Citibank, N.A., ("Senior Lender"), ororder, to the extend and in the manner provided in that certain Subordination Agreement,dated as of , 2009, between the payee of this Promissory Note, and theSenior Lender and the maker of the Promissory Note (the "Subordination Agreement"). Themortgage or deed of trust securing this Promissory Note is and shall be subject andsubordinate in all respects to the Assignment of Rents, Security Agreement and FixtureFiling securing the rights and remedies of the payee and each subsequent holder of thisPromissory Note under the mortgage or deed of trust securing this Promissory Note aresubject to the restrictions and limitations set forth in the Subordination Agreement. Eachsubsequent holder of this Promissory Note shall be deemed, by virtue of such holder'sacquisition of the Promissory Note, to have agreed to perform and observe all of the terms,covenants and conditions to be performed or observed by the Subordinate Lender under theSubordination Agreement."

In the event of the refinancing of the senior loan for an amount not in excess of theoutstanding principal balance of the existing senior loan and reasonable and customary closing costs,the Agency will execute an instrument or instruments evidencing the subordination of theindebtedness evidenced by this Promissory Note to such new senior loan.

7. Miscellaneous.

(a) Governing Law. All questions with respect to the construction of thisPromissory Note and the rights and liabilities of the parties to this Promissory Note shall be governedby the laws of the State of California.

(b) Binding on Successors. This Promissory Note shall inure to the benefit of,and shall be binding upon, the successors and assigns of each of the parties to this Promissory Note.

(c) Attorneys' Fees.

(i) Maker shall reimburse Payee for all reasonable attorneys' fees, costsand expenses, incurred by Payee in connection with the enforcement of Payee's rights under thisPromissory Note, including, without limitation, reasonable attorneys' fees, costs and expenses fortrial, appellate proceedings, out-of-court negotiations, workouts and settlements or for enforcementof rights under any state or federal statute, including, without limitation, reasonable attorneys' fees,costs and expenses incurred to protect Payee's security and attorneys' fees, costs and expensesincurred in bankruptcy and insolvency proceedings such as (but not limited to) seeking relief fromstay in a bankruptcy proceeding. The term "expenses" means any expenses incurred by Payee inconnection with any of the out-of-court, or state, federal or bankruptcy proceedings referred to above,including, without limitation, the fees and expenses of any appraisers, consultants and expertwitnesses retained or consulted by Payee in connection with any such proceeding.

A-3DOCSOC/1376366v7/024012-0016

(ii) Payee shaJI also be entitled to its attorn\?ys' fees, costs and expensesincurred in any post-judgment proceedings to collect and enforce the judgment. This provision isseparate and several and shall survive the merger of this Promissory Note into any judgment on thisPromissory Note.

(d) Entire Agreement. This Promissory Note and the relevant provisions of theAmended Agreement constitute the entire agreement and understanding between and among theparties in respect of the subject matter of such agreements and supersede all prior agreements andunderstandings with respect to such subject matter, whether oral or written.

(e) Time of the Essence. Time if of the essence with respect to every provisionhereof.

(f) Waivers by Maker. Except as otherwise provided in any agreement executedin connection with this Promissory Note, Maker waives: presentment; demand; notice of dishonor;notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice ofcosts, expenses or losses and interest thereon; and diligence in taking any action to collect any sumsarising under this Promissory Note or in any proceeding against any of the rights or interests in or toproperties securing payment of this Promissory Note.

(g) Non-waivers. No previous waiver and no failure or delay by Maker in actingwith respect to the terms of this Promissory Note or the Capital Deed of Trust shall constitute awaiver of any breach, default, or failure of condition under this Promissory Note, the Capital Deed ofTrust or the obligations secured thereby. A waiver of any term of this Promissory Note, the CapitalDeed of Trust or of any of the obligations secured thereby must be made in writing and shall belimited to the express written terms of such waiver. In the event of any inconsistencies between theterms of this Promissory Note and the terms of any other document related to the loan evidenced bythis Promissory Note, the terms of this Promissory Note shall prevail.

(h) Non-recourse Liability of Developer. Notwithstanding anything to thecontrary of this Promissory Note, neither Developer nor any of its partners shall be personally liablefor any default, loss, claim, damage, expense or liability or any person and the sole remedy againstDeveloper hereunder shall be limited to its interest in the Development.

WARD ROAD APARTMENTS, II, L.P.,a California Limited Partnership

By: Corporation for Better Housing,a California nonprofit public benefit corporation,its Managing General Partner

By:Name: David SclafaniTitle: Senior Vice President

A-4DOCSOC/1376366v7/024012-0016

DOCSOC/1376366v7/024012-0016

EXHIBIT "B"

AGENCY LEASE

B-1

..

EXHIBIT C

AGENCY DEED OF TRUST

Order No.Escrow No.Loan No.

WHEN RECORDED MAIL TO:


SPACE ABOVE THIS LINE FOR RECORDER'S USE

DEED OF TRUST WITH ASSIGNMENT OF RENTS(SHORT FORM)

This DEED OF TRUST, made as of December 1,2009, between

WARD ROAD APARTMENTS, II, L.P.., a California limited partnership, herein called TRUSTOR,whose general partner is a California non-profit public benefit corporation, whose address is:

15303 Ventura Blvd., Suite 1100, Sherman Oaks, California 91403

FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein calledTRUSTEE, and

the LOS BANOS REDEVELOPMENT AGENCY, a public body corporate and politic, herein calledBENEFICIARY,

WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City ofLos Banos, County ofMerced, State of California, described as:

SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF.

together with the rents, issues and profits thereof, subject, however, to the right, power and authorityhereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits forthe purpose of securing (1) payment of the sum of $1,300,000 with interest thereon according to the termsof a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, andextensions or renewals thereof, (2) the performance of each and every obligation, covenant, promise oragreement of Trustor contained in the Loan Agreement between Beneficiary and Trustor, the AgencyDeveloper CC&Rs recorded as to the Property of even date herewith, and that certain Disposition andDevelopment!Affordable Housing Agreement between the Beneficiary and the Trustor dated as ofSeptember 19, 2007 (the "Original Agreement") as amended by that certain First Amendment toDisposition and Development!Affordable Housing Agreement between the Beneficiary and the Trustordated as of February 4,2009 (the "First Amendment") and that certain Second Amendment to Disposition

C-lDOCSOC/1376366v7/024012-0016

and Development!Affordable Housing Agreement between the Beneficiary and the Trustor dated as ofDecember r, 2009 (the "Second Amendment" and, together with the Original Agreement as amended bythe First Amendment, the "Amended Agreement"), which is on file with the Beneficiary as a publicrecord and is incorporated herein by reference, or contained herein, and (3) payment of additional sumsand interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, whenevidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. A breach ordefault under the promissory note or a breach or default under the "Agreement" or any instrumentreferenced in Exhibit B hereto, or under any obligation to which this deed oftrust is subordinated, shall bedeemed to constitute a default hereunder.

To protect the security of this Deed of Trust, and with respect to the property above described, Trustorexpressly makes each and all of the agreements, and adopts and agrees to perform and be bound by eachand all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all ofthe terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in OrangeCounty August 17, 1964, and in all other counties August 18, 1964, in the book and at the page ofOfficial Records in the office of the county recorder of the county where said property is located, notedbelow opposite the name of such county, namely:

C-2DOCSOC/1376366v7/024012-0016

COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE

Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621Butte 1330 513 Los Angeles T3878 874 Sacramento 5039 124 Sonoma 2067 427Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56Colusa 323 391 Marin 1849 122 S. Bernardino 6213 768 Sutter 655 585Contra Costa 4684 1 Mariposa 90 453 S. Francisco A-804 596 Tehama 457 183Del Norte 101 549 Mendocino 667 99 S. Joaquin 2855 283 Trinity 108 595El Dorado 704 635 Merced 1660 753 S. Luis Obispo 1311 137 Tulare 2530 108Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693Inyo 165 672 Nevada 363 94 Shasta 800 633Kern 3756 690 Orange 7182 18 San Diego 1964 149774

Series 5

shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms andprovisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof)are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as .fully as set forth at length herein, and Beneficiary may charge for a statement regarding the obligation securedhereby, provided the charge therefor does not exceed the maximum allowed by law.

The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed tohim at his address hereinbefore set forth.

Notwithstanding anything to the contrary in such fictitious deed of trust, Beneficiary shall provide to trustor allcasualty insurance proceeds to enable Trustor to repair or rebuild the improvements located on the property subjecthereto in accordance with Section 4.5 of the Amended Agreement.

) Signature ofTrustorSTATE OF CALIFORNIACOUNTYOF __

On. _

ss)

before me,

WARD ROAD APARTMENTS, II, L.P.,a California Limited Partnership

personally appeared ,personally known to me (or proved to me on the basis ofsatisfactory evidence) to be the person(s) whose names(s) is/aresubscribed to the within instrument and acknowledged to me thathe/she/they executed the same in his/her/their authorizedcapacity(ies), and that by his/her/their signature(s) on theinstrument the person(s), or the entity upon behalf of which theperson(s) acted, executed the instrument.

WITNESS my hand and official seal

SIGNATURE _

C-3DOCSOCI1376366v7/024012-0016

By: Corporation for Better Housing,a California nonprofit public benefit corporationits Managing General Partner


(This area for official notaries seal)

EXHIBIT "A"

LEGAL DESCRIPTION

A leasehold interest of Trustor under that certain ground lease by and between Beneficiary (as lessor)and Trustor (as lessee) dated as of December 1,2009 with respect to the land situated in the State ofCalifornia, County of Merced, City ofLos Banos, and described as follows:

Real property in the City of Los Banos, County of Merced, State of California, described as follows:

PARCEL A:

PARCEL 3 OF PARCEL MAP NO. 2007-11, ACCORDING TO THE MAP THEREOFRECORDED DECEMBER 14, 2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

EXCEPTING THEREFROM ALL MINERALS AND MINERAL RIGHTS, INTEREST ANDROYALTIES, INCLUDING WITHOUT LIMITATION, ALL OIL, GAS AND OTHERHYDROCARBON SUBSTANCES, AS WELL AS METALLIC OR OTHER SOLID MINERALSOF WHATEVER KIND OR CHARACTER, WHETHER NOW KNOWN OR HEREAFTERDISCOVERED, IN AND UNDER THE LAND BELOW A DEPTH OF 500 FEET UNDER THESURFACE WITHOUT REGARD TO THE MANNER IN WHICH THE SAME MAYBEPRODUCED OR EXTRACTED FROM THE LAND, BUT WITHOUT ANY RIGHT TO ENTERUPON OR THROUGH THE SURFACE DOWN TO 500 FEET BELOW THE SURFACE TOEXTRACT, DRILL, EXPLORE OR OTHERWISE EXPLOIT SUCH MINERALS OR MINERALRIGHTS AND WITHOUT ANY RIGHT TO REMOVE OR IMPAIR LATERAL OR SUBJACENTSUPPORT.

PARCELB:

A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR CIRCULATION,ACCESS, INGRESS AND EGRESS, PUBLIC UTILITIES AND INCIDENTAL PURPOSES, ON,OVER AND THROUGH THAT PORTION OF PARCELS 1 AND 2 DESIGNATED AS "ACCESSEASEMENT FOR THE BENEFIT OF PARCELS 1,2, AND 3" ON PARCEL MAP NO. 2007-11RECORDED DECEMBER 14,2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

APN: 083-100-083

Also except therefrom all minerals and mineral rights, interests and royalties, including withoutlimitation all oil, gas and other hydrocarbon substances, as well as metallic or other solid minerals ofwhatever kind or character, whether now known or hereafter discovered, in and under the land belowa depth of 500 feet under the surface without regard to the manner in which the same may beproduced or extracted from the land, but without any right to enter upon or through the surface downto 500 feet below the surface to extract, drill, explore or otherwise exploit such minerals or mineralrights and without any right to remove or impair lateral or subjacent support.

APN: 083-100-083

C-4DOCSOCI1376366v71024012-0016

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EXHIBIT "B"

RIDER TO DEED OF TRUST

Exhibit B to Deed of Trust with Assignment of Rents dated as of December 1, 2009,executed by Ward Road Apartments, II, L.P., a California limited partnership, as "Trustor", to FirstAmerican Title Insurance Company, a California corporation, as Trustee, for the benefit of LosBanos Redevelopment Agency, a public body, corporate and politic, as "Beneficiary" ("Deed ofTrust").

1. DEFAULT - OTHER DEEDS OF TRUST, DEED, COVENANTS CONDITIONS ANDRESTRICTIONS (CC&Rs) AND AGREEMENT. A default under any of the followingshall, at Beneficiary's option, constitute a default under this Deed ofTrust:

(a) A default under that certain Disposition and Development/Affordable HousingAgreement dated as of September 19, 2007, between Trustor and Beneficiary (the"Original Agreement") as amended by that certain First Amendment to Dispositionand Development/Affordable Housing Agreement dated as of February 4, 2009,between Trustor and Beneficiary (the "First Amendment"), as amended by thatcertain Second Amendment to Disposition and Development/Affordable HousingAgreement dated as of December 1, 2009 (the "Second Amendment" and, togetherwith the Original Agreement as amended by the First Amendment, the "AmendedAgreement") or any default under any Agency Note or Agency Deed of Trustdelivered under the Agreement, whether senior or junior to this Deed of Trust (allcapitalized terms not defined herein shall have the meanings established thereforunder the Agreement);

(b) A default under the "Agency Developer CC&Rs" (as executed and recorded pursuantto the Amended Agreement);

(c) A default under the "Tax Credit Regulatory Agreement" (as defined in the AmendedAgreement); or

(d) A default under the Agency Lease (as entered into pursuant to the AmendedAgreement).

2. NON-IMPAIRMENT. Except as supplemented and/or modified by this Deed of Trust, allof the terms, covenants and conditions of the Other Deeds of Trust and the other loandocuments executed in connection therewith shall remain in full force and effect.

3. DUE ON SALE OR ENCUMBRANCE. In the event of any Transfer (as defined below) ofthe Property, or any portion thereof or interest therein, Beneficiary shall have the absoluteright at its option, without prior demand or notice, to declare all sums secured herebyimmediately due and payable. As used herein, the term "Transfer" means and includes thedirect or indirect sale, transfer, conveyance, mortgage, further encumbrance, assignment, orother alienation of the Property, or any portion thereof or interest therein, whether voluntary,involuntary, by operation of law or otherwise, the execution of any installment land salecontract, sales agreement or similar instrument affecting all or a portion of the Property,

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granting of an option to purchase any portion of or interest in the Property or any interesttherein, or the lease of all or substantially all of the Property or of all or substantially all ofthe improvements situated on the Property. "Transfer" shall not include the leasing ofindividual dwelling units on the Property so long as Trustor complies with the provisions ofthe Agreement relating to such leasing activity and such transfers as are permitted under thatcertain agreement entitled "Regulatory Agreement and Declaration of Restrictive CovenantsBy and Among Los Banos Redevelopment Agency, , andWard Road Apartments II, L.P., a California limited partnership", dated as of December 1,2009. Transfer shall not include the sale, transfer, assignment, pledge, hypothecation orencumbrance by Developer's limited partner of its partnership interest to the extent permittedby the Amended Agreement nor shall Transfer include the removal of any general partner ofDeveloper by the limited partner for cause and the replacement of such removed generalpartner by another person or entity in accordance with the terms of the Developer'spartnership agreement to the extent permitted by the Amended Agreement. Failure ofBeneficiary to exercise the option to declare all sums secured hereby immediately due andpayable upon a Transfer will not constitute waiver of the right to exercise this option in theevent of any subsequent Transfer.

4. PRIORITY OF DEED OF TRUST. This Deed of Trust is subject and subordinate to thefollowing:

(i) the Agency Lease; (ii) the Agency Developer CC&Rs; and (iii) the lien securingconstruction financing for the Development.

5. NOTICE AND CURE RIGHTS BY LIMITED PARTNERS. Notwithstanding anythingto the contrary contained in the Agency Lease, Agency hereby agrees that any cure of anydefault made or tendered by Developer's limited partners shall be deemed to be a cure byDeveloper and shall be accepted or rejected on the same basis as if made or tendered byDeveloper. Copies of all notices which are sent to Developer under the terms of the AgencyLease shall also be sent to Developer's Administrative Limited Partner, Alliant Tax CreditIV, LLC, a Florida limited liability company, c/o Alliant Asset Management Company, LLC,21600 Oxnard Street, Suite 1200, Woodland Hills, CA 91367.

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EXHIBIT "D"

NOTICE OF AFFORDABILITY RESTRICTIONS

Recording Requested By:

When Recorded Return To andMail Tax Statements To:


[Space above for recorder.]

This document is exempt from the payment of a recordingfee pursuant to Government Code Section 27383.

NOTICE OF AFFORDABILITY RESTRICTIONS ONTRANSFER OF PROPERTY

This NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFEROF SITE (or "Notice of Affordability Restrictions") is executed and recordedpursuant to Section 33334.3(f)(3)(B) of the California Health and Safety Code asamended by AB 987, Chapter 690, Statutes of 2007 (herein, "Chapter 690"), andaffects that certain property described in Exhibit "A" hereto ("Site"). The LosBanos Redevelopment Agency ("Agency") and Ward Road Apartments, II, L.P.("Developer") have previously entered into a Disposition andDevelopment/Affordable Housing Agreement dated as of September 19, 2007 (the"Original Agreement"), as amended by a First Amendment to Disposition andDevelopment/Affordable Housing Agreement between the Agency and theDeveloper dated as of February 4, 2009 (the "First Amendment" and a SecondAmendment to Disposition and Development/Affordable Housing Agreementbetween the Agency and the Developer dated as ofDecember 8, 2009 (the "SecondAmendment" and, together with the Original Agreement and First Amendment asamended by the Second Amendment, the "Amended Agreement").

1. The Amended Agreement provides for affordability restrictions andrestrictions on the transfer of the Site, as more particularly set forth in theAmended Agreement. A copy of the Amended Agreement is on file with theAgency as a public record and is deemed incorporated herein. Reference is made

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to the Amended Agreement with regard to the complete text of the provisions ofsuch agreement which provides for affordability restrictions and restrictions on thetransfer of the Site.

2. The Amended Agreement provides for the Agency to convey aleasehold interest in the Site to Developer and for Developer to (a) construct 80rental dwelling units at the Site and (b) rent a specified number of such dwellingunits to households of limited income, paying an affordable rent; such restrictionsare set forth at greater length in a document entitled the "Regulatory Agreement,"substantially in the form of Attachment No. 11 to the Amended Agreement, whichhas been entered into by and among the Agency, the City of Los Banos ("City"),and the Developer, and which is expected to be recorded substantially concurrentlyherewith among the official land records of the County of Merced. The RegulatoryAgreement and the Amended Agreement are deemed to be incorporated herein byreference.

2.1 Article II, Section 1 of the Regulatory Agreement provides asfollows; where the terms "Declaration" and "CC&Rs" are used in the quotedlanguage below, such terms refer to the Regulatory Agreement:

"Uses. The Developer shall develop the Approved HousingProject on the Site in conformity with the Amended Agreement.Thereafter, the Site shall be operated as an Affordable HousingProject and devoted only to the uses specified in the AmendedAgreement and the Agency Lease for the periods of time specifiedherein. All uses conducted on the Site, including, without limitation,all activities undertaken by the Developer pursuant to the AmendedAgreement, shall conform to all applicable provisions of the LosBanos Municipal Code and the City Approvals.

"The Site shall be used, maintained and operated in accordancewith the Amended Agreement, the Agency Lease, and this RegulatoryAgreement for the Required Covenant Period. None of the units inthe Rental Project shall at any time be utilized on a transient basis norshall the Rental Project or any portion thereof ever be used as a hotel,motel, dormitory, fraternity or sorority house, rooming house,hospital, nursing home, sanitarium, rest home or trailer court or park.No part of the Site, from the date the Developer acquired its leaseholdinterest in the Site, has been or will at any time be owned or used as a

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cooperative housing corporation or a community apartment project ora stock cooperative."

2.2 Article II, Section 2 of the Regulatory Agreement provides asfollows:

"Affordable Housing.

"Number of Units. Throughout the Required Covenant Period,not fewer than thirty-nine (39) of the Units shall be rented atAffordable Rent as follows: (a) as to thirty-four (34) Units, rent thatis Affordable Rent for Very Low Income Households as follows:(i) twenty-four (24) two-bedroom Units; (ii) eight (8) three-bedroomUnits; and (iii) two (2) four-bedroom Units; and, (b) as to anadditional five (5) Units, rent that is Affordable Rent for LowerIncome Households as follows: (5) two-bedroom Units. RequiredAffordable Units shall be continuously occupied by or held availablefor occupancy by Very Low Income Households or Lower IncomeHouseholds, as applicable, at Affordable Rent. All Affordable Unitsshall be rented at Affordable Rent. For this purpose, a tenant whoqualifies as aVery Low Income Household at the time he or she firstoccupies an Affordable Unit shall be deemed to continue to be soqualified until such time as a recertification of such individual's orfamily's income in accordance with Section 3 below demonstratesthat such individual or family no- longer qualifies as a Very LowIncome Household. Moreover, a unit previously occupied by a VeryLow Income Household, and then vacated shall be consideredoccupied by such Very Low Income Household until reoccupied,other than for a temporary period, at which time the character of theunit shall be redetermined. A similar process shall apply as to LowerIncome Units. In no event shall such temporary period exceed thirtyone (31) days.

"At such time as a tenant ceases to qualify as a Very LowIncome Household, the unit occupied by such tenant shall cease to bea Very Low Income Unit. The Developer shall replace each suchVery Low Income Unit by designating the next available unit and anynecessary units thereafter as a Very Low Income Unit. For purposesof this Agreement, such designated unit will be considered aVeryLow Income Unit if it is held vacant and available for occupancy by aVery Low Income Household, and, upon occupancy, the income

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eligibility of the tenant as a Very Low Income Household is verifiedand the unit is rented at Affordable Rent. A similar process shallapply as to Lower Income Units.

"In the event a household's income initially complies with thecorresponding income restriction for aVery Low Income Household(or, in the case of a Lower Income Unit, a Lower Income Household)but the income of such household increases, such increase shall not bedeemed to result in a violation of the restrictions of this RegulatoryAgreement concerning limitations upon income of occupants,provided that the occupancy by such household is for a reasonabletime of not to exceed one year (measured from the time the income ofthe household ceases to qualify at the designated affordability level).The Developer shall include in its rental agreements provisions whichimplement this requirement and limitation, and the Developer shallexpressly inform prospective renters as to this limitation prior to thecommencement of a tenancy.

"Duration of Affordability Requirements. Thirty-four (34) ofthe Required Affordable Units shall be available to and occupied byVery Low Income Households and an additional five (5) of theRequired Affordable Units shall be available to and occupied byLower Income Households at Affordable Rent throughout theRequired Covenant Period. All tenants residing in the AffordableUnits during the last two (2) years of the Required Covenant Periodshall be given notice by the Developer at least once every six (6)months prior to the expiration date of this requirement, that the rentpayable on the Affordable Unit may be raised to a market rate rent atthe end of the Required Covenant Period.

"Selection of Tenants. As specified hereinbelow, Developershall demonstrate to the Agency that the proposed tenants of each ofthe Required Affordable Units constitutes a Very Low IncomeHousehold or, as to five (5) of the Required Affordable Units, aLower Income Household.

"Prior to the rental or lease of an Required Affordable Unit to atenant, and as set forth in this Section 2 of Article II of thisDeclaration, the Developer shall require the tenant to execute awritten lease and to complete an Income Verification certifying thatthe tenant(s) occupying the Required Affordable Unit is/are a Very

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Low Income Household or, as to five (5) of the Required AffordableUnits, a Lower Income Household and meet(s) the eligibilityrequirements established for the Required Affordable Unit. TheDeveloper shall verify the income of the tenant(s).

"The Developer shall accept as tenants on the same basis as allother prospective tenants, persons who are recipients of federalcertificates for rent subsidies pursuant to the existing program underSection 8 of the United States Housing Act of 1937, or its successor.The Developer shall not apply selection criteria to Section 8 certificateholders which are more burdensome than criteria applied to any otherprospective tenants.

"Determination of Affordable Rent for the Affordable Units.The Affordable Units shall be rented or leased at Affordable Rent. Asof the approval of the Amended Agreement, Affordable Rent iscalculated in accordance with the Affordable Rent Worksheet. Themaximum monthly rental for the Affordable Unit shall be adjustedannually as permitted by Section 50053 of the California Health andSafety Code based on the annual adjustment to the Median Income forthe Area established pursuant to Section 50093 of the CaliforniaHealth and Safety Code, as more particularly set forth in theAffordable Rent Worksheet.

"THE DEVELOPER UNDERSTANDS AND KNOWINGLYAGREES THAT THE MAXIMUM RENTAL FOR THEAFFORDABLE UNITS ESTABLISHED BY THE AMENDEDAGREEMENT, THIS REGULATORY AGREEMENT AND THEAGENCY LEASE IS SUBSTANTIALLY BELOW THE FAIRMARKET RENT FOR THE AFFORDABLE UNITS."

3. The restrictions contained in the Regulatory Agreement expireseventy-five (75) years following the date the Regulatory Agreement is recorded.The Regulatory Agreement is being submitted for recordation contemporaneouslywith this Notice of Affordability Restrictions.

4. The commonly known address for the Site is Ward Road in theCity ofLos Banos.

5. The assessor's parcel number for the Site IS: 083-100-083; suchnumber is subject to change.

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6. The legal description for the Site is attached hereto as Exhibit A and isincorporated herein by reference.

7. The Regulatory Agreement, which includes the affordabilityrestrictions referenced above, is expected to be submitted for recordation in theOffice of the Merced County Recorder contemporaneously with this Notice ofAffordability Restrictions.

8. This Notice of Affordability Restrictions is intended merely to satisfythe requirements of Chapter 690. The Amended Agreement and the RegulatoryAgreement both remain in full force and effect and are not amended or altered inany manner whatsoever by this Notice of Affordability Restrictions.

9. Capitalized terms shall have the meaning established under theAmended Agreement (including all Attachments thereto) excepting only to theextent as otherwise expressly provided under this Notice of AffordabilityRestrictions.

10. Persons having questions regarding this Notice of AffordabilityRestrictions, the Amended Agreement or the Attachments thereto (including theRegulatory Agreement) should contact the Agency at its offices (520 J Street, LosBanos, or such other address as may be designated by the Agency from time totime).

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LOS BANOS REDEVELOPMENTAGENCY,a public body, corporate and politic

By: _Stephen J. Rath, Executive Director

ATTEST:

By: _Lucille Mallonee, Agency Secretary

CITY OF LOS BANOS,a municipal corporation

By: _Stephen J. Rath, Executive Director

ATTEST:

By: _Lucille Mallonee, Agency Secretary


By:Corporation for Better Housing,a California nonprofit public benefitcorporation,its Managing General Partner

By:David SclafaniSenior Vice President

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EXHIBIT A

LEGAL DESCRIPTION

That certain real property situated in the City of Los Banos, County of Merced,State of California, more particularly described as follows:

PARCEL A:

PARCEL 3 OF PARCEL MAP NO. 2007-11, ACCORDING TO THE MAPTHEREOF RECORDED DECEMBER 14, 2007 IN VOLUME 108 OF PARCELMAPS, AT PAGES 29-31, MERCED COUNTY RECORDS.

EXCEPTING THEREFROM ALL MINERALS AND MINERAL RlGHTS,INTEREST AND ROYALTIES, INCLUDING WITHOUT LIMITATION, ALLOIL, GAS AND OTHER HYDROCARBON SUBSTANCES, AS WELL ASMETALLIC OR OTHER SOLID MINERALS OF WHATEVER KIND ORCHARACTER, WHETHER NOW KNOWN OR HEREAFTER DISCOVERED,IN AND UNDER THE LAND BELOW A DEPTH OF 500 FEET UNDER THESURFACE WITHOUT REGARD TO THE MANNER IN WHICH THE SAMEMAYBE PRODUCED OR EXTRACTED FROM THE LAND, BUT WITHOUTANY RlGHT TO ENTER UPON OR THROUGH THE SURFACE DOWN TO500 FEET BELOW THE SURFACE TO EXTRACT, DRlLL, EXPLORE OROTHERWISE EXPLOIT SUCH MINERALS OR MINERAL RlGHTS ANDWITHOUT ANY RlGHT TO REMOVE OR IMPAIR LATERAL ORSUBJACENT SUPPORT.

PARCELB:

A NON-EXCLUSIVE EASEMENT FOR PEDESTRlAN AND VEHICULARCIRCULATION, ACCESS, INGRESS AND EGRESS, PUBLIC UTILITIESAND INCIDENTAL PURPOSES, ON, OVER AND THROUGH THATPORTION OF PARCELS 1 AND 2 DESIGNATED AS "ACCESS EASEMENTFOR THE BENEFIT OF PARCELS 1,2, AND 3" ON PARCEL MAP NO. 200711 RECORDED DECEMBER 14,2007 IN VOLUME 108 OF PARCEL MAPS,AT PAGES 29-31, MERCED COUNTY RECORDS.

APN: 083-100-083

Also except therefrom all minerals and mineral rights, interests and royalties,including without limitation all oil, gas and other hydrocarbon substances, as well

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as metallic or other solid minerals of whatever kind or character, whether nowknown or hereafter discovered, in and under the land below a depth of 500 feetunder the surface without regard to the manner in which the same may be producedor extracted from the land, but without any right to enter upon or through thesurface down to 500 feet below the surface to extract, drill, explore or otherwiseexploit such minerals or mineral rights and without any right to remove or impairlateral or subjacent support.

APN: 083-100-083

E-9DOCSOC/1376366v7/024012-0016

EXHIBIT "E"

CERTIFICATE OF COMPLETION

RECORDING REQUESTED BYAND WHEN RECORDED MAIL TO:

(Space Above for Recorder's Use Only)

This document is exempt from the payment of a recordingfee pursuant to Government Code Section 27383.

CERTIFICATE OF COMPLETION

THIS CERTIFICATE OF COMPLETION (the "Certificate") is made by the LOSBANOS REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), infavor of WARD ROAD APARTMENTS, II, L.P., a California limited partnership (the"Developer"), as of the date set forth below.

RECITALS

A. Agency and the Developer have entered into that certain Disposition andDevelopment!Affordable Housing Agreement between the Beneficiary and the Trustor dated as ofSeptember 19, 2007 (the "Original Agreement") as amended by that certain First Amendment toDisposition and Development!Affordable Housing Agreement between the Beneficiary and theTrustor dated as of February 4, 2009 (the "First Amendment") and that certain Second Amendmentto Disposition and Development/Affordable Housing Agreement between the Beneficiary and theTrustor dated as of December 1, 2009 (the "Second Amendment" and, together with the OriginalAgreement as amended by the First Amendment, the "Amended Agreement") concerning theredevelopment of certain real property situated in the City of Los Banos, California, as more fullydescribed in Exhibit "A" attached hereto and made a part hereof (the "Site").

B. As referenced in Section 4.13 of the Amended Agreement, Agency is required tofurnish the Developer or its successors with a Certificate of Completion upon completion ofconstruction of the "Improvements" (as defined in Section 1.1 of the Amended Agreement), whichCertificate is required to be in such form as to permit it to be recorded in the Recorder's Office ofMerced County. This Certificate is conclusive determination of satisfactory completion of theconstruction and development required by the Amended Agreement.

C. Agency has conclusively determined that the construction and development of theDevelopment has been satisfactorily completed.

NOW, THEREFORE, Agency hereby certifies as follows:

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1. Agency does hereby certify that the Improvements to be constructed by theDeveloper has beenrully and satisfactorily completed in full conformance with the AmendedAgreement.

2. This Certificate shall not constitute evidence of compliance with or satisfaction ofany obligation of Developer to any holder of a mortgage, or any insurer of a mortgage, securingmoney loaned to finance construction work on the Site, or any part thereof.

3. This Certificate shall not constitute evidence of Developer's compliance with thosecovenants in the Amended Agreement that survive the issuance of this Certificate.

4. This Certificate is not a Notice of Completion as referred to in California Civil CodeSection 3093.

5. Nothing contained in this instrument shall modify in any other way any otherprovisions of the Amended Agreement (including without limitation the attachments thereto).

IN WITNESS WHEREOF, Agency has executed this Certificate of Completion this _day of , 20o_.

LOS BANOS REDEVELOPMENT AGENCY, apublic body, corporate and politic

By: _

Stephen Rath, Executive Director

ATTEST:

Lucille MalloneeAgency Secretary

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EXHIBIT"A"

LEGAL DESCRIPTION

Real property in the City of Los Banos, County of Merced, State of Califomia, described as follows:

PARCEL A:

PARCEL 3 OF PARCEL MAP NO. 2007-11, ACCORDING TO THE MAP THEREOFRECORDED DECEMBER 14,2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

EXCEPTING THEREFROM ALL MINERALS AND MINERAL RIGHTS, INTEREST ANDROYALTIES, INCLUDING WITHOUT LIMITATION, ALL OIL, GAS AND OTHERHYDROCARBON SUBSTANCES, AS WELL AS METALLIC OR OTHER SOLID MINERALSOF WHATEVER KIND OR CHARACTER, WHETHER NOW KNOWN OR HEREAFTERDISCOVERED, IN AND UNDER THE LAND BELOW A DEPTH OF 500 FEET UNDER THESURFACE WITHOUT REGARD TO THE MANNER IN WHICH THE SAME MAYBEPRODUCED OR EXTRACTED FROM THE LAND, BUT WITHOUT ANY RIGHT TO ENTERUPON OR THROUGH THE SURFACE DOWN TO 500 FEET BELOW THE SURFACE TOEXTRACT, DRILL, EXPLORE OR OTHERWISE EXPLOIT SUCH MINERALS OR MINERALRIGHTS AND WITHOUT ANY RIGHT TO REMOVE OR IMPAIR LATERAL OR SUBJACENTSUPPORT.

PARCELB:

A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR CIRCULATION,ACCESS, INGRESS AND EGRESS, PUBLIC UTILITIES AND INCIDENTAL PURPOSES, ON,OVER AND THROUGH THAT PORTION OF PARCELS 1 AND 2 DESIGNATED AS "ACCESSEASEMENT FOR THE BENEFIT OF PARCELS 1,2, AND 3" ON PARCEL MAP NO. 2007-11RECORDED DECEMBER 14,2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

APN: 083-100-083

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STATE OF CALIFORNIA

COUNTY OF _

)) ss.)

On ______________ , before me, , Notary Public,(Print Name ofNotary Public)

personally appeared

who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aresubscribed to the within instrument and acknowledged to me that he/she/they executed the samein his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument theperson(s), or the entity upon behalf ofwhich the person(s) acted, executed the instrument.

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


Signature ofNotary Public

OPTIONAL

Though the data below is not required by law, it may prove valuable to persons relying on the document and could preventfraudulent reattachment of this form.

CAPACITY CLAIMED BY SIGNER

o Individualo Corporate Officer

Title(s)

DESCRIPTION OF ATTACHED DOCUMENT

Title Or Type Of Document

LimitedGeneral

o

DDoD

Partner(s) 0o

Attomey-In-FactTrustee(s)Guardian/ConservatorOther: _

Number Of Pages

Signer is representing:Name OfPerson(s) Or Entity(ies)

DOCSOC/1376366v7/024012-0016E-4

Date Of Documents

Signer(s) Other Than Named Above

• EXHIBIT "F"

AGENCY DEVELOPER CC&RS

RECORDING REQUESTED BY: ))

WHEN RECORDED RETURN TO AND )MAIL TAX STATEMENTS TO: )

)Los Banos Redevelopment Agency )520 J Street )Los Banos, California 93635 )Attn: Executive Director )

APN: 083-100-083)

(Space above for Recorder's Use.)

This document is exempt from the payment of a recording feepursuant to Government Code Section 27383.

REGULATORY AGREEMENT

These Covenants, Conditions and Restrictions, herein sometimes referred to as these"CC&Rs" or "Declaration" or "Regulatory Agreement" are made by the signatories hereto.

RECITALS

WHEREAS, each of the LOS BANOS REDEVELOPMENT AGENCY, a public body,corporate and politic ("Agency"), the CITY OF LOS BANOS, a municipal corporation ("City"),and WARD ROAD APARTMENTS, II, L.P., a California limited partnership ("Developer") is aparty to this Declaration. The Agency, the City and the Developer are sometimes collectivelyreferred to herein as the "Declarants".

WHEREAS, the Agency and the Developer have entered into that certain Disposition andDevelopment/Affordable Housing Agreement dated as of September 19, 2007 (the "OriginalAgreement") as amended by a First Amendment to Disposition and Development/AffordableHousing Agreement by and between the Agency and the Developer dated as of February 4,2009 (the"First Amendment") and a Second Amendment to Disposition and Development!Affordable HousingAgreement by and between the Agency and the Developer dated as of December 1, 2009 (the"Second Amendment" and, together with the Original Agreement, and the First Amendment, the"Amended Agreement") for the improvement and development of certain real property described inExhibit "A" (to which these CC&Rs are attached) as the "Site", which Amended Agreement providesfor the recordation of this Regulatory Agreement. Any capitalized term not defined herein shall havethe meaning established therefor in the Amended Agreement. The City is a third party beneficiary ofthe Amended Agreement.

WHEREAS, this Regulatory Agreement establishes a plan for the improvement,development and maintenance of the Site, for the benefit of the Project Area, as well as the rest of theCity.

F-lDOCSOCI1376366v7/024012-0016 -

WHEREAS, it is contemplated under the Amended Agreement that, as of the recordation ofthis Regulatory Agreement, the Developer has entered into or will enter into a lease of the "Site" anddescribed in the legal description attached hereto as Exhibit "A" and incorporated herein by thisreference. The form of the lease, as prescribed by the Amended Agreement, is referenced to as the"Agency Lease."

WHEREAS, the Amended Agreement sets forth certain restrictive covenants applicable tothe Site, particularly the use of the Site for the provision of rental housing units available to VeryLow Income Households at Affordable Rents as those terms are defined therein.

WHEREAS, Agency, City, and Developer wish to adopt this Regulatory Agreement tofurther govern the use of the Site in conjunction and along with the Amended Agreement and toensure that the Agency achieves credit for production of affordable housing units pursuant toSection 33413 of the California Health and Safety Code.

NOW, THEREFORE, the Agency and the City each of the Developer (as owner of realproperty interests described hereinabove), in the City, declares that the Site shall be held, transferred,encumbered, used, sold, conveyed, leased and occupied subject to the Covenants, Conditions andRestrictions hereinafter set forth expressly and exclusively for the use and benefit of said property,and the Agency and the City. Each and all of the restrictions, limitations, conditions, covenants,liens, reservations and charges herein contained shall run with the land and be recorded on theproperty title and shall be binding on Declarants, their grantees, successors, heirs, executors,administrators, devisees or assigns, and all subsequent owners of all or any part of the Site.

ARTICLE IDEFINITIONS

The definitions provided herein shall be applicable to this Declaration and also to anyamendment or supplemental Declaration (unless the context implicitly or explicitly shall prohibit),recorded against the Site pursuant to the provision of this Declaration.

Section I. "Affordable Housing Project" means an affordable housing project operatedin conformity with this Regulatory Agreement throughout the Required Covenant Period.

Section 2. "Affordable Rent" has the meaning set forth in Health and Safety CodeSection 50053. For a Very Low Income Household, Affordable Rent means a monthly rent whichdoes not exceed one twelfth (1I12th) of thirty percent (30%) of fifty percent (50%) of the MedianIncome for the Area for a household size appropriate to the unit. For a Lower Income Household,Affordable Rent means a monthly rent which does not exceed one-twelfth (lIlih) of thirty percent(30%) of sixty percent (60%) of the Median Income for the Area. "Household size appropriate to theunit," as used herein, shall mean two persons for each one-bedroom unit (if any), and three personsfor each two bedroom unit. The maximum monthly rental amount of the units shall be adjustedannually by the formula set forth above upon the promulgation of revised Merced PrimaryMetropolitan Statistical Area median income figures by regulation of the California Department ofHousing and Community Development. Actual rent charged may be less than such maximum rent.

Section 3.interest.

"Agency" means the Los Banos Redevelopment Agency and its successors in

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Section 4 "Approved Housing Project" means all improvements developed byDeveloper under the Amended Agreement.

Section 5. "Area" means the Merced Primary Metropolitan Statistical Area, asperiodically defined by HUD.

Section 6. "Calculation of Affordable Rents" means the worksheet substantially in theform of Attachment No.7 to the Amended Agreement.

Section 7.

Section 8.

"Certificate" or "Certification" is defined in Section 3(a).

"City" means and refers to the City of Los Banos, a municipal corporation.

Section 9. "City Code" means and refers to the City of Los Banos Municipal Code asrevised from time to time.

Section 10. "Common Areas" means all areas on the Site that are open or accessible to alltenants of the Site (such as grounds, but excluding buildings).

Section 11. [Intentionally Omitted.]

Section 12. "Gross Income" means all payments from all sources received by a person(together with the gross income of all persons of the age of 18 years or older who intend to residewith such person in one residential unit) whether in cash or in kind as calculated pursuant to theDepartment of Housing and Urban Development ("HUD") Regulations (24 C.F.R. § 813) in effect asof the Date ofAgreement.

Section 13. "Lower Income Household" means a household earning not greater thaneighty percent (80%) of median income for the Area as set forth by regulation of the CaliforniaDepartment of Housing and Community Development, pursuant to Health and Safety CodeSection 50079.5.

Section 14. "Median Income for the Area" means the median income for the Area as mostrecently determined by the Secretary of Housing and Urban Development under Section 8 of theUnited States Housing Act of 1937, as amended, or, if programs under Section 8 are terminated,Median Income for the Area determined under the method used by the Secretary prior to suchtermination.

Section 15. "Prescribed Rent Levels" means: (a) as to the thirty-four (34) Units, rent thatis Affordable Rent for Very Low Income Households for the following Units, as indicated by numberof bedrooms: (i) twenty-four (24) two-bedroom Units; (ii) eight (8) three-bedroom Units; and(iii) two (2) four-bedroom Units; and, (b) as to an additional five (5) Units, rent that is AffordableRent for Lower Income Households for five (5) two-bedroom Units.

Section 16. "Regulatory Agreement" means this Regulatory Agreement and anyamendments, modifications or supplements which may also be referred to herein as these "CC&Rs"or this "Declaration".

Section 17.the Site.

"Rental Project" means the eighty (80) unit residential rental development on

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Section 18. "Required Affordable Unit" means a dwelling unit in the Rental Project, andavailable to, occupied by, or held vacant for occupancy only by tenants qualifying as Very LowIncome Households or Lower Income Households and rented at Affordable Rent conforming to thePrescribed Rent Levels.

Section 19. "Required Covenant Period" means the period commencing on the date thisRegulatory Agreement is recorded and ending seventy-five (75) years thereafter.

Section 20. [Intentionally Omitted].

Section 21. "Site" means all of the real property and appurtenances as described above,including all structures and other improvements thereon, and those hereafter constructed.

Section 22. "Unit" means a dwelling unit on the Rental Project.

Section 23. "Very Low Income Households" means Very Low Income Householdswhose Adjusted Income does not exceed fifty percent (50%) of Median Income for the Area asdetermined by the United States Department of Housing and Urban Development from time to timeand as set forth in Health and Safety Code Section 50105.

ARTICLE IILAND USE RESTRICTIONS; IMPROVEMENTS

Section 1. Uses. The Site shall be used, maintained and operated in accordance with thisRegulatory Agreement for the Required Covenant Period. None of the units in the Rental Projectshall at any time be utilized on a transient basis nor shall the Rental Project or any portion thereofever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital,nursing home, sanitarium, rest home or trailer court or park. No part of the Site, from the date theDeveloper acquired its leasehold interest in the Site, has been or will at any time be owned or used asa cooperative housing corporation or a community apartment project or a stock cooperative.

Section 2. Affordable Housing.

Number of Units. Throughout the Required Covenant Period, not fewer than thirtynine (39) of the Units shall be rented at Affordable Rent as follows: (a) as to thirty-four (34) Units,rent that is Affordable Rent for Very Low Income Households as follows: (i) twenty-four (24) twobedroom Units; (ii) eight (8) three-bedroom Units; and (iii) two (2) four-bedroom Units; and, (b) asto an additional five (5) Units, rent that is Affordable Rent for Lower Income Households as follows:five (5) two-bedroom Units. Required Affordable Units shall be continuously occupied by or heldavailable for occupancy by Very Low Income Households at Affordable Rent. All Affordable Unitsshall be rented at Affordable Rent. For this purpose, a tenant who qualifies as a Very Low IncomeHousehold at the time he or she first occupies an Affordable Unit shall be deemed to continue to beso qualified until such time as a recertification of such individual's or family's income in accordancewith Section 3 below demonstrates that such individual or family no longer qualifies as aVery LowIncome Household. Moreover, a unit previously occupied by a Very Low Income Household, andthen vacated shall be considered occupied by such Very Low Income Household until reoccupied,other than for a temporary period, at which time the character of the unit shall be redetermined. Asimilar process shall apply as to Lower Income Units. In no event shall such temporary periodexceed thirty-one (31) days.

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At such time as a tenant ceases to qualify as a Very Low Income Household, the unitoccupied by such tenant shall cease to be a Very Low Income Unit. The Developer shall replaceeach such Very Low Income Unit by designating the next available unit and any necessary unitsthereafter as a Very Low Income Unit. For purposes of this Agreement, such designated unit will beconsidered a Very Low Income Unit if it is held vacant and available for occupancy by a Very LowIncome Household, and, upon occupancy, the income eligibility of the tenant as a Very Low IncomeHousehold is verified and the unit is rented at Affordable Rent. A similar process shall apply as toLower Income Units.

In the event a household's income initially complies with the corresponding incomerestriction for a Very Low Income Household (or, in the case of a Lower Income Unit, a LowerIncome Household) but the income of such household increases, such increase shall not be deemed toresult in a violation of the restrictions of this Regulatory Agreement concerning limitations uponincome of occupants, provided that the occupancy by such household is for a reasonable time of notto exceed one year (measured from the time the income of the household ceases to qualify at thedesignated affordability level). The Developer shall include in its rental agreements provisionswhich implement this requirement and limitation, and the Developer shall expressly informprospective renters as to this limitation prior to the commencement of a tenancy.

Duration ofAffordability Requirements. Thirty-four (34) of the Required AffordableUnits shall be available to and occupied by Very Low Income Households and an additional five (5)of the Required Affordable Units shall be available to and occupied by Lower Income Households atAffordable Rent throughout the Required Covenant Period. All tenants residing in the AffordableUnits during the last two (2) years of the Required Covenant Period shall be given notice by theDeveloper at least once every six (6) months prior to the expiration date of this requirement, that therent payable on the Affordable Unit may be raised to a market rate rent at the end of the RequiredCovenant Period.

Selection of Tenants. As specified hereinbelow, Developer shall demonstrate to theAgency that the proposed tenants of each of the Required Affordable Units constitutes a Very LowIncome Household or, as to five (5) of the Required Affordable Units, a Lower Income Household.

Prior to the rental or lease of an Required Affordable Unit to a tenant, and as set forthin this Section 2 of Article II of this Declaration, the Developer shall require the tenant to execute awritten lease and to complete an Income Verification certifying that the tenant(s) occupying theRequired Affordable Unit is/are a Very Low Income Household or, as to five (5) of the RequiredAffordable Units, a Lower Income Household and meet(s) the eligibility requirements established forthe Required Affordable Unit. The Developer shall verify the income of the tenant(s).

The Developer shall accept as tenants on the same basis as all other prospectivetenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existingprogram under Section 8 of the United States Housing Act of 1937, or its successor. The Developershall not apply selection criteria to Section 8 certificate holders which are more burdensome thancriteria applied to any other prospective tenants.

Determination of Affordable Rent for the Affordable Units. The Affordable Unitsshall be rented or leased at Affordable Rent. As of the approval of the Amended Agreement,Affordable Rent is calculated in accordance with the Affordable Rent Worksheet. The maximummonthly rental for the Affordable Unit shall be adjusted annually as permitted by Section 50053 of

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the California Health and Safety Code based on the annual adjustment to the Median Income for theArea established pursuant to Section 50093 of the California Health and Safety Code, as moreparticularly set forth in the Affordable Rent Worksheet.

THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THEMAXIMUM RENTAL FOR THE AFFORDABLE UNITS ESTABLISHED BY THISREGULATORY AGREEMENT IS SUBSTANTIALLY BELOW THE FAIR MARKET RENTFOR THE AFFORDABLE UNITS.

Section 3. Developer Verification and Program Compliance.

Income Verification and Certification. The Developer will obtain and maintain onfile an Income Verification from each tenant, dated immediately prior to the initial occupancy ofsuch tenant in the Rental Project.

On August 15,2010 and annually thereafter, the Developer shall file with the Agencyor its designee a Certificate, containing all information required pursuant to Health and Safety CodeSection 33418, in a form prescribed by the Agency. Each Certificate shall cover the immediatelypreceding fiscal year.

Reporting Amounts. Agency is required by Section 33418 of the California Healthand Safety Code to require Developer to monitor the Affordable Units and submit the annual reportsrequired by Section 3 of Article II of this Declaration. The Agency relies upon the informationcontained in such reports to satisfy its own reporting requirements pursuant to Sections 33080 and33080.1 of the California Health and Safety Code. In the event the Developer fails to submit to theAgency or its designee the Certification as required by Section 3(a), the Developer shall be innoncompliance with this Regulatory Agreement. In the event the Developer remains innoncompliance for thirty (30) days following receipt of written notice from the Agency of suchnoncompliance under Sections 3(a) and 3(b) of Article II hereinabove, then the Developer shall,without further notice or opportunity to cure, pay to the Agency Two Hundred Fifty Dollars($250.00) per Required Affordable Unit for each year Developer fails to submit a Certificatecovering each and every housing unit on the Site.

Section 4. Nondiscrimination. The Developer shall refrain from restricting the rental,sale or lease of the Site, or any portion thereof, on the basis of race, color, creed, religion, sex,marital status, national origin or ancestry of any person. All such deeds, leases or contracts shallcontain 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 orher heirs, executors, administrators, and assigns, and all persons claiming under or through them, thatthere shall be no discrimination against or segregation of, any person or group of persons on accountof any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those basesare defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (P) ofSection 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer,use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or anyperson claiming under or through him or her, establish or permit any practice or practices ofdiscrimination or segregation with reference to the selection, location, number, use or occupancy oftenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoingcovenants shall run with the land."

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(2) In leases: "The lessee herein covenants by and for himself or herself, his orher heirs, executors, administrators and assigns, and all persons claiming under or through him orher, 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 groupof persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of theGovernment Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) andparagraph (1) of subdivision (P) of Section 12955, and Section 12955.2 of the Government Code, inthe leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises hereinleased 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 tothe selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, orvendees in the premises herein leased."

(3) In contracts: "There shall be no discrimination against or segregation of, anyperson or group ofpersons on account of any basis listed in subdivision (a) or (d) of Section 12955 ofthe Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) andparagraph (1) of subdivision (P) of Section 12955, and Section 12955.2 of the Government Code, inthe sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are thesubject of this Agreement, nor shall the grantee or any person claiming under or through him or her,establish or permit any practice or practices of discrimination or segregation with reference to theselection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendeesin the premises herein conveyed. The foregoing covenants shall run with the land."

The covenants established in this Declaration and the deeds of conveyance for theSite shall, without regard to technical classification and designation, be binding for the benefit and infavor of the Agency, its successors and assigns, the City and any successor in interest to the Site,together with any property acquired by the Developer pursuant to this Agreement, or any partthereof. The covenants against discrimination as set forth in this Section 1 of Article II shall remainin effect in perpetuity.

Section 5. Keeping of Animals. No animals of any kind shall be raised, bred or kept onthe Site, except that domesticated dogs, cats or other household pets may be kept by the tenants in theRental Project at the discretion of Developer and subject to compliance with all laws. However, noanimal shall be kept, bred or maintained for any commercial purpose or for fighting purposes.Nothing permitted herein shall derogate in any way the right of the Developer to further restrictkeeping ofpets.

Section 6. Parking of Vehicles. After completion of construction of the Improvements(as Improvements is defined in the Amended Agreement), the Developer shall not permit theparking, storing or keeping of any vehicle except wholly within the parking areas designated for theRequired Affordable Units. The Developer shall not permit the parking, storing or keeping of anylarge commercial type vehicle (dump truck, cement mixer truck, oil or gas truck, etc.), or anyrecreational vehicle over twenty (20) feet in length (camper unit, motor home, trailer, mobile homeor other similar vehicle), boats over twenty (20) feet in length, or any vehicle other than a privatepassenger vehicle, upon any portion of the Common Areas, including parking spaces. For purposesof this section, a pickup truck with a pickup bed mounted camper shall be considered a privatepassenger vehicle; provided however, that no such vehicle shall be used for residential purposeswhile parked on the premises.

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The Developer shall not permit major repairs or major restorations of any motor vehicle,boat, trailer, aircraft or other vehicle to be conducted upon any portion of the Common Area,including the parking areas, except for emergency repairs thereto and then only to the extentnecessary to enable movement of the vehicle to a proper repair facility. No inoperable vehicle shallbe stored or kept in the Common Area. The Developer shall give the vehicle owner not less thanfour (4) days, nor more than seven (7) days notice and an opportunity to remove any vehicle parked,stored or kept in violation of the provisions of this Declaration. Notice shall consist minimally of areasonably diligent attempt to personally notify the vehicle owner or alternatively leaving writtennotice on the subject vehicle. After due notice and opportunity have been given to the vehicle owner,the Developer shall have the right to remove, at the vehicle owner's expense, any vehicle parked,stored or kept in violation of the provisions of this Declaration.

Section 7. Maximum Occupancies. No persons shall be permitted to occupy anyApartment within the Rental Project in excess of applicable limit of maximum occupancy set by theLos Banos Municipal Code and the laws of the State of California.

Section 8. Signs Required. "No loitering" signs will be posted at each building andenforced by the owner(s). "Illegally parked vehicles will be towed" signs in compliance withCalifornia Vehicle Code requirements will be posted and enforced by the Developer.

Section 9. Fences and Electronic Installations. The Developer shall not install orknowingly permit to be installed on the exterior of any improvement or building on any fences or anyantenna or other television or radio receiving device, excepting satellite dishes having a diameter ofeighteen inches (18") or less, without prior written consent of City. This prohibition shall notprohibit the installation of cable television or subscription wires or receiving devices.

Section 10. Structural Change. Upon completion of construction of the AffordableHousing Project, nothing shall be done on the Site in, on or to any building which would structurallychange the exterior or the interior bearing walls of any such building or structure, except as otherwiseprovided herein. Nothing herein shall affect the rights of the Developer to repair, alter or constructimprovements on the buildings on the Site unless such repair, alteration or improvement wouldimpair the structural integrity and/or exterior appearance of said buildings. Nothing herein shall bedeemed to prohibit work ordered to be performed by the City building official.

Section 11. Compliance with Laws. The Developer shall comply with all applicable lawsin connection with the development and use of the Site, including without limitation the CaliforniaCommunity Redevelopment Law (Health and Safety Code section 33000, et seq.) and Fair HousingAct (42 U.S.C. § 3601, et seq., and 24 C.F.R. § 100.300, et seq.). The Developer is a sophisticatedparty, with substantial experience in the acquisition, development, financing, obtaining financing for,marketing, and operation of affordable housing projects, and with the negotiation, review, andpreparation of agreements and other documents in connection with such activities. The Developer isfamiliar with and has reviewed all laws and regulations pertaining to the acquisition, developmentand operation of the Rental Project and has obtained advice from any advisers of its own choosing inconnection with this Agreement.

ARTICLE IIIDUTIES OF DEVELOPER: SPECIFIC MAINTENANCE RESPONSIBILITIES

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Section 1. Exterior Building Maintenance. After completion of construction of theImprovements, all exterior, painted surfaces shall be maintained at all times in a clean andpresentable manner, free from chipping, cracking and defacing marks. Any such defacing marksshall be cleaned or removed within a reasonable period of time as set forth herein.

Section 2. Front and Side Exteriors. After completion of construction of theImprovements, the Developer shall at all times maintain the front exterior and yard in a clean, safeand presentable manner, free from defacing marks or any disrepair and any visible side exteriors.The Developer shall hire maintenance personnel to maintain and/or repair any front exterior or yardor visible side yard and exterior ofany lot or building.

Section 3. Graffiti Removal. After completion of construction of the Improvements, allgraffiti, and defacement of any type, including marks, words and pictures must be removed and anynecessary painting or repair completed by the later to occur of (i) seventy-two (72) hours of theircreation or (ii) seventy-two (72) hours after notice to Developer.

Section 4. Driveways. After completion of construction of the Improvements, alldriveways must be paved and maintained with impervious material in accordance with the Los BanosMunicipal Code. In addition, all water must be made to drain freely to the public part of thewaterway without any pooling.

Section 5. Exterior Illumination. After completion of construction of the Improvements,the Developer shall at all times maintain adequate lighting in all entrance ways, garages and parkingareas. Adequate lighting shall mean outdoor, night lighting designed and installed, which providesno less than one (1.0) foot candles in the parking areas and no less than one and one-half (1-112) footcandles in the walking areas or common areas and no less than 0.2 foot candles at the point of leastillumination.

Section 6. Front Setbacks. After completion of construction of the Improvements, allfront setback areas that are not buildings, driveways or walkways shall be adequately andappropriately landscaped in accordance with minimum standards established by the City and shall bemaintained by the Developer. The landscaping shall meet minimum standards set from time to timeby the City.

Section 7. Trash Bins. After completion of construction of the Improvements, all trashshall be collected and placed at all times in an enclosable bin to be placed in a designated refuse/trashbin area. The designated area shall be located so that the bin will, to the extent possible, be readilyaccessible from the street.

Section 8. Prohibited Signs. After completion of construction of the Improvements, nosign of any kind shall be displayed to the public view on or from any portion of the Site without theapproval of the City and appropriate City departments if any as required by the City Code.

ARTICLE IVOBLIGATION TO MAINTAIN, REPAIR AND REBUILD

Section 1. Maintenance by Developer. Following completion of construction of theAffordable Housing Project, the Developer shall, at its sole cost and expense, maintain and repair theSite and the improvements thereon keeping the same in a decent, safe and sanitary manner, in

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accordance with the United States Department of Housing and Urban Development ("HUD")Housing Quality Standards ("HQS"), and in good condition and making all repairs as they may berequired by these CC&Rs and by all applicable Municipal Code and Uniform Code provisions. TheDeveloper shall also maintain the landscaping required to be planted in a healthy condition. If, at anytime following completion of construction of the Affordable Housing Project, Developer fails tomaintain the Rental Project or any portion thereof, and said condition is not corrected after theexpiration of forty-five (45) days from the date of written notice from the Agency, either the Agencyor the City may perform the necessary maintenance and Developer shall pay such costs as arereasonably incurred for such maintenance. Payment shall be due within fifteen (15) days of receiptof an invoice from the Agency or the City.

Section 2. Damage and Destruction Affecting Project - Developer's Duty to Rebuild.Subject to the rights of Developer's lenders and mortgagees that are Approved Construction and/orPermanent Lenders, if, after completion of construction of the Improvements, all or any portion ofthe Site and the improvements thereon is damaged or destroyed by fire or other casualty, it shall bethe duty of the Developer to rebuild, repair or reconstruct said portion of the Site and/or theimprovements in a timely manner which will restore it to Code compliance condition.

In furtherance of the requirements of this Section 2, Developer shall keep the construction onthe Site insured by carriers at all times satisfactory to Agency against loss by fire and such otherhazards, casualties, liabilities and contingencies as included within an all risk extended coveragehazard insurance policy, in an amount of the full replacement cost of the constructions. In the eventof loss, Developer shall give prompt notice to the insurance carrier and to the Agency.

Subject to the rights of Developer's lenders and mortgagees that are Approved Constructionand/or Permanent Lenders, if the, Site is abandoned by the Developer, or if Developer fails to respondto Agency within thirty (30) days from the date notice is mailed by Agency to Developer that theinsurance carrier offers to settle a claim for insurance benefits, Agency is authorized to collect andapply the insurance proceeds at Agency's option either to restoration or repair of the Site.

Section 3. Variance in Exterior Appearance and Design. In the event the AffordableHousing Project sustains substantial physical damage due to a casualty event, the Developer mayapply to the City of Los Banos for approval to reconstruct, rebuild or repair in a manner which willprovide different exterior appearance and lot design from that which existed prior to the date of thecasualty.

Section 4. Time Limitation. Subject to the rights of Developer's lenders and mortgageesthat are Approved Construction and/or Permanent Lenders, upon damage to the Site or theAffordable Housing Project or other improvements, the Developer shall be obligated to proceed withall due diligence hereunder and commence reconstruction within two (2) months after the damageoccurs and complete reconstruction within six (6) months after damage occurs or demolition andvacate within two (2) months, unless prevented by causes beyond their reasonable control, in whichevent reconstruction shall be commenced at the earliest feasible time.

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•

ARTICLE VENFORCEMENT

Section 1. Remedies. Breach of the covenants contained in the Declaration may beenjoined, abated or remedied by appropriate legal proceeding by the Agency or City.

This Declaration does not in any way infringe on the right or duties of the City of Los Banosto enforce any of the provisions of the Los Banos Municipal Code including, but not limited to, theabatement of dangerous buildings.

Section 2. Nuisance. The result of every act or omission whereby any of the covenantscontained in this Declaration are violated in whole or in part is hereby declared to be and constitutesa nuisance, and every remedy allowable at law or equity, against a nuisance, either public or private,shall be applicable against every such result and may be exercised by any owner or its successors ininterest, without derogation of the City's rights under law.

Section 3. Right of Entry. In addition to the above general rights of enforcement, theCity shall have the right through its agents and employees, to enter upon any part of the project areafor the purpose of enforcing the California Vehicle Code, and the ordinances and other regulations ofthe City, and for maintenance and/or repair of any or all publicly owned utilities. In addition, theCity has the right of entry at reasonable hours and upon and after reasonable attempts to contactDeveloper, on any lot to effect emergency repairs or maintenance which the Developer has failed toperform. Subsequent to sixty (60) days written notice to the Developer specifically outlining theDeveloper's noncompliance, the City shall have the right of entry on the Site at reasonable hours toenforce compliance with this Declaration which the Developer has failed to perform.

Section 4. Costs of Repair. The costs borne by the City or Agency of any such repairsor maintenance emergency and/or non-emergency, shall become a charge for which Developer shallbe responsible.

Section 5. Cumulative Remedies. The remedies herein provided for breach of thecovenants contained in this Declaration shall be deemed cumulative, and none of such remedies shallbe deemed exclusive.

Section 6. Failure to Enforce. The failure to enforce any of the covenants contained inthis Declaration shall not constitute a waiver of the right to enforce the same thereafter.

Section 7. Enforcement and Nonliability. The City or Agency may from time to timemake such efforts, if any, as it shall deem appropriate enforce and/or assist in enforcing thisDeclaration. However, neither the Agency nor the City will be subject to any liability for failure toaffirmatively enforce any provision of this Declaration.

ARTICLE VIGENERAL PROVISIONS

Section 1. Covenant Against Partition. By acceptance of its interest in the Site, theDeveloper shall be deemed to covenant for itself and for its heirs, representatives, successors andassigns, that it will not institute legal proceedings or otherwise seek to effect partition of its right and

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interest in the interest being conveyed to the Developer, or the burdens running with the land as aresult of this Regulatory Agreement.

Section 2. Severability. Invalidation of anyone of these covenants or restrictions byjudgment or court order shall in no way affect any other provisions which shall remain in all forceand effect.

Section 3. Term. This Declaration shall run with and bind the interest of the Developerin the Site, and shall inure to the owner(s) of any property subject to this Declaration, his legalrepresentatives, heirs, successors and assigns, and as provided in Article VI, Sections 2 and 3, beenforceable by the City, for a term equal to the Required Covenant Period as defined in the AmendedAgreement, provided; however, that the covenants regarding nondiscrimination set forth in Section 4of Article II of this Declaration shall remain in effect for perpetuity.

Section 4. [Intentionally Omitted.]

Section 5. Construction. The provisions of this Declaration shall be liberally construedto effectuate its purpose of creating a uniform plan for the development and operation of rentalhousing available at Affordable Rent for Very Low Income Households and Lower IncomeHouseholds. The article and section headings have been inserted for convenience only, and shall notbe considered or referred to in resolving questions of interpretation or construction.

The Developer shall be obligated by this Declaration to comply with the provisions hereof.In the event of conflict, the Developer shall comply with the most stringent requirements, in eachcase.

Section 6. Amendments. This Declaration may be amended only by the writtenagreement of the Developer, the Agency and the City.

Section 7. Encroachments. None of the rights and obligations of the Developer createdherein shall be altered in any way by encroachments due to settlement or shifting of structures or anyother cause. There shall be valid easements for the maintenance of said encroachments so long asthey shall exist; provided, however, that in no event shall a valid easement for encroachment becreated in favor of Developer if said encroachment occurs due to the willful conduct of saidDeveloper.

Section 8. Notices. Any notice permitted or required to be delivered as provided hereinto Developer shall be in writing and may be delivered either personally or by certified mail. Noticeto the Agency shall be made by certified mail to the Executive Director or his designee at 520 JStreet, Los Banos, California 93635 (with a copy to Stradling Yocca Carlson & Rauth,Attention: Mark J. Huebsch, 660 Newport Center Drive, Suite 1600, Newport Beach, California92660), and shall be effective upon receipt. Notice to Developer shall be made by certified mail toWard Road Apartments, II, L.P., a California limited partnership, 15303 Ventura Boulevard, Suite1100, Sherman Oaks, California 91403, and shall be effective upon receipt, with a copy to AlliantAsset Management Company, LLC, 21600 Oxnard Street, Suite 1200, Woodland Hills, CA 91367.Such addresses may be changed from time to time by notice in writing.

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Dated: _

ATTEST:

By:-------------Lucille Mallonee, Agency Secretary

LOS BANOS REDEVELOPMENT AGENCY,a public body, corporate and politic

By: _Stephen Rath, Executive Director

CITY OFa municipal corporation

LOS BANOS,

Dated: _

ATTEST:

By: _Lucille Mallonee, City Clerk

DOCSOCIl376366v7/024012-0016

By: _Stephen Rath, City Manager


By: Corporation for Better Housing,a California nonprofit public benefit corporation,its Managing General Partner


F-13

EXHIBIT A

LEGAL DESCRIPTION

Real property in the City of Los Banos, County of Merced, State of California, described as follows:

PARCEL A:

PARCEL 3 OF PARCEL MAP NO. 2007-11, ACCORDING TO THE MAP THEREOFRECORDED DECEMBER 14, 2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

EXCEPTING THEREFROM ALL MINERALS AND MINERAL RIGHTS, INTEREST ANDROYALTIES, INCLUDING WITHOUT LIMITATION, ALL OIL, GAS AND OTHERHYDROCARBON SUBSTANCES, AS WELL AS METALLIC OR OTHER SOLID MINERALSOF WHATEVER KIND OR CHARACTER, WHETHER NOW KNOWN OR HEREAFTERDISCOVERED, IN AND UNDER THE LAND BELOW A DEPTH OF 500 FEET UNDER THESURFACE WITHOUT REGARD TO THE MANNER IN WHICH THE SAME MAY BEPRODUCED OR EXTRACTED FROM THE LAND, BUT WITHOUT ANY RIGHT TO ENTERUPON OR THROUGH THE SURFACE DOWN TO 500 FEET BELOW THE SURFACE TOEXTRACT, DRILL, EXPLORE OR OTHERWISE EXPLOIT SUCH MINERALS OR MINERALRIGHTS AND WITHOUT ANY RIGHT TO REMOVE OR IMPAIR LATERAL OR SUBJACENTSUPPORT.

PARCELB:

A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR CIRCULATION,ACCESS, INGRESS AND EGRESS, PUBLIC UTILITIES AND INCIDENTAL PURPOSES, ON,OVER AND THROUGH THAT PORTION OF PARCELS 1 AND 2 DESIGNATED AS "ACCESSEASEMENT FOR THE BENEFIT OF PARCELS 1,2, AND 3" ON PARCEL MAP NO. 2007-11RECORDED DECEMBER 14, 2007 IN VOLUME 108 OF PARCEL MAPS, AT PAGES 29-31,MERCED COUNTY RECORDS.

APN: 083-100-083

EXHIBIT "A"

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STATE OF CALIFORNIA

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O proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aresubscribed to the within instrument and acknowledged to me that he/she/they executed the samein his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument theperson(s), or the entity upon behalf of which the person(s) acted, executed the instrument.


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DOCSOC/1376366v7/024012-0016F-17

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At the Crossroads of California

Agenda Staff Report

TO:

FROM:

DATE:

Mayor & City Council members

Stev~ty Manager

December 2,2009

SUBJECT: City Council Support for November 2010, State of California ConstitutionalBallot Measure to Protect Funding for Public Safety, Transportation,Redevelopment, Transit and Other City Services

TYPE OF REPORT:

Recommendation:

Non Consent Agenda

Staff recommends City Council approve the attached November 2010, ballot measure;Resolution in Support of the Local Taxpaver, Public Safety and TransportationProtection Act of 2010, as proposed at the annual League of California Citiesconference and unanimously supported by voting delegates.

Background:

As the City Council is aware the State of California within the past two weeks hasestimated that their budget deficit for the next eighteen months will total approximately$21 billion dollars. As State Legislators most recently demonstrated, they will take localCity of Los Banos tax revenues that support public safety, roads, transportation, parksand recreation services to cover the State's budget deficit.

Discussion:

For City Council review, attached is a copy of the Executive Summary from ChrisMcKenzie, Executive Director for the California League of Cities, and the Resolution inSupport of the Local Taxpayer, Public Safety and transportation Protection Act of 2010,

in addition to the draft Constitutional Amendment that is being submitted to the State ofCalifornia.

Mr. Stephen Qualls, League of California Cities District Representative will present theLeague's proposal regarding the Constitutional Amendment and is available to answerany questions.

Fiscal Impact:

Further State takings of local tax revenue that support our public safety services, roads,transportation, parks and recreation will have dire consequences affecting the City'sability to provide core services for its citizens.

Attachments:

1. Resolution in Support of the Local Taxpayer, Public Safety and TransportationProtection Act of 2010

2. League of California Cities Executive Director, Chris McKenzie's ExecutiveSummary

3. Amended long version of the draft - State of California ConstitutionalAmendment, 09-0063

RESOLUTION NO. __

A RESOLUTION OF THE CITY COUNCIL OF THECITY OF LOS BANOS IN SUPPORT OF THELOCAL TAXPAYER, PUBLIC SAFETY ANDTRANSPORTATION PROTECTION ACT OF 2010

WHEREAS, California voters have repeatedly and overwhelmingly passedseparate ballot measures to stop State raids of local government funds, and to dedicatethe taxes on gasoline to fund local and state transportation improvement projects; and

WHEREAS, these local government funds are critical to provide the police andfire, emergency response, parks, libraries, and other vital local services that residentsrely upon every day, and gas tax funds are vital to maintain and improve local streetsand roads, to make road safety improvements, relieve traffic congestion, and providemass transit; and

WHEREAS, despite the fact that voters have repeatedly passed measures toprevent the State from taking these revenues dedicated to funding local governmentservices and transportation improvement projects, the State Legislature has seized andborrowed billions of dollars in local government and transportation funds in the past fewyears; and

WHEREAS, this year's borrowing and raids of local government, redevelopmentand transit funds, as well as previous, ongoing raids of local government andtransportation funds have lead to severe consequences, such as layoffs of police, fireand paramedic first responders, fire station closures, stalled economic development,healthcare cutbacks, delays in road safety improvements, public transit fare increasesand cutbacks in public transit services; and

WHEREAS, State politicians in Sacramento have continued to ignore the will ofthe voters, and current law provides no penalties when state politicians take or borrowthese locally-dedicated funds; and

WHEREAS, a coalition of local government, transportation and transit advocatesrecently filed a constitutional amendment with the California Attorney General, calledthe Local Taxpayer, Public Safety, and Transportation Protection Act of 2010, forpotential placement on California's November 2010 statewide ballot; and

WHEREAS, approval of this ballot initiative would close loopholes and changethe constitution to further prevent State politicians in Sacramento from seizing,diverting, shifting, borrowing, transferring, suspending or otherwise taking or interferingwith tax revenues dedicated to funding local government services, includingredevelopment, or dedicated to transportation improvement projects and mass transit.

THEREFORE, BE IT RESOLVED that the City of Los Banos formally endorsesthe Local Taxpayer, Public Safety and Transportation Protection Act of 2010, aproposed constitutional amendment.

BE IT FURTHER RESOLVED that we hereby authorize the listing of the City ofLos Banos in support of the Local Taxpayer, Public Safety and TransportationProtection Act of 2010 and instruct staff to fax a copy of this resolution to campaignoffices at 916.442.3510.


AYES:NOES:ABSENT:

APPROVED:

Tommy Jones, Mayor

ATTEST:


1400 KStreet, Suite 400. Sacramento, California 95814Phone: 916.658.8200 Fax: 916.658.8240

www.cacities.org

TO:FROM:RE:

DATE:

California City OfficialsChris McKenzie, Executive DirectorBallot Measure Filed to Protect Funding for Public Safety, Transportation,Redevelopment, Transit and Other Vital Local ServicesOctober 20, 2009

EXECUTIVE SUMMARY: The League is part of a coalition that filed a proposed initiativeballot measure today for the November 2010 ballot to protect local government(including redevelopment), transportation and transit revenues from state raids andloans. This memo summarizes its contents and alerts YOU to two upcoming briefings onthe measure.

Special City Official Briefings

Please RSVP to your regional managerto participate on a conference call

briefing about the Revenue ProtectionMeasure

Wednesday. Oct. 21. 1:30 p.m.Call-in number: (888) 390- 0677Pass code: LOCAL

I wanted to share with you some very importantnews for the future of city services. Today, acoalition (including the League) of localgovernment, transportation and public transitleaders filed an initiative ballot measure -- calledthe Local Taxpayer, Public Safety andTransportation Protection Act -- with theCalifornia Attorney General's office. (Twoalternative versions of the ballot measure actuallywere filed, but their content is virtually identical.The major difference is formatting).

Thursday. Oct. 22. 8:30 a.m.Call-in number: (888) 769- 8913Pass code: LOCAL

We are working to have this measure placed onthe statewide ballot for November 2010. If passedby voters, the measure would close loopholesand prevent the State from borrowing, raiding or

otherwise redirecting local government (local taxes, property taxes, redevelopment),transportation (HUTA and Prop. 42 funds) and public transit funds.

More than 300 city officials participated in a historic summit this summer where we cametogether with over 200 of our colleagues from the school boards and counties to focuson the need for state governance and fiscal reform. At that summit, participants selected"Local Revenue Protection" as the highest reform priority.

Many of you also attended the League's annual conference last month in San Josewhere the voting delegates unanimously voted to support the League's co-sponsorshipof a ballot measure for November 2010 to tighten protections of city and transportationrevenues. No one can doubt the need for this measure after the state came dangerouslyclose to stealing $1 billion in local gas tax revenues and actually did borrow $2 billion inlocal property taxes, seize billions in redevelopment agency funds and take $697 millionof transit funds.

Let me now tell you about the work of a growing coalition the League has joined toprotect local revenues and local services. Specifically, the ballot measure our coalitionfiled today would:

Prohibit the State from taking, borrowing or redirecting local taxpayer funds dedicated topublic safety, emergency response and other vital local government services (includingredevelopment). The measure would close loopholes to prevent the taking of localtaxpayer funds currently dedicated to cities, counties and special districts. It would alsorevoke the State's authority to borrow local government property tax funds or divert localredevelopment funds.

Protect vital, dedicated transportation and public transit funds from state raids. Themeasure would prevent State borrowing, taking or redirecting of the state sales tax ongasoline (Prop. 42 funds) and Highway User Tax on gasoline (HUTA) funds that arededicated to transportation maintenance and improvements. It would also prevent theState from redirecting or taking public transit funds.

For more information, join the League officers and me for one of our special briefing callson this matter. See page one for the details.

Filing the measure with the Attorney General's office is just the first step in a long andexpensive process of qualifying a measure for the November 2010 ballot and securingvoter approval. The coalition will receive the official Title and Summary in late Novemberor early December 2009 and, at that point, can proceed with collecting the apprOXimately1 million signatures needed to qualify for the November ballot.

With the State continuing to raid and borrow local government, transit and transportationfunds, this measure is desperately needed to protect taxpayers and the vital localgovernment and transportation services that support our quality of life and economy.

As a core partner in this effort, the League will keep you informed as the process movesforward. If we proceed, we will need a strong grassroots and fundraising effort. In fact,the most important factor to the League board in determining whether to supportgathering signatures and filing one of the measures will be the strength of interest andcommitment to signature gathering and fundraising by city officials. In other words, thefate of this measure is in your hands and those of thousands of your colleagues aroundthe state.

The coalition released a news release today announcing the filing of the measure. It'sbeen posted on the League's Web site at www.cacities.org/resource files/28386.10-20-09Local Protection Measure Filed.doc.

Copies of the short and long versions of the ballot measures filed with the AttorneyGeneral have been posted on the League's Web site.

Short: www.cacities.org/resourcefiles/28385.BaliotMeasurePublicSafetyShortVersion.pdf

Long: www.cacities.org/resourcefiles/28384.BaliotMeasurePublicSafetyLongVersion.pdf

You can also visit the campaign's Web site at www.savelocalservices.com for additionalinformation and what you can do to help. If you do so, however, you should only do itfrom a private computer and not on city time.

Thank you again for all of your hard work on behalf of the cities you serve.

*Note: This memo was not paid for with public funds.

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"

.09-0063Amdt..l4NS

Section One. Title.

This act shall be known and may be dted as the "local Taxpayer, Public Safety, andTransportation Protection Act of 2010."

section Two. Findings and Declarations.

The people of the State of california find and declare that:

(a) In order to maintain local control over local taxpayer funds and protect vital services

like local fire protection and 9-1-1 emergency response, law enforcement, emergency room

care, public transit, and transportation improvements, callfomla voters have repeatedly and

overwhelmingly voted to restrict state politicians in Sacramento from taking revenues

dedicated to funding local government services and dedicated to funding transportation

Improvement projects and services.

(b) By taking these actions; voters have acknowledged the critical importance of

preventing State raids of revenues dedicated to funding vital local government services and

transportation improvement projects and services.

(c) Despite the fact that voters have repeatedly passed measures to prevent the State

from taking these revenues dedicated to funding local govemment services and transportation

improvement projects and services, state politicians In. Sacramento have seized and borrowed

billions of dollars in local government and transportation funds.

(d) In recent years, state politicians in Sacramento have specifically:'

(1) Borrowed billions of dollars in local property tax revenues that would otherwise beused to fund local police, fire and paramedic response and othervital local services;

(2) Sought to take and borrow billions of dollars in gas tax revenues that voters havededicated to on-going transportation projects and tried to use them for non-transportationpurposes;

(3) Taken local community redevelopment funds on numerous occasions and used themfor unrelated purposes;

(4) Taken billions of dollars from local public transit like bus, shuttle, light-rail andregional commuter rail, and used these funds for unrelated state purposes.

(e) The continued raiding and borrowing of revenues dedicated to funding localgovernment services and dedicated to funding transportation improvement projects can cause

1

..

severe consequences, such as layoffs of police, fire and paramedic first responders, fire stationclosures, healthcare cutbacks, delays in road safety improvements, public transit fare increasesand cutbacks in public transit services.

(f) State politicians in Sacramento have continued to ignore the will of the voters, andcurrent law provides no penalties when state politldans take or borr-ow these dedicated funds.

(8) It is hereby resolved, that with approval of this ballot initiative, state politicians in

Sacramento shall be prohibited from seizing, diverting, shifting, borrowing, transferring,suspending or otherwise taking or interfering with tax revenues dedicated to funding localgovernment services or dedicated to transportation improvement projects and services.

Section Two and One-Half. Statement of Purpose.

The purpose of this measure is to conclusively and completely prohibit state politldansin Sacramento from seizing, diverting, shifting, borrowing, transferring, suspending or

otherwise taking or Interfering with revenues that are dedicated to funding services providedby local government or funds dedicated to transportation improvement projects and services.

Sectton Three. section 24 of Artlde XIII of the california Constitution Is hereby amended toread 8S follows:

!il.The Legislature may not impose taxes for local purposes but may authorize localgovernments to impose them.

(b) The Legislature may not reallocate. transfer. borrow. appropriate. restrict the useof. or otherwise use the proceeds of anytax imposed or levied by a local government solely forthe local government's purposes.

~Money appropriated from state funds to a local government for Its local purposesmay be used as provided by law.

un Money subvened to a local government under Section 25 may be used for state orlocal purposes.

section Four. Section 25.5 ofArtide XIII of the california Constitution Is hereby amended toread as follows:

SEC. 25.5. (a) On or after November 3, 2004, the Legislature shall not enact a statute todo any of the following:

2

(1) (A) Except as otherwise provided in subparagraph (8), modify the manner In which

ad valorem property tax revenues are allocated In accordance with subdivision (a) ofSection 1

of Article XIII A so as to reduce for any fiscal year the percentage of the total amount of ad

valorem property tax revenues in a county that Is allocated among all of the local agencies In

that county below the percentage of the total amount of those revenues that would be

allocated among those agencies for the same fiscal year under the statutes in effect on

November 3, 2004. For purposes of this subparagraph, Rpercentage" does not include any

property tax revenues referenced in paragraph (2).

(8) QesiAAiASIJL'd'h 'he ~008 09 In the 2009-10 fiscal year only" and except as otherwiseprovided in subparagraph (e), subparagraph (A) may be suspended for a !hi! fiscal year if all ofthe following conditions are met:

(i) The Governor Issues a proclamation that declares that, due to a severe state fiStellhardship, the suspension ofsubparagraph (A) Is necessary.

(il) The Legislature enacts an urgency statute, pursuant to a bill passed in each house ofthe Legislature by rollcall vote entered In the journal, two-thirds of the membership concurring,that contains a suspension ofSUbparagraph (A) for that fiscal year and does not contain anyother provision.

(iii) No later than the effective date of the statute described in dause (iI), a statute isenacted that provides for the full repayment to local agencies of the total amount of revenuelosses, including interest as provided by law, resulting from the modification of ad valoremproperty tax revenue allocations to local agencies, This full repayment shall be made not laterthan the end ofthe third fiscal year immediately following the fiscal year to which themodification applies.

f'W} ' ......aNsra'h ~&.} shall AS' Be sYs,eRded fer R1ere 'RaA :~"Je lissal rears dYriRg aA';,erlelll 8f 19 &eAseSyt!".'e #fssal'/ears, whish peri8EIlle8iAs with the first lissal·tear fer tovhiehsYllpa~phf~issYSpeAded.

(ii) '1:IIIP8Figfiipl:ll~ shall Ret lie sYs,eRded dyriRg aA)' fiseal'/ear ilthe fyll repll'/fReAtreEfyiredliv a statyte eAaeted iR 8sssAiaRse •....'ith elayse fiii} sf syllpaFigraph (8) has Aet ret"eeA eSR1ple'ed.

Uii) &Yllp8FIlfilph ~ti) shall Aet "e 5..,peAded d"AAI aA'; tis.1 'lear if the aMS"'" that•...·a5 rellwl,ei te he lJaidts Bitles, sewMies, aAd sities aFlIII 6swMies wFlde, 'eRieFl 191&4.11 efthe R~JeAYI!! aFld 1=aMatisFI CSde, as that seRieA ,eaEi SFI Nsvemher a, ~994, has Aet laeeFl lIaid1Ft fylllJris, ts the effeetive lIIate sf 'he S&ltY4ie ,reTAil. fer that SWSpeFtAeA 15 deslirllls&lIAslayse (Ii) sf sYh,a,agraplt '8).

3

M 1Q A suspension of subparagraph (A) shall not result in a total ad valorem propertytax revenue Joss to all local agencies within a county that exceeds 8 percent of the total amountof ad valorem property tax revenues that were allocated among all local agencies within thatcounty for the fiscal year immediately preceding the fiscal year for which subparagraph (A) issuspended.

(2)(A) Except as otherwise provided in subparagraphs (B) and (C), restrict the authorityof a city, county, or city and county to impose a tax rate under, or change the method ofdistributing revenues derived under, the Bradley-Burns Uniform Local Sales and Use Tax Law setforth in Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and TaxationCode, as that law read on November 3, 2004. The restriction Imposed by this subparagraph alsoapplies to the entitlement of a city, county, or city and county to the change in tax rateresulting from the end of the revenue exchange period, as defined in Section 7203.1 of theRevenue and Taxation Code as that section read on November 3, 2004.

(B) The Legislature may change by statute the method of distributing the revenuesderived under a use tax imposed pursuant to the Bradley-Bums Uniform Local Sales and UseTax Law to allow the State to partidpate in an interstate compact orto comply with federal law.

(C) The Legislature may authorize by statute two or more specifically identified localagencies within a county, with the approval of the governing body ofeach of those agencies, toenter into acontract to exchange allocations ofad vaJorem property tax revenues for revenuesderived from atax rate imposed under the Bradley-Bums Uniform Local Sales and Use Tax Law.The exchange under this subparagraph of revenues derived from atax rate imposed under thatlaw shall not require voter approval for the continued Imposition ofany portion of an existingtax rate from which those revenues are derived.

(3) Except as otherwise provided in subparagraph (C) of paragraph (2), change for anyfiscal year the pro rata shares In which ad valorem property tax revenues are allocated amonglocal agendes in a county other than pursuant to a bill passed in each house of the Legislatureby roll call vote entered in the journal, two--thirds of the membership concurring. Ib!Legislature shall not change the pro rata shares of ad valorem property tax pursuant to thisparagraph. nor change the allocation of the revenues described in Section 15 of Article XI. toreimburse alocal government when the Legislature or any state agency mandates anewprogram or higher level of service on that local government.

(4) Extend beyond the revenue exchange period, as defined in Section 7203.1 of theRevenue and Taxation Code as that section read on November 3, 2004, the suspension of theauthority, set forth in that section on that date, of a city, county, or city and county to Impose asales and use tax rate under the Bradley-Burns Uniform Local sales and Use Tax Law.

4

(5) Reduce, during any period In which the rate authority suspension described inparagraph (4) is operative, the payments to a city, county, or city and county that are requiredby Section 97.68 of the Revenue and Taxation Code, as that section read on November 3, 2004.

(6) Restrict the authority of a local entity to Impose atransactions and use tax rate Inaccordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) ofDivision 2 ofthe Revenue and Taxation Code), or change the method for distributing revenuesderived under a transaction and use tax rate imposed under that law, as it read on November 3,2004.

(7) Require a community redevelopment agency IA} to pay. remit. loan or otherwisetransfer, directly or indirectly, taxes on ad valorem real property and tangible personal property

allocated to the agency pursuant to Section 16 ofArticle XVI to or for the benefit of the State.any agency of the State. or any jurisdiction; or (B) to use. restrict. or assign a particular purpose

for such taxes for the benefit ofthe State, any agency ofthe State. or any jurisdiction. otherthan til for making payments to affected taxing agencies pursuant to sections 33607.5 and33607.7 of Health and Safety Code or simitar statutes rej:!uiring such payments, as thosestatutes read on January I. 2008; or liil for the purpose of increasing. Improving, and preservingthe supplv of low and moderate income housing available at affordable housing cost.

(b) For purposes of this section, the follOWing definitions apply:

(1) "Ad valorem property tax revenu~ means all revenues derived from the taxcollected by a county under subdivision (a) ofSection 1 ofArticle XIII A, regardless of any ofthlsrevenue being otherwise classified by statute.

(2) "local agency" has the same meaning as specified In Section 95 of the Revenue andTaxation Code as that section read on November 3, 2004.

(3) "Jurlsdictlon"· has the same meaning as specified in Section 95 ofthe Revenue andTaxation Code as that section read on November 3. 2004.

Section FJve. Article XIX of the C8l1fomla Constitution Is hereby amended to read as follows:

.SECTION I. The legislature shall not borrow revenue from the Highwav Users TaxAccount, or its successor. and shall not use these revenues for purposes. or In ways. other thanthose specifically permitted by this article.

SEC. 2. Revenues from taxes 1mposed by the State on motorvehicle fuels for use Inmotor vehicles upon public streets and highways, over and above the costs of collection andany refunds authorized by law, shall be deposited into the Highway Users Tax Account (Section2100 of the Streets and Highways Code) or its successor, which is hereby declared to be a trust

5

fund. and shall be allocated monthly In accordance with Section 4. and shall used~for thefollowing purposes:

(a) The research, planning, construction, improvement, maintenance, and operationof public streets and highways (and their related public fadlities for nonmotorized traffic),including the mitigation of their environmental effects, the payment for property taken ordamaged for such purposes, and the administrative costs necessarily incurred in the foregoingpurposes.

(b) The research, planning, construction, and improvement of exclusive public masstransit guideways (and their related fixed facilities), including the mitigation of theirenvironmental effects, the payment for property taken or damaged for such purposes, theadministrative costs necessarily Incurred In the foregoing purposes, and the maintenance of thestructures and the Immediate right-of-way for the public mass transit guideways, but excludingthe maintenance and operating costs for mass transit power systems and mass transitpassenger facilities, vehides, equipment, and services.

~~. Revenues from fees and taxes Imposed by the State upon vehicles ortheir use or operation, over and above the costs of collection and any refunds authorized bylaw, shall be used for the follOWing purposes:

(a) The state administration and enforcement of laws regulating the use, operation, orregistration of vehicles used upon the public streets and highways ofthis State, including theenforcement of traffic and vehicle laws by state agencies and the mitigation of theenvironmental effects of motor vehicle operation due to air and sound emissions.

(b) The purposes specified in Section .a.~ ofthis article.

~ SEC. 4. fa) Except as provided In subdivision (b). ;!he legislatl:lFe shall ,r:evhtefer the alle&alleA ehR8 r&\leltya, 18 ~e "1st" fer the ....fII8se5 s'lMiifiee iA 5e6tisA 1 sf tl:l15artlele iF! a MaAAsr ·:tRleR SF!5YfSS Il:Ie ,sAtiRyaA,e sfHistiRS statutory alleeatieR fOrmulas ineffect on June 30. 2009 which allocate the revenues described in Section 2 to fer cities,counties, and areas ofthe State shall remain in effect.

(b) The leBislature shall not modify the statutorv allocations In effect on June 30. 2009unless and until both of the follOWing have occurred:

ill~ The Lesislature determines in accordance with this subdivision that another basisfor !In equitable, geographical, and jurisdictional distribution exists: IIF.·Iidell that, wAtil SWM

Elet8FfRiRatieR 15 FRalle> aA'; YS8 ef 'Y&h FelleRye, fer ,YF'S'85 s,eellied iR 5ysEiMsisA (~) efSealeR! sftl:li, aRiels S'; eF IA a elt';, eeYFI~, SF aFea sftt.e Stale &"alills IFl6huteEi witl:llA theeMistiA8 statyteFy aileeatisA5 te, sr fer eM,eFlEIltYFe 1-., that 6it',', 6SYAty, SF aFea, Any futurestatutory revisions shall W provide for the allocation of these revenues, together with other

6

similar revenues, in a manner which gives equal consideration to the transportation needs of allareas of the State and all segments of the population; and (8) be consistent with the orderlyachievement of the adopted local, regional, and statewide goals for ground transportation inlocal general plans, regional transportation plans, and the california Transportation Plan-:.i.

(2) The process described in subdivision (el has been completed.

(c)The legislature shall not modify the statutOry allocation pursuant to subdivision (b)until all ofthe following have occurred:

(11 The California Transportation Commission has held no less than four publichearings in different parts of the State to receive public input about the local and regional goalsfor ground transportation in that part ofthe State;

(2) The california Transportation Commission has published a report describing the'nput received at the public hearings and howthe modification to the statutory allocation isconsistent with the orderly achievement of local. regional. and statewide goals for groundtransportation in local general plans. reRional transportation plans. and the CaliforniaTransportation Plan; and

(3) Ninety days have passed since the publication of the report by the californiaTransportation Commission.

(d) A statute enacted by the legislature modifying the statutOry allocations must be bya bill passed in each house of the Lesislature bv roll call vote entered in the iournal. two-thirdsof the membership concurring, provided that the blll does not contain any other unrelatedprovision.

(e) The revenues allocated by statute to cities. counties. and areas of the State

pursuant to this article may be used solelv bv the entity to which they are allocated. and solely

for the purposes described in sections 2. S, or 6 of this article.

(f) The Legislature may not take any action which permanently or temporarily does

any of the following: (1) changes the status of the Highway Users Tax Account as a trust fund;(2) borrows. diverts. or appropriates these revenues for pUrPoses other than those desqibed

in subdivision (e); or (3) delavs, defers. suspends. or otherwise interrupts the payment.

allocation. distribution. disbursal. or transfer of revenues from taxes described In Section 2to

cities. counties. and areas of the State pursuant to the procedures in effect on June 30, 2009,

&&&4. SEC, 5, Revenues allocated pursuant to Section i.4 may not be expended forthe purposes specified in subdivision (b) ofSection -I~ except for research and planning, untilsuch use is approved by amajority of the votes cast on the proposition authorizing such use of

7

such revenues In an election held throughout the county or counties, or a specified area ofacounty or counties, within which the revenues are to be expended. The legislature mayauthorize the revenues approved for allocation or expenditure under this section to be pledgedor used for the payment of principal and interest on voter-approved bonds issued for thepurposes specified in subdivision (b) ofSection ~1.

~. SEC, 6. 1!l The &:eglslatYre May ayttleflze !!yp to 25 percent of the revenuesa'JilIIa..le feF eMileAfilityre ..', aA'" 5tty eF 59YA""', eF ..',. th9 &tate, allocated to the State pursuantto Section 4 for the purposes specified in subdivision (a) of Section ~1 of this article may bepledged or used by the State, upon approval by the voters and appropriation by the legislature.for the payment of principal and interest on voter-approved bonds for such pUrPoses issued~the State on and after November 2, 2010 fer s"M ,"Flleses.

(b) Up to 25 percent of the revenues allocated to any city or county pursuant toSection 4 for the purposes specified In subdivision (a) ofSection 2 of thil article may be pledgedor used only by any cltv or county for the payment of principal and interest on voter-approvedbonds issued by that citv or county for such purposes.

SiC. i. TI:Ie taM Fe'/eAHes files'..a'. "'REIer ~'s aRiele MatI lJe leaAeEl te the GeAeralfiYR8 9R1y if eAe ef the fellWJiA8 &eRElitieRs 15 IFRpese":

(a) "A:lat aA'{ aMeHAt leaAeElls te he rellalfil IR Nil te tile fHREI we... v.iRleh it washeFF9weli ElyriA8 the saMe flsNI','ear if' 'NAletl 'tie leaA was Mafile, 8.8'" thiM: Fella'/MeRt Ma',he filela)'e" wMii a filate Ret fAeFe lllaA i9 Ela'j'S after tile date ef eRB&tfReM efthe "yfilset 1:1111 ferthe sy"seElyeAt fisE,1 .,.ear.

(iJ) Ttlat aR'! aRieHR' leaRed 15 te "e repaid iR full te tt:le fuRd freRl '.\'!:Iieh it lJ+'asBerre't.'eEi Wittl'R t~ree tiseal ltears "e", the date eR .....hieh the leaR was Rlade aAd eAe efthefelle'NIAI has e6ew,reElI

(1) Tt:le Gw:erFier has IIr:eealfRefil a state sf e",ergeF!ey BREI Eleeares that theefReFlef'&y 1+"t'iII r8SYit iA a s1BAifi6i1At Ae8atil/e fissal iRlIIBet '9 the GeReNaI FWA",

(~} The aareBate aRiSYRt ef GlIRlIral FYAd 'lIVeRYIS fer ~e eHA'eRt #iseal year, asIIrejeeteEt ..'; the Ge".'erReF iA a re,eR Ie the &:egislatH,e iA MI',. sf-'e EYA'eA' fisEal'l8ar, i51esst!:laA ttte aareBate aRlewAt af (ieAeral FWAtiI Ri\'ElAWliI& feF '!:Ie prel/ieys fiseal'/eaF, aEljYRed fertile ehaRBe IR the eest ef IhAAS aRd tile ehaRle iF! ,e,..IatlaA, as speeiAefil iA the i:!YEteetSY"M*eEl ..y the GeVeFAeF ,yrsyaRt te SeetieR la ef .'\rll,18 IV IF! tl:l8 ,urFIAt fissal )'ear.

(Ei) NetA!F!BIA this se6tieF! ,r:ettihits ttle begislatHFe (reRi aytheriziRtf/ ..", statute, leaR5te lesal t'BAs,erlatisH a8eAses) eities, ,sYAtles, er Eities aRfiI eeYAties, fFeRi NRfils that aresylJjeette t!:lis artlsle; feFtI:le ,H"958S iYtI:leFileEi "Aderthis aRlele••'\R.,.leaA ayt!:leFiled as

8

deSEFibed btl ~i:lis swbdi¥isisR si:lall be r:e,akl, ,.",ith TAlepes! a' '~Q Fate paid eR MeA.1 iA 'hePeeled MeAe}'IR'testfReRt ',eeewRt, eF aRV sweeesss, te t!:lM a&&8HA&, "HriAg the ,eFied eftlAU!

~hat '!:Ie FAe,..!'!' Is leaRed, ts '!:I8 fWA" KS'" w!:ll'h it was he,ps'tJed, Aet later ttlaA fey, vearsafter tAe date SA whieh ttte leaR "Jons Mase,

SEC. 7, If the legislature reduces or repeals the taxes described in Section 2 andadopts an alternative source of revenue to replace the moneys derived from those taxes. thereplacement revenue shall be deposited Into the Highway Users Tax Account. dedicated to thepurposes listed in Section 2, and allocated to cities, counties, and areas of the State pUrsuant toSection 4. All other provisions of this article shall apply to any revenues adopted by theLegislature to replace the moneys derived from the taxes desaibed in Section 2.

, HGr+. SEC. 8. This article shall not affect or apply to fees or taxes imposed pursuantto the Sales and Use Tax Law or the Vehicle Ucense Fee Law, and aU amendments and additionsnow or hereafter made to such statutes.

~. SEC. 9. Notwithstanding Sections UR4 2 and 3 of this article, any realproperty acquired by the expenditure of the designated tax revenues by an entity other thanthe State for the purposes authorized in those sections, but no longer required for suchpurposes, may be used for local public park and recreational purposes.

~. SEC. 10. Notwithstanding any other provision of this Constitution, thelegislature, by statute, with respect to surplus state property acquired by the expenditure oftax revenues designated In Sections *'aR& 2 and 3 and located in the coastal zone, mayauthorize the transfer of such property, for a consideration at least equal to the acquisition costpaid by the ~tate to acquire the property, to the Department of Parks and Recreation for statepark purposes, or to the Department of Fish and Game for the protection and preservation offlsh and wildlife habitat, or to the Wildlife Conservation Board for purposes ofthe WildlifeConservation Law of 1947, or to the State Coastal Conservancy for the preservation ofagricultural lands.

As used In this section, "coastal zone" means "coastal zone" as defined by Section30103 of the Public Resources Code as such zone is described on January 1, 1977.

Section Six. Article XIX A of the CaUfornla Constitution is hereby amended to read as follows:

SECTION 1. (a) The Legislature shall not borrow revenues from the PublicTransportation Account. or any successor account, and shall not use these revenues forpurposes. or In ways. other than those specificallv permitted by this article.

.ou The fyRElS iA ttte Public Transportation Account in the State Transportation Fund,or any successor account, Is a trust fund. The legislature may not change the status of thePublic Transportation Account as a trust fund. Funds in the Public Transportation Account may

9

not be loaned or otherwise transferred to the General Fund or any other fund or account in theState Treasury. M'; tie leaAeEl ta the 'eAe,al F"AdeRly if BRe sf the fallewiR! 68RElitieRS isIM,e5ed:

(ci All revenues specified In paragraphs (1) through (3), Inclusive. of subdivision (al of

Section 7102 of the Revenue and Taxation Code, as that section read on June 1. 2001, shall be

deposited no less than quarterly Into the Public Transportation Account (Section 993100fthe

Public Utilities Code), or Its successor. The Legislature may not take any action which

temporarily or permanently diverts or appropriates these revenues for purposes other than

those described In subdivision (dl, or defays, defers, suspends, or otherwise interrupts the

quarterly deposit ofthese funds into the Public Transportation Account.

(dl Funds in the Public Transportation Account may only be used for transportationplannln! and masstransportatjQn purposeS. The revenues described In subdivision Ic) arehereby continuously appropriated to the Controller without regard to fiscal years for allocationas follows:

(1) Fifty percent pursuant to subdivisions (a) through (fl, Inclusive, ofSection 99315 ofthe Public Utllittes Code. as that section read on July 30. 2009.

(2) Twenty-five percent pursuantto subdivision (bl of Section 99312 of the PublicUtilities Code. as that section read on July 30, 200?,

(31 Twenty·fiye percent pursuant to subdMslon te) ofSection 99312 oUbe PublicUtilities Code, as that section read on July 30, 2009.

(al That aAr aMSYAt IsaAed is te be ,epaid iF! Nil te the 'SSeYM dYAAg t~e saMe flssal';ea, iA '.~iEh the laaR was MadeJ eKee,t that F41,a)'MeRt Ma'; tie delared "Atil a date Aet meretheA 39 iit'ls afte, the iate sf eAaEtMeAI efthe IUIE'get tiill fe, the s....seqyeAI tiseal ';eaF.

(..)That aAy aMeYAt leaAed's te "s Fellalll'A Nil Is the "58WAI ttlithlA 'tlFeB t1s6il1 't'eaFSHem the lIats SA whish the lelA ·....B5 "'Iliis aAIi eAB sf the feNe..,.·'A. hBS eSSY,Fedi

(1) The Ge'/e'Ae, has ,reelaimed a slate sf e"'S'&eAGlf BAd desta'S5 t~at t~e eMe'leA&ywill Fes..1t IA a silRifisaAt Relati'/e flssallMlliMit Ie the GeA8FaII=HAi.

(1) TI:I8 aggF88ate i1Me..M ef CieAeral FYRIt Fe'"/8A..es fe,.h8 e.."eAt tissal 'fear, asI*ejeete~ 9r Ihe '8'.o'e'Rs, iR a F41,sFt 1:e the besisla1:..re IA May ef the , .."eRt tseal yea" 15 lesstl\aA the asBFefJate aMaYAt ef CieAeral FYAi RI\'8RYS5 fer the "e'Jie..s liseal,,.e,,, as sileafiediA the ....d8et s"BFRitteEi "t; the Cie'.o'e'Aer , ..,suaAt 1:e Seet'eA 12 ef .o.Ftlsle IV IA the SYrreAtfisealrear. .

10

Ie) For purposes ofparagraph (1) of subdivision fd)' "transportation plannins" meansonly the purposes described In subdivisions Cc) through (fl. inclusive. of Section 99315 ofthePublic Utilities Code. as that section read on July 30. 2009.

(f) For pumoses of this article, "mass transportation," "'publlc transit.'" and "masstransit» have the same meaning as "public transportation.'" ·Public transportation" means:

(UfA) Surface transportation service prOVided to the general public. complementarvparatransit service prOVided to persons with disabilities as required by 42 U.S.c. 12143. orsiml/ar transportation provided to people with disabilities or the elderly: (B) operated by bus.ran. ferry. or other conveyance on a fixed route. demand response. or otherwise regularlyavailable basis; (C) generally for which afare Is charged; and (0) prOVided by any transit district.included transit district. municipal operator, Included municipal operator. eligible munidpaloperator. or transit development board. as those terms were defined in Article 1 of ChaRter 4 of Part 11 of Division 10 of the Public Utilities Code on January 1, 2009. a joint powers authorityformed to provide mass transportation services, an agency described in subdivision (f) ofSection 15975 ofthe Government Code. as that section read on January I. 2009. any recipientof funds under Sections 99260. 99260.7. 99275. or subdivision (cl of Section 99400 ofthe PublicUtilities Code. as those sections read' on January 1. 2009. or a consolidated agency as defined in .Section 132353.1 of the Public Utilities Code. as that section read on Januarv 1. 2009.

(2) Surface transportation service provided by the Department ofTransportationpursuant to subdivision (a) of section 99315 of the Public Utilities Code. as that section read onJuly 30. 2009.

(3) Public transit capital improvement projects. including those identified in subdivision(b) of section 99315 of the Public Utilities Code. as that section read on July 3D. 2009.

sec. 2. (a) As used in this section, a "local transportation fund- is a fund created underSection 29530 of the Govemment Code, or any successor to that statute.

(b) All local transportation funds are hereby designated trust funds. The legislaturemay not change the status of local transportation funds as trust funds.

(c) A local transportation fund that has been created pursuant to iaw may not beabolished.

(d) Money in a local transportation fund shall be allocated only by the localgovernment that created the fund. and only for the purposes authorized under Article 11(commencing with Section 29530) of Chapter 2 of Division 3 ofTitle 3 of the Government Codeand Chapter 4 (commendng with Section 99200) of Part 11 of Division 10 ofthe Public UtilitiesCode, as those provisions existed on OCtober 1, 1997. Neither the county nor the legislature

11

may authorize the expenditure of money in a local transportation fund for purposes other thanthose specified in this subdivision.

fe) This section constitutes the sale method of allocating. distributing. and using therevenues In a local transportation fund. The purposes described In subdivision (d) are the sale

purposes for which the revenues In a local transportation fund may be used. The Legislaturemav not enact a statute or take any other action which. permanently or temporarily, does any

ofthe following:

(1) Transfers, diverts. or appropriates the revenues in a local transportation fund for any

other purpose than those described in subdivision (dle

(2) Authorizes the expenditures of the revenue In a local transportation fund for anyother purpose than those described in subdivision (d)j

(3) Borrows or loans the revenues in a local transportation fund. regardless Qfwbetherthese revenues remain in the Retail Sales Tax Fund In the State Treasury or are transferred toanother fund or account.

(fl The percentage of the tax Imposed pursuant to section 7202 of the Revenue and

Taxation Code allOcated to local transportation funds shall not be reduced below thepercentage that was transmitted to such funds during the 200S calendar year. Revenuesallocated to local transportation funds shall be transmitted In accordance with Section 7204 ofthe Revenue and Taxation Code and deposited into local transportation funds in accordance

with Section 29530 of the Government Code. as those sections read on June 30. 2009.

section seven. Artlde XIX Bof the California Constitution is hereby amended to read asfollows:

SECTION 1. The Legislature shall not borrow revenues from the TransportationInvestment Fund. or its successor. and shall not use these revenues for purposes. or In ways.other than those specifically permitted by this article.

SEC. 2. (a) For the 2003-04 fiscal year and each fiscal year thereafter, all "'BRey5

revenues that are collected during the fiscal year from taxes under the Sales and Use Tax Law(Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code), orany successor to that law, upon the sale, storage, use, or other consumption In this State ofmotorvehicle fuel. as defined for purposes of the Motor Vehicle Fuel License Tax Law (Part 2(commencing with Section 7301) of Division 2 of the Revenue and Taxation Codel. "Rd tbt aFelIefl9sited iR the weRe,.1 Fl:lRd af the State IJYF6WaRt te that law, shall be t,aRgeFFe-' t9deRosited into the Transportation Investment Fund or Its successor, which Is hereby created In

12

the State Treasury and which is hereby declared to be a trust fund. The Legislature may notchange the status ofthe Transportation Investment Fund as a trust fund.

(b)(l) Forthe 2003-Q4 to 2007-08 fiscal years, indusive, moneys in the TransportationInvestment Fund shall be allocated, upon appropriation by the Legislature, in accordance withsection 7104 of the Revenue and Taxation Code as that section read on March 6, 2002.

(2) For the 2008-09 fiscal year and each fiscal year thereafter, moneys in theTransportation Investment Fund shall be allocated solely for the following purposes:

(A) Public transit and mass transportation. Moneys appropriated for public transit andmass transportation shall be allocated as follows: II) Twenty-five percent pursuant tosubdiVision Cbl ofSection 99312 of the Pyblic Utilities Code. as that section read on July 30,2009; (In Twenty-five percent pursuant to subdivision Cc) of Section 99312 of the Public UtilitiesCode. as that section read on July 30, 2009; and (iii) Fifty Percent for the purposes ofsubdiyislons (a) and Ib) ofSection 99315 of the Public Utilities Code, as that section read on July30,2009.

(B) Transportation capital improvement projects, subject to the laws governing the StateTransportation Improvement Program, or any successor to that program.

(C) Street and highway maintenance, rehabilitation, reconstruction, or storm damagerepair conducted by dtles, Including a city and county,

(0) Street and highway maintenance, rehabilitation, reconstruction, or storm damagerepair conducted by counties, including a city and county.

(c) For the 2008-09 fiscal year and each fiscal year thereafter, moneys In theTransportation Investment Fund are hereby continuously appropriated to the Controllerwithout regard to fiscal years, which shall be allocated, upeR appFepFiMi8A 13.., the beeislatwr:e,as follows:

(A) Twenty percent of the moneys for the purposes set forth in subparagraph (A) ofparagraph (2) of subdivision (b).

(8) Forty percent of the moneys for the purposes set forth in subparagraph (B) ofparagraph (2) of subdivision (b).

(C) Twenty percent ofthe moneys for the purposes set forth in subparagraph (C) ofparagraph (2) of subdivision (b),

(0) Twenty percent of the moneys for the purposes set forth in subparagraph (0) ofparagraph (2) of subdivision (b).

13

(EI} (a) &Nee,t as ettleA\'ise ,wAliled &:tV paFaSFaftl:l (~), t~e tFaRsfer sf re';eRyeS RM the'eAeRiI F"A" shhe itilte ta ttle 1=f:aAsfteFtiitisR IRvestMeRt FURd JU:IFS..aRt te su&:t"M.'isieA (a)Marl he s"sfJeRdeEl, iR whale ar iR part, fer a fisEal',tear if all afthe fella'lARg 6aAditiaRs are Meti

(AJ lhe C;sverRsr iss..es a ,rs"aMatiaA that "liIllllrSS tt.H, EI..e te a sewre stat;e fisealtlardshi,; the s"SfJeA5tBA Bittle tFaRsfer af re','eftyes reqYireElIJ',. sulJdhtislaft (I} 15 AeeeS5aFY>

(8) na I.alislatyra aRI6t5 b'l statwta, ,Yrs..aRt 'e I lJili ,aHaEi in al61:1"e..ss sfthe&Oelisl;t.. re by Felleall'Jete eRteFed in tha ja"FRal, 1\,,'a t"iNs afthe meMIa.sh., 6aRewFFIAf; a·s..sfteRsisR fer tt.at fissal )fear ahhe trlAsfer sf FeVeR..es reqYireEi by s.,lIdl,.,15IeA (a) aREi thehill Elses Ret EaAtalR aR'; ether YANI.ld prBlJisieR,

(') Nelatsr'''IA t"e effe&tl't'e Elate efthe statyte dessFllaed iR sYlapaFa8Ri,h (8), aseparate stiRw'. Iii .Aalte" tllat ,wt'iEle5 fer t"e full re,a'/MeAt te the +raR5pertatisAInvestMaAt FYA" 8f 'tie tetal aMeYA' ef re't'eAye tl:lat 'JIas Ret tFaRsferreEi ta tl:lat fuR" as aFas..al af~e SYs,SRsiSR, iRelYdiRI iRterest as pFeVidedlJ'l'aw, lhis f..11 repaYMeR' shalllJeMade Rst later tl:laA the eREI sf the thirEi liseal yesr iMMedlstel'! feIlS'IAR! the f1s&a1 yesF tewl:li6h the 5..s,eRsieR applies,

(~) fl.) 'Ale lFaRsfe, required ltv sYhdMsiaR (a) shall Ret lJe sYs,eFlded fer Mere thaRI\...e fis&aI'/8IF& IIWAR! aA'Il'lrle8 If aQ eSR5eeyti\!s tisell,,.Irs, wt.l. ,eAeEl BeliRs wtth tt:.efiFst f1seal 'fear saMMeRSIR! eR sr aftsrJYI\' J:, 2QQ7, fer whish the trsAsfer Fe"YirelilliysYIJElhrisiaA (a) 15 SYSpeAEleEi.

(B} 11:1e traAsfer req..ired by Sybdi\lisisR (a) shall RSt be sus,aRElad ElYriRS aR', fiseal yea,If a fylI repa'j'fReRt requireEi "'I a statute eRacted in aeeeNaRee witt. syh,aragraph (CJ afparagFa,h (1) has Rat 'let heeR &eMpleteEl.

W1!UThe Legislature may !12!.enact a statute that modifies the percentale shares setforth In subdivision (c) II)' 1.11I ,assed IA eaeh hawse efthe besisla"",e b)' F8l1eall'I8tB IIMllrllEiiR the jawrRal, tr.,t J!8 '''IFEIs sf the fReMlJeFshi, EaREy"i"" ,Fa..,ide" that the .iII daes Rat €8AtiliAaR" &ther YRreliRed ,revis'aR aRd that the maR. dese,ihed in SYbdi'JisisR (a) are ell,eREledssl~ly fa, the ,YFpaSeS sat feFth IA ,araSA,h (2} at swbdh:islaR (b) until all of the following haveoccurred:

(1) The California Transportation Commission has held no less than four public hearingsin different parts of the State to receive public input about the need for public transit, masstransportation, transportation capital improvement projects. and street and highwaymaintenance;

(2) The California Transportation Commission has published a report describing theinput received at the public hearings and how the modification to the statutory allocation is

14

consistent with the orderly achievement of local. regional and statewide goals for public transit,mass transportation, transportation capital improvements, and street and highwaymaintenance in a manner that is consistent with local general plans, regional transportationplans, and the California Transportation Plan;

{31 Ninety days have passed since the publication ofthe report by the CaliforniaTransportation Commission,

(4) The statute enacted by the Legislature pursuant to this subdivision must be by a billpassed in each house ofthe Legislature by roll call vote entered in the tournai, two-thirds of themembership concurring, prOVided that the bill does not contain any other unrelated provisionand that the revenues described in subdivision (a) are expended solely for the purposes setforth in paragraph (2) of subdivision (bJ.

~~(1) An amount equivalent to the total amount of revenues that were nottransferred from the General Fund ofthe State to the Transportation Investment FundJ as ofJuly I J 2007J because ofa suspension of transfer of revenues pursuant to this section as it readon January 1, 2006, but excluding the ar:nount to be paid to the Transportation DeferredInvestment Fund pursuant to Section 63048,65 of the Government Code, shall be transferredfrom the General Fund to the Transportation Investment Fund no later than June 30,2016,Until this total amount has been transferred, the amount oftransfer payments to be made ineach fiscal year shall not be less th~n one-tenth of the total amount required to be transferredby June 30, 2016, The transferred revenues shall be allocated solely for the purposes set forthIn this section as if they had been received in the absence of a suspension oftransfer ofrevenues,

(2) The Legislature may provide by statute for the issuance ofbonds by the state or localagencies, as applicable, that are secured by the minimum transfer payments required byparagraph (1). Proceeds from the sale of those bonds shall be allocated solely for the purposesset forth in this section as if they were revenues subject to allocation pursuant to paragraph (2)of subdivision (b).

(f) This section constitutes the sole method of allocating, distributing, and using the

revenues described in subdivision (at. The purposes described in paragraph (21 ofsubdivision

(bl are the sole purposes for which the revenues described in subdivision (a) may be used. TheLegislature may not enact a statute or take any other action which, permanently or temporarily,

does any of the followln.:

(1) Transfers. diverts. or appropriates the revenues described In subdivision (a) for any

other purposes than those described in paragraph (21 of subdivision (bl;

15

(2) Authorizes the expenditures of the revenues described in subdivision (a) for anyother purposes than those described in paragraph (2) ofsubdivision (b) orj

(3) Borrows or loans the revenues described In subdivision (a), regardless ofwhetherthese revenues remain In the Transportation Investment Fund or are transferred to another

fund or account such as the Public Transportation Account. a trust fund In the StateTransportation Fund.

(I) For purposes ofthls article. "mass transportation." "publictranslt" and "masstransit" have the same meanings as "public transportation." "Public transportation" means:

11llA) Surface transportation service provided to the general public. comptementaryparatranslt service provided to persons with disabilities as required by 42 U.S.C. 12143. orsimilar transportation provided to people with disabilities or the elderlyj (8) operated by bus.rail. ferry, or other conveyance on afixed route. demand response, or otherwise regularly

avaltable basisj (C) generally for which a fare is charged; and (0) provided by any transit district,Included transit district. municipal operator. Included munldpal operator, eligible munidpaloperator. or transit development board. as those terms were defined in Article 1 of Chapter 4of Part 11 of Division 10of the Public Utilities Code on January 1, 2009. a lolnt powers authorityformed to provide mass transportation services, an aseney described In subdivision (f) ofSection 15975 of the Government Code. as that section read on January I. 2009. any recipient

offunds under Sections 99260. 99260.7. 99275, or subdivision Ce) ofSection 99400 olthe PublicUtilities Code. as those sections read on January 1. 2009. or a consolidated ageney as defined In

Section 132353.1 of the Public Utilities Code, as that section read on January 1, 2009.

(2) Surface transportation service provided by the Department of Transportation

pursuant to subdivision (a) of Section 99315 of the Public Utilities Code, as that section read on

July 30. 2009.

(3) Public transit capital improvement projects. Indudlng those Identified In subdivision

(b) of Section 99315 of the Pubtic Utilities Code, as that section read on Julv 30, 2009,

(hi If the Legislature reduces or repeals the taxes described in subdivision (a) and adopts

an alternative source of revenue to replace the moneys derived from those taxes, the

replacement revenue shall be deposited Into the Transportation Investment Fund, dedicated to

the purposes listed in paragraph (2) of subdivision (bl. and allocated pursuant to subdivision (c).All other provisions ofthis article shan apPly to any revenues adopted by the Leslslatureto

replace the moneys derived from the taxes desajbed In subdivision (a),

Section Eight, Artide XIX Cis hereby added to the Constitution to read as follows:

16

SECTION 1. If any challenge to Invalidate an action that violates Articles XIX, XIX A, orXIX Bof the California Constitution is successful either by way of a final judgment, settlement,or resolution by administrative or legislative action, there is hereby continuously appropriatedfrom the General Fund to the Controller, without regard to fiscal years, that amount of revenuenecessary to restore the fund or account from which the revenues were unlawfully taken ordiverted to its financial status had the unlawful action not been taken.

SEC. 2. If any challenge to invalidate an action that violates Section 24 or Section 25.5 ofArtide XIII of this CDnstitutiDn is successful either by way of a final judgment, settlement, or

resolution by administrative or legislative action, there is hereby continuously appropriatedfrom the General Fund to the local government an amount of revenue equal to the amount ofrevenue unlawfully taken or diverted.

SEC. 3. Interest calculated at the Pooled Money Investment Fund rate from the date ordates the revenues were unlawfully taken, or diverted shall accrue to the amounts required to

be restored pursuant to this section. Within thirty days from the date a challenge is successful,the Controller shall make the transfer required by the continuous appropriation ,and Issue anotICe to the parties that the transfer has been completed.

SEC. 4. If in any challenge brought pursuant to this section a restraining order or

preliminary Injunction is Issued, the plaintiffs or petitioners shall not be required to post abondobligating the plaintiffs or petitioners to Indemnify the government defendants or the State ofCalifornia for any damage the restraining order or preliminary Injunction may cause.

Section Nine.

Section 16 of Article XVI of the Constitution requires that a specified portion of thetaxes levied upon the taxable property In a redevelopment project each year be allocated tothe redevelopment agency to repay indebtedness Incurred for the purpose of eliminating blightwithin the redevelopment project area. Section 16of Arttde XVI prohibits the Legislature fromreallocating some or that entire specified portion ofthe taxes to the State, an agency Df the .State, or anyother taxing jurisdiction, Instead of to the redevelopment agency. The legislaturehas been Illegally circumventing Section 16 of Article XVI in recent years by requiringredevelopment agencies to transfer a portion of those taxes for purposes other than thefinancing of redevelopment projects. A purpose of the amendments made by this measure Is toprohibit the Legislature from requiring, after the taxes have been allocated to a redevelopmentagency, that the redevelopment agency transfer some or all of those taxes to the State, anagency of the State, or ajurisdiction; or use some or all of those taxes for the benefit of theState, an agency of the State, or a jurisdiction.

section Ten. Continuous Appropriations.

17

The provisions of Sections 6, 7, and 8 of this Act that require a continuous appropriation

to the Controller without regard to fiscal year are intended to be "appropriations made by law"

within the meaning ofSection 7 of Article XVI of the California Constitution.

section Eleven. Liberal COnstruction.

The provisions ofthis Act shall be liberally construed In order to effectuate its purposes.

section Twelve. Conflicting Statutes.

Any statute passed by the Legislature between October 21, 2009 and the effective date

of this measure, that would have been prohibited if this measure were In effect on the date it

was enacted, is hereby repealed.

section Thirteen. ConfIlctlnl laOliat Measures.

In the event that this measure and another measure or measures relating to the

direction or redirection of revenues dedicated to funding services provided by local

governments and/or transportation projects or services appear on the same statewide election

ballot, the provisions of the other measure or measures shall be deemed to b~ In conflict with

this measure. In the event that this measure shall receive a greater number of affirmative

votes, the provisions of this measure shall prevail in their entirety, and the provisions of the

other measure or measures shall be null and void.

section Fourteen. Severability.

It is the intent of the People that the provisions of this Act are severable and that if any

provision of this Act or the application thereof to any person or circumstance, is held invalid,

such invalidity shall not affect any other provision or application of this Act which can be given

effect without the Invalid provision or application.

18

Agenda Staff Report

TO: Honorable Mayor & City Council Members

FROM:

DATE:

Mark Fachin, P.E., Public Works Director/City Engineer C(y)cvJ2.C1c-~December 2, 2009

SUBJECT: Joint City of Los Banos and Central California Irrigation District (CCID)Groundwater Study

TYPE OF REPORT: Non Consent Agenda

Recommendation:That the City Council adopt the Resolution approving the City of Los Banos toparticipate equally with CCID in a Groundwater Study to be performed by Kenneth D.Schmidt and Associates and AECOM. The fee for this study will be a total amount of$78,000.00, of which the City's share will be $39,000.00. This amount includes a 10%contingency. The City's administration associated with the Groundwater Study,including the 10% contingency, is to be done by the Public Works Director/CityEngineer.

Background:The City of Los Banos and CCID have been discussing the need to assess the existingand future of the groundwater basin, which is the water source for the Los Banos area.Both quantity and quality issues of the groundwater basin need to be addressed andmitigation measures need to be developed to further analyze the methods required tomaintain the basin's integrity.

A prior study, Groundwater Conditions in the Vicinity of the City of Los Banos, wasperformed by Kenneth D. Schmidt and Associates for CCID and the City of Los Banosin December of 1991. This study was updated in August of 1998. Kenneth D. Schmidtand Associates did a report in June of 2009 for CCID which analyzed the impact ofincreased private pumpage southwest of the City of Los Banos. One of the

recommendations of that report was to update the joint CCID/City of Los BanosGroundwater Study. At that time, the CCID Board directed that that update be done.

Discussion:The scope of work which City staff has requested that this study address, besidesupdating all topics covered in previous groundwater studies, include the following:

1. Define project area boundary and basis for established location, i.e. theprimary zone of influence on the City's groundwater supply. Discuss therelationship of groundwater management activities on the quantity andquality of the groundwater available to the City. Estimate the amount ofgroundwater pumped in the project area used both inside and outside ofthe project area.

2. Define the viable water supply scenarios for the project area under wet,normal dry, and critically dry conditions. Include the "no project"alternative (existing conditions).

3. Assess the ability of the City of Los Banos to expand existing groundwaterproduction as identified in the City's Water Master Plan with and withoutartificial groundwater recharge using water resource operation studies.

4. Recommend clustered monitoring well locations and estimate the cost ofsuch well installations.

5. Groundwater Recharge:

a) Assess how proposed development in the Los Banos General Plan willinfluence groundwater recharge.

b) Research the feasibility of groundwater recharge and identify userswho may benefit from such recharge, in addition to the City of LosBanos.

c) Identify and qualitatively evaluate potential recharge methods including"in-lieu" recharge resulting from increasing surface water delivery in theproject area.

d) Identify recharge locations.

e) Approximate the yield of the potential recharge programs to thebenefactors including the amount of additional water which can bepumped by the City of Los Banos without overdraft, and the totalamount of potable groundwater available to the City of Los Banos if thefull recharge potential is developed.

f) Evaluate how the recharge project will impact City of Los Banos wellwater quality.

6. Additional wells southwest of the City of Los Banos:

a) Assess impacts to the City of Los Banos groundwater production andquality.

b) Address significance of poorer quality groundwater movement from theeast side of the basin into the City of Los Banos.

7. Assess significance of exporting groundwater out of project area.

This study will produce a list of action items that will be needed in order to address theissues which will be identified. These may include the need for the construction ofseveral monitoring wells and the implementation of groundwater recharge strategies.

The CCID Board has approved the implementation of this groundwater update. Thestudy is projected to be complete by March/April of 2010.

Fiscal Impact:The cost for the City's share of this study will be $39,000.00. This amount is currently inthe 2009/2010 approved budget in Fund 501-461-100-738.

Reviewed by:

Attachments:Letters:

August 3,2009 - City Letter to CCID outlining ScopeSeptember 21,2009 - Schmidt Letter to CCID outlining ScopeOctober 1, 2009 - City Letter to CCID clarifying ScopeOctober 13, 2009 - Schmidt Letter to CCID addressing ScopeOctober 22, 2009 - AECOM Letter to CCID addressing Scope

Approved Budget, Fund 501-461-100-738Resolution

Public Works Department411 Madison AvenueLos Banos, CA 93635Telephone: 209 827-7056Fax: 209827-7069

TO:

FROM:

DATE:

RE:

Chris White, General Manager, Central California Irrigation District

Gary Hutsell, Assistant Public Works Director

August 3,2009

Joint Groundwater Study Items Submitted by Los Banos PublicWorks

Thank you for the opportunity to participate in an update on GroundwaterConditions in our area. The City of Los Banos, with the assistance of AECOMEngineering is requesting the items in this letter be included in the study.

Los Banos Public Works is requesting an update on the study "Update onGroundwater Conditions in the Vicinity of the City of Los Banos" dated August19, 1998. This was an update associated with the original study "GroundwaterConditions in the Vicinity of the City of Los Banos" dated December 31, 1991.

The following list is in addition to updating the topics covered in the past studiesincluding construction and pumping data for City wells, current water levels andwater level change, aquifer characteristics, groundwater quality and identifiedchanges in groundwater quality, estimates of the availability of potable waterfrom the two major aquifers, and artificial recharge potential.

1. Define Project Area boundary and basis for established location i.e. theprimary zone of influence on the City's groundwater supply. Discuss therelationship of groundwater management activities on the quantity andquality of the groundwater available to the City. Estimate the amount ofgroundwater pumped in the Project Area used both inside and outsideof the Project Area.

2. Define the viable water supply scenarios for the Project Area under wet,normal dry, and critically dry conditions. Include the "no project"alternative (existing conditions).

3. Assess the ability of the City of Los Banos to expand existinggroundwater production as identified in the City's Water Master Planwith and without artificial groundwater recharge using water resourceoperation studies.

4. Recommend clustered monitoring well locations and estimate the costof such well installations.

5. Groundwater Recharge:

a). Assess how proposed development in the Los Banos GeneralPlan will influence groundwater recharge.

b). Research the feasibility of groundwater recharge and identifyusers who may benefit from such recharge in addition to the Cityof Los Banos.

c). Identify and qualitatively evaluate potential recharge methodsincluding "in-lieu" recharge resulting from increasing surfacewater delivery in the Project Area.

d). Identify recharge locations.

e). Approximate the yield of the potential recharge programs to thebenefactors including the amount of additional water which canbe pumped by the City of Los Banos without overdraft and thetotal amount of potable groundwater available to the City of LosBanos if the full recharge potential is developed.

f). Evaluate how the recharge project will impact City of Los Banoswell water quality.

6. Additional wells southwest of the City of Los Banos:

a). Assess impacts to the City of Los Banos groundwaterproduction and quality.

b). Address significance of poorer quality groundwater movementfrom the eastside of the basin into the City of Los Banos.

7. Assess significance of exporting groundwater out of Project Area.

After your review Public Works staff is available, at your convenience, to discussthese items in more detail should you desire.

Cc: Mark Fachin, P.E. Public Works Directorl City Engineer

KENNETH D. SCHMIDT AND ASSOCIATESGROUNDWATER QUALITY CONSULTANTS

600 WEST SHAW SUITE 250

FRESNO, CALIFORNIA 93704

TELEPHONE (559) 224-4412

RECEIVEDSEP 2 1 2009

C.C.I.D.

September 21~ 2009

Mr. Chris WhiteGeneral ManagerCentral California Irrigation District1335 West I StreetLos Banos, CA 93635

Re: Joint CCID and City of Los BanosGroundwater Study

Dear Chris:

I have reviewed the City of Los Banos correspondence to you ofAugust 3, 2009. Pursuant to your request~ following is the proposed scope of work and estimated costs for a report on the Updateon Groundwater Conditions in the Los Banos area. There are severalassociated engineering issues that I recommend Bob Stoddard cover.Our work would basically cover all of the identified hydrogeologicissues.

Proposed Scope of WorkI would attend a kick-off meeting with the participating

entities. We would propose the boundaries of the study area, andthe reason for these~ for review by CCID, City of Los Banos~ andUSBR. We would prepare an updated illustration and tables on CCIDand City test holes and well construction, prepare an updatedwater-level elevation and direction of groundwater flow map, andinterpret updated water-level hydrographs (to be prepared by CCID) .We would prepare an updated table on recent City and CCID well pumptests. The CCID would compile information on non-City pumpage inthe area, and we would evaluate the total pumpage in the studyarea. We would review updated chemical analyses for CCID and Citywells in the study area, and evaluate changes in groundwater quality to the extent possible.


2

We would estimate the amount of potable groundwater both aboveand below the Corcoran Clay. We would recommend locations and completion intervals for cluster monitor wells and provide costestimates for these. We would evaluate the potential to increasegroundwater pumpage as identified in the City's Master Water Planfor both with and without intentional recharge. In conjunctionwith Bob Stoddard, we would evaluate the groundwater supply underwet, nor.mal, dry, and critically dry conditions. We would discussthe effect of various groundwater management activities on theamount and chemical quality of groundwater available to the City.Bob Stoddard would also provide input on this.

The amount of groundwater recharge or surface water use thatwould be necessary to balance the consumptive use for the GeneralPlan Area would be estimated. The influence of the proposed development in the Los Banos General Plan Area on groundwater rechargewould be evaluated. We would identify and evaluate potential methods of recharge, including in-lieu. We would review subsurfacegeologic conditions, depth to groundwater, and groundwater quality,and identify possible recharge locations. We would evaluate theamounts possible for potential recharge programs, and estimate theamount of additional water which could be pumped by the City. Wewould estimate the total amount of potable groundwater available tothe City, assuming full development of the potential intentionalrecharge programs. We would evaluate the impact of intentional recharge on the chemical quality of City well water. We would evaluate impacts of the development of new City wells in the southwestpart of the City, and evaluate the potential enhanced migration ofpoor quality groundwater from the east due to increased City pumpage.

In terms of water transfers, we would evaluate historicalpumpage by nMC pumpers and pumpage for transfers within the CCIn inthe study area. The influence of these transfers on water levelsand groundwater quality would be discussed. The influence of variations in Los Banos Creek streamflow on groundwater levels would beevaluated. We would prepare a draft technical report, meet withthe entities on the results of the study and review comments,address these comments, and prepare a final report. The durationof the study is expected to be about four to five months.

Estimated CostsProfessional fees would be as follows:


3

K. D. Schmidt, Principal 90.0 hours @ $230 per hour

J. Angell, Senior Hydrogeologist 70.0 hours @ $130per hour

c. Lassotovitch, Hydrogeologist 50.0 hours @ $120per hour

O. Sartono, Geologist 40.0 hours @ $80 per hour

$20,700

$9,100

$6,000

$3,200

Total professional fees would be $39,000.follows:

Expenses would be as

Mileage Fresno-Los Banos (450 miles @ 0.50)Phonecalls and copiesFAX and delivery chargesBlueprints and mapsSecretarial services (24.0 hours @ $50/hr)Drafting services (20.0 hours @ $45/hr)Report reproductionSubtotal:

$ 225145230120

1,200900150

$2,970

Total professional fees and expenses would be $41,970. I recommendthat an additional $12,000 to $15,000 be provided for assistancefrom Bob Stoddard.

Please call me if you have any questions.

Sincerely Yours,

J~~0/66Kenn(th D. Schmidt

KDS/pe

Public Works Department411 Madison AvenueLos Banos, CA 93635Telephone: 209827-7056Fax: 209827-7069

TO:

FROM:

DATE:

RE:

Christopher White P.E. General Manager, Central CaliforniaIrrigation District

Gary Hutsell, Assistant Public Works Director

October 1, 2009

Joint Groundwater Study Work Scope Comments

Thank you for the opportunity to participate in an update on GroundwaterConditions in our area. The City of Los Banos appreciates partnering with CCIDand other entities in having Ken Schmidt prepare the groundwater study.

After completing a review of the Groundwater Scope of Work, City Public WorksStaff has the following comments and revision requests to the Scope of Work:

City Scope Request # 1:

Define Project Area boundary and basis for establishedlocation i.e. the primary zone of influence on the City's groundwatersupply. Discuss the relationship of groundwater management activitieson the quantity and quality of the groundwater available to the City.Estimate the amount of groundwater pumped in the Project Area usedboth inside and outside of the Project Area.

Ken Schmidt Scope:

We would propose the boundaries of the study, and the reason forthese, for review by CCID, City of Los Banos, and USBR.

Comment:

Please define the complete request as submitted. Estimate the amountof groundwater pumped within the Project Area used both inside andoutside of the Project Area. When Project Boundary has been defined,how much groundwater is being directed out of the Project Boundary?

City Scope Request # 5b:

Research the feasibility of groundwater recharge and identify users whomay benefit from such recharge in addition to the City of Los Banos.

Ken Schmidt Scope:

We would evaluate the amounts possible for potential rechargeprograms, and estimate the amount of additional water which could bepumped by the City.

Comment:

Identify users who may benefit from such recharge in addition to theCity of Los Banos.

City Scope Request # 5e:

Approximate the yield of the potential recharge programs to thebenefactors including the amount of additio'nal water which canbe pumped by the City of Los Banos without overdraft and thetotal amount of potable groundwater available to the City of LosBanos if the full recharge potential is developed.

Ken Schmidt Scope:

We would estimate the total amount of potable groundwater availableto the City, assuming full development of the potential rechargeprograms.

Comment:

Please discuss how the existing and potential future benefactors in thedefined area including the City of Los Banos would influence potablewater available with recharge. Other potential potable water users inthe defined area boundary outside city limits and general planboundary.

City Scope Request # 6a:

Additional wells southwest of the City of Los Banos:

a). Assess impacts to the City of Los Banos groundwaterproduction and quality.

Ken Schmidt Scope:

We would evaluate impacts of the development of new City wells inthe southwest part of the City, evaluate the potential enhancedmigration of poor quality groundwater from the east due to increasedCity pumpage.

Comment:

In addition to Schmidt's scope evaluate the potential enhancedmigration of poor quality groundwater due to increased non-cityboundary area pumpage. Estimate pumpage capacity before migrationoccurs.

Please have the scope of work revised to address these comments and forwardto me. An informational only presentation will be given to the City Council on theoutline of the report prior to staff authorizing preparation of the report.

The City of Los Banos is prepared to pay its fair share of the study's cost. Itwould be helpful if you would further define our share of costs.

The implementation of the mitigation measures which will be defined in the studyshall be approved at a later date when all partners agree on an implementationplan.

Cc: Mark Fachin, P.E. Public Works Director! City Engineer


600 WEST SHAW SUITE 250

FRESNO, CALIFORNIA 93704

TELEPHONE (559) 224-4412

October 13, 2009

Mr. Chris WhiteGeneral ManagerCentral California Irrigation District1335 West r StreetLos Banos, CA 93635

Re: Joint ccrD and City of Los BanosGroundwater Study

I reviewed the City of Los Banos correspondence to youof October 1, 2009. My proposal of September 21, 2009 didnot fully respond to all of the City's requests. Followingare additions to the scope of work that are intended tofully address the City's requests, as stated in their October 1, 2009 letter.

Second Sentence.outside of the projecttent possible.

Request No.1This transfer of groundwater pumpedarea will be determined to the ex-

Request No.5bWe will identify groundwater users other than the City

who may benefit from such recharge.

Request No.5cWe would determine how the existing and potential

future benefactors (sic) in the defined area including theCity, would influence potable water available with recharge.

Request No.6aWe would evaluate the potential enhanced migration of

poor quality groundwater due to increased non-City pumpagein the boundary area. We would also estimate the pumpagecapacity before such migration occurs.

Please call me if you have any questions.

KDS/cl


Sincerely yours,

"~)G~~Kenneth D. Schmidt

2

!

I AECOM

AECOM1120 West "I" Street, Suite C, Los Banos. CA 93635T 209.826.5155 F 209.826.3307 www.aecom.com

Mr. Chris WhiteGeneral ManagerCENTRAL CALIFORNIA IRRIGATION DISTRICT1335 West "I" StreetLos Banos, California 93635

October 22, 2009

Dear Mr. White,

Subject: Proposal for Extended Period Water Resource Study

Pursuant to your request, we provide this proposal to perform an analysis of Plan Area water resourcesincluding an extended period hydrologic operations study to better understand the use and availability ofgroundwater in the future and the potential for incorporating an artificial recharge program to augmentwater supply. We anticipate the following tasks will be required to complete the analysis:

Task 101 Kick-off Meeting

We will attend a kick-off meeting with Central California Irrigation District (CCID), the City of Los Banos(City), Ken Schmidt and Associates (KSA) and others as appropriate to identify project participants andtheir roles and responsibilities and key issues related to the project. Additionally, a project schedule willbe established and key goals and expectations of the project team will be confirmed.

Task 201 Data Collection

We will collect study data for the Plan Area on an annual basis forthe 1975 to 2008 study period for thefollowing inflow sources:

• Los Banos Creek Outflows

• CCID Water Deliveries

• San Luis Water District Water Deliveries

• General Future Average Cropping Patterns based on Historic Land Use

• Reference Evapotranspiration

• Rainfall

• Estimates of Canal Seepage

AECOM \/Vater

Task 301 Develop Annual Components of Inflow

We will analyze Ihe dala collected in Task 201 to estimate the annual inflow from each identified sourceover the study period to determine the annual total net inflow to the Plan Area. We will obtain netsubsurface inflow data from KSA to determine annual net groundwater inflow. We will then review thesources of inflow and the assumptions regarding the disposition of inflow with CCID and City staff beforeproceeding with the project.

Task 401 Develop Annual Components of Outflow

We will estimate the annual outflow from each of the following sources over the study period to determinethe annual total net outflow from the basin:

• Crop Consumptive Use

• Urban Demand (City)

• Tail Water Discharge (Basin Surface Water Outflow)

• Urban Demand (City)

• Groundwater Transfers (Out of Basin)

Task 501 Change in Groundwater Storage

Utilizing the annual inflow and outflow as determined in the tasks above, we will estimate the changes ingroundwater storage in the basin over the study period. These data will be used to develop aspreadsheet model which characterizes the flow into and out of the basin and the change in thegroundwater storage under natural conditions.

Task 601 Develop and Artificial Recharge Program

In conjunction with KSA the natural condition findings and the defined hydrogeologic conditions will be thegrounds for understanding the potential for an artificial recharge program. The model developed in Task501 will be expanded to include an artificial recharge component. The additional inflow required for anartificial recharge program to balance basin water supply with water demand will be estimated as limitedby the recharge potential defined by KSA.

Task 701 Final Report Preparation

A short report will be prepared summarizing Ihe work performed, the findings and recommendations.

Task 801 Project Management and Client Meetings

Robert Stoddard, PE will serve as both the Project Engineer and Project Manager. He will be responsibleto supervise, coordinate and monitor project activities. A meeting will be scheduled with CCID and Citystaff 10 review inflow sources and assumptions. Additional meetings will be scheduled as necessary tosolicit input and discuss project progress. We have budgeted Ihree meetings in addition to the kick-offmeeting.

Task 901 Quality Assurance and Quality Control (QAlQC)

The deliverables prepared by AECOM during the project will undergo a QA/QC review prior to delivery toCCID. This QAlQC review will be made by a qualified individual(s) that are not directly involved in theexecution of this project.

AECOM Water , AECOM

Schedule

We anticipate the project will take approximately 4 months to complete. Work will be coordinated withKSA.

Project Cost

To estimate the cost of the work, we have performed a detailed man-hour cost evaluation which isattached. The total estimated cost to complete the project is $28,200. Two copies of the proposedagreement and a rate schedule for performance of the work are also attached. If you wish to proceedwith the project as proposed herein, please return one signed copy of the agreement and authorize us toproceed.

Please call if you would like to discuss any aspect of this proposal or desire additional information.

Robert M. StoddardPrincipal Engineer

Enclosures: Enclosures

AECOM WaterIAECOM

~,-'.~

, .,.2009-2t)10

Adopted

-

$1,407,000

$0500,000170,000222,000

ooo

3,428

$895,428

$10,595396,03161,143

836,477aoo

12,705

$1,316,951

2007·2008 '. 2008-2009Actual Projected

. / .';. ..

Busfness-Tvpe Fund2009-201.0 Ad0t!ted:'B/Ud9tt:~

$6.60062,887.47,29815,77183,050

o7,4999,551

$232,656

.- :=. ~. t

.." " ~. .' ~

SS,363115,28938.365

897,618ooo

6,248

2005-2OO(j - " ~6-200?Actual Actual

$1.062,883

$497,853 $593,037 $555,710 $590,740 $589,352, . '29,761 $44,749 54,061 60,000 75,000

. '12,732 r $21,090 14,987 21,000 21,000·9:b.,798 $417.123 432,213 _.----,~S4.,;..;7,:;,5;;.84~. _-=-=S60~,l~43=-

'$8'13,144 $1,076,099 $1,057.031 $1,219,324 $1,245,495

$2,607 $6,712 $3.128 SZ,OOO .$6,00023,848 34,451 30,843 49,995 ~s,wo

15,081 3,341 10,299 8,000 15,000. 0 10,584 20,815 37,215 32,2367,768 9,676 3,444 5,500 S,5OO

o 0 0 256,311 256.3111,404 2,000 4.541 15;000 17,0.00

19,174 8,511 60,731 12,000 60,000. 3,396 3,72S 4,067 2,267 ' ·011,243 8,397 11,737 7.sex> 7,500

. ,7,an (1,218) 0 5.000 5,000.- 4,5'73 12.143 36,173 11.000 H,OOO

2,(100 553 935 J,ooo 1,sOo6,782 4.067 600 417 ' 0

73,932 , 143,657 38,649 50,000 60,000o . 0 4,840 11,514 '6~42S

34,200 28,579 27.378 27;J,S6 '28,3834,802 4,889 5,899 5,000 - 6,500

23,121 26,386 16,091 18.000 18,000o 0 0 SOO .. 500

389,330 0 0 0 0U.sZl 4,402 9,749 14,000 17,0002,166 6,682 4,633 5,000 7,000

16,056 15.797 10,617 10.000 14.00011,800 15,132 10,088 18,000 24,0009.473 9,826 10,808 12,000 12,000

429,296 515,872 523,S98 692,849 775,99124,553 24,244 35,862 28,000 30,000

209,851 209,181 164,079 170,000 179,000135 0 337 sao .'500

_--=1;:;''';.:.47~ -=22:,5:.::;05::.. ....l(\::$222=='-). __---:1::,.,400:=.. __---=I:z:,SOO:==...$1,347,181 $1.110,094 $1,049,719 $1,4~7,284 .$I,~a,8,46

-.$5,000500,000

- .. 680,000'20,000189.00013,000

oo

.. ,.,

,: : _ J' ," ~ ........

:201 Grounds Mainteoancc20z Fleet Repair & Maint..203 Bquipm~~&.M~int. ..'204 Fleet serVices'20S Facility Maintcnam::e,.206 Property Lease .. .'~8 Renlal: Vehicl~uip':212 Well Repair & Maint.. ':..~13 Water, Sewer &:PispOS81"231 Professional8eivices-';233~~ServiCes .:~ Ci!-Y $igiJieer' .: ' '236 Medical SCrvices237Recruitmeot·i38 Technical Services~i40 IT Services'Zso I'nswances.251 Memberships & Dues ..-252 Communications,253 Advertising~is4 -Franchise Fees~6 Permh Fees & Charges.2s7 Travel & Training,259 Community Promotion260 Office SUpplies

-262 Uniform BxpeIIse-'264 Blecll'icity & Gas265 GasoIine&.Oil267 General Materials & Supplies:273~ pepartmeDtal Expense:274-Books 8ri Periodieals

SuPPlie. " Services

.;?2O BUilcJmgslStructure'737 Meters "738 Wells'-

i739 Water Master Plan Improv.:-7SO Vehicles':753 Spe.cialized Equipment:763 Office Equipment'770 COinputer Equipment

..Water -~'FDnd SOl> . VI --

Water • Departm~f'46i ..,General Services· Activity ~OO

~101 Salaries "'~ioz Part.Time F

103 Overtime.0120 Employee"Benefits ...

iI

.1!iI

I~ 1

!. i

'j.::'!,. ,_,;.- .7" ..........

. --• • ~ ,,'t

260

IWater (continued)

738-WELLS: Test drilling ofprospective well sites and .developm.ent ofthese new well sites intooperating municipal wells. Initiate a study to acquire surface water sources for the City. Resolvethe arsenic mitigation with well #15 water supply and other studies as necessary to maintain waterquality within the system.

739-WATER MASTER PLAN IMPROVEMENTS: Finish the work aSsociated withdeveloping the City's water master plan.

750-VEHICLES: Purchase replacementoffour pickups in the,water fund.

753-SPECIALIZED EQUIPMENT: Purchase of a vehicle and equipment lift (114) for theservice and repair ofheavy duty vehicles and equipment Cost ofpurchase to be shared equallywith the Solid Waste, Collections, and Treatment funds.

DEBT SERVICE

822-PRINCIPAL - DEBT SERVICE: Principal costs for the 2002 Certificate of Participation,eighth year ofa twenty year COP.

882-INTEREST- DEBT SERVICE: Interest costs for the 2002 Certificate of Participation,eighth year ofa twenty year COP.

265

RESOLUTION NO. __

A RESOLUTION OF THE CITY COUNCIL OF THECITY OF LOS BANOS AUTHORIZING THE CITYOF LOS BANOS TO PARTICIPATE EQUALLYWITH CENTRAL CALIFORNIA IRRIGATIONDISTRICT (CCID) IN A GROUNDWATER STUDY

WHEREAS, the City of Los Banos and CCID have been discussing the need toassess the existing and future of the groundwater basin; and

WHEREAS, both quantity and quality issues of the groundwater basin need tobe addressed and mitigation measures need to be developed to further analyze themethods required to maintain the basin's integrity; and

WHEREAS, the City of Los Banos and CCID have agreed to participate equallyin a Groundwater Study to be performed by Kenneth D. Schmidt and Associates andAECOM; and

WHEREAS, the fee for this study will be a total amount of $78,000.00, of whichthe City's share will be $39,000.00, which includes a 10% contingency.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of LosBanos does hereby authorize the City of Los Banos to participate equally with CCID ina Groundwater Study to be performed by Kenneth D. Schmidt and Associates andAECOM in the total amount of $78,000.00, of which the City's share will be $39,000.00.

BE IT FURTHER RESOLVED that the City Council of the City of Los Banosauthorizes the Public Works Director/City Engineer to do the City administrationassociated with the Groundwater Study, including the 10% contingency.

The foregoing Resolution was introduced at a regular meeting of the City Councilof the City of Los Banos held on the 2nd day of December 2009, by Council Member___ who moved its adoption, which motion was duly seconded by Council Member___ and the Resolution adopted by the following vote:

AYES:NOES:ABSENT:

APPROVED:

Tommy Jones, Mayor

1

ATTEST:


2

TO:

FROM:

DATE:

Agenda Staff Report


Chet Guinitni, Chief Building Official

December 2,2009

SUBJECT: Consider A Secured Impact Fee Deferral Agreement Between The City OfLos Banos And Court of fountains LLC - 34 Town homes

TYPE OF REPORT:

Recommendation:

Non Consent Agenda

Adopt a Resolution Approving A Secured Impact Fee Deferral Agreement Between TheCity Of Los Banos And Court of Fountains and Authorizing The City Manager ToExecute The Agreement And Related Instruments

Background:

1. On December 11, 2002, the Planning Commission approved a 44 unit townhome complex -Site Plan Review #2002-16;

2. On April 14, 2004 the Planning Commission recommended a zone change fromR-3 to PO;

3. On April 14, 2004 the Planning Commission approved a 36 unit town homecomplex - Site Plan RevieW#2004-05;

4. On May 19, 2004 the City Council approved a zone change from R-3 to PlannedDevelopment;

5. On May 25, 2005 the Planning Commission recommended approval of a FinalDevelopment Plan- FOP #2005-03;

6. On June 15, 2005 the City Council approved Final Development Plan- FOP#2005-03;

7. On April 26, 2006 the Planning Commission approved tentative tract map #200507;

8. On May 16, 2006 the City issued a building permit for the project.

Discussion:

The original Developer has lost the property through foreclosure. The currentDeveloper/Applicant Court of Fountains LLC acquired the property through foreclosure.Currently the Project is 90% completed. The building permit has expired and there hasbeen no activity on the project for some time. As is, the project is deteriorating and anattractive site for vandalism. The business plan of the current Developer/Applicant is tocomplete the project, lease the units and operate the project as a high quality, wellmaintained rental community for the foreseeable future. When the housing market cansupport the sale of town homes at a value that exceeds the value of a stabilized wellmanaged apartment complex, the units may be sold as individual town homes.

As part of its financing plan the current Developer/Applicant has requested that the Cityconsider a deferral of the development impact fees owing for the project. The feesowing prior to issuance of an occupancy permit total $603,620.91 ($577,743.45 impactfees, $22,305.89 permit fees, and $3,571.57 reimbursable staff costs).

The essential terms of deferral agreement are:

• The current Developer/Applicant shall immediately winterize the property tomitigate further deterioration of the property;• Payment of $25,877 in permit fees and past due staff time billings uponreissuance of the building permit, to occur within 90 days of execution of theAgreement; deferral of payment of 25% ($144,436) of the total impact fees to bepaid within 10 days of after the removal from record title the two Lis Pendensrecorded against the property, to occur within one year of the reissuance of thebuilding permit; 35 % ($151,658) of the remaining balance within 24 months ofreissuance of the building permit; and the entire remaining balance ($281,650) within36 months of reissuance of the building permit.• Interest to accrue at the rate of 5% per annum.• Payment of Fees secured by a deed of trust.• An agreement by the City for subordination to the Construction loan financing notto exceed the lesser of $1,500,000 or 75% of the value of the property andsubordination to Permanent financing not to exceed 75% of the value of theproperty.

It is expected that the current Developer/Applicant will seek to obtain construction andother interim financing as necessary and appropriate for the development andcompletion of the project. In order to obtain such additional financing the City will beasked to subordinate its deed of trust to such other lenders. The resolution authorizesthe City Manager to execute such other instruments as may be necessary, includingsubordination agreements as may be subsequently requested by current

..

Developer/Applicant and its future lenders, subject to the terms of the deferralagreement and the City Attorneys review and approval.

The City will eventually be taking second position to construction and permanentfinancing and the risk of default by the current Developer/Applicant is present but basedupon the appraised value of the completed project in relation to the combined debt(CLTV), and the intangible value of the project as completed, the risk would appear tobe acceptable.

Fiscal Impact:

In the long term, deferral of the payment of development impact fees for this project willbe balanced by the advantages brought through the economic development. TheAgreement provisions include collection of legal and interest costs to cover the city'sexpenses associated with the Agreement.

Conclusion:

Staff believes that economic development is important to support services for thecommunity and provide local employment and affordable housing opportunities. It isalso vital to the long-term financial sustainability of the City_ The City Council has alsoindicated the desire to find ways to encourage the construction of needed projects in theCity and to promote economic development during the current slowdown in theeconomy_ Additionally, it is important that the Court of fountains project be completedso that it does not continue to deteriorate into a state of blight.

Attachments:

Deferral AgreementResolution

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OFTHE CITY OF LOS BANOS APPROVING A SECURED IMPACT FEE

DEFERRAL AGREEMENT BETWEEN THE CITY OF LOS BANOS ANDCOURT OF FOUNTAINS LLC AND AUTHORIZING THE CITY MANAGER TO

EXECUTE THE AGREEMENT AND RELATED INSTRUMENTS

WHEREAS, economic development is important to support population growth andprovide local employment and retail opportunities, and is also vital to the long-termfinancial sustainability of the City of Los Banos; and

WHEREAS, the City Council has adopted ordinances and resolutions establishing andrevising Development Impact Fees required to be paid by new development; and

WHEREAS, as a standard condition of approval the payment of the DevelopmentImpact Fees is due prior to the issuance of an occupancy permit; and

WHEREAS, the City Council of the City of Los Banos desires to encourage theconstruction of projects in the City which fill a need in the community and promoteeconomic development during the slowdown in the current housing market; and

WHEREAS, Court of Fountains LLC the developer of 34 town homes has requested adeferral of fees in order to complete the project; and

WHEREAS, the City Council finds that approving and authorizing the temporary deferralof certain Development Impact Fees and authorizing the City Manager to execute aSecured Fee Deferral Agreement is in the best interest of the City by allowing forgreater flexibility in the collection of fees for projects negatively affected by theslowdown in the economy.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Los Banosdoes hereby approve the Secured Impact Fee Deferral Agreement Between The City ofLos Banos and Court of Fountains LLC as presented and authorizes the City Manager,to execute the Agreement and related instruments including future subordinationagreements consistent with the terms of the Deferral Agreement in a form approved bythe City Attorney.

The foregoing Resolution was introduced at a regular meeting of the City Council of theCity of Los Banos held on the 2nd day of December 2009, by Council Member____, who moved its adoption, which motion was duly seconded by CouncilMember , and the Resolution was adopted by the following vote:

AYES: Council MembersNOES:ABSENT:

ATTEST:


APPROVED:

Tommy Jones, Mayor

SECURED IMPACT FEE DEFERRAL AGREEMENTBETWEEN THE CITY OF LOS BANOS AND

COURT OF FOUNTAINS, LLC

This Agreement is entered into as of the __ day of December, 2009 by andbetween the City of Los Banos, a municipal corporation (the "City") and Court ofFountains, LLC, a limited liability company (the "Developer"), the developer of propertylocated at 440 through 530 N. Mercey Springs Road, in the City of Los Banos, moreparticularly described in Exhibit A attached hereto and incorporated herein by thisreference (the "Property"). The Property is further described as A.P.N. 424-160-001 thru013; and 424-170-001 thru 023.

Recitals

WHEREAS, the Property is permitted under the City's laws, and has obtainedfrom the City the approvals identified on Exhibit B hereto (the "Approvals") to develop a34 Unit Townhome Community (the "Project"); and

WHEREAS, as a condition for granting the Approvals, the City is authorizedunder state law to levy, and the Property is obligated to pay, certain fees includingbuilding permit fees and development impact fees to offset the impacts of the Project onthe community's system of infrastructure such as roads, water facilities, wastewaterfacilities and community facilities ("Fees"). City has imposed total Fees in the sum of$603,620.91; and

WHEREAS, in the absence of this Agreement the conditions for approval for theProject required Developer to pay to City all Fees prior to obtaining a Certificate ofOccupancy for the Project; and

WHEREAS, the Developer has requested that the City defer Developer'sobligation to pay a portion of the Fees and desires to enter into this Agreement wherebythe payment ofthe Fees will be deferred; and

WHEREAS, the purpose ofthis Agreement is to set forth the terms and conditionsupon which City will allow the Developer to defer payment ofthe Fees; and

WHEREAS, the Parties acknowledge and agree that the obligations created underthis Agreement shall run with the land and be binding upon all successors and assigns tothe Property, or any part thereof;

THE PARTIES AGREE AS FOLLOWS:

1. Incorporation of Recitals. The Recitals set forth above are true and correct andare incorporated into this Agreement by reference as though fully set forth herein.

2. Payment of the Fees. The conditions of approval for the Project requiredDeveloper to pay Fees, in a single lump sum payment, in the amount of $603,620.91prior to obtaining a Certificate of Occupancy. By this Agreement, City agrees to allow

..

Developer to defer the payment of the Fees as set forth below. The City's agreement todefer the Fees is expressly conditioned upon Developer winterizing the Project, bymaking the repairs described on Exhibit C hereto, on or before December 30, 2009.Provided that the Developer satisfies this condition, the Fees shall be due and payable asfollows:

Upon reissuance ofa building permit to complete theProject ("Permit Reissuance"), Developer shall makepayment for permit fees and past due staff time billings of:

Within 10 days after the removal from record title oftheLis Pendens (see paragraph 7), Developer shall deliver theNote described below and shall make payment on accountof impact fees ("Impact Fees First Installment") in theamount of:

Twenty-four months from the Permit Reissuance, forimpact fees, as provided by the Note ("Impact Fees SecondInstallment"):

Thirty-six months from the Permit Reissuance, for impactfees, as provided by the Note ("Impact Fees ThirdInstallment"):

Total

$ 25,877

$144,436

$151,658

$281,650

$603,621

At the time the Developer pays the Impact Fees First Installment, Developer shallexecute and deliver to City a promissory note in the amount of $433,308 (the "Note")which the City shall accept as payment in full ofthe remaining Fees. The Note shall:

A. Require a payment of $151,658 plus accrued interest twenty-four (24)months after Permit Reissuance and a [mal payment of $281,650 plus accrued interestthirty-six (36) months after Permit Reissuance.

B. Accrue interest at five percent (5%) per annum from the date of the Note.

C. Contain an acceleration clause allowing the City, in its sole discretion, todeclare all sums due and payable if the Developer or its successors or assigns defaults inthe performance ofany obligation under this Agreement, the Note or the Deed ofTrust.

D. Be in the standard form customarily used in Merced County commercialreal estate transactions by Chicago Title Company.

Developer shall apply for and obtain a building permit to complete theimprovements at the Project within ninety (90) days of the full and final execution of thisAgreement, even if the Lis Pendens described in paragraph 7 are still of record againstDeveloper's title to the Property. Developer shall be entitled to an extension of thebuilding permit for an additional six (6) months if, at the time the initial six-month term

2 286- CtFountainsFeeDeferralAgreement v9.doc

of the permit expires, Developer has (i) completed the weatherization work set forth inExhibit C, and (ii) incurred more than $70,000 for the permitted construction work on theProject, as contemplated by the budget for that work attached hereto as Exhibit D.

3. Security for the Note. Simultaneously with the execution of and delivery ofthe Note, Developer shall also execute and deliver to City a deed of trust (the "Deed ofTrust") securing the Note. The Deed of Trust:

A. Shall be in favor of the City as beneficiary, made by Developer as trustor,in the standard form customarily used in Merced County commercial real estatetransactions by Chicago Title Company, as named trustee.

B. Shall be recorded in the Official Records of Merced County, Californiasubject only to non-delinquent taxes, exceptions 39 through 51 as shown on the ChicagoTitle Preliminary Report effective May 29, 2009 attached hereto as Exhibit E and suchother exceptions which do not unreasonably impair the priority or rights of the City, andthe Developer's construction fmancing which is described below. It is a condition of thisAgreement that the City receives a CLTA lender's policy of title insurance in the fullamount of the Fees insuring that the lien of the Deed of Trust is subject only to theexceptions set forth herein. If the policy is not obtained, the City may, at its solediscretion, terminate this Agreement and neither party shall have any further rights asagainst the other under this Agreement, the Note or the Deed of Trust.

C. Shall provide for the release of any lot or lots selected by Developer("Released Lot") within the subdivision upon payment to the City of a sum equal to theunpaid principal balance on the Note plus all accrued interest (if any) on the unpaidprincipal balance divided by the number of unsold lots remaining in the Project ("LotRelease Price"). Upon payment of the Lot Release Price, the City shall cause the lien ofthe Deed ofTrust to be reconveyed from Released Lot.

D. May be subordinate to, or contain a subordination clause providing thatthe lien of the Deed of Trust shall be subordinated to, a future construction loan to beobtained by the Developer, provided that the construction loan is as follows:

i. The loan amount shall not exceed the lesser of

(a) $1,500,000;

(b) 75% of the value of the Property when the Project iscompleted, as determined by the construction lender.

ii. The proceeds of the loan are to be used solely for

(a) All hard and industry standard soft costs necessary for thecompletion of the Project and obtaining a Certificate ofOccupancy;


(b) Points, lender fees and broker fees and other fmancing chargeswhich are deducted from the loan amount, not to exceed 6% ofthe principal loan balance;

(c) Delinquent real estate taxes;

(d) Payment ofthe Note;

(e) Funding an interest reserve from which funds can be drawn topay interest to the lender.

iii. The proceeds of the loan will be disbursed by the construction lenderor builder central service chosen by the construction lender.

iv. The loan can be prepaid at any time more than twelve (12) monthsafter the date oforigination.

v. The monthly payments must not exceed interest only. An interestreserve can be established at loan origination.

vi. There can be no balloon payment prior to 12 months followingorigination.

vii. There need not be a commitment for a permanent loan at the time theconstruction loan is originated.

E. Contain a subordination clause providing that the lien of the Deed of Trustshall be subordinated an existent or future permanent loan to be obtained by theDeveloper provided that the subordinating permanent loan is as follows:

i. The loan amount shall not exceed 75% of the value of the Project atthe time the loan is made as determined by the permanent lender.

11. Points and fees payable from the permanent loan will not exceed 2.5%ofthe principal amount ofthe subordinating permanent loan.

iii. The loan must be amortized over a term not less than 25 years and duenot sooner than 10 years from origination.

iv. The loan must not contain a prepayment penalty or other prepaymentobligation in excess of the standard yield maintenance provisions.

v. The net operating income shall be equal to or greater than the requireddebt service.

F. Require that the Developer maintain property insurance on the Project forits replacement value and, in addition, to name the City as an additional insured onDeveloper's comprehensive general liability policy.


4. Issuance of Occupancy Permit. Developer shall be entitled to apply for, andthe City shall issue, a Certificate of Occupancy for the entire Project or, at Developer'sdiscretion, for any individual building within the Project, upon completion ofDeveloper's work on the Project or on an individual building within the Project. TheCity's obligation to issue an occupancy permit shall be conditioned upon the following:

(a) Developer has satisfied all conditions required by the Approvals forthe issuance of a Certificate of Occupancy other than the obligationsrelating to the payment ofFees;

(b) Developer is not in default of its obligations under this Agreement, theNote or the Deed ofTrust;

(c) If the application is for an individual building, rather than for the entireProject, Developer has also completed all common areaimprovements; and

(d) The Lis Pendens have been removed (see paragraph 7).

5. Personal Obligation; Obligation Runs with the Land. The partiesacknowledge and agree that payment ofthe Fees benefits the Property, and the obligationto pay the Fees as evidenced by the Note and secured by the Deed of Trust shall be a lienupon the Property, and the obligation evidenced by the Note and this Agreement andsecured by the Deed of Trust shall be binding upon Developer and all successors andassigns who take subject to the Deed of Trust. Developer hereby further acknowledgesand agrees that the obligation to pay the Note shall continue and remain an obligation ofDeveloper, as well as Gointly and severally) any successors in interest of Developer whotake fee title to the Property, or any portion of the Property, which is subject to the DeedofTrust.

6. Costs of this Transaction. In connection with this transaction and thepreparation and recording of the Deed of Trust, Developer shall pay all recording costs,escrow fees and the premium for a CLTA lender's policy oftitle insurance in favor of theCity insuring the priority of the Deed of Trust, in an amount equal to the full amount ofthe Note. Except as otherwise expressly stated in this Agreement and in paragraph 26,each party shall bear its own costs and attorneys' fees associated with this Agreement andthe transaction contemplated thereby.

7. Lis Pendens. The Property is subject to two lis pendens. See exceptions 52and 53 to the Preliminary Report of title which is attached hereto as Exhibit E.Developer agrees that it shall use its reasonable diligence and effort to have those lispendens promptly removed as clouds upon title. If despite the efforts of Developer bothlis pendens are not or cannot be reasonably removed, Developer may, in Developer's solediscretion, declare this Agreement null and void and thereafter neither party shall haveany rights against the other under the terms of this Agreement, the Note or the Deed ofTrust. Further, if both lis pendens are not removed within 12 months from the PermitReissuance the City may, in City's sole and absolute discretion, by written notice to the


Developer (with a 30 day cure period) declare this Agreement null and void andthereafter neither party shall have any rights against the other under the terms of thisAgreement, the Note or the Deed of Trust. If this Agreement is declared null and void,the City shall be restored to all other rights the City may have at law or at equity to asserta lien against the Property for the outstanding Fees and to collect the Fees from suchparties as the City deems appropriate. A Lis Pendens shall be considered "removed"when Chicago Title delivers to the Developer its Preliminary Report of Title indicatingthat it is willing to issue a ALTA policy of title insurance which does not reference, orinsures around, any Lis Pendens as a cloud upon title to the Property.

8. City's Remedies for Developer's Default. In event of default hereunder byDeveloper, the City shall have the right, in addition to any other right or remedycontained in this Agreement, in its sole discretion, to:

(a) demand immediate payment in full by Developer or successors ininterest of Developer of all outstanding amounts owed;

(b) treat and collect all outstanding amounts as a lien against the Property;or

(c) enforce any combination of the foregoing rights, in addition to anyother right City may have in law or in equity.

Notwithstanding any other provision in this Agreement to the contrary, in noevent shall the City have the right to a double recovery of the Fees and the amountevidenced by the Note. The Note is deemed to be payment in full of the Fees. The Citymay only collect Fees if this Agreement, the Note or Deed of Trust is, for any reason,declared unenforceable, null and void pursuant to the provisions of this Agreement andthen only to the extent that the Developer has not previously made payments to the City.

The following shall constitute an "Event ofDefault":

(i) IfDeveloper fails to tender any payment due when said payment is dueand payable, if such default shall continue uncured for ten (10) daysfollowing written notice from the City; or

(ii) If Developer fails to perform any covenant or obligation, when suchperformance is due, contained in the Note or Deed of Trust securingDeveloper's obligations, and/or if Developer defaults under the Deedof Trust; or

(iii) If Developer makes an assignment for the benefit of creditors oradmits its inability to pay its debts generally as they become due; or

(iv) If any action or proceeding is commenced by or against Developerunder the Federal Bankruptcy Act or under any other present or futurestate or federal law for the relief ofdebtors or for the appointment of areceiver or trustee or the issuance of an attachment of substantially all


the assets of Developer, and is not stayed, satisfied or dischargedwithin sixty (60) days; or

(v) If, without the prior written consent of the City or otherwise incontravention of the terms of this Agreement or the Deed of Trust,Developer sells, hypothecates or otherwise disposes of or transfers allor any part ofthe Property.

If any amounts under this Agreement are not paid when due, whether on the duedates or as a result of acceleration as set forth in subparagraph (a) above, then Developerpromises to pay all costs and expenses of collection, whether or not an action will be orhas been instituted to enforce this Agreement.

9. Indemnification. Developer shall defend (with counsel of City's choice),indemnify and hold City, its officials, officers, employees and agents free and harmlessfrom any and all claims, liabilities, losses, costs, expenses, damages or injuries toproperty or persons, including wrongful death, in any manner caused by any acts,omissions or willful misconduct of Developer, its officials, officers, employees, agents,consultants and contractors arising out of or in connection with this Agreement("Claims"), including without limitation, the payment of all consequential damages,attorneys fees and other related costs and expenses. This indemnification provision shallnot apply to any Claims arising out of or incident to the sole negligence or willfulmisconduct ofCity, its officials, officers, employees and agents.

10. Notice to Subsequent Owners. The Deed of Trust shall reference thisAgreement to provide record notice to subsequent owners of the Property that theProperty is subject to this Agreement, and the conditions and obligations containedherein. Recordation of the Deed of Trust shall provide constructive notice to buyers andall others of the existence of this Agreement and the obligations hereunder to pay theNote when and as due.

11. Cumulative Remedies. The rights or remedies of City, as provided in thisAgreement, or pursuant to any applicable laws, rules or regulations, may be pursuedsingly, successively, together or otherwise against the Property, Developer or itstransferees, successor or assigns at the sole discretion of City. City's failure to exerciseany such right or remedy shall in no event be construed as a waiver or release of suchrights or remedies, or ofthe right to exercise them at any later time. Notwithstanding anyother provision in this Agreement to the contrary, in no event shall the City have the rightto a double recovery of the Fees and amount evidenced by the Note. The Note is deemedto be payment in full of the Fees. The City may only collect Fees if this Agreement, theNote or Deed of Trust is, for any reason, declared unenforceable, null and void pursuantto the provisions of this Agreement and then only to the extent that the Developer has notpreviously made payments to the City.

12. Representations. In consideration ofCity entering into this Agreement, and asan inducement to City to defer the payment of Fees, Developer makes the followingrepresentations and warranties (subject to the exceptions set forth below) as ofthe date of


this Agreement, each of which is material and is being relied upon by City (and the truthand accuracy of which shall constitute a condition precedent to City's obligationshereunder).

(a) Developer has the legal power, right and authority to enter into thisAgreement.

(b) All requisite action (corporate, trust, partnership or otherwise) hasbeen taken by Developer in connection with entering into thisAgreement and no additional consent of any individual, director,manager, shareholder, partner, member, trustee, trustor, beneficiary,creditor, investor, judicial or administrative body, governmentalauthority or other party shall be required for Developer to enter intothis Agreement.

(c) The individuals executing this Agreement and the instrumentsreferenced herein on behalf of Developer have the legal power, rightand actual authority to bind Developer to the terms and conditionshereof and thereof.

(d) Neither the execution or delivery of this Agreement or the documentsor instruments referenced herein, nor incurring the obligations set forthherein, nor compliance with the terms of this Agreement or thedocuments or instruments referenced herein or therein conflict with, orresult in, the material breach of any terms, conditions or provisions of,or constitute a default under, any bond, note or other evidence ofindebtedness or any contract, indenture, mortgage, deed of trust, loan,lease or other agreement or instrument to which Developer is a partyor that affect the Property.

(e) To the best of Developer's knowledge, there is no pending litigation orthreatened litigation, which does or will adversely affect the Property.

(f) To the best of Developer's knowledge, there are no actions orproceedings pending or threatened against Developer before any courtor administrative agency in any way connected with or relating to theProperty, or affecting Developer's ability to fulfill all of its obligationsunder this Agreement.

(g) Developer is not in default of its obligations under any contract,agreement or instrument to which Developer is a party pertaining tothe Property. To the best of the Developer's knowledge, no documentsupplied to City by Developer contains any untrue statement of amaterial fact, and no document omits any facts that would benecessary, in the circumstances, to make the document supplied notmisleading.


•

(h) To the best of Developer's knowledge, there are no mechanics',materialmen's or similar claims or liens presently claimed or whichwill be claimed against the Property for work performed orcommenced for Developer or on Developer's behalf prior to the dateofthis Agreement.

(i) To the best of Developer's knowledge, each of the statementscontained in the Recitals to this Agreement is true and correct and Citymay rely on such statements.

Notwithstanding any other provision of this Agreement to the contrary andnotwithstanding any representation and warranty contained in this paragraph, Developermakes no representation or warranty concerning the items which are disclosed on thePreliminary Report on Title which is attached hereto as Exhibit E, including but notlimited to the litigation referenced on that report, and Developer shall have no liability tothe City with respect to such matters.

13. General Provisions.

A. No Waiver. City's or Developer's failure to insist on performance of anyof the terms or conditions of this Agreement or to exercise any right, remedy or privilegeor City's or Developer's waiver of any breach hereunder shall not thereafter be deemed asubsequent waiver of any other terms, conditions, or rights, remedies or privileges,whether of the same or similar type. No party will be deemed to have waived any rightsunder this Agreement unless the waiver is made in writing and signed by the waivingparty or that party's duly authorized representative. All rights and remedies provided forunder this Agreement are cumulative.

B. Cooperation. The Parties agree to cooperate with each other in good faithand in furtherance of the purposes of this Agreement. The Parties hereby agree to takesuch other reasonable actions and execute such other documents as are consistent withthis Agreement and as are reasonably necessary to effectuate this Agreement; provided,however, that the foregoing shall not require City to take any legislative act or exercise itsdiscretion in any particular manner.

C. Entire Agreement. This Agreement contains the final and completeagreement between the Parties with respect to the matters herein discussed andsupersedes all previous communications and agreements between them, either oral orwritten, to the extent such prior communications and agreements are inconsistent withthis Agreement.

14. Assignment. Except as expressly provided herein, this Agreement is notassignable, in whole or in part, by Developer. Developer may assign this Agreement inconnection with a transfer of all or a portion of the Property and only with the priorwritten consent of City. Until the Lis Pendens are removed and the Developer has paidthe Impact Fees First Installment (the "Assignment Date"), the City may withhold itsconsent to any proposed assignment in its sole, absolute and unfettered discretion. After


the Assignment Date, the City's consent shall not be unreasonably delayed or withheld.After the Assignment Date the City shall be entitled to withhold consent if the proposedassignee is uncreditworthy or does not have the capacity to perform the obligations of theDeveloper under this Agreement. Any attempt to make an assignment without theconsent of the City shall be void and shall constitute an incurable material default underthis Agreement. Upon such unpermitted assignment, City shall be entitled, in addition toany other remedy provided in this Agreement, to immediately make demand upon theNote. In connection with any assignment, the Developer shall notify City in writing atleast 30 days prior to the date of such assignment, and the City may require the assigneeto expressly assume the rights and obligations of the Agreement by a written agreementin form and substance acceptable to City. In order for City to make an informed decisionto approve or disapprove a proposed assignment of this Agreement, City may require theproposed assignee to submit fmancial statements in evidence of its fitness, experienceand ability to comply with the rights and obligations being assumed.

15. Successors and Assigns. The terms, conditions and obligations created underthis Agreement shall run with the Property from the Effective Date, and shall be bindingupon all successors and assigns to the Property.

16. Attorneys' Fees. In the event that any action or proceeding is commencedbetween City and Developer to enforce or interpret any term of this Agreement, theprevailing party in such action or proceeding, in addition to all other relief to which itmay be entitled, shall be entitled to recover from the other party the prevailing party'scosts of suit and reasonable attorney's fees. The attorney's costs and fees shall include,without limitation, attorney's costs and fees incurred on appeal and those incurred inenforcing any judgment rendered in any such action or proceeding. Such attorney's costsand fees may be recovered as an element of costs in the underlying action or proceedingor in a separate recovery action.

17. Notices. All notices shall be in writing and shall be considered given:(i) when delivered in person to the recipient named below; or (ii) two (2) days afterdelivery to a recognized overnight courier with confirmation of receipt ofdelivery.

All notices shall be addressed as follows:

If to City:

If to Developer:

Chet GuintiniChiefBuilding Official520 J StreetLos Banos, CA 93635

Court ofFountains, LLC100 Pine Street, Suite 2450San Francisco, CA 94111Attn: Dennis Konczal


With a copy to: Michael J. FlynnFlynn / Williams LLP1010 B Street, Suite 200San Rafael, CA 94901

Either party may, by notice given at any time, require subsequent notices to begiven to another person or entity, whether a party or an officer or representative of aparty, or to a different address, or both. Notices given before actual receipt of notice ofchange shall not be invalidated by the change.

18. Governing Law. This Agreement and its provisions shall in all respects beinterpreted, construed, enforced and governed by and under the laws of the State ofCalifornia, without regard to conflict of laws principles. Venue shall be in MercedCounty.

19. Consent to Jurisdiction, Venue and Service. Any action or proceedingbrought respecting this Agreement shall be instituted and maintained in the appropriatecourt in the County of Merced, California. Developer hereby forgoes and waives anyprovision of law providing for a change of venue from such courts.

20. Modification. This Agreement may be modified only by another writteninstrument duly authorized and executed by both City and Developer.

21. Severability. The provisions of this Agreement are specifically madeseverable. If any clause, provision, rights and/or remedy provided for herein is unlawfulor unenforceable, the remainder of this Agreement shall remain in effect and be enforcedas if such clause, provision, right and/or remedy were not contained herein.

22. Headings. Section headings contained in this Agreement are for convenienceonly, and shall not impact the construction or interpretation ofany provision.

23. Rules ofConstruction. The language in all parts of this Agreement shall in allcases be construed as a whole according to its fair meaning, and not strictly for or against,either City or Developer. This Agreement is the product of mutual negotiation anddrafting efforts. Accordingly, the judicial rule of construction that ambiguities in adocument are to be construed against the drafter of that document shall have noapplication to the interpretation or enforcement ofthis Agreement.

24. Execution. This Agreement may be executed in one or more counterparts,each of which shall be an original and all such counterparts together shall constitute theentire agreement ofthe Parties hereto.

25. Authorization. Each individual executing this Agreement hereby representsand warrants that he or she has the full power and authority to execute this Agreement onbehalfofthe named Parties.

26. Costs. The Developer agrees to pay the City's administrative and or legalcosts in preparing and administering this Agreement, within ten (10) days after execution


of this Agreement, in an amount which shall not, under any circumstances, exceed$5,000.

[SIGNATURE BLOCK BEGINS ON NEXT PAGE]


IN WITNESS WHEREOF, this Agreement was executed by the parties theretoon the dates set forth below.

CITY OF LOS BANOSA municipal corporation

Dated-----------Tommy Jones, Mayor

ATTEST:

Dated-----------Lucille Mallonee, City Clerk


William A. Vaughn, City Attorney

DEVELOPER

COURT OF FOUNTAINS, LLC

by:

Dated'--- _

Dated _

SIGNATURES MUST BE NOTARIZED


EXHIBIT ASUBJECT PROPERTYLEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LOS BANOS, INTHE COUNTY OF MERCED, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Lot 1 as shown on the map for Tract No. 2005-07, Court of Fountains, filed for record March 2,2007, in Book 76 of Official Plats Page 49, Merced County Records. Together with those mattersset forth in that certain Certificate of Correction recorded August 21,2007, as document number2007-047030, Merced County Records.

EXCEPTING THEREFROM the property and property rights excepted and reserved in Deedrecorded January 28, 1960 in Vol. 1457 Official Records, Page 318, Merced County Records,(892-60) and Deed recorded June 29, 1962 in Vol. 1576, Official Records, Page 802, MercedCounty Records, (13583-62) and Deed recorded May 5, 1963 in Vol. 1609, Official Records,Page 646, (9590-63) and as modified by Quitclaim Deeds recorded May 3, 1963 in Vol. 1609,Official Records, Page 650, (9592-63) and May 3,1963, Vol. 1609, Official Records, Page 652,(9593-63), being all oil, gas and minerals lying below a depth of 500 feet without the right of entry.

APN: 424-160-01 through 013 inclusive and 424-170-001 through 023, inclusive

EXHffiITBAPPROVALS

See attached.

EXHIBITCWINTERIZATIONIREPAIRS

See attached

..

fiiOl:taJrWindows inc.

November 10, 2009

Court of Fountains, LLCPO Box 2507Los Banos, CA 93635

Revised Glass & Screen Replacement Bid for: Court of FountainsLos Banos, CA

Attn: Jenenne

Thank you for considering Clear View Windows, Inc. for your glass and screenreplacement requirements.

The revised price below includes supplying and installation of broken lowe over clearglass (tempered where noted), missing patio door handies and missing Empire Pacificscreens. Also, includes installation of screens on job with lock and slide throughout.

Please note the glass in the french door @ the community bUilding is unable to bereplaced.

PROPOSAL

$ 8,577.00

If you have any questions, please feel free to contact me at (209) 572-3045.

Mike Davies

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Acknowledgement & Acceptanceof Order ..

CLEAR VIEW WINDOWS INC.1648 Herndon Rd, PO Box 1535

Ceres, CA 95307Phone: (209)572-3045

Fax: (209) 572-3048

DATE: __-"1,-",1,,-,ll,,,-,7~/=O=9 _

TO:

COMPANY NAME:

FROM:

PHONE NUMBER:

NO.OFPAGES:~4 _

Doug

Community Builders. LLC

Mike Davies

(209) 572-3045

We appreciate your order. Realizing the importance of ordering your window and doorscorrectly please review our Product Information Sheet. Confirm our understanding ofyour order and make any corrections as needed. If any corrections are required, arevised Product Information Sheet will be required prior to placing order.

A signed copy of the Product Information Sheet is reguired prior to placing your order.

Please examine Product Information Sheet to insure this order is correct. Again, thankyou for your order! If you have any questions, please do not hesitate to call.

This message is intended only fol' the use of the individual or entity to which it is addressed and ll1a~'contain in(ol'l1l<ltiollthat is privileged, confidential and exempt f!'Om disclosure under applicable la\\"o If the reader of this lIlcssuge is not theintended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you arehereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. J( you havereceived this communication in error, please notify us immediately by telephone or the above fax or pholll;' numlx>r.Thank you.

PRODUCT INFORMATION SHEET

QUOTE TO:

, Community Builders, LLC - Doug Elliott, 700 Irwin Street, Suite 101: San Rafael, CA 94901! DELIVER TO:

i Court of FountainsJ:.!?S Banos, CA: GlassOnlv

Replace dual units of Low-E glass only, tempered where notedReplace missing patio door handles

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SUPPLY AND INSTALL

Please carefully review Product Information Sheet, make changes if necessary, sign and fax back.If changes are necessary, fax back with changes and new Product Information Sheet will be faxed forsignature.

Order will not be processed until signed Product Information Sheet is received.

Date: It /17/01I

I,I

PRODUCT INFORMATION SHEET

:-QUOTE TO:

~ Community Builders, LLC - Doug Elliotti 700 Irwin Street. Suite 101: San Rafael, CA 94901! DELIVER TO:

, Court of Fountainsi Los Banos, CA

!-~..:-~;.:.~E..;.,.1:7:...:./-=-09.:e..-- ._.__~=~PHONE: I

!COLOR:

W~ite Frame, Charcoal Cloth ...__....

I Screens OnlyInstall missing screensWhite frame with black clothLock and slide throughout

QTY. SIZE & DESCRIPTION----

<JI 22 4030 XO SCREENS ONLYI

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i 43 4050 XO SCREENS ONLYI~ 41 5050 XO SCREENS ONLY

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Please carefully review Product Information Sheet. make changes if necessary, sign and fax back.If changes are necessary, fax back with changes and new Product Information Sheet will be faxed forsignature.

Order will not proceed until signed Product Information Sheet is received.

Approved on ~e Date I (It7h L~ I:

EXHmITDCONSTRUCTION COST BUDGET

See attached

COURT OF FOUNTAINS, LLC, LOS BANOS, CA

MASTER COST BREAKDOWN

Contractor: Pacific Sol

Original Date: August 14th, 2009

Amended Date: November 17th, 2009

FOR: LOS BANOS FEE DEFERRAL EXHIBIT BUDGET PHASE 1 PHASE 2

Phase 1-lst six months of permit

Phase 2- 2nd six months of permit

1 FLOORING

Wood 60,000 60,000

Tile 18,000 18,000

Carpet 24,707 24,707

2 CONTERTOPS- Granite kitchen, tile in baths 66,000 66,000

3 APPLIANCES- Stainless steel 109,400 109,400

4 PAINTING 10,000 10,000

5 ELECTRICAL 30,687 15,344 15,344

6 CARPENTRY & MISCELLANEOUS 12,000 6,000 6,000

7 CABINET WORK- included in #6

8 DRYWALL - included in #6

9 WINDOWS, SLIDING GLASS DOORS, MIRRORS 27,515 9,000 18,515

10 PLUMBING, including fixtures 74,833 74,833

11 HVAC/SHEETMETAL 7,278 7,278

12a MISC INTERIOR WORK & MATERIALS 6,400 2,560 3,840

12b MISC EXTERIOR WORK & MATERIALS 11,000 4,400 5,500

13 RECREATION ROOM 880 880

14 POOL & BATHROOMS 14,200 14,200

Included pool repair, bathroom and tile

15 LANDSCAPING 15,000 4,000 11,000

16 FIREPLACE SURROUNDS & HEARTHS 5,000 5,000

17 SHOWERS/TUB ENCLOSURES 500 500

18 GENERAL CONDITIONS- supv, clean up, temp. facilities 12,000 2,000 10,000

19 CONTINGENCY 5,000 1,000 4,000

SUB TOTAL 510,400 67,162 442,139

OVERHEAD 0.98% 5,000 658 4,331

PROFIT 3.53% 18,000 2,369 15,593

TOTALOHP 4.51% 23,000 3,026 19,924

TOTAL 533,400 70,188 462,062

..

EXHIBITEPRELIMINARY TITLE REPORT

See attached.

PROPERTY OWNER'S CONSENT

VWe, the undersigned am/are the owner(s) of record of APN: 424-160-001 thru 013; 424-170

001 thru 023 that property described in Exhibit A to this Impact Fee Deferral Agreement byand between the City ofLos Banos and Court ofFountains LLC, relative to the projectknown as Court ofFountains. VWe hereby consent to all the terms and conditions of saidagreement and agree that my/our property as described herein shall be bound by all oftheterms and conditions of said agreement.

Dated:

SIGNATURES MUST BE NOTARIZED

Law Offices of

WILLIAM A. VAUGHN

Telephone

209-826-3531

DATE:

TO:CC:

FROM:

525 JStreet, Suite ALos Banos, CA 93635

MEMORANDUM

December 2, 2009

Mayor and City CouncilCity Manager

William A. Vaughn, City Attorney

Facsimile

209-826-2431

RE: POLICY FOR MEETING RULES OF ORDER, PROCEDURE, DEBATE, ANDDECORUM

Discussion: The City Council has requested that I prepare a Policy for council consideration toprovide guidelines relating to the conduct of the public business at the meetings of the CityCouncil. Many cities have adopted rules of conduct for the conduct of meetings. The points onwhich the rules generally focus are rules of order, procedure, debate, and decorum. The attachedPolicy attempts to address the foregoing and includes provisions related to the Role of thePresiding Officer; Motions and Rules of Debate; Voting Procedures; Public Participation inCouncil Meetings; and the Public Hearing Process.

It should be pointed out that rules of decorum are lawful so long as they do not impinge on themember's first amendment rights. Rules of conduct that are intended to restrict speech that iscritical or inflammatory is particularly suspect (Pittsburg Unified School Dis!. v. CaliforniaSchool Employees Assn. (1985)). As noted in the Pittsburg Unified case: "Public office is noplace for the thin skinned.... the United State Supreme Court expressed "profound nationalcommitment to the principle that debate on public issues should be uninhibited, robust and wideopen, and that such debate may well include vehement, caustic, and sometimes unpleasant sharpattacks on government and public officials."

Rules governing limiting debate have been upheld as long as they are content neutral (Parker v.Merlino (1981), see also Government Code 36813 -council may establish rules for the conduct ofits proceedings).

Rules prohibiting personal, impertinent, slanderous or profane remarks have been upheld wheresuch utterances are tied to actual disruption or impeding the conduct of a meeting (White v. CityofNorwalk (1990)).

As the court noted in White, "a City Council meeting is still just that, a governmental processwith a governmental purpose. The Council has an agenda to be addressed and dealt with. Therestrictiveness of a rule of conduct is governed by the extent to which it interferes with theconstitutionally protected freedoms of speech, assembly and petition. Public forum or not, the

Re: Memo Policy Rules of OrderDecember 2, 2009Page 2

usual First Amendment antipathy to content oriented control of speech cannot be imported intothe council chambers intact", see also In re Kay, (1970) -the Constitution does not require thatany person, however lofty his motive, be permitted to obstruct a convention or continuation of ameeting without regard to the implicit customs and usage or explicit rules governing its conduct.

While the council may discuss and propose other rules of conduct to regulate and guide theirown conduct, the rules outlined in the Policy are intended to follow the dictates of the courtdecisions outlined above.

Recommendation: Adopt Resolution No _ or provide further direction.

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LOSBANOS ESTABLISHING COUNCIL POLICY FOR MEETING RULES

OF ORDER, PROCEDURE, DEBATE AND DECORUM

WHEREAS, City Councils are composed of persons with a variety of values,personalities, backgrounds, opinions and goals. All of these elected officials have chosento serve in public office in order to maintain and improve the quality of life in thecommunity. As issues are discussed and debated there is a recognition that constructivepublic discourse is necessary to develop public policy and is a cornerstone in ourdemocratic society; and

WHEREAS, Respect, civility, and professionalism when engaging in discussion, debateand the deliberative process will further advance opportunities to reach the common goalto maintain and improve the quality of life for all persons in the City Los Banos.Difficult questions, constructive debate, and criticism of ideas and information arelegitimate elements of the democratic process. However, council members and the publicshould practice civility and decorum in discussions and debate; and

WHEREAS, rules of order, procedure, debate, and decorum are established in order toefficiently and productively conduct the business of the council in an orderly, fair, andopen way, for the benefit of the general public.

NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Los Banoshereby adopts and establishes the rules pertaining to its meetings as are set forth in theattached document entitled "City of Los Banos Policy For Meeting Rules Of Order,Procedure, Debate And Decorum."

The foregoing Resolution was introduced at a regular meeting of the City Councilof the City of Los Banos held on the __ day of 2009, by City CouncilMember XXXXX, who moved its adoption, which motion was duly seconded by CityCouncil Member XXXXXXX, and the Resolution was adopted by the following vote:

AYES:NOES:ABSENT:

APPROVED:

Tommy Jones, MayorATTEST:


POLICY FOR MEETING RULES OF ORDER, PROCEDURE,DEBATE, AND DECORUM

PURPOSE

1. Purpose. The purpose and intent of the City Council in adopting the within rules shallbe to provide directory guidelines relating to the conduct of the public business by or onbehalf of the City Council. Except as provided in this Policy, or applicable provisions ofState law, the procedures of the City Council shall be guided by the latest revised editionof Robert's Rules of Order. These rules are intended to be consistent with State law,however, in the event of any inconsistency with State law, State law shall prevail. In theevent of any inconsistency between these rules and Robert's Rules of Order, these rulesshall control.

a. Failure to Observe Rules of Order. Rules adopted to expedite the transaction of thebusiness of the City Council in an orderly fashion are deemed to be procedural onlyand the failure to strictly observe such rules shall not affect the jurisdiction ofthe CityCouncilor invalidate any action taken at a meeting that is otherwise held inconformity with law.

PRESIDING OFFICER

1. Presiding Officer. The Mayor shall be the Presiding Officer at all meetings of the CityCouncil. In the absence of the Mayor, the Mayor Pro Tern shall preside. In the absenceof both the Mayor or Mayor Pro Tern, the Council shall elect a temporary presidingofficer to serve until the arrival of the Mayor or Mayor Pro Tern or until adjournment.

2. Participation Of Presiding Officer. The Presiding Officer may move, second, anddebate from the Chair, subject only to such limitations of debate as are imposed on allCouncil Members, and he or she shall not be deprived of any of the rights and privilegesof a Council Member by reason ofhis acting as Presiding Officer.

3. Maintenance Of Order. The Mayor or Presiding Officer is responsible for themaintenance of order and decorum at all times.

MOTIONS AND RULES OF DEBATE

1. Getting the Floor. Any Council Member wishing to speak must first obtain the floorby being recognized by the Mayor, and shall confine himself or herself to the questionunder debate, avoiding personalities and indecorous language. The Mayor mustrecognize any Council Member who seeks the floor when that Council Member isappropriately entitled to do so.

2. Decorum of Council Members. Members of the City Council shall conduct themselvesin an orderly and business-like manner to ensure that the business of the City Council

shall be attended to efficiently and thorougWy and to ensure that the integrity of thedeliberative process of the City Council is maintained at all times. Discussion by CouncilMembers must relate to the subject matter at hand and shall be relevant and pertinent toallow for the expeditious disposition and resolution of the business before the CityCouncil. Council participation during the presentation of public testimony or staffreports shall be limited to questions asked at the conclusion of the public testimony orstaff report. No general discussion should be permitted until the public testimony or staffreport has been completed. Members of the City Council shall maintain a polite,respectful and courteous manner when addressing one another, City staff, and membersof the public during the meetings.

3. Interruptions. A Council Member, once recognized, shall not be interrupted whenspeaking unless called to order by the Mayor, unless a point of order or personal privilegeis raised by another Council Member, or unless the speaker chooses to yield to a questionby another Council Member. If a Council Member, while speaking, is called to order, heor she shall cease speaking until the question of order is determined and, if determined tobe in order, he or she may proceed.

4. Limitation of Debate. As a matter of preferred protocol and courtesy to fellowmembers of the Council, no Council Member normally should speak more than onceupon anyone subject until every other Council Member choosing to speak thereon hasspoken and Council Member's should avoid speaking for an excessive length of timeeach time he or she has the floor.

5. Motions. The Mayor or any member of the City Council may call an action on anymatter before the City Council by making a motion. Before the motion can be consideredor debated it must be seconded. Once the motion has been properly made and seconded,the Mayor shall open the matter for debate offering the first opportunity to debate to themoving party and thereafter, to any Council Member properly recognized by the Mayor.Once the motion has been fully debated and the Mayor calls for a vote, no further debatewill be allowed. However, Council Members may be allowed to explain their vote.

After a motion has been made or a public hearing has been closed, no member of thepublic shall address the Council from the audience on the matter under considerationunless requested by the Mayor or by a majority of the City Council.

6. Procedural Rules of Order. Once the main motion is properly placed on the floor,several related motions may be employed in addressing the main motion, and if properlymade and seconded, must be disposed of before the main motion can be acted upon. Thefollowing motions are appropriate and may be made by the Mayor or any CouncilMember at any appropriate time during the discussion of the main motion. They arelisted in order of precedence. The first three subsidiary motions are not debatable; thelast three are debatable.

a. Subsidiary Motions

Motion to Lay on the Table/or Postpone. Any Council Member may move to laythe matter under discussion on the table. This motion suspends any furtherdiscussion of the pending motion without setting a time certain to resume debate.In order to bring the matter back before the City Council, a motion must beadopted that the matter be taken from the table at the same meeting at which itwas placed on the table. Otherwise the motion that was tabled dies, although itcan be raised later as a new motion, if the matter is properly noticed on theagenda. The motion requires a second and a majority of the quorum present topass. A motion to lay on the table is not debatable.

Motion on Previous Question. Any Council Member may move to immediatelybring the question being debated by the Council to a vote, suspending any furtherdebate. The motion must be made and seconded without interrupting one whoalready has the floor. A two thirds majority vote of the quorum present isrequired for passage. A motion to move previous question is not debatable.

Motion to Limit or Extend Debate. Any Council Member may move to put limitson the length of debate. The motion requires a second and a two thirds majorityvote of the quorum present to pass. A motion to limit or extend limits of debate isnot debatable.

Motion to Continue (or Postpone) to a Time Certain. Any Council Member maymove to continue debate and action on a motion to a date and time certain. Themotion requires a second and majority vote of the quorum present to pass. Amotion to postpone to a time certain is debatable.

Motion to Refer. Any Council Member may move that the matter being discussedbe referred to staff, or a committee for further study. The motion requires asecond and a majority vote of the quorum present to pass. The motion maycontain directions for the staff or committee, as well as a date upon which thematter will be returned to the Council's agenda. If no date is set for returning theitem to the Council agenda, it may be agendized by the City Manager or anyCouncil Member may move at any time to require that the item be returned to theagenda. A motion to refer is debatable.

Motion to Amend. Any Council Member may amend the main motion or anyamendment made to the main motion. Before the main motion may be actedupon, all amendments and amendments to the amendments must fIrst be actedupon. An amendment must be related to the main motion or amendment to whichit is directed. Any amendment that substitutes a new motion rather than amendingthe existing motion is out of order and may be so declared by the Mayor. Amotion to amend is debatable.

..

VOTING PROCEDURES

1. Participation. It is the policy of the City Council that all members present at a meetingfully participate in the discussion of a matter and shall vote for or against a motion,unless disqualified by conflict of interest or other legal reason.

2. Voting Procedure. In acting upon every motion, the vote shall be taken by voice or rollcall or any other method by which the vote of each Council Member present can beclearly ascertained. Any vote of the Council, including a roll call vote, may be registeredby the members by answering "Yes" for an affirmative vote or "No" for a negative voteupon the member's name being called by the City Clerk upon a vote being called for bythe Mayor. Following the vote, the Mayor or the City Clerk shall audibly announce theresults of the vote indicating whether the question carried or was defeated. The sameshall be recorded in the minutes as the vote.

3. Disqualification for Conflict of Interest. Any Council member who is disqualifiedfrom voting on a particular matter by reason of a conflict of interest shall publicly state orhave the Mayor state the nature of such disqualification in open meeting. A Councilmember who is disqualified by reason of a conflict of interest in any matter shall notremain in his or her seat during the debate and vote on such matter, but shall request andbe given the permission of the Mayor to step down from the Council dais and leave theCouncil Chambers. A Council member stating such disqualification shall not be countedas a part of a quorum and shall be considered absent for the purpose of determining theoutcome ofany vote on such matter.

4. Failure to Vote. Every Council member should vote unless disqualified by reason of aconflict of interest. If a Council Member abstains from voting, except when abstainingdue to a conflict of interest, he or she is counted as present for quorum purposes, but, isnot deemed to be "voting" for purposes of determining whether there has been a"majority vote of those members present and voting." If the member abstains due to aconflict of interest, the Council Member will not be counted toward making a quorum,and will not be deemed to be "voting" for purpose of determining whether there has beena "majority vote of those members present and voting."

5. Tie Vote. Tie votes shall be lost motions and may be reconsidered. In such instance,any member of the council may offer a motion for further action. If there is no action byan affIrmative vote, the result is no action. If the matter involves an appeal, and anaffirmative vote does not occur, the result is that the decision appealed stands as decidedby the decision-making person or body from which the appeal was taken.

6. Changing Vote. A member may change his vote only if he makes a timely request todo so immediately following the announcement of the vote by the Mayor or City Clerkand prior to the time that the next item in the order ofbusiness is taken up.

7. Reconsideration. A motion to reconsider the vote on any action taken by the CityCouncil at the meeting at which the matter was voted upon or at the next succeeding

meeting may be made only by one of the Council Members who voted with theprevailing side.

8. Consideration of Same Question. In no case, other than for legally required secondreadings, shall any Agenda ItemIMotion which has been voted upon at a Council meetingappear on the Agenda again so as to present the same or substantially same question forCouncil consideration unless and until anyone ofthe following has occurred:

a. A motion for reconsideration regarding the ItemIMotion has been passed, or

b. Six (6) months have passed since the last meeting at which the Item! Motion wasvoted upon, or

c. The Council has determined by a majority vote of its entire membership to have theItemIMotion placed on its Agenda again.

PUBLIC PARTICIPATION IN COUNCIL MEETINGS

1. Public Input. Members of the general public have the right to address the City Councilon any item on the agenda, as well as any item under the subject jurisdiction of the body.The purpose of addressing the City Council is to communicate formally with the Councilregarding matters that relate to Council business or citizen concerns within the subjectmatter jurisdiction of the City Council.

a. Agendized Matters. Speakers on agenda items shall limit their comments to five(5) minutes and shall step from the podium immediately after their time has elapsedunless the Mayor has granted the speaker's request for additional time. The Mayor,without objection from a majority of the City Council may extend the time limit at hisor her discretion. Persons addressing the City Council on an agenda item shallconfme their remarks to the matter under consideration by the Council.

b. Non-agendized Matters. The agenda shall contain a public comment section duringwhich any member of the public may address the Council on any agenda or nonagenda item generally considered to be a municipal affair and within the subjectmatter jurisdiction of the Council. To ensure that all members of the public have anopportunity to address the Council during public comments, each speaker shall belimited to five (5) minutes and shall immediately step from the podium uponexpiration of the allotted time. Staff and!or members of the City Council may brieflyrespond to each speaker who testifies during public comments. Responses shall belimited to the specific issue(s) raised by the speaker and shall generally be limited toinformation helpful to the public's understanding of the issue(s) raised by the speaker.The City Council shall not take action relative to any public comment unless anaction would be authorized by Section 54954.2(b) of the Government Code.

2. Decorum of Speakers. Each person who addresses the City Council shall not makepersonal, impertinent, slanderous or profane remarks to any member of the City Council,

staff or general public. Any person who makes such remarks, or who utters loud,threatening, personal or abusive language, or engages in any other disorderly conductwhich disrupts, disturbs or otherwise impedes the orderly conduct of any council meetingshall, at the discretion of the Mayor or a majority of the council, be barred from furtheraudience before the City Council during that meeting and be subject to removal from thatmeeting. Nothing in this section shall prohibit or discourage orderly criticism of any Citydecision or policy within the limits ofthese rules.

3. Audience Decorum. Members of the audience shall not engage in disorderly orboisterous conduct, including the utterance of loud, threatening or abusive language,whistling, stamping of feet or other acts which disturb, disrupt impede or otherwiserender the orderly conduct of the City Council meeting unfeasible. A member of theaudience engaging in any such conduct shall, at the discretion of the Mayor or a majorityof the City Council, be subject to removal from that meeting.

4. Speak Only Once. Second opportunities for the public to speak on the same issue willnot be permitted unless mandated by state or local law.

5. Addressing the Council. Persons addressing the City Council shall address the CityCouncil as a whole. Dialogue between and inquiries from citizens at the podium andindividual Council Members, members of staff, or the audience is not permitted.

6. Yielding of Time. It is understood that a person making a request to speak does so onhis own behalf. For this reason and to guarantee all persons an ample opportunity to beheard, all speakers will be recognized for the same amount of time. No speaker will beallowed to yield part or all of his time to another, and no speaker will be credited withtime requested but not used by another.

7. Violation of the Rules of Decorum. Upon violation of the rules of decorum establishedin Items 2 or3 above, the procedure to enforce the rules shall be as follows:

a. Warning. The Mayor shall first request that a person who is violating the rulescease such conduct. If, after receiving a request from the Mayor, the person persistsin violating the rules, the Mayor shall order a recess. Any representative of lawenforcement who is present at the meeting when the violation occurs shall beauthorized to warn the person that his or her conduct is violating the rules and that heor she is requested to cease such conduct. If upon resumption of the meeting theviolation persists, the Mayor shall order another recess, whereupon the Mayor shallhave the authority to asked the law enforcement personnel to remove the person fromthe meeting and/or to cite the person as being in violation of Penal Code Section 403.

b. Motion to Enforce. If the Mayor fails to enforce the rules of decorum set forthherein, any Council Member may move to require the Mayor to do so, and anaffirmative vote of a majority of the Council shall require the Mayor to do so.

c. Clearing the Room. Pursuant to Government Code Section 54957.9, in the eventthat any meeting is willfully interrupted by a person or groups of persons so as torender the orderly conduct of such meeting unfeasible and order cannot be restored bythe removal of the individuals who are willfully interrupting the meeting, by amajority vote of the City Council, the meeting room may be ordered cleared and themeeting shall continue in session. Only matters appearing on the agenda may beconsidered in such a session. Representatives of the press or other news media,except those participating in the disturbance, shall be allowed to attend any sessionheld pursuant to Government Code Section 54957.9.

d. Violation of the California Penal Code. A person or persons who substantiallyimpair(s) the conduct of a City Council meeting by knowingly and intentionallyviolating these rules of decorum may be prosecuted under Penal Code Section 403 fordisturbing a public meeting. Every person who violates Penal Code Section 403 isguilty ofa misdemeanor.

PUBLIC HEARINGS

1. Process and Procedures. The City Council conducts Public Hearings on applications,projects, and other matters as required to provide due process of law. The followinginformation outlines the process under which Public Hearings will be conducted.

a. Staff will review the application/project/matter, will prepare a staff report, and maymake a recommendation or propose alternatives to the City Council prior to thePublic Hearing.

b. A notice of the Public Hearing will be posted, published, and mailed as required bylaw.

c. The members of the City Council will receive the staff report for theapplication/project/matter in the Agenda packet prior to the meeting. This providesthe Council with an opportunity to study the staff report, which will become part ofthe hearing record, and to become familiar with the project prior to the PublicHearing.

d. When the Public Hearing is called, staff will summarize theapplication/project/matter as contained in the staff report or request a continuance to afuture meeting. The City Council may ask questions for clarification.

e. Once the Public Hearing is opened, the applicant/property owner is entitled topresent the application/project/matter in person or through a representative. Theapplicant/property owner shall be allowed 10 minutes to present his or her testimony.

f. Following this presentation, all other proponents/supporters, opponents, or otherconcerned citizens of the application/project/matter shall be provided the opportunityto speak for no more than 5 minutes each.

h. Once all other proponents/supporters, and all opponents or concerned citizens havespoken, the applicant/property owner will be provided an opportunity to rebut anytestimony or evidence provided by opponents or by staff. The rebuttal shall belimited to answering or refuting testimony of opponents or staff and shall be limitedto 5 minutes.

i. Following each presentation, members of the City Council may question thespeakers.

j. Following rebuttal, the item is then before the City Council for discussion andclarification.

k. When all parties have been heard and there are no additional requests to speak, theMayor may close the Public Hearing and/or any member of the Council may make amotion to

1. Continue the Public Hearing to a date certain to allow for furtherstudy/discussion; or

2. Close the Public Hearing and do one of the following

(i) approve the application/project/matter as submitted,(ii) conditionally approve the application/project/matter with certain revisions,(iii) deny the application/project/matter, or(iv) deny the application/project/matter without prejudice (this action will allowapplicant to refile without waiting a specified time period and will permit thewaiver of the required fees).

1. The applicant may withdraw the application/project/matter at any time before a voteis taken by the City Council.

From: Mike VillaIta [mailto:[email protected]]sent: Tuesday, November 24, 2009 1:51 PMTo: Steve RathSubject: Fw: Utility Billing Resolution

Steve,

I hope I was clear at the last CC meeting. The attached is what I would to placeon the next CC agenda.

MikeV.

Resolution No. 4182

A RESOLUTION OF THE CITY OF LOS BANOSRELATING TO AN INCREASE IN WATER RATES & WATER SERVICES

AND AN INCREASE IN WASTEWATER RATES & SERVICES

WHEREAS, the City Council of the City of Los llanos findS it necessary and

proper that each City Utility be a self-sustaining operation, adequately financed by the

user service charges and fees, and has an appropriate billing and collection procedure to

ensure that each· customer pays for the services rendered by the water, wastewater

collection and wastewater treatment under its rates and fees structure, and

WHEREAS, the City Council ofthe city ofLos Banos has received a report from

the City Staff relative to the necessity of adjusting the service rates of the City of Los

Banos as well as services, in order to maintain the City ofLos Banos water, wastewater

collection, and wastewater treatment systems in an adequate financial condition,

WHEREAS, the City Council of the City of Los ~an08 has decided that monthly

billing would be an enhancement of the City billing and desires to enhance the system

with a monthly billing cycle commencing on the April 1st 2001 to the necessity of

adjusting the service rates of the City ofLos Banos as well and in order to maintain the

City ofLos Banos water, wastewater collection, and wastewater treatment systems,

NOW THEREFORE, BE IT RESOLVED by the City Council of the City ofLos

Banos that it does hereby set the following charges relative to water, wastewater

collection and wastewater· treatment rates with the following effective date: charges

effective April I, 2001 Billing.

WATER RATE ADWSTMENTS:

1. WATER SERVICES: TEMPORARY CONNECTIONS.

Contractors or any persons desiring to use water in construction work where nonmetered connections must be made shall in each case obtain a written permit fromthe Public Works Director. The Public Works DireCtor will then designate theconnection and the cost of the meter installation. AIl water shaIi then be chargedat the prevailing rate. The minimum charge shall be: $22.57

2. WATER RATES: .

The following schedule ofrates and compensation is hereby set and established as the

rates and compensation to be charged and collected by the Utility Department for

water furnished by it:

-1-

•

a. The minimum monthly charges for 1,500 cubic feet ofwater supplied for alluses through various size meters shall be as follows:

1. For meters one inch (1") or under: $13.08.

2. For meters over one (1") to and including one and one-half(1 i.2")inches: $15.90.

3. For meters over one and one-half (1 112'') to and including two (2")inches: $18.33.

4. For meters over two inches (2") to and including three (3'') inches:'$20.94. .

5. For meters over three inches (3'') to and including four (4") inches:$26.16.

6. For meters over four (4") inches, the minimum monthly charge shall be asdetermined by the office ofPublic Works and the City Engineer.

b. For all water supplied by the Utility Department within the City in excess ofthefirst 1500 cubic feet per month, the charge shall be: $1.01 per 100 cubic feet.The monthly charges set forth in this subsection shall be made irrespective ofthe amount ofwater consumed through the metered connection during themonthly billing period.

c. For all water supplied through an un-metered service connection,by the UtilityDepartment, a flat monthly charge shall be made therefore, to be determined bythe Council based upon the estimated quantity ofwater supplied at the rates setforth in subsections (a) or (b) ofthis section, as determined by the character ofthe use, but in no case shall such charge be less than: $13.08

d. For all water supplied by the Utility Department that is used in spray rigs, roadspririlding vehicles, and other containers, the charge shall be: $32.73.

e. For all water supplied and/or charges for the rendering ofsuch services to anyconsumer shall be three (3) times the applicable minimum rates and charges setforth in this section for similar service within the City. Such treble rate shall notbe charged such consumers for water used in excess of 1,500 cubic feetmonthly.

f The City hereby reserves the right and power to contact separately with anyperson, :firm, or corporation for the sale and delivery ofwater within or outsidethe City at wholesale, at times, plil.ces, and prices fixed and agreed upon byresolution ofthe Council. Water rates and compensation to be paid shall bebased in part upon the use ofthe City water system.

3. METERS: MULTIPLE CONSUMERS: RATES

a. Separate services. A single-family residence or business lot occupied by oneprivate busmess concern with a regulation five-eights (5/8") inch or threefourths (3/4") inch meter shall constitute a service connection. No person shallrun any water from any meter or service connection to any other consumer,whether on the same lot or property or not, for which the rate has been paid orthe rules and regulations set forth in this chapter have not been complied with.

b.' Changes to multiple services. No change in the use ofthe water shall be madeafter the filing ofthe application until a written notice has been given to theUtility Department and written permission to make such change has beengranted by the Public Works Director.

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sc. Multiple Family Services. Ifone meter connection sb.IiIJ. serve more than one

fiunily living separate and apart from another fiunily, whether in suites orotherwise, and it is impossible tQ both the consumer and the Utility Departmentto install separate services, each consmner shall pay the minimum rate, plus hisproportionate share ofthe excess water used, at the scheduled rate, with themaximum quantity ofwater to be allowed for each consumer at the minitimmmonthly charge; provided, however, for eaCh apartment house, bungalOw court,or flat consisting ofthree(3) or more family units, the applicant sb.IiIJ. pay theminimum rate, plus the sum ofS4.65 for each apartment house, bungalow courtand/or flat unit served by this meter connection, plusthe sum required to be paidfor excess water used at the scheduled rate.

d. Multiple Commercial Services. Ifone meter connection shall serve more thanone store, shop, or any other concern doing business separate and aPart fromone another, whether in the samebl,lilding or not, and it is impractical to boththe consumer and the Utility Department to install separate services or meters,each consumer shall pay the minimum rate, pluS his proportionate share oftheexcess water used at the scheduled rate, with the maximum quantity ofwater tobe allowed for each consumer at the minimum monthly charge.

e. Liability. WIth the e)!:ception ofresidential accounts, but not excluding master-- metered apartments where one-meter connection serves two (2) or more

separate and distinct consumers, the property owner or the aPplicant forservices, or both at the option ofthe City shall be held responsible to the Cityfor all water used.

£ Utility Department Option for Separate Services. The Utility Department may,at its option, install separate services and collect the regular rate from eachconsumer, in_which case the owner or Consumer l!hall, at his expense, install awater pipeline from the property to the meter and pay the regular serviceconnection fee.

4. WATER SERVICES: APPLICATIONS: DEPOSlTS

The City Utility Department, as a condition to granting an application and

supplying water to the premises theremdescribed when the applicant is not the

owner ofthe premises, shall require a deposit of$70.00. Such a deposit shall be

refunded when the serviceS are discontinued provided all charges to the applicant

by the Utility department have been paid; otherwise such deposit shall be applied

to the account ofthe applicant.

5. WATER SERVICES: APPLICATIONS: CONNECTION CHARGES

When the applicant applies for waier services, an estimate ofthe cost ofinstalling

the water service, including labor, meters, valve boxes, valves, service lines, and

service saddles or removing seals from sealed services, shall be made by the

Public Works Director. An amount equal to such estimate shall be deposited with

the Utility Department. The final payment for installing the water service shall he

a sum equal to the cost ofthe materials required, plus the cost ofthe labor for

installation. Ifthe estimated deposit does not cover the cost, the difference shall

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be paid priorto the commencement ofthe service. If the estimated deposit

exceeds the actual cost, the credit shall be applied against subsequent billings for

the use ofthe City water system and water furnished.

6. METERS: TESTS

Any Consumer may require, upon depositing $25.00 at the office ofthe Utility

Department, that the meter through which water is being furnished to such

consumer be tested by the Utility Department for the purpose ofascertaining

whether or not the meter is registering correctly. If, upon such test, the meter

shall be found to register over two (2%) percent more water than actually passes

through, another meter shall be substituted therefore, and the deposit of$25.00

shall be returned to the consumer miling the application, and the water bills for

the current period shall be adjusted in an equitable manner. It: upon such test, the

meter shall be found to register under two (2%) percent more water than actually

passes though, the $25.00 deposit shall be retained by the Utility Department and

deposited in the water fund.

WASTEWATER COLLECTION SYSTEM CHARGES

Every person whose premises in the City is served by a connection with the public

sewage system ofthe City whereby the public sewage is disposed ofby the City,

either through the public sewage system or otherwise, shall pay a wastewater

colleCtion system charge as follows:

a. For single-family dwelIings: $ 7.62 per month. "

b. For all connections other than single-family dwelIings, except as provided in thissection: $15.24 per month.

c. For multiple dwellings having a common sewer: $7.62 per month and $7.62 permonth for each living unit in excess ofone.

d. For trailer parks, $7.62 per month for each occupied space in excess ofone.

e. For hotels and motels, $15.24 per month plus $3.75 per month for each sleepingroom that has kitchen facilities connected to or devoted to the exclusive use ofitsoccupants or $1.08 per month fot each sleeping room that does not have kitchenfaciIities.

f For industrial establishments including, but not limited to, packing sheds, garages,manUfacturing plants, and chemical plants, that do not discharge large volumes ofefl:luent and/or that do not contain unusual concentrations ofmaterials that couldaffect the capacity or integrity ofthe sewer system as determin.ed by the CityEngineer, "$15.24 per month.

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... g. For schools, $.33 per month per student during the school year based on the

monthly average daily attendance.

h. For places ofreligious worship, $7.62 per month.

I. For hospitals, $50.73 per month.

j. For the Los Banos Foods, $ 646.92 per month.

k. For the Los Banos Abattoir, $42.72 per month.

WASTEWATER TREATMENT CHARGES

Every person whose premises in the Cityis served by a connection with the public

sewage system ofthe City whereby the public sewage is treated by the City, either

through the sewage treatment plant or otherwise, shall pay a wastewater treatment

charge as follows:

1. Residential and School Discharges

a. For single-futniIy dwellings, $3.3 1 per month per dwelling,

b.. For all connections other than single-family dwellings except as provided inthis section, $3.31 per month. .

c. For multiple dwellings having a common sewer, $3.31 per moth, plus $3.31per month for each additional living wiit in excess ofone.

d. For trailer parks, including mobile home subdivision, $3.31 per month plus$3.31 per month for each occupied trailer space in excess ofone.

e. For schools, $.37 per month per student based on the monthly average dailyattendance.

2. Discharge from Non-Residential premises, Unit charge.

The following listed classifications shall pay a minimum waste treatment charge

per one hundred (100 cu. ft.) cubic feet ofwater delivered. Where existing water

services are not metered or are served by water sources other than metered City

Water service, the City Engineer shall es~ate the water use by the best available

method and recommend a set monthly rate to the City based on the estimated

water use and the minimum water treatment charge for the business classification.

Where more than one business is provided water service through a single water

meter, each business shall pay a $ 5.46 monthly wastewater treatment charge for

up to and including an average 1000 cubic feet ofwater delivered per business;

where the metered account shall.be billed the ex~essat the appropriate wastewater

treatment unit charge.

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BUSINESS CLASSIFICATION CODE

Classification

Standard Industrial Classification MaimalIndustry # 5462 Retail BakeriesIndustry # 5812 RestaurantsIndustry # 7216 Dry Cleaning PlantsIndustry # 7832 Motion Picture TheatersAll others except critical industries

ClassificationCritical Industries (Division D)

Group # 072 Crop Preparation Services(packing Sheds)

Group # 201 Meat ProductsGroup # 202 Dairy Products (Dry Process only)Group # 243 Mill Work (Door Factory)Group # 379 Miscellaneous TransportationEquipment

Minimum Waste Treatment Charge. Cents per 100 cubic feet

.73 . ($0.73)

.73 ($0.73)

.73 ($0.73)

.73 ($0.73)

.56 ($0.56)Minimum Waste Treatment Charge

Cents per 100 cubic feet

.73 ($0.73)

.95 ($0.95)

.73 ($0.73)

.56 ($0.56)

.56 ($0.56)

Unit Charges: (Unit Chargeswill apply to all Division D Industries where testingindicates that the total ofthe unit charges exceeds the minimum charge.)Group # 202 Dairy Products (Except Dry Process)Industry 2011 Meat Packing PlantsUnit Charges for the above classification shall be based on the folfowing unit rateformula:

Where Total Annual Charges = Cac + Ic + Ct

Cac = Cgf+(Cnf)=9,368.1l3Vd+0.176Bd+0.503 SdIc = 17,036.21 Vd + 0.308 Bd + 0.898 SdCt = 583.875 Vu+ 11.226Bu + 27.194 SuCgf = 51216.498 Vd + 1.007 Bd + 2.883 Sd == 0

Cnf= 8,773.284 Vd + 0.176 Bd + 0.504 SdAnd

Vu = Annual Effluent Flow, volume in million gallonsBu = Annual quantity ofBOD in 1000 Ibs. (and/or COD as determined to be applicableby City Engineers)Su = Annual quantity ofSS in 1000 lbsVd = Effluent Flow in MGDBd = Quantity ofBOD and/or CODSd = Quantity ofSS, lbs. Per day.

WATER, WASTEWATER TREATMENT, & WASTEWATER COLLECTION FEES

1. ANNUAL CONSUMER PRICE INDEX ADJUSTMENTS:

The fees set forth in this resolution shall continue to be subject to Resolution 4095

that established an annual adjustment to these service charges based on the West

Coast Sm Fnuicisco Region Consumer Price Index, for Urban Wage Earners and

Clerical workers starting each year on the April billing.

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2. COLLECTION BY TIlE FINANCE DIRECTOR

It shall be the duty of the Finance Director or any other officer of the City

designated by resolution of the City Council dilly adopted, to collect the water,

wastewater collection, and wastewater treatment service charges set forth in this

resolution.

3. UTILITY SERVICE CHARGES: PROPERTY LEINS FOR DELINQUENCIES

With the exception of residential accounts but not excluding master-metered

apartinents all unpaid delinquent water, wastewater collection, and wastewater

treatment service charges may, at the City's discretion, become a lien .on the

property served by the water and wastewater system of the City and will be

collected and enforced in the same manner unpaid City taxes on such propertY are

collected and enforced.

4. REGULAR BILLING, FIRST OF EVERY MONTH "

This notification is amended the bi-monthly billing cycle to a monthly billing

cycle and to provide that services are due and payable with new due date which is

tobe on"the 20th ofthat month for water, wastewater collection and wastewater

treatment service charges. As water meter readings will still be on a bi·monthly

cycle, the first billing shall be a base rate billing and the second billing will reflect

the metered services for the first and second billing.

5. PENALTY: DETERMINATION OF DELINQUENCY

Utility billing account delinquency is defined as failureto pay the utility"account

in full after the due date. The penalty for failure to pay a utility bill after the 20th

day will be fifteen percent (15%) that shall be assessed against any outstanding

account balance at delinqueticy. Any payment after the 20th of the month may be

considered delinquent. Paid in full utility payments received through the mail on

or after this delinquent date but postmarked before this delinquent date shall be

considered payment on time and will not be assessed a penalty.

6. "48 HOUR NOTICE

The City shall continue to mail out a courteous 48-hour notice that will serve as a

reminder indicating what the City is required to do ifpayment is not received at

City Hall by the fifteenth" (1511') ofthe month ofthe delinquency. This notice will

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reiterate the current account balance outstanding due and the Delinquency

Processing Fee to be assessed ifafter the fifteenth (15th) ifpayment is not

received.

7. DELINQUENCY PROCESSING FEE; RED TAG NOTICE; WATERSHUTOFF

The Reconnection charge and reinstatement service charge shall be $35.00. This

delinquency processing fee sball be assessed to any utility account not paid in full

by the end ofthe fifteenth (15th) ofthe delinquency month irregardless ofwhether

or not the water has actually been turned offon the sixteenth (16th) for failure to

pay the utility bill. Postmarkssball not be accepted. Iffull paymem: is not

received at City Hall by the fifteenth (l5~ ofthe delinquency month, the

Delinquency Processing Fee shall be assessed against the unpaid account and the

Red Tag Notice and water shutoff procedures shall commence on or after the

sixteenth (16~ ofthe Delinquency month. The Red Tag Notice shall indicate the

assessment ofthe delinquency Processing Fee and the total account balance

outstanding, indicating that full payment must be made to reestablish utility

services, and that~ checks will be accepted and that payment can be made by

cash, money order, cashier check or credit card.

8. RETURNED CHECK I CREDIT.CARD I ATM I DIRECT PAY FEE

The fee of$35 will be charged for any payment that is returned this includes form

ofa returned check; returned electronic direct payment, credit card, or debit card

and will be subject to shutoffprocedures.

9. METER REMOVAL AND REINSTALLATION; METER VANDALISM ANDDESTRUCTION

Fees and charges for meter removal and reinstallation due to customer tampering

and them~ after shutoffin violation ofMunicipal code and fees and charges for

meter vandalism and destruction sball be determined by City staffbased on time

and material cost incurred by the City for correction, repair, or replacement.

10. This resolution goes into effect on February 21,2001

The foregoing resolution~s introduced at a regular meeting ofthe City Council

ofthe City ofLos Banos held on the 21st day ofFebruary~ 2001 by Council Member

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Burnett-Hampson who moved its "adoption, which motion was duly seconded by

Council Member McAdam and the Resolution adopted by the fullowing vote:

AYES:

NOES:

ABSENT:

ATTEST:

COUNCIL MEMBERS Burnett-Hampson, Hudak. McAdam, and Smith

COUNCIL MEMBERS None

COUNCIL MEMBERS Mayor Amabile

APPROVED:

Mayor Pro Tern- City ofLos Banos

c~

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RESOLUTION NO. 5135

A RESOLUTION OF THE CITY COUNCIL OFTHE CITY OF LOS BANOS RELATING TO THEANNUAL CPI ADJUSTMENT IN WATER,WASTE WATER COLLECTION, AND WASTEWATER TREATMENT RATES

WHEREAS, the City Council of the City of Los Banos finds it necessary andproper that each City Utility bea self-sustaining operation,adequately financed by theuser service charges and fees, and has an appropriate billing and collection procedureto ensure that each customer pays for the services rendered by the water, wastewatercollection and wastewater treatment under its rates and fees structure; and

WHEREAS, the City Council of the City of Los Banos has received a report fromthe City Staff relative to the necessity of the annual adjusting the service rates of theCity of Los Banos as well as services, in order to maintain the City of Los Banos water,wastewater collection, and wastewater treatment systems in an adequate financialcondition; and

WHEREAS, the City Council of the City of Los Banos has verified the annualadjustment for the San Francisco-Oakland-San Jose Consumer Price Index was 3.35%for 2008; and

WHEREAS, the City Council of the City of Los Banos has had a majority protestpublic hearing on May 6th 2009 to the necessity of adjusting the service rates of the Cityof Los Banos as well and in order to maintain the City of Los Banos water, wastewatercollection, and wastewater treatment systems..

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of LosBanos that it does hereby set the following charges as shown on Attachment A relativeto water, wastewater collection, and wastewater treatment rates with the followingeffective date: charges effective June 21, 2009 to be reflected on the August 1, 2009Billing.

The foregoing resolution was introduced at a regular meeting of the City Councilof the City of Los Banos held on the 6th day of May, 2009 by Council Member Sousawho moved its adoption, which motion was duly seconded by Council Member Fariaand the Resolution adopted by the following vote:

AYES:NOES:ABSENT:

ATTEST:

Council Members Faria, Sousa, Stone, Villalta, Mayor JonesNoneNone

£~~.~~Lucille L. Mallonee, City Clerk

ATTACHMENT A

WATER, WASTEWATER TREATMENT, AND WASTEWATERCOLLECTION RATES

The following schedule of rates and compensation is hereby set and established as the

rates and compensation to be charged and collected:

1. RATES TO BE EFFECTIVE June 21, 2009:

RESIDENTIAL (MONTHLY)WATER: $16.34 Minimum base rate per month(Allowance of 1,500 cubic feet per month)+$ 1.26 Overage cost per 100 cubic feetFor multiple family units greater than one unit on one meter:minimum rate plus $5.81 per unit.WASTEWATER COLLECTION: $9.53 Flatcharge monthly rateFor multiple dwellings or trailer parks with a common sewer: $9.53 +$9.53 per each unit in excess of one.WASTEWATER TREATMENT: $4.15 Flat charge monthly rateFor multiple dwellings or trailer parks with a common sewer: $4.15 +$4.15 per each unit in excess of one.

. DEPOSITS: $100.00 For new non-owner applicantsMETER TESTS: $25.00 Deposit, returnable if meter registers overtwo percent more than actual flow.LATE CHARGES: 15% charge of billing for water, wastewatercollection, wastewater treatment, and garbage disposal.DELINQUENCY ADMINISTRATION PROCESSING FEE: $35:00 for water,wastewater treatmerit, wastewater collection, and garbage disposal.

RETURNED CHECK FEE: $35.00

COMMERCIAL:WATER:For meters 1" or less - $16.34 per monthFor meters more than 1" to 11/2" - $19.89 per monthFor meters more than 1 112" to 2" - $22.93 per monthFor meters more than 2" to 3" - $26.18 per monthFor meters more thEm 3" to 4" - $32.71 per monthFor meters over 4" ~etermin~d by the Public Works DepartmentAllowance amount = 1,500 cubic feet per month any usage over 1,500cubic feet during a one month reading cycle will be charged at $1.26 per 100cubic feet

WASTEWATER COLLECTION:$19.06 flat charge - monthly rate

1

For hotels & motels $19.06 per month +$4.70 per room with kitchen facility$2.37 per room without kitchen facilities.$ .43 per student per month$9.53 for places of religious worship per monthWASTEWATER TREATMENT:$ .84 per student per month$ .71 per 100 cu ft of water used for standard industrial$ .91 per 100 cu ft of water used for bakeries, restaurants, dry cleaning,motion picture theaters, packing sheds, and dry process dairy products.

.$ 1.19 per 100 cu ft of water used for meat productsDEPOSITS: $100.00 For new non-owner applicantsMETER TESTS: $25.00 Deposit, returnable if meter registers overtwo percent more than actual flow .LATE CHARGES: 15% charge of billing tor water, wastewatertreatment, wastewater collection, and garbage disposal.DELINQUENCY PROCESSING FEE: $35.00 tor water, wastewatercollection, wastewater treatment, and garbage disposal.RETURNED CHECK FEE: $35.00 per returned transaction.

WATER RATE ADJUSTMENTS:

2. WATER SERVICES: TEMPORARY CONNECTIONS.

Contractors or any persons desiring to use water in construction work where non-

metered connections must be made shall in each case obtain a written permit

from the Public Works Director. The Public Works Director will then designate

the connection and the cost of the meter installation. All water shall then be

charged at the prevailing rate. The minimum charge shall be: $32.69 for the

hydrant rental rate and $40.92 minimum water charge.

3. For water meters over four (4") inches, the minimum monthly charge shall be as

determined by the office of Public Works and the City Engineer.

4. The monthly charges set forth in this subsection shall be made irrespective of the

amount of water consumed through the metered connection during the monthly

billing period.

2

5. For all water supplied through an un-metered service connection by the Utility

Department, a flat monthly charge shall be made therefore, to be determined

based upon the estimated quantity of water supplied at the rates set forth in as

determined by the character of the use. but in no case shall such charge be less

than: $16.34.

6. For all water supplied outside the City limits and/or charges for the rendering of

such services to any consumer shall be three (3) times the applicable minimum

rates and charges set forth in this section for similar service within the City. Such

treble rate shall not be charged such consumers for water used in excess of

1,500 cubic feet monthly.

7. The City hereby reserves the right and power to contact separately with any

person. firm. or corporation for the sale and delivery of water within or outside the

City at Wholesale, at times, places, and prices fixed and agreed upon by

resolution of the Council. Water rates and compensation to be paid shall be

based in part upon the use of the City water system.

8. ,METERS: MULTIPLE CONSUMERS: RATES

a. Separate services. A single-family residence or business lot occupied by

one private business concern with a regulation five-eights (5/8") inch or three-fourths

(3/4") inch meter shall constitute a service connection.. No person shall run any

water from any meter or service connection to any other consumer, whether on the

same lot or property or not, for which the rate has been paid or the rules and

regUlations set forth in this chapter have not been complied with.

b. Changes to multiple services. No change in the use of the water shall be

made after the filing of the application until a written notice has been given to the

3

Utility D"epartment and written permission to make such change has been granted by

. the Public Works Director.

c. Multiple Family Services. If one meter connection shall serve more than

one family living separate and apart from another family, whether in suites or

otherwise, and it is impossible to both the consumer and the Utility Department to

install separate services, that meter shall be given the allowance consumption of

1,500 cubic feet for all units. If one utility customer for all units, the customer shall

pay the minimum base rate, the multi unit rate per unit plus for excess water used

over the allowance at the scheduled rate. If more than one utility customer for all

units, the first unit shall pay the minimum base rate, plus the excess water used of

over the allowance at the scheduled rate. The other units shall pay the multi unit rate

per unit in excess of one.

d. Multiple Commercial Services. If one meter connection shall serve more

than.one store, shop, or any other concern doing business separate and apart from

one another, whether in the same building or not, and it is impractical to both the

consumer and the Utility Department to install separate services or meters, that

meter shall be given the allowance consumption of 1500 cubic feet for all units. The

owner shall pay the charges of the minimum base rate, the multi unit rate per unit

pius for excess water used over the allowance of the scheduled rate.

e. Liability. With the exception of residential accounts, but not excluding

master-metered apartments where one-meter connection serves one (1) or more

separate and distinct consumers, the property owner or the applicant for services, or

both at the option of the City shall be held responsible to the City for all water used.

4

f. Utility Department Option for Separate Services. The Utility Department

may, at its option, install separate services and collect the regular rate from each

consumer, in which case the owner or consumer shall, at his expense, install a water

pipeline from the properly to the meter and pay the regular service connection fee.

9. WATER SERVICES: APPLICATIONS: DEPOSITS

The City Utility Department, as a condition to granting an application and supplying

water to the premises therein described when the applicant is not the owner of the

premises, shall require a deposit of $100.00. Such a deposit shall be refunded when

the services are discontinued provided all charges to the applicant by the Utility

department have been paid; otherwise such deposit shall be applied to the account

of the applicant.

WASTEWATER COLLECTION SYSTEM CHARGES

1. For industrial establishments including, but not limited to, packing sheds, garages,

manufacturing plants, and chemical plants, that do not discharge large volumes of

effluent and/or that do not contain unusual concentrations of materials that could

affect the capacity or integrity of the sewer system as determined by the City

Engineer, $19.06 per month.

2. For schools, $.43 per month per student during the school year based on the

monthly average daily attendance.

3. For places of religious worship, $9.53 per month.

4. For hospitals, $63.44 per month

5. For the Los Banos Foods, $808.67 per month

6. For the Los Banos Abattoir, $53.43 per month.

5

WASTEWATER TREATMENT CHARGES

Every person whose premises in the City is served by a connection with the public

sewage system of the City whereby the public sewage is treated by the City, either

through the sewage treatment plant or otherwise, shall pay a wastewater treatment

charge as follows:

1. For schools, $.84 per month per student based on the monthly average daily

attendance.

2. Discharge from Non-Residential premises, Unit charge.

The following listed classifications shall pay a minimum waste treatment charge per

one hundred (100 cu. ft.) cubic feet of water delivered. Where existing water

services are not metered or are served by water sources other than metered City

Water service, the City Engineer shall estimate the water use by the best available

method and recommend a set monthly rate to the City based on the estimated water

use and the minimum water treatment charge for the business classification. Where

more than one business is provided water service through a single water meter,

each business shall pay an $8.95 monthly wa$tewater treatment charge for up to

and including an average 1000 cubic feet of water delivered per business; where the

metered account shall be billed the excess at the appropriate wastewater treatment

unit charge.

BUSINESS CLASSIFICATION CODE

Minimum Waste TreatmentCharge

Cents per 100 cubic feet

Classification

Standard Industrial Classification ManualIndustry # 5462 Retail BakeriesIndustry # 5812 RestaurantsIndustry # 7216 Dry Cleaning PlantsIndustry # 7832 Motion Picture Theaters

6

.91

.91

.91

.91

($0.91)($0.91)($0.91)($0.91)

All others except critical industries

Classification

Critical Industries (Division D)Group # 072 Crop Preparation Services

(Packing Sheds)Group # 201 Meat ProductsGroup # 202 Dairy Products (Dry Processonly)Group # 243 Mill Work (Door Factory)Group # 379 Miscellaneous TransportationEquipment

..

.71 ($0.71)Minimum Waste Treatment

ChargeCents per 100 cubic feet

.91 ($0.91)

1.19 ($1.19).91 ($0.91)

.71 ($0.71)

.71 ($0.71)

Unit Charges: (Unit Charges will apply to all Division 0 Industries where testingindicates that the total of the unit charges exceeds the minimum charge.)Group # 202 Dairy Products (Except Dry Process)Industry 201 Meat Packing Plants

Unit Charges for the above classification shall be based on the following unit rateformula:'

Charge ItemFlow800(1)SS(1}

Penalties

QuanityMonthly readingMonthly readingMonthly reading

Unit of MeasureMillion gallons X1,OOOIbs X1,000 Ibs XEach X

Charge Rate654.72

12.5330.97

333.78

(1) Formula: Flow X 8.34 Ibs/gallon X mg/l concentration = quantity treated

10.WATER SERVICES: APPLICATIONS: CONNECTION CHARGES

When the applicant applies for water services, an estimate of the cost of installing

the water service, including labor, meters, valve boxes, valves, service lines, and

service saddles or removing seals from sealed services, shall be made by the Public

Works Director. An amount equal to such estimate shall be deposited with the Utility

Department. The final payment for installing the water service shall be a sum equal

to the cost of the materials required, plus the cost of the labor for installation. If the

7

estimated deposit does not cover the cost, the difference shall be paid prior to the

commencement of the service. If the estimated deposit exceeds the actual cost, the

credit shall be applied against subsequent billings for the use of the City water

system and water furnished.

11.METERS: TESTS

Any Consumer may require, upon depositing $25.00 at the office of the Utility

Department, that the meter through which water is being furnished to such consumer

be tested by the Utility Department for the purpose of ascertaining whether or not the

meter is registering correctly. If, upon such test, the meter shall be found to register

over two (2%) percent more water than actually passes through, another meter shall

be substituted therefore, and the deposit of $25.00 shall be returned to the

consumer making the application, and the water bills for the current period shall be

adjusted in an equitable manner. If, upon such test, the meter shall be found to

register under two (2%) percent more water than actually passes though, the $25.00

deposit shall be retained by the Utility Department and deposited in the water fund.

12.ANNUAL CONSUMER PRICE INDEX ADJUSTMENTS:

The fees set forth in this resolution shall continue to be subject to Resolution 5018

that established an annual adjustment to these service charges based on the West

Coast San Francisco Region Consumer Price Index, for All Urban Consumers

starting each year on the April billing.

13.COLLECTION BY THE CHIEF FINANCIAL OFFICER

It shall be the duty of the Chief Financial Officer or any other officer of the City

designated by resolution of the City Council duly adopted, to collect the water,

8

wastewater collection, wastewater treatment, and disposal service charges set forth

in this resolution.

14. UTILITY SERVICE CHARGES: PROPERTY LEINS FOR DELINQUENCIES

With the exception of residential accounts but not excluding master-metered

apartments all unpaid delinquent water, wastewater collection, wastewater

treatment, and disposal service charges may, at the City's discretion, become a lien

on the property served by the water and wastewater system of the City and will be

collected and enforced in the same manner unpaid City taxes on such property are

collected and enforced.

15.REGULAR BILLING, FIRST OF EVERY MONTH

This notification is a monthly billing cycle to be sent out in the first week of the month

and to provide that services are due and payable on the 20th of that month for water,

wastewater collection, wastewater treatment, and disposal service charges. Water

meter readings will be on a monthly cycle.

16. PENALTV: DETERMINATION OF DELINQUENCY

Utility billing account delinquency is defined as failure to pay the utility account in full

after the due date. The penalty for failure to pay a utility bill after the 20th day will be

fifteen percent (15%) that shall be assessed against any outstanding account

balance at delinquency. Any payment after 5:00 p.m. on the 20th of the month may

be considered delinquent.

9

17. 48 HOUR NOTICE

The City shall mail out a courteous 48-hour notice that will serve as a reminder

indicating that there is a delinquent amount. This notice will reiterate the past

balance outstanding due and the Delinquency Processing Fee to be assessed if it is

not received by the 20th at 5:00p.m.

18. DELINQUENCY PROCESSING FEE; RED TAG NOTICE; WATER SHUTOFF

The Administrative charge for delinquency processing and reinstatement service

charge shall be $35.00. This delinquency processing fee shall be assessed to any

past due amount not paid in full by 5:00 p.m. of the twentieth (20th) of the

delinquency month regardless of whether or not the water has actually been turned

off on the twenty-first (21~ for failure to pay the utility bill. Postmarks shall not ~e

accepted. If the delinquent amount is not received at City Hall by 5:00 p.m. on the

twentieth (20th) of the delinquency month, the Delinquency Processing Fee shall be

assessed against the unpaid account and the Red Tag Notice and water shutoff

procedures shall commence on or after the twenty-first (21 st) of the Delinquency

month. The Red Tag Notice shall indicate the assessment of the delinquency

Processing Fee and the total account balance outstanding, indicating that fUll

payment must be made to reestablish utility services, and that no checks will be

accepted and that payment can be made by cash, money order, cashier check or

credit card.

10·

•

19. RETURNED CHECK I CREDIT CAROl ATM I DIRECT PAY FEE

The fee of $35 will be charged for any payment that is returned this includes form of

returned check, returned electronic direct payment, credit card, or debit card and will

be subject to shutoff procedures. After three returned payments in a year, the

customer may only pay by cash, money order cashier check or credit card for the

remainder of that year.

20. METER REMOVAL AND REINSTALLATION; METER VANDALISM AND

DESTRUCTION

Fees and charges for meter removal and reinstallation due to customer tampering

and the meter after shutoff in violation of Municipal code and fees and charges for

meter vandalism and destruction shall be determined by City staff based on time and

material cost incurred by the City for correction, repair, or replacement.

11

Databases, Tables & Calculators by SubjectFONT SIZE:

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I 200B iJII>To: '

I 199B jJ""II••....,Output0ptI0n8: From:

rude graphs NEW!Data extr........d on: February 6,2009 (11:24:12 AM)

Consumer Price Index - Urban Wage Earners and Clerical Workers

series Id: CWURM22SAONot Seasonally AdjustedArea: san FrancJsco-Oakland-8an Jose. CAItem: A1lltemsBase Period: 1982-84=100

Year,~19992000

~,~2003

'2004

~20062iiii7200i

3.35%

THE CITY OF LOS BANOS WISHES TO PROVIDE PUBLIC NOTICE REGARDING:

1. The City's proposal to perform\the annual cost of liVing increase of 3.35% for water and wastewaterrates. The purpose of the proposed increase is necessary to maintain, operate and improve the waterand wastewater system as well as all related administrative and incidental costs.

2. The proposed minimum monthly residential bill for utility services is $59.09 as of June 21, 2009. This isa $0.98 adjustment for the minimum residential bill.

WaterWastewater CollectionWastewater TreatmentGarbage Disposal

Total:

$16.34$ 9.53$ 4.15$29.07$59.09

3. The proposed schedule of maximum rates is shown in the table on the back of this notice. If the rateincreases are approved, it is proposed that they will commence to be collected beginning with the August1, 2009 utility bills and will continue to be collected until otherwise modified by the City. The water andwastewater rates will not exceed the maximum amounts shown without another written notice and pUblichearing.

4. Before taking final action on the proposed rate increase, the City Council will hold a PUBLIC HEARINGon Wednesday, May 6, 2009, at 7:00 p.m. in the City Council Chambers, 520 J Street, Los Banos.The Public Hearing will be held to allow the public to provide testimony on the proposed water andwastewater rate increases. The Council may continue the hearing from time to time without further writtennotice.

5. Any 'utility customer or property owner may file with the City Clerk, at any time before the end of the PublicHearing, a written protest against the proposed rate increases. The written protest must identify theaddress, the name on the utility account, and be signed by the customer on the utility account or propertyowner.

A protest form has been provided below for your use. The written protests may be hand delivered or mailedto the City Clerk at the City's address shown below. To be counted, the City Clerk must receive al writtenprotest not later than the end of the Public Hearing specified above. Protests by telephone, fax, or e-mailcannot be accepted. A majority protest exists if, at the end of the Public Hearing, there are valid writtenprotests submitted by utility customers or property owners of a majority of the properties subject to theproposed rate increase. A majority protest will result in the proposed rate increase not being imposed. Notethat no more than one protest per address may be submitted.

6. To get additional information about the proposed rate increase, contact City Hall at (209) 827~7000 or email [email protected].

520 J STREET - LOS BANOS, CA 93635TELEPHONE: (209) 827-7000-FAX: (209)827-7006 - www.losbanos.org

--'T-he eity-of-I:;os -Banos proposed··schedule of rates- is-shown in--t-he-tablebelow~ If-the rate inereases are·approved, it is proposed that they will become effective June 21, 2009 and to be collected beginning withthe August 1, 2009 utility bills

RESIDENTIAL (MONTHLY)WATER: $16.34 Minimum base rate per month(Allowance of 1,500 cubic feet per month)"+$ 1.26 Overage cost per 100 cubic feetFor mUltiple family units greater than three units on one meter:minimum rate plus $5.81 per unitWASTEWATER COLLECTION: $9.53 Flat charge monthly ratefor multiple dwellings or trailer parks with a common sewer: $9.53 +$9.53 per each unit in excess of one.WASTEWATER TREATMENT: $4.15 Flat charge monthly ratefor multiple dwellings or trailer parks with a common sewer: $4.15 +$4.15 per each unit in excess of one.

COMMERCIAL:WATER:For meters less than 1" - $16.34 per monthFor meters more than 1" to 11/2" - $19.89 per monthFor meters more than 1 1/2" to 2" - $22.93 per monthFor meters more than 2" to 3" - $26.18 per monthFor meters more than 3" to 4" - $32.71 per monthFor meters over 4" -determined by the Public Works DepartmentAllowance amount =1,500 cubic feet per month any usage over 1500cubic feet during a one month reading cycle will be charged at $1.26 per100 cubic feetWASTEWATER COLLECTION:$ 19.06 flat charge - monthly rateFor hotels & motels $19.06 per month +

\ $4.70 per room with kitchen facility$2.37 per room without kitchen facilities.$ .43 per student per month$ 9.53 for places of religious worship per monthWASTEWATER TREATMENT:$.71 per 100 cu ft of water used for standard industrial$ .91 per 100 cu ft of water used for bakeries, restaurants, dry cleaning,motion picture theaters, packing sheds, and dry process dairy prodUcts.$ 1.19 per 100 cu ft of water used for meat prodUcts

DEPOSITS: $100.00 For new non-owner applicantsMETER TESTS: $25.00 Deposit, returnable if meter registers overtwo percent more than actual flowLATE CHARGES: 15% charge of billing for water, wastewatertreatment, wastewater collection, and garbage disposal.DELINQUENCY PROCESSING FEE: $35.00 for water, wastewatercollection, wastewater treatment, and garbage disposal.RETURNED CHECK FEE: $35~00 per returned transaction.

520 J STREET - LOS BANOS, CA 93635TELEPHONE: (209) 827-7000 - FAX: (209)827-7006 - www.losbanos.org

LOS BanosAt the Crossroads~fCalifornia

--------------------------..---------------------------------------------------------------------------Protest Form

If you would like to protest the proposed water and wastewater cost of living rate increase of 3.35%, youmay complete this Protest Form, detach it, and mail or hand deliver it to the Los Banos City Clerk, 520 JStreet, Los Banos, CA 93635. In order for this form to be counted as a valid protest against the proposedrate increase, this form must be signed and delivered to the City Clerk no later than the end of the PublicHearing on May 6, 2009. Only one protest is allowed per address.

DI protest the proposed water and wastewater rate increases to fund operation, maintenance andreplacement costs related to providing water and wastewater services to City of Los Banosresidents.

I hereby declare under penalty of perjury that I am the utility holder of the property or the authorizedrepresentative of the owner of the property.

Customer Name/Property Owner:, _

Customer Account Number:, _

Address:, _

Please sign here: _

520 J STREET - LOS BANOS, CA 93635TELEPHONE: (209) 827-7000-FAX: (209)827-7006 - www.losbanos.org

LOS Banos, ,'; " ; " ;.' I :'- '~ -;. ~.-,

» :a: ... .L

PLANNING DEPARTMENTi..

Date: November 27, 2009

Regarding: Notice of Public Hearing

Proposal: Los Banos Rail Trail Corridor Regulating Code

NOTICE IS HEREBY GIVEN THAT a Public Hearing will be held by the LosBanos Planning Commission to consider making a recommendation to the LosBanos City Council on the Los Banos Rail Trail Corridor Regulating Code. Thepurpose of the Regulating Code is to establish appropriate zoning anddevelopment standards that allow and facilitate the envisioned types ofdevelopment within the Rail Trail Corridor.

.'-.--'. A PUBLIC HEARING on this matter will be held at the next scheduled meeting ofthe Los Banos Planning Commission on Wednesday, December 9, 2009 at 7:00p.m. in the Council Chambers of Los Banos City Hall located at 520 "J" Street.Questions regarding the above-referenced item may be directed to Elaine Post,Redevelopment Agency Director at City Hall or at (209) 827-7000, Ext.146. Acopy of the document is available for viewing at City Hall.

Persons wishing to provide oral comments on the described proposal may do soat this meeting or may provide written comments on this matter prior to the pUblicmeeting. Written comments may be sent by U.S. Mail or hand delivered to theCity of Los Banos City Hall at 520"J" Street, Los Banos, California 93635. If nocomments are received prior to or on the above date, it will be assumed that nocomments are being offered. The public is also informed that should this matter,at some future date go to court, testimony shall be limited to only those issuesraised at the public hearing or in written correspondence delivered to the Cityprior to, or at, the public hearing per Government Code Section 65009.

THE CITY OF LOS BANOS

~r_~~_itf{J~ «Assistant Planner

I

LOS BanosPLANNING DEPARTMENT

Date: November 27, 2009

Regarding: Notice of Public Hearing

Proposal: Model Water Efficiency Landscape Ordinance

NOTICE IS HEREBY GIVEN THAT a Public Hearing will be held by the LosBanos Planning Commission to consider making a recommendation to the LosBanos City Council on the Model Water Efficiency Landscape Ordinance asmandated by the State of California.

A PUBLIC HEARING on this matter will be held at the next scheduled meeting ofthe Los Banos Planning Commission on Wednesday, December 9, 2009 at 7:00p.m. in the Council Chambers of Los Banos City Hall located at 520 "J" Street.Questions regarding the above-referenced item may be directed to PaulaFitzgerald, AICP, Planning Director at City Hall or at (209) 827-7000, Ext. 114.

Persons wishing to provide oral comments on the described proposal may do soat this meeting or may provide written comments on this matter prior to the publicmeeting. Written comments may be sent by U.S. Mail or hand delivered to theCity of Los Banos City Hall at 520 "J" Street, Los Banos, California 93635. If nocomments are received prior to or on the above date, it will be assumed that nocomments are being offered. The public is also informed that should this matter,at some future date go to court, testimony shall be limited to only those issues·raised at the public hearing or in written correspondence delivered to the Cityprior to, or at, the public hearing per Government Code Section 65009.

THE CITY OF LOS BANOS

<idJw~Assistant Planner