claremont city council

CLAREMONT CITY COUNCIL

MEETING AGENDA

“We are a vibrant, livable, and inclusive community dedicated to quality services,

safety, financial strength, sustainability, preservation, and progress

with equal representation for our community.”

City Council Chamber

225 Second Street

Claremont, CA 91711

Tuesday

September 28, 2021

6:30 PM

COUNCILMEMBERS

JENNIFER STARKMAYOR

COREY CALAYCAY JED LEANO SAL MEDINA ED REECE

Pursuant to the local emergency concerning the COVID-19 virus declared by

the City Council of the City of Claremont on March 19, 2020, the Los Angeles

County Department of Health's "Safer at Home Order" issued March 19, 2020,

and Executive Order N-29-20 issued by Governor Gavin Newsom on March

18, 2020, the following protocols will apply to public participation for the

duration of the emergency:

Members of the public will not be permitted to be physically present at meetings. To allow for public

participation, the City Council will conduct its meeting through Zoom Video Communications. To

participate in the meeting from the comfort of your own home or office, download Zoom on any phone or

computer device and copy and paste the following link into your browser to access and participate in the

live City Council meeting at 6:30 p.m.: https://zoom.us/j/256208090 or to only listen from the phone dial

(213)338-8477, Webinar ID: 256 208 090. For assistance, please call (909)399-5461 or

(909)399-5463.

Members of the public who wish to address the City Council on any matter listed on the agenda or a

subject matter within the jurisdiction of the City Council may utilize the following methods. The Council

requests, but does not require, the public speakers to identify themselves.

OPTION 1: LIVE COMMENTS - Through Zoom, someone wishing to speak may virtually "raise your

hand". Wait to be called upon by the City Clerk, and then you may provide verbal comments for up to 4

minutes.

OPTION 2: E-MAIL - Public comments may be sent via email to the City Clerk’s office at

[email protected] and [email protected]. All emails received before 3:00

p.m., will be distributed to the City Council, imaged into the City’s document archive system, and read

into the record (up to 4 minutes).

September 28, 2021 City Council Agenda

OPTION 3: MAIL - Public comments may be mailed to Claremont City Hall, Attn: City Clerk’s Office, PO

Box 880, Claremont, CA 91711. All comments received via mail will be distributed to the City Council,

imaged into the City’s document archive system, and read into the record (up to 4 minutes).

OPTION 4: TELEPHONICALLY - Members of the public wanting to address the City Council

telephonically are requested to inform the Claremont City Clerk's office no later than 3:00 p.m. on the

day of the meeting. The Claremont City Clerk's office can be reached at (909) 399-5461, (909)

399-5463, [email protected], or [email protected]. You will be called during

consideration of the item you are interested in and given up to 4 minutes to speak.

The meeting will not be live streamed through Granicus as the meeting will be live streamed through

Zoom instead. The recorded meeting will be uploaded and saved as a record.

CALL TO ORDER THE MEETING OF THE CITY COUNCIL

PLEDGE OF ALLEGIANCE

MOMENT OF SILENCE

ROLL CALL

CLOSED SESSION REPORT

CEREMONIAL MATTERS, PRESENTATIONS, AND ANNOUNCEMENTS

Staff Introduction:

Alexander Cousins, Community Development Management Analyst

MAYOR AND COUNCIL

Council Items

Council Assignment Reports

City Councilmembers may serve as representatives on regional organizations. This time is

allocated for reports about their activities. For information about the City Council's local,

intergovernmental and regional appointments please visit the City website :

www.ci.claremont.ca.us/government/city-council/city-council-assignments-and-appointments.

CITY MANAGER REPORT

PUBLIC COMMENT

The Council has set aside this time for persons in the audience who wish to comment on items

that ARE NOT LISTED ON THIS AGENDA, but are within the jurisdiction of the City Council.

Members of the audience will later have the opportunity to address the City Council regarding ALL

OTHER ITEMS ON THE AGENDA at the time the Council considers those items.


At this time the Council will take public comment for 30 minutes. Public Comment will resume later

in the meeting if there are speakers who did not get an opportunity to speak because of the

30-minute time limit.

The Brown Act prohibits the City Council from taking action on oral requests relating to items that

are not on the agenda. The Council may engage in a brief discussion, refer the matter to staff,

and/or schedule requests for consideration at a subsequent meeting.

The Council requests, but does not require, speakers to identify themselves. When you come up

to speak, please state your name unless you wish to remain anonymous. Each speaker will be

allowed four (4) continuous minutes.

CONSENT CALENDAR

All matters listed on the consent calendar are considered to be routine. The City Council or one or

more Commissions and/or Committees have previously considered most of the items on the

consent calendar. The Council may act on these items by one motion following public comment.

Only Councilmembers may pull an item from the consent calendar for discussion.

The City Council will waive reading of resolutions and ordinances. Each resolution and ordinance

will be numbered following Council approval.

Now is the time for those in the audience to comment on the consent calendar. Each speaker will

be allowed four (4) continuous minutes to comment on items on the consent calendar.

ADOPTION OF A RESOLUTION APPROVING THE CITY WARRANT REGISTER1.

Recommendation: Staff recommends that the City Council adopt A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ALLOWING

CERTAIN CLAIMS AND DEMANDS AND SPECIFYING THE FUNDS OUT

OF WHICH THE SAME ARE TO BE PAID, dated September 16, 2021.

Resolution Approving City Warrant Register Dated September 16, 2021Attachment(s):

CITY COUNCIL MINUTES OF SEPTEMBER 14, 20212.

Recommendation: Staff recommends that the City Council approve and file the regular City

Council meeting minutes of September 14, 2021.

Draft Regular Meeting Minutes of September 14, 2021Attachment(s):

SECOND READING AND ADOPTION OF AN ORDINANCE ADOPTING A CLAREMONT

MUNICIPAL CODE AMENDMENT TO UPDATE THE INCLUSIONARY HOUSING

ORDINANCE (CMC CHAPTER 16.036) FOR RESIDENTIAL DEVELOPMENTS CITYWIDE

(#21-CA02) - CITY-INITIATED (FUNDING SOURCE: GENERAL FUND)

3.


Recommendation: Staff recommends that the City Council waive further reading and adopt AN

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CLAREMONT,

CALIFORNIA, ADOPTING A CODE AMENDMENT TO UPDATE THE CITY'S

INCLUSIONARY HOUSING ORDINANCE-CHAPTER 16.036 TO THE

CLAREMONT MUNICIPAL CODE - APPLICANT CITY OF CLAREMONT.

Draft OrdinanceAttachment(s):

AWARD OF CONTRACT TO ELEVATORS ETC. FOR CONTRACT ELEVATOR SERVICES

(FUNDING SOURCE: GENERAL FUND)

4.

Recommendation: Staff recommends that the City Council award a contract to Elevators Etc. for

monthly elevator services and authorize the City Manager to enter into a

two-year agreement, with three optional one-year extensions, in an amount

not to exceed $18,950 annually, and authorize a contingency of $2,000 per

year for an annual contract amount of $20,950.

AWARD OF CONTRACT FOR PEST CONTROL AND BEE REMOVAL SERVICES (FUNDING

SOURCES: GENERAL FUND, PROPOSITION C FUND, LANDSCAPE AND LIGHTING

DISTRICT FUND, AND CEMETERY FUND)

5.

Recommendation: Staff recommends that the City Council award a contract to ABBA Termite &

Pest Control for pest control and bee removal services and authorize the City

Manager to execute a three-year contract with two optional one-year

extensions in an amount not to exceed $7,750 per year, and authorize a

contingency of $1,000 per year for an annual total of $8,750.

AWARD OF CONTRACT TO BEAR ELECTRICAL SOLUTIONS, INC. FOR ON-CALL

ELECTRICAL SERVICES (FUNDING SOURCES: GENERAL FUND, PROPOSITION C

FUND, AND LANDSCAPE AND LIGHTING DISTRICT FUND)

6.

Recommendation: Staff recommends that the City Council award a contract to Bear Electrical

Solutions, Inc. for on-call electrical services and authorize the City Manager

to enter into a three-year contract with two optional one-year extensions in an

amount not to exceed $76,050 per year, and authorize an annual

contingency of $4,950, for a total annual contract amount of $81,000.

AWARD OF CONTRACT TO HDL ECONSOLUTIONS FOR ADMINISTERING THE COVID-19

RELIEF AND ECONOMIC RECOVERY PROGRAM (FUNDING SOURCE: AMERICAN

RESCUE PLAN ACT FUND)

7.

Recommendation: Staff recommends that the City Council:

A. Authorize the City Manager to enter into an agreement with HdL

ECONSolutions for an amount not to exceed $49,500 to administer the

COVID-19 Relief and Economic Recovery Program; and

B. Appropriate $49,500 from American Rescue Plan Act Fund to fully fund

the cost of the agreement with HdL ECONSolutions.

HdL ECONSolutions ProposalAttachment(s):


AUTHORIZATION TO AMEND THE AGREEMENT WITH LIEBERT CASSIDY WHITMORE TO

INCREASE COMPENSATION FOR SPECIAL LEGAL SERVICES (FUNDING SOURCE:

GENERAL FUND)

8.


A. Authorize the City Manager to execute an amendment to the existing

agreement with Liebert Cassidy Whitmore for special legal services

pertaining to employment relations matters, increasing compensation by

$100,000; and

B. Appropriate $75,000 from unassigned General Fund balance to fully fund

the agreement.

PUBLIC HEARINGS - None

ORDINANCES - None

ADMINISTRATIVE ITEMS

PSYCHIATRIC ASSESSMENT CARE TEAM (PACT) - SIX-MONTH EVALUATION (FUNDING

SOURCE: STATE “1991” REALIGNMENT FUNDS)

9.

Recommendation: Staff recommends that the City Council receive, provide opportunity for

community input, and file the Psychiatric Assessment Care Team (PACT) -

Six-Month Evaluation report.

5150 Hold EvaluationAttachment(s):

EXECUTION AND DELIVERY OF A LEASE AGREEMENT FOR THE PURPOSE OF

FINANCING ENERGY CONSERVATION IMPROVEMENTS - (FUNDING SOURCE:

GENERAL FUND)

10.


A. Adopt a RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

CLAREMONT, CALIFORNIA AUTHORIZING EXECUTION AND DELIVERY

OF A LEASE AGREEMENT IN AN AGGREGATE PRINCIPAL AMOUNT NOT

TO EXCEED $6,900,000 FOR THE PURPOSE OF FINANCING ENERGY

CONSERVATION IMPROVEMENTS AND AUTHORIZING AND DIRECTING

CERTAIN ACTIONS IN CONNECTION THEREWITH; and.

B. Authorize the City Manager to negotiate and enter into a construction

agreement with Trane U.S., Inc., for an amount not to exceed $6,577,150 for

a comprehensive energy improvement project that meets all requirements

detailed in the project scope of services.

Resolution

Proforma Cash Flows

Good Faith Estimates

Attachment(s):


CONTINUED PUBLIC COMMENT

This time is reserved for those persons who were unable to speak earlier in the agenda because

of the 30-minute time restriction.

COMMISSIONS

One Planning Commission Vacancy

ADJOURNMENT

THE NEXT REGULAR MEETING OF THE CLAREMONT CITY COUNCIL WILL BE HELD ON,

OCTOBER 12, 2021, AT 6:30 P.M.

A LOOK AHEAD – Upcoming Meetings and Tentative Agenda Items

- Resolution Approving Warrants

- Draft September 14, 2021 Minutes

- Resolution Declaring Continued Existence of Emergency (COVID-19)

- Award of Contract for Traffic Control Signals and Equipment

- Municipal Code Clean-Up Amendments

MATERIALS RELATED TO AN ITEM ON THIS AGENDA, AND SUBMITTED TO THE CITY COUNCIL

AFTER PUBLICATION OF THE AGENDA, ARE AVAILABLE TO THE PUBLIC IN THE CITY CLERK’S

OFFICE AT 207 HARVARD AVENUE, CLAREMONT, MONDAY THROUGH THURSDAY, 7 AM – 6

PM. SUBJECT MATERIALS WILL BE MADE AVAILABLE ON THE CITY WEBSITE AS SOON AS

POSSIBLE - www.ci.claremont.ca.us. For more information, please call the City Clerk’s Office at

909-399-5461.

IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT 0F 1990, THIS AGENDA WILL

BE MADE AVAILABLE IN APPROPRIATE ALTERNATIVE FORMATS TO PERSONS WITH

DISABILITIES. ANY PERSON WITH A DISABILITY WHO REQUIRES A MODIFICATION OR

ACCOMMODATION IN ORDER TO PARTICIPATE IN A CITY MEETING SHOULD CONTACT THE

CITY CLERK AT 909-399-5461 “VOICE” OR 1-800-735-2929 “TT/TTY” AT LEAST THREE (3)

WORKING DAYS PRIOR TO THE MEETING, IF POSSIBLE.

I, SHELLEY DESAUTELS, CITY CLERK OF THE CITY OF CLAREMONT, CALIFORNIA, HEREBY

CERTIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING AGENDA WAS POSTED AT

CLAREMONT CITY HALL, 207 HARVARD AVENUE, ON SEPTEMBER 23, 2021, PURSUANT TO

GOVERNMENT CODE SECTION 54954.2.

POST THROUGH: September 29, 2021

Claremont City Council

Agenda Report

File #: 3939 Item No: 1.

TO: ADAM PIRRIE, CITY MANAGER

FROM: SHELLEY DESAUTELS, CITY CLERK

DATE: SEPTEMBER 28, 2021Reviewed by:

City Manager: AP

Interim Finance Director: DC

SUBJECT:

ADOPTION OF A RESOLUTION APPROVING THE CITY WARRANT REGISTER

RECOMMENDATION

Staff recommends that the City Council adopt A RESOLUTION OF THE CITY COUNCIL OF THECITY OF CLAREMONT, CALIFORNIA, ALLOWING CERTAIN CLAIMS AND DEMANDS ANDSPECIFYING THE FUNDS OUT OF WHICH THE SAME ARE TO BE PAID, dated September 16,2021.

PUBLIC NOTICE PROCESS

The agenda and staff report for this item have been posted on the City website and distributed tointerested parties. If you desire a copy, please contact the City Clerk’s Office.

Submitted by:

Shelley DesautelsCity Clerk

Attachment:Resolution Approving City Warrant Register Dated September 16, 2021

CLAREMONT Printed on 9/23/2021Page 1 of 1

powered by Legistar™

RESOLUTION NO. 2021-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ALLOWING CERTAIN CLAIMS AND DEMANDS AND SPECIFYING THE FUNDS OUT OF WHICH THE SAME ARE TO BE PAID NOW THEREFORE, THE CLAREMONT CITY COUNCIL DOES HEREBY RESOLVE: SECTION 1. That the list of claims and demands dated September 16, 2021, totaling $1,024,848.65 has been audited as required by law. SECTION 2. That warrant numbers 4172 through 4177, and 246001 through 246121, inclusive, are hereby allowed in the amounts and ordered paid out of the respective funds. SECTION 3. That the Mayor shall sign this Resolution and the City Clerk shall attest and certify to the passage and adoption thereof. PASSED, APPROVED, AND ADOPTED this 28th day of September, 2021.

________________________________ Mayor, City of Claremont

ATTEST: ________________________________ City Clerk, City of Claremont

jcostanza

Typewritten Text

ATTACHMENT


Agenda Report





City Manager: AP


SUBJECT:

CITY COUNCIL MINUTES OF SEPTEMBER 14, 2021

RECOMMENDATION

Staff recommends that the City Council approve and file the regular City Council meeting minutes ofSeptember 14, 2021.



Submitted by: Prepared by:

Shelley Desautels Jamie CostanzaCity Clerk Deputy City Clerk

Attachment:Draft Regular Meeting Minutes of September 14, 2021



CLAREMONT CITY COUNCIL MEETING MINUTES

Tuesday, September 14, 2021 – 6:30 p.m. Meeting Conducted Via Zoom and Video Recording is Archived on the City Website https://www.ci.claremont.ca.us/government/city-council/watch-city-council-meetings

CALL TO ORDER Mayor Stark called the meeting to order at 6:30 p.m. PLEDGE OF ALLEGIANCE MOMENT OF SILENCE – In honor of City of Azusa Councilmember Uriel E. Macias and those

who passed on September 11, 2011. ROLL CALL PRESENT VIA ZOOM COUNCILMEMBER: CALAYCAY, LEANO, MEDINA, REECE,

STARK ABSENT COUNCILMEMBER: NONE ALSO PRESENT VIA ZOOM Adam Pirrie, City Manager; Alisha Patterson, City Attorney;

Jamie Earl, Assistant City Manager; Shelly Vander Veen, Police Chief; Brad Johnson, Director of Community Development; Jeremy Swan, Director of Community Services; Melissa Vollaro, Director of Human Services; Shelley Desautels, City Clerk

CLOSED SESSION REPORT There was no closed session meeting to report on. CEREMONIAL MATTERS, PRESENTATIONS, AND ANNOUNCEMENTS The City Council recognized the following 2021 Monday Night Concert Series Event Sponsors: Kiwanis Club of Claremont John Elway’s Claremont Chrysler Dodge Jeep Ram The City Council recognized the following outgoing City Commissioners for their service:

Rachel Forester, Community and Human Services Commission Scott Horsley, Architectural Commission Phyllis Munson, Community and Human Services Commission Julie Medero, Traffic and Transportation Commission Rick Reed, Planning Commission

The City Council introduced the following Commissioners/Committee Member:

Robert Perry, Architectural Commission Georgeann Spivack, Architectural Commission

jcostanza

Typewritten Text

ATTACHMENT

City Council Minutes September 14, 2021 Page 2

Brisa Sifuentes, Community and Human Services Commission Greg Glass, Community and Human Services Commission Charles Edwards, Planning Commission Richard Weiner, Traffic and Transportation Commission Katie Sandridge, Public Art Committee

Melissa Vollaro, Director of Human Services, introduced Rafael Gonzalez, Human Services Manager. MAYOR AND COUNCIL Council Items - None Council Assignment Reports This item starts at 28:15 in the archived video. Councilmember Reece reported that he and City of Montclair Mayor Sean Spiller hosted representatives David Price and Norma Torres on a Gold Line tour. Mayor Stark announced that she has been appointed by Supervisor Solis to serve on the Personal Assistance Services Council. CITY MANAGER REPORT This item starts at 32:14 in the archived video. City Manager Pirrie provided an update on the City’s Housing Element and announced that the Hughes Center has returned to normal operating hours, Monday through Thursday 9 a.m. to 9 p.m., Friday from 9 a.m. to 6 p.m., and Saturday 9 a.m. to 2 p.m. PUBLIC COMMENT This item starts at 34:05 in the archived video. Mayor Stark invited public comment. Courtney Aguire, Claremont resident, asked the City Council to revise the Municipal Code to increase the number of dogs and cats allowed at a single-family home. Larry Schroeder spoke about illegal activity taking place at the Village Plaza and around the Village. He asked the City Council to address those who are breaking the law. Ryan Serrano, Assistant Field Deputy for Supervisor Hilda Solis, provided a statement by Supervisor Solis regarding the 20th anniversary of September 11 and offered assistance if any service organization wished to hold a covid vaccine event. Cheryl Gilera, Claremont Helen Renwick Library Manager, provided an update on events taking place at the Library. Charles Price, Founding Director of Priceless Pets, thanked everyone for their support of Priceless Pets and provided an update on their successful pet adoptions.


Joyce Sauter asked the City Council to address safety concerns and retrofits needed at the current Police station. Joseph Lyons spoke in support of the comments made by Ms. Sauter, congratulated the Mayor on her recent appointment, and thanked the City Council for their participation in other agencies. Patrick Parungao expressed concern regarding the removal of the School Resource Officer. The following written public comments were read into the record: Sharon Williams, Kathryn Flynn, and Keep La Puerta Public. Marisa Prasse urged the City Council to revisit its Accessory Dwelling Unit (ADU) ordinance to allow for more than one ADU on a property and asked the City Council to address the inaccuracies being spoken about the potential development at La Puerta. There were no other requests to speak. The City Council directed City staff to add a discussion item to their priority meeting regarding the maximum number of dogs and cats allowed at a property. CONSENT CALENDAR This item starts at 1:15:35 in the archived video. Mayor Stark invited public comment on the Consent Calendar. Drew Ready spoke to Consent Calendar Item No. 7. He raised concern that the Local Hazard Mitigation Plan does not address the risk of the San Antonio Dam or climate change. There were no other requests to speak. Councilmember Calaycay pulled Item No. 7 from the Consent Calendar for additional discussion. 1. Resignation of Planning Commissioner Tiena Johnson Hall Accepted with regret the resignation of Tiena Johnson Hall from the Planning Commission. 2. Adoption of Resolutions Approving City Warrant Register

A. Adopted Resolution No. 2021-45, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ALLOWING CERTAIN CLAIMS AND DEMANDS AND SPECIFYING THE FUNDS OUT OF WHICH THE SAME ARE TO BE PAID, dated August 5, 2021;

B. Adopted Resolution No. 2021-46, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ALLOWING CERTAIN CLAIMS AND DEMANDS AND SPECIFYING THE FUNDS OUT OF WHICH THE SAME ARE TO BE PAID, dated August 19, 2021; and

C. Adopted Resolution No. 2021-47, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ALLOWING CERTAIN CLAIMS AND DEMANDS AND SPECIFYING THE FUNDS OUT OF WHICH THE SAME ARE TO BE PAID, dated September 2, 2021.

3. City Council Minutes of July 27, 2021 (Regular) Approved and filed the regular City Council meeting minutes of July 27, 2021.


4. Award of Contract to Los Angeles Truck Center, LLC., for Two CNG Front-Loader Sanitation Trucks (Funding Sources: Sanitation Fund South Coast Air Quality Management District Fund) A. Authorized the City Manager to enter into an agreement with Los Angeles Truck Center,

LLC in an amount not to exceed $766,456 to purchase two CNG front-loader sanitation trucks; and

B. Appropriated $281,632 from the Sanitation Fund balance and $150,000 from the South Coast Air Quality Management District Fund balance to fully fund the purchase.

5. Award of Contract to Allied Universal Janitorial Services for City-Owned Building Custodial

Services (Funding Sources: General Fund, Transportation Fund, and Cemetery Fund) Authorized the City Manager to enter into a three-year contract with two optional one-year extensions with Allied Universal Janitorial Services in an amount not to exceed $200,848 per year, and authorize a contingency of $10,000, for an annual contract amount of $210,848 for custodial services for all City-owned buildings.

6. Memorandum of Understanding Between the City of Claremont and the Claremont Police

Officers’ Association (CPOA), Implementing Wages, Hours, and Terms and Conditions of Employment, and Adoption of Four Revised Classification Plans and Salary Schedules for Full-Time Job Classification for Fiscal Years 2021-22, 2022-23, 2023-24, and 2024-25 (Funding Source: General Fund) A. Adopted Resolution No. 2021-48, A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF CLAREMONT, CALIFORNIA, APPROVING CLAREMONT POLICE OFFICERS' ASSOCIATION (CPOA) MEMORANDUM OF UNDERSTANDING AND AUTHORIZING THE CITY MANAGER TO IMPLEMENT WAGES, HOURS, AND TERMS AND CONDITIONS OF EMPLOYMENT THROUGH JUNE 30, 2025; and

B. Adopted Resolution No. 2021-49, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA ADOPTING FOUR REVISED CLASSIFICATION PLANS AND SALARY SCHEDULES FOR FULL-TIME JOB CLASSIFICATION FOR FISCAL YEARS 2021-22, 2022-23, 2023-24, AND 2024-25 WITH THE 2021-22 CLASSIFICATION PLAN AND SALARY SCHEDULE RETROACTIVE TO JULY 1, 2021.

7. Resolution Adopting the Local Hazard Mitigation Plan Update (Funding Sources: California

Office of Emergency Services Grant Fund and General Fund) This item was removed from the Consent Calendar.

Councilmember Calaycay moved to approve Consent Calendar Items No. 1-6, seconded by Councilmember Reece, and carried on a roll call vote as follows: AYES: Councilmember – Calaycay, Leano, Medina, Reece, Stark NOES: Councilmember – None Item Removed from the Consent Calendar This item starts at 1:20:17 in the archived video. 7. Resolution Adopting the Local Hazard Mitigation Plan (LHMP) Update (Funding Sources:

California Office of Emergency Services Grant Fund and General Fund) Councilmember Calaycay asked City staff to address Mr. Ready’s concerns.


Katherine Williams and Julie Quinn, representing Quinn Williams, worked as the City’s consultants to create the Local Hazard Mitigation Plan Update. They explained that the risk of the San Antonio Dam is currently being reviewed by the Army Corps of Engineers and more information will be available following their review. The LHMP is reviewed and submitted to CalOES every five years. Councilmember Calaycay suggested that the LHMP be reviewed by the City Council once the Army Corps completes their review of the San Antonio Dam. Councilmember Calaycay moved to: A. Adopt Resolution No. 2021-50, A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF CLAREMONT, CALIFORNIA, ADOPTING THE LOCAL HAZARD MITIGATION PLAN (LHMP) UPDATE; and

B. Direct staff to bring an update to the Local Hazard Mitigation Plan for City Council review in one year.

Ms. Quinn responded to a question from the City Council regarding extreme heat and climate change. The motion was seconded by Councilmember Medina, and carried on a roll call vote as follows: AYES: Councilmember – Calaycay, Leano, Medina, Reece, Stark NOES: Councilmember – None

The City Council recessed at 7:59 p.m. The City Council reconvened at 8:05 p.m. PUBLIC HEARING 8. Amendment to the Claremont Municipal Code (#21-CA02) Amending the Inclusionary

Housing Requirement for Residential Developments Citywide – City Initiated (Funding Source: General Fund)

This item starts at 1:35:20 in the archived video.

Brad Johnson, Director of Community Development, and Kathe Head, Keyser Marston, gave a PowerPoint presentation. Director Johnson, Ms. Head, and City Attorney Patterson responded to questions from the City Council regarding the Planning Commission’s recommendations, low-income requirement for rental units, authority allowing Claremont to set inclusionary housing requirements, income standards, Pasadena’s Inclusionary Housing Ordinance, expected rate of return, management of the inclusionary housing program, execution of an Inclusionary Housing Agreement, statutory low income, sale price listed by developers, review of financial implications, purchaser forgiveness, association dues, calculation of moderate income, definition of extreme hardship, in-lieu fee, timing of the inclusionary housing review, delayed effective date of the proposed ordinance, down payment, and local control of developments. The City Council recessed at 10:09 p.m. The City Council reconvened at 10:18 p.m.


Mayor Stark opened the public hearing and invited public comment.

Sheldon Schuster, Keck Graduate Institute President, asked that the Village South development be excluded from the proposed inclusionary housing ordinance amendment.

Sorrel Stielstra, Claremont resident, spoke in support of the amended inclusionary housing ordinance and asked that the amended inclusionary housing ordinance not be applicable to Village South development.

Joseph Lyons spoke in support of prioritizing affordable housing and the proposed inclusionary housing ordinance amendment.

Brad Jensen, Claremont resident, encouraged the City Council to allow a grace period when applying the new inclusionary housing ordinance requirements to housing developments, especially the Village South project.

Bob Gerecke, Claremont resident, asked that the proposed ordinance be amended to include a provision that units remain affordable in perpetuity and require that additional housing units allowed by Senate Bill 9 include one affordable unit.

Marisa Prasse, Claremont resident, urged the City Council to approve the proposed inclusionary housing ordinance

Karissa DiStefano, Building Industry Association Director of Public Affairs, urged the City Council to continue this item for 30 days to provide for the opportunity to meet with staff and members of the Building Industry to discuss the proposed changes.

Lee Kane, Claremont resident, spoke in support of the proposed inclusionary housing ordinance mandating affordable housing in all new developments.

Richard Rosenbluth, Claremont resident, spoke in support of the proposed inclusionary housing ordinance and asked that the new ordinance apply to all developments, including Village South.

Rachel Forester, President of the League of Women Voters – Mt. Baldy Area, shared that the League supports the updated inclusionary housing ordinance and asked that the new provisions of the ordinance apply to all projects, including the Village South.

Matt Moore, Claremont resident, spoke in support of the comments made by Mr. Gerecke and Mr. Lyons and suggested that accessory dwelling units be included in the proposed ordinance.

Nancy Williams spoke in support of the proposed inclusionary housing ordinance, including all development projects.

Larry Schroeder suggested that the proposed ordinance be amended to provide units affordable to low-income households.

Kaitlin Morris, South Village Partners, shared that if the City applies the proposed inclusionary housing ordinance on the Village South development, those new requirements would threaten the fundamental economics and potential financing of the project.


Aithan Peterson, Claremont resident, spoke in support of the amended inclusionary housing ordinance, and asked that it be applied to the Village South development.

Sam Pedroza expressed concern about process and rushing the process for amending the inclusionary housing ordinance.

Zach Courser, Claremont resident, spoke in support of the amended inclusionary housing ordinance and suggested that accessory dwelling units be included in the ordinance.

Gene Boutilier, Claremont resident, shared that 58 Pilgrim Place residents support the amended inclusionary housing ordinance.

Ilsa Lund spoke in support of the amended inclusionary housing ordinance and for making it a priority in 2021.

Jerry Tessier, South Village Partners, shared that Village Partners supports inclusive affordable housing so long as there are funding mechanisms to offset losses and asked that the amended inclusionary housing ordinance not be applied to the Village South.

Christine Margiotta, Claremont resident, spoke in support of the proposed inclusionary housing ordinance as it will help produce more affordable housing units.

Phalana Tiller, Claremont resident, spoke in support of the proposed inclusionary housing ordinance; however, raised concern about applying the ordinance to the Village South development.

Sue Keith spoke in support of the comments made by Mr. Pedroza as the proposed ordinance will affect development for many years.

Cindy Sullivan, Claremont resident, asked that the City Council thoroughly study how the proposed ordinance will affect development of projects that have already been through the City’s process.

Becky Margiotta spoke in support of the proposed inclusionary housing ordinance.

Jim Keith asked the City Council to study the financial impacts of the proposed inclusionary housing ordinance before its adoption.

Sharon Stranford, Claremont resident, asked the City Council to support affordable housing.

The following written public comments were read into the record: Jeff Rhyne, Daryl Smith, Sumita Pahwa, Anthea Kraut, Rick Cole, David Lull, Margaret Burdge, Justin Simonson, Scott Chamberlain, Cynthia Kurtz, Karen Lull, Reverend Lyn Juckniess, Alexander Rudolph, Danny DeBare, Inclusive Claremont, Mike Boos, Lydia Bouroumand, Shawn Morrissey, Laura Kotovsky, Reverend Jennifer Strickland, Reverend Jacob Buchholz, Alicia Brady, Jeff Cranmer, Reverend Thomas Johnson, Stuart Wood, Natalie Shiras, Tim Barden, Josue Barnes, Noah Winnick, Christy Anderson, Deena Benjamin, Lynn Forester, Sarah Barnes, Daniel Stoebel, Eve Kaufman, Claremont United Church of Christ, Jennifer Jaffe, Ben McCoy, David Taussig, Will Saba, Kate Irvine, Bennett Rea, Chris Naticchia, Daniel Stoebel, Joseph Salas, Claudia Strauss, and Gretchen Potter.

There were no other requests to speak.


The City Council recessed at 12:38 a.m. The City Council reconvened at 12:45 a.m.

Councilmember Calaycay raised concern regarding the potential tradeoffs to allow for higher density and the State’s lack of cooperation. He does not feel comfortable at this time supporting the proposed inclusionary housing ordinance. Mayor Stark spoke in support of the proposed inclusionary housing ordinance and expressed concern imposing the proposed ordinance onto projects already in the process. Councilmember Reece spoke in support of not applying the proposed inclusionary housing ordinance upon the Village South development, and expressed concern about the quick timeline for creation and review of the proposed inclusionary housing ordinance. City Attorney Patterson announced that the City Council could either delay the effective date of the proposed inclusionary housing ordinance so that the ordinance does not apply to projects already in the process or modify the language of the proposed ordinance and go back to the Planning Commission for review. City Manager Pirrie suggested the City Council adopt the proposed ordinance changing the effective date. Councilmember Leano spoke in support of the proposed inclusionary housing ordinance and his preference is that the ordinance would become effective 30 days after second reading; however, is willing to compromise. Councilmember Medina raised concern regarding the short timing of the process to create the proposed inclusionary housing ordinance. Director Johnson responded to the City Council’s concern regarding public participation. He explained that staff created a large list of interested parties and has received a lot of public participation on this topic. He suggested that the inclusionary housing requirements be discussed during the Housing Element update. Mayor Stark spoke in support of introducing the proposed ordinance at tonight’s meeting changing the effective date of the ordinance to allow for a grace period.

The public hearing was closed. Councilmember Leano moved to:

A. Introduce AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ADOPTING A CODE AMENDMENT TO UPDATE THE CITY'S INCLUSIONARY HOUSING ORDINANCE-CHAPTER 16.036 TO THE CLAREMONT MUNICIPAL CODE - APPLICANT CITY OF CLAREMONT, for first reading and that reading be by title only, amending the effective date of the Ordinance as shown in Section 6 from 30 days to 180; and

B. Direct staff to educate the community and solicit input on the City’s inclusionary housing requirements through the upcoming Housing Element Update;

Seconded by Mayor Stark, and carried on a roll call vote as follows:

AYES: Councilmember – Leano, Medina, Reece, Stark NOES: Councilmember – Calaycay


ORDINANCES - None ADMINISTRATIVE ITEMS - None ADJOURNMENT Mayor Stark adjourned the meeting of the Claremont City Council Wednesday at 2:20 a.m. The next regular meeting of the Claremont City Council will be held on Tuesday, September 28, 2021, at 6:30 p.m., via Zoom. Mayor ATTEST: Deputy City Clerk


Agenda Report





City Manager: AP


SUBJECT:

SECOND READING AND ADOPTION OF AN ORDINANCE ADOPTING A CLAREMONTMUNICIPAL CODE AMENDMENT TO UPDATE THE INCLUSIONARY HOUSING ORDINANCE(CMC CHAPTER 16.036) FOR RESIDENTIAL DEVELOPMENTS CITYWIDE (#21-CA02) - CITY-INITIATED (FUNDING SOURCE: GENERAL FUND)

SUMMARY

At the September 14, 2021 regular City Council meeting, the City of Claremont’s CommunityDevelopment Department presented a staff report requesting City Council approval of an amendmentto the existing Inclusionary Housing Ordinance (Claremont Municipal Code Chapter 16.036). TheCity’s current Inclusionary Housing Ordinance requires housing development projects with five ormore units to make fifteen percent of the units affordable to households that qualify as moderate-income households or ten percent of units affordable to low-income households. The currentordinance has not resulted in the construction of any units for low-income households since itsadoption in 2006. Staff recommended an amendment that would require housing developmentprojects with five or more units to make units affordable to both low-income and moderate-incomehouseholds.

The City Council placed the proposed ordinance on first reading with amended language to changethe effective date of the ordinance as shown in Section 6 from 30 days to 180 days; directed staff toeducate the community and solicit input on the City’s inclusionary housing requirements through theupcoming Housing Element update; and, provided direction to staff for implementation of anadministrative manual policy.

Staff will provide periodic updates to the City Council, Planning Commission, and the community tomeasure the success of the Inclusionary Housing Program.



RECOMMENDATION

Staff recommends that the City Council waive further reading and adopt AN ORDINANCE OF THECITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ADOPTING A CODE AMENDMENTTO UPDATE THE CITY’S INCLUSIONARY HOUSING ORDINANCE-CHAPTER 16.036 TO THECLAREMONT MUNICIPAL CODE - APPLICANT CITY OF CLAREMONT.

ALTERNATIVES TO RECOMMENDATION

In addition to the recommendation, there are the following alternatives:

A. Request additional information and continue the item to a future date.B. Do not adopt the existing Inclusionary Housing Ordinance.

FINANCIAL REVIEW

The costs to prepare documentation, administer this program, and prepare reports is estimated at$40,756 and are included in the operating budgets of the Community Development andAdministrative Services Departments.

ANALYSIS

Approximately 170 jurisdictions in California currently have inclusionary housing ordinances. It isexpected that this number will dramatically increase as cities consider additional tools to increase thehousing production rates mandated by the State. The Claremont City Council first adopted anInclusionary Housing Ordinance on July 25, 2006. The ordinance requires developers to constructaffordable units at affordable income levels at a ratio of either fifteen percent for moderate-income orten percent for low-income households.

The proposed amendments to Chapter 16.036 are set forth in Section 4 of the proposed ordinance(Attachment). The Municipal Code currently requires new developments of five or more “for sale” or“rental” units to allocate a minimum of fifteen percent of the total units to be sold or rented tomoderate-income households at an affordable housing cost. “Moderate income households” aredefined as households whose gross income does not exceed 120% of the median income for LosAngeles County, adjusted for family size and other factors by the United States Department ofHousing and Urban Development (“HUD”). If a housing development project has five to six units, it iseligible to pay an “in-lieu” fee, rather than providing the affordable unit on-site. The number ofaffordable inclusionary units may be reduced if “low-income” qualifying units are provided versus“moderate-income” units within the development. The reduced calculation for “low-income” units isbased on a credit of 1.5 units to every 1 “moderate-income” unit.

Residential developments containing four or fewer housing units are exempt from the InclusionaryHousing Ordinance. Residential developments with five to six units may “by right” pay the applicablein-lieu fee into the City’s inclusionary housing fund. Currently the in-lieu fee utilized for a five- or six-unit project is $121,782 per inclusionary unit. This fee is also used for calculations that produce apartial unit and may be paid proportionally to the unit percentage.

The development community has not constructed market-rate, residential rental apartment projects inClaremont for many years. However, developers within the region are constructing rental products ata higher rate than in past years. Increasing development pressures and demand for more supply andCLAREMONT Printed on 9/23/2021Page 2 of 4


a higher rate than in past years. Increasing development pressures and demand for more supply anda variety of housing product is evidenced throughout the region.

LEGAL REVIEW

The City Attorney has reviewed the proposed ordinance and has approved it as to form.

RELATIONSHIP TO CITY PLANNING DOCUMENTS

Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documentsand finds that it applies to the following City Planning Documents: Council Priorities, Sustainable CityPlan, General Plan, and the 2021-22 Budget.

CEQA REVIEW

The California legislature has expressed its intent that cities (and other local agencies) “shouldundertake all necessary actions to encourage, promote, and facilitate the development of housing toaccommodate the entire regional housing need, and reasonable actions should be taken by local andregional governments to ensure that future housing production meets, at a minimum, the regionalhousing need established for planning purposes.” (Gov. Code § 65884(a)(2).) To that end, StatePlanning and Zoning Law and the implementing regulations to the California Environmental QualityAct (CEQA) exempt such determinations from environmental review. (Gov. Code § 65884(g); 14 Cal.Code Regs. §§ 15283, 15326.)

In addition, this Ordinance is covered by CEQA’s “common sense” exception that CEQA applies onlyto projects, which have the potential for causing a significant effect on the environment. Here, it canbe seen with certainty that there is no possibility that the Ordinance may have a significant effect onthe environment, and therefore, the Ordinance is not subject to CEQA. The ordinance merely adjuststhe already-existing levels of affordability required for housing development projects from fifteenpercent (15%) moderate income to a mix of moderate and low income (still within 15%). ThisOrdinance may impact the cost of developing, purchasing, and/or renting housing, but those impactsare administrative and fiscal, which are not environmental impacts (i.e., administrative and fiscalactivities are not “projects” under CEQA). (14 Cal. Code Regs. § 15378(b)(2), (4).)

COMMISSION REVIEW

The Planning Commission held public hearings on the proposed code amendment on July 20, 2021and August 10, 2021. The five members of the Planning Commission who were present at thecontinued public hearing on August 10 reached a consensus and their recommendation was that theCity Council adopt the following:

· For rental units, require any mix of “low” and “moderate,” not to exceed 15% total, thatincludes at least 10% “low.”

· For for-sale units, require any mix of “Claremont low” and “moderate,” not to exceed 15% total,that includes at least 5% “Claremont low.”

Before making a motion, the Planning Commission summarized and confirmed that this was therecommendation several times. However, the maker of the motion accidently misspoke and movedthat the Planning Commission recommend the City Council adopt “Option D” as follows:

· For rental units, require any mix of “low” and “moderate,” not to exceed 15% total, that



· For rental units, require any mix of “low” and “moderate,” not to exceed 15% total, thatincludes at least 5% “low” (instead of the 10% minimum the Planning Commission haddiscussed).

· For for-sale units, require any mix of “Claremont low” and “moderate,” not to exceed 15% total,that includes at least 5% “Claremont low” (same as what the Commission had previouslydiscussed).

Although staff believes the Planning Commission intended to recommend the City Council require noless than 10% “low” income units for rental housing, no one corrected the error, and the motion wasseconded and passed with the recommendation that the City Council could approve as few as 5%“low” income units for rental housing.

The Planning Commission raised two policy issues related to the ordinance that included rentalhousing monitoring, and future program review periods.

Staff will monitor future tenants’ ongoing income status to determine continued eligibility within rentalunits. The City’s Community Development Department must include a policy within the program’sadministrative manual to implement with rental households that may exceed the allowable incomesafter initial eligibility approval.

The Planning Commission also discussed a potential for reviews and reporting by the CommunityDevelopment Department. Staff currently provides annual reports to the California Department ofHousing (HCD) for purposes of meeting existing reporting requirements of housing element law. Staffagrees that it would be worthwhile to provide periodic updates to the Planning Commission, CityCouncil, and the community if this amendment is approved.



Submitted by: Reviewed by:

Shelley Desautels Brad JohnsonCity Clerk Community Development Director

Attachment:Draft Ordinance



ORDINANCE NO. 2021-

AN ORDINANCE OF THE CITY OF CLAREMONT, CALIFORNIA, ADOPTING A CODE AMENDMENT TO UPDATE THE CITY’S INCLUSIONARY HOUSING ORDINANCE – CHAPTER 16.036 TO THE CLAREMONT MUNICIPAL CODE. APPLICANT – CITY OF CLAREMONT

WHEREAS, in 2006, the City Council for the City of Claremont (“City Council”) adopted its Inclusionary Housing Ordinance, Chapter 16.036 to the Claremont Municipal Code (“CMC”); and

WHEREAS, the City’s Inclusionary Housing Ordinance was last amended in 2018 through the adoption of Ordinance 2018-10; and

WHEREAS, the State of California continues to face a housing crisis and, in particular, a shortage of affordable housing (Gov. Code § 65589.5(a)(1)(A)-(B), (2)(A) [“The lack of housing ... is a critical problem that threatens the economic, environmental, and social quality of life in California”; “California housing has become the most expensive in the nation”; “California has a housing supply and affordability crisis of historic proportions”]; and

WHEREAS, in adopting AB 1515 (2017-28 Regular Session), the California legislature reported that “California's overall homeownership rate is at its lowest level since the 1940s” and that “[t]he state ranks 49th out of the 50 states in homeownership rates as well as in the supply of housing per capita” and that “[o]nly half of California's households are able to afford the cost of housing in their local regions” (finding codified at Gov. Code § 65589.5(a)(2)(E)); and

WHEREAS, in adopting AB 1515 (2017-28 Regular Session), the California legislature also reported that “[t]he majority of California renters, more than 3,000,000 households, pay more than 30 percent of their income toward rent and nearly one-third, more than 1,500,000 households, pay more than 50 percent of their income toward rent” (finding codified at Gov. Code § 65589.5(a)(2)(G)); and

WHEREAS, “[w]hen Californians have access to safe and affordable housing, they have more money for food and health care; they are less likely to become homeless and in need of government-subsidized services; their children do better in school; and businesses have an easier time recruiting and retaining employees (Gov. Code § 65589.5(a)(2)(H)); and

WHEREAS, in March of 2021, the Southern California Association of Governments (“SCAG”) determined that the City of Claremont’s allocated share of the regional housing needs assessment (“RHNA”) for the Sixth Housing Element Cycle (2021-2029) is 1,711 units, which is comprised of: 556 very-low income units, 310 low income units, 297 moderate income unites, and 548 above-moderate income units; and

WHEREAS, the City’s Inclusionary Housing Ordinance currently requires new residential developments with five (5) or more units to make at least fifteen percent (15%) of the units affordable to moderate income households (with the option of in lieu fees or land dedication as alternatives to the provision of inclusionary units on-site); and

ATTACHMENT

Ordinance No. 2021- Page 2

WHEREAS, although the City’s Inclusionary Housing Ordinance also provides credits if residential developments provide low income units (instead of moderate income units), no developer has ever exercised this option to provide low income units; and WHEREAS, to meet its share of the RHNA for the Sixth Housing Element Cycle (2021-2029) and likely future Housing Element Cycles, the City needs more affordable housing units at a greater variety of affordability levels; and WHEREAS, in accordance with Chapter 16.315 of the Claremont Municipal Code, the City initiated the preparation of the proposed update to Claremont’s Inclusionary Housing Ordinance, Chapter 16.036 to the Claremont Municipal Code; and WHEREAS, the proposed Code Amendment would amend the City’s Inclusionary Housing Ordinance to require a greater variety of levels of affordability in housing development projects; and WHEREAS, on July 20, 2021 and August 10, 2021, the Planning Commission held a duly noticed public hearing regarding the proposed Code Amendment, at which time oral and documentary evidence was introduced along with the written recommendation of the Planning Division of the City of Claremont; and

WHEREAS, after considering the proposed Code Amendment, the staff report,

written public comments, and all information, evidence, and testimony received at its July 20, 2021 and August 10, 2021 meetings, the Planning Commission voted 5-0-1-1 (with one absence and one vacancy) to recommend the City Council approve the proposed Code Amendment; and

WHEREAS, on September 14, 2021, the City Council held a duly noticed public

hearing regarding the proposed Code Amendment, at which time oral and documentary evidence was introduced along with the written recommendation of the Planning Division of the City of Claremont and the Resolution of the Planning Commission; and

WHEREAS, the City Council has considered the proposed Code Amendment, the

Planning Commission Resolution, the staff report, written public comments, and all information, evidence, and testimony received at its September 14 and 28, 2021 meetings. THE CITY COUNCIL OF THE CITY OF CLAREMONT DOES ORDAIN AS FOLLOWS:

SECTION 1. The City Council hereby finds that all the facts set forth in the recitals are true and correct and are incorporated as substantive findings of this resolution.

SECTION 2. The California legislature has expressed its intent that cities (and

other local agencies) “should undertake all necessary actions to encourage, promote, and facilitate the development of housing to accommodate the entire regional housing need, and reasonable actions should be taken by local and regional governments to ensure that future housing production meets, at a minimum, the regional housing need established


for planning purposes.” (Gov. Code § 65884(a)(2).) To that end, State Planning and Zoning Law and the implementing regulations to the California Environmental Quality Act (CEQA) exempt such determinations from environmental review. (Gov. Code § 65884(g); 14 Cal. Code Regs. §§ 15283, 15326.) In addition, this Ordinance is covered by CEQA’s “common sense” exception that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. Here, it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment, and therefore, the Ordinance is not subject to CEQA. The ordinance merely adjusts the already-existing levels of affordability required for housing development projects from fifteen percent (15%) moderate income to a mix of moderate and low income (still within 15%). This Ordinance may impact the cost of developing, purchasing, and/or renting housing, but those impacts are administrative and fiscal, which are not environmental impacts (i.e., administrative and fiscal activities are not “projects” under CEQA). (14 Cal. Code Regs. § 15378(b)(2), (4).)

SECTION 3. Based upon substantial evidence presented to the City Council during

the public hearing, including the Planning Commission’s resolution, written staff reports, the staff presentation, written public comments, and verbal testimony, the City Council hereby finds and determines:

A. It is appropriate to amend the Inclusionary Housing Ordinance City-wide. B. This Ordinance is consistent with the objectives, policies, general land uses and

programs of the General Plan, and in particular, the Housing Element. The goal of the Housing Element as per Chapter 8 Provision of Adequate Housing - Goal 8-3 Provide opportunities throughout the City for adequate and affordable housing in a wide range of housing types to meet the needs of all socioeconomic segments of the community.

C. This Ordinance would not be detrimental to the public interest, health, safety, convenience or welfare. The proposed amendment is being carried out in response to the public request to include a share of housing that is affordable to low and moderate income households and it is intended to supplement other programs that assist and encourage affordable housing in the City.

D. The Planning Commission, after holding a duly-noticed public hearing, recommended the City Council adopt this Ordinance on August 10, 2021. The City Council has reviewed the Planning Commission’s resolution and agrees with the Planning Commission’s recommendation.

SECTION 4. Adoption of Code Amendment. Claremont Municipal Code Chapter 16.036 is hereby amended to read as follows:

Chapter 16.036 INCLUSIONARY HOUSING

16.036.000 Intent 16.036.010 Definitions 16.036.020 Applicability 16.036.030 Inclusionary Unit Requirement 16.036.040 Alternatives


16.036.050 Procedures and Regulations 16.036.060 Standards 16.036.070 Enforcement 16.036.080 General Provisions 16.036.000 Intent It is the intent of this chapter to establish standards and procedures that facilitate the development and availability of housing affordable to a range of households with varying income. The purpose of this chapter is to encourage the development and availability of such housing by ensuring that the addition of affordable housing units to the City’s housing stock is in proportion with the overall increase in new jobs and housing units. 16.036.010 Definitions As used in this chapter, the following terms shall have the following meanings: “Adjusted for household size appropriate for the unit” means a household of one (1) person in the case of a studio unit, two (2) persons in the case of a one-bedroom unit, three (3) persons in the case of a two- bedroom unit, four (4) persons in the case of a three-bedroom unit, five (5) persons in the case of a four- bedroom unit, and six (6) persons in the case of a six-bedroom unit. “Administrative Manual” means the Administrative Manual adopted pursuant to Section 16.036.050.E for the implementation and enforcement of the provisions of this chapter. “Affordable housing costs” means the total housing costs paid by a qualifying household, which shall not exceed a specified fraction of their gross income, adjusted for household size appropriate for the unit, as follows:

A. Rental Units:

1. Low income units: thirty percent (30%) of sixty percent (60%) of the Los Angeles County area median income. 2. Moderate income units: thirty percent (30%) of one hundred and ten percent (110%) of the Los Angeles County area median income.

B. For Sale Units:

1. Claremont low income units: thirty percent (30%) of eighty percent (80%) of the Los Angeles County area median income. 2. Moderate income units: thirty-five percent (35%) of one hundred and ten percent (110%) of the Los Angeles County area median income.

“Affordable sales price” means the maximum price that can be charged for an Inclusionary Unit. The Affordable sales price is equal to the lesser of:


A. The sum of the supportable mortgage plus the benchmark down payment, which is used solely for calculation of the affordable sales price:

1. The benchmark down payment is set at 10% of the affordable sales price for Claremont low-income units.

2. The benchmark down payment is set at 5% of the affordable sales price for

moderate income units. B. The purchase price prospective buyers are willing to pay in return for purchasing a home that is subject to restrictive covenants. “Appreciation” means the difference in dollar amount between the net resale price of the inclusionary unit, as defined in the Administrative Manual, at the time it is sold by the initial purchaser and the fair market value of the inclusionary unit at the time of the original sale. “City Council” means the City Council of the City of Claremont. “City principal” means the difference between the fair market value of the inclusionary unit at the time of initial sale of the unit and the affordable purchase price actually paid by the initial purchaser for that unit as a consequence of the requirements set forth in this chapter. “City share of appreciation” means a proportionate share of the appreciation of each inclusionary unit based on the City principal to be paid to the City at the time of resale of an inclusionary unit by the initial purchaser in accordance with the equity share agreement. The City share of appreciation is calculated as a percentage of the appreciation which is equal to the ratio of the City principal to the fair market value of the inclusionary unit at the time of initial sale. “Claremont low income households” means persons and families whose income does not exceed eighty percent (80%) of the Los Angeles County area median income, adjusted for household size. “Claremont low income units” means for sale inclusionary units restricted to occupancy by Claremont low income households at the applicable affordable housing cost. “Developer” means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities, which seeks City approvals for all or part of a housing development project. The term “developer” also means the owner or owners for any such property for which such approvals are sought. “Development agreement” means an agreement entered into between the City and a developer pursuant to Section 65865 of the California Government Code. “Director” means the City’s Director of Community Development.


“Discretionary approval” means any entitlement or approval, including but not limited to a use permit, variance, design approval, and subdivision map. “Equity share agreement” means an agreement by which appreciation on the value of an inclusionary unit from the time of the original purchase at an affordable price to the time of resale shall be shared between the purchaser of the inclusionary unit and the City. Such an agreement shall be a condition of sale of the inclusionary unit. “Fair market value” means the fair market value of an inclusionary unit at the time of initial purchase of that unit without regard to any restrictions on sales price, as substantiated by an appraisal in a form and substance and by an appraiser acceptable to the City. “Housing development project” means the construction of new projects (including mixed use projects) requiring any approval from the City (including approval of a building permit) for which an application has been submitted to the City and which would create one (1) or more additional dwelling units to be offered for rent or sale by construction or alteration of structures. All new construction projects creating one (1) or more additional dwelling units to be offered for rent or sale on contiguous parcels of land by a single developer shall constitute a single housing development project subject to the requirements of this chapter, and any accompanying regulations, regardless of whether such projects are constructed all at once, serially, or in phases. The term “housing development project” shall include the conversion of rental units to for-sale units and vice versa. “Inclusionary housing agreement” means a legally binding written agreement between a developer and the City, in form and substance satisfactory to the Director and City Attorney, setting forth those provisions necessary to ensure that the requirements of this chapter, whether through the provision of inclusionary units or through an alternative method, are satisfied. “Inclusionary housing fund” shall have the meaning set forth in Section 16.036.080.A. “Inclusionary housing plan” means the plan referenced in Section 16.036.050 and further described in the Administrative Manual, which sets forth the manner in which the requirements of this chapter will be implemented for a particular housing development project. “Inclusionary unit” means a dwelling unit developed pursuant to an inclusionary housing agreement that will be offered for rent or sale to low- and moderate-income households, at an affordable housing cost, pursuant to this chapter. “Los Angeles County area median income” means the median income published by the California Department of Housing and Community Development (“HCD”) each year as required by California Code of Regulations, Title 25, Section 6932 and Health and Safety Code Section 50093. “Low income households” is defined in Health and Safety Code Section 50079.5 as


persons and families whose income does not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. . “Low income units” means rental inclusionary units restricted to occupancy by low income households at the applicable affordable housing cost. “Market rate units” means dwelling units in a housing development project that are not inclusionary units. “Moderate income households” means persons and families whose income does not exceed one hundred twenty percent (120%) of the Los Angeles County area median income, adjusted for household size. “Moderate income units” means for sale inclusionary units restricted to occupancy by moderate income households at the applicable affordable sales price. “Resale price” means the agreed upon purchase price negotiated between the initial purchaser of an inclusionary unit and the subsequent buyer upon resale, which is used for the purpose of determining the amount of appreciation that is shared under the terms of the equity share agreement. The resale price shall not include any fees, escrow costs, or closing costs incurred in connection with the resale of the inclusionary unit. The City may, through the equity share agreement or the regulations adopted pursuant to this chapter, require that the seller of the inclusionary unit provide documentation, including, but not limited to, an appraisal, demonstrating that the resale price is consistent with prevailing market sales prices for comparable homes in the City. “Substantial rehabilitation” or “substantially rehabilitated” means the rehabilitation of at least one (1) dwelling unit that has substantial building and other code violations, and has been vacant for at least six (6) months, such that the unit is returned to the City’s housing supply as decent, safe, and sanitary housing, and the cost of such work constitutes at least twenty-five percent (25%) of the after-rehabilitation value of the dwelling unit, inclusive of the land value. “Total housing costs” means the total monthly or annual recurring expenses required of a household to obtain shelter. For a rental unit, total housing costs include the monthly rent payment and utilities. For a for-sale unit, total housing costs include the mortgage payment (principal and interest), utilities, homeowner’s association dues, homeowner’s insurance, mortgage insurance, property taxes and assessments, and any other related assessments. “Unrestricted units” has the same meaning as “market rate units.” The Administrative Manual provides additional definitions for terms used in this chapter that are not defined in this Section. 16.036.020 Applicability This chapter shall apply to all housing development projects, except as provided below:


A. Housing development projects that will contain four (4) or fewer units. B. Housing development projects that are exempt from this chapter by State Law.

C. Any dwelling unit or housing development project which is damaged or destroyed

by fire or natural catastrophes so long as the use of the reconstructed building and number of dwelling units remain the same, and the cost of such rehabilitation constitutes no more than twenty-five percent (25%) of the after-rehabilitation square footage of the dwelling unit, inclusive of the land value. D. Student dormitories, student apartments owned and developed by educational institutions, and faculty housing associated with boarding schools below the college level. 16.036.030 Inclusionary Unit Requirement A. Rental Units. A total of five percent (5%) of all newly constructed rental units shall be low income units, and a total of ten percent (10%) of all newly constructed rental units shall be moderate income units. B. For-Sale Units. A total of five percent (5%) of all newly constructed for-sale units shall be Claremont low income units, and a total of ten percent (10%) of all newly constructed for-sale units shall be moderate income units. C. In the event the calculation for the number of inclusionary units results in a fraction of an inclusionary unit, the developer shall have the option of either:

1. Providing a full inclusionary unit within the housing development project at the applicable affordability level; or 2. Making an in lieu payment to the inclusionary housing fund in an amount equal to the percentage represented by the fractional unit multiplied by the applicable in lieu fee.

D. For purposes of calculating the number of inclusionary units required by this chapter, any additional units authorized as a density bonus under Chapter 16.033 and California Government Code Section 65915 shall not be counted in determining the required number of inclusionary units. E. Subject to the exceptions listed below, while the Housing Accountability Act (Section 65589.5 of the California Government Code) and Section 56941.1 of the California Government Code are in effect, and provided the housing development project complies with applicable, objective general plan, zoning, and subdivision standards and criteria, including design review standards, the number of inclusionary units required for a housing development project will be determined based on the requirements that are or were in effect as of the latter of: the date the City’s Community Development Department received a complete preliminary application that fully complies with Section 56941.1 of the California Government Code and any checklist or application form developed by the City; or the date the City received full payment of any applicable filing fee for review of


the preliminary application. If a housing development project does not require any discretionary approvals, submittal of a complete application for a building permit shall serve as the preliminary application. The required number of inclusionary units required for a housing development project shall be recalculated in the following circumstances:

1. Change in Number of Units. If a change in the housing development project results in a change in the total number of units, exclusive of any increase resulting from the receipt of a density bonus, incentive, concession, waiver, or similar provision under Chapter 16.033 and California Government Code Section 65915, the number of inclusionary units required shall be recalculated based on the inclusionary housing requirements in effect as of the date of submittal of the revised housing development project.

2. Change in Square Footage. If a change in the housing development project results

in the square footage of construction changing by 20 percent or more, exclusive of any increase resulting from the receipt of a density bonus, incentive, concession, waiver, or similar provision under Chapter 16.033 and California Government Code Section 65915, the number of inclusionary units required shall be recalculated based on the inclusionary housing requirements in effect as of the date of submittal of the revised housing development project. For purposes of this subdivision, “square footage of construction” means the building area, as defined by the California Building Standards Code (Title 24 of the California Code of Regulations).

3. Failure to Timely Submit a Complete Application. If the City’s Community

Development Department does not receive an application for the housing development project within one hundred and eighty (180) days of receipt of the preliminary application, or if the City’s Community Development Department does not receive a complete application within ninety (90) days of notifying the applicant that the application is incomplete, then preliminary application shall expire and have no further force or effect, and the number of inclusionary units required shall be recalculated based on the inclusionary housing requirements in effect as of the date of submittal of a new preliminary application.

For housing development projects that do not comply with applicable, objective general plan, zoning, and subdivision standards and criteria, including design review standards, and for all housing development projects if the Housing Accountability Act (Section 65589.5 of the California Government Code) or Section 56941.1 of the California Government Code are repealed or expire, the number of inclusionary units required for a housing development project will be determined based on the requirements that are or were in effect as of the latter of: the date the City’s Community Development Department received a complete submittal of a proposed inclusionary housing plan; or the date the City received full payment of any applicable filing fee for review of the proposed inclusionary housing plan.


16.036.040 Alternatives In lieu of providing the inclusionary units in the housing development project pursuant to Section 16.036.030, the requirements of this chapter may be satisfied through one or more of the alternatives set forth in this Section, in accordance with procedures and standards set forth in the Administrative Manual. A. In Lieu Fee. For housing development projects proposing five (5) or six (6) units, the developer may, by right, pay a fee in lieu of providing an inclusionary unit on-site. For housing development projects proposing seven (7) units or more units, the developer may request the City Council’s discretionary approval of a fee in lieu of providing all or some of the required inclusionary units on-site. Whether by right or discretionary, all in lieu fees shall be paid as follows:

1. The amount of the fee shall be calculated using the fee schedule established by resolution of the City Council at the time the fee is paid. 2. One-half of the in-lieu fee required by this subsection shall be paid (or a letter of credit posted) prior to issuance of a building permit for all or any part of the housing development project. The remainder of the fee shall be paid before a certificate of occupancy is issued for any unit in the housing development project. 3. The fees collected shall be deposited in the inclusionary housing fund. 4. No certificate of occupancy shall be issued for any unit in a housing development project (market rate or inclusionary) unless any and all fees required under this section have been paid in full to the City.

B. Land Dedication. In lieu of providing inclusionary units, a developer may request City Council approval to dedicate land to the City that the Director determines is suitable for the construction or substantial rehabilitation of inclusionary units. To accept a land dedication in lieu of on-site inclusionary units, the City Council must determine the fair market value of the dedicated land is equivalent to or greater than the amount of in lieu fees that would have been needed to satisfy the housing development project’s inclusionary housing obligation. C. City Council Approval. To approve a discretionary in lieu fee, the City Council must make all of the findings set forth below. It is the developer’s burden to provide any and all information needed to make these findings. Even if the City Council can make these findings, it still has discretion to deny a request for an in lieu fee and can, instead, require the housing development project meet the requirements of this chapter by providing on-site inclusionary units and/or dedicating land unless doing so would legally constitute a taking of property without just compensation under the California or Federal Constitutions.

1. The housing development project complies with all requirements in the Administrative Manual.


2. Providing the inclusionary units on-site and/or through land dedication would result in an unreasonable and unavoidable economic hardship. In evaluating this finding, the City Council should evaluate whether there are feasible financial, design, and/or development methodologies that would mitigate or avoid the unreasonable economic hardship of providing inclusionary units on-site and/or through land dedication. 3. The developer has explored and exhausted all options to reduce the cost of development and sources of funding to subsidize on-site inclusionary units, such as participating in such programs like: (a) low income housing tax credits; (b) below market rate financing from governmental affordable housing programs; (c) tax-exempt bond financing; and (d) any other available government programs.

16.036.050 Procedures and Regulations A. In accordance with the standards and procedures set forth herein and in the Administrative Manual, developer shall:

1. Submit an inclusionary housing plan for approval by the Director, setting forth in detail the manner in which the provisions of this chapter will be implemented for the proposed housing development project. If land dedication or off-site units are proposed, the inclusionary housing plan shall include information necessary to evaluate the site, location, suitability for inclusionary housing, potential development constraints, and the number of inclusionary units assigned pursuant to the Administrative Manual. 2. Execute and cause to be recorded an inclusionary housing agreement, unless developer is complying with this chapter solely through in lieu fees pursuant to Section 16.036.040.A. 3. If the housing development project consists of for-sale units, as a condition of the sale of each inclusionary unit, require that the purchaser to enter into an equity sharing agreement with the City and execute a second deed of trust in favor of the City securing the equity sharing agreement against the inclusionary unit. The equity sharing agreement and second deed of trust shall be in a form and include terms that are in accordance with the requirements of the Administrative Manual, as they may be amended from time to time.

B. No discretionary or ministerial approval shall be issued for all or any portion of a housing development project subject to this chapter until the developer has submitted an inclusionary housing plan. C. No building permit shall be issued for all or any portion of a housing development project subject to this chapter until the Director has approved the inclusionary housing plan, and the inclusionary housing agreement, if required, is recorded. D. No certificate of occupancy shall be issued for all or any portion of a housing development project subject to this chapter unless the housing development project is in


full compliance with the approved inclusionary housing plan. E. The Community Development Department of the City shall establish, and may amend from time to time, regulations for the implementation of this chapter, which shall be known as the Administrative Manual. The Administrative Manual provides more detailed descriptions of the requirements imposed by the Ordinance. Each developer of a housing development project that is subject to the Ordinance will be provided with a copy of the Administrative Manual when an Inclusionary Housing Agreement is executed. The Administrative Manual is modified from time-to-time. Pertinent modifications to the Administrative Manual will be applied prospectively to existing project, 16.036.060 Standards A. Inclusionary units shall be reasonably dispersed throughout the housing development project; shall be proportional, in number of bedrooms, to the unrestricted units. If the housing development project offers a variety of unit plans with respect to design, materials, and optional interior amenities, the inclusionary units shall be identical to the housing development project’s base-plan in terms of design, appearance, materials, finished quality, and interior amenities. If multiple floor plans with the same number of bedrooms are proposed, the inclusionary units may be the units with the smaller floor plans. The inclusionary units may have non-garage parking or garages smaller than the unrestricted units so long as the inclusionary unit otherwise conforms with the standards set forth herein and in the Administrative Manual. B. All inclusionary units in a housing development project shall be constructed concurrently with or prior to the construction of the unrestricted units. In the event the City approves a phased project, the inclusionary units required by this chapter shall be constructed and occupied in proportion to the number of units in each phase of the housing development project. C. Inclusionary units shall be rented or sold to low and moderate income households at the ratios established pursuant to the Administrative Manual, and shall be provided at the applicable affordable housing cost. An inclusionary unit that is for rent shall remain reserved for the target income level group at the applicable affordable housing cost in perpetuity, as secured by recorded covenants. D. The number of bedrooms in inclusionary units must be the same as the number of bedrooms in the unrestricted units, except that if the unrestricted units provide more than four (4) bedrooms, the inclusionary units need not provide more than four (4) bedrooms. E. The equity share agreement for any inclusionary units that are for-sale shall be in a form approved by the Director and City Attorney in conformance with this chapter and the Administrative Manual prepared in accordance herewith. The equity share agreement shall include the following terms:

1. Upon resale of an inclusionary unit between the date of the initial sale and the ten (10) year anniversary of the initial sale, the seller must repay to the City an amount equal to the sum of: (i) the City principal from the


inclusionary unit; plus (ii) one hundred percent (100%) of the City share of appreciation.

2. Upon resale of an inclusionary unit between the date of the ten (10) year anniversary of the initial sale and the fifteen (15) year anniversary of the initial sale, the seller must repay to the City an amount equal to the sum of: (i) the City principal from the inclusionary unit; plus (ii) eighty percent (80%) of the City share of appreciation.

3. Upon resale of an inclusionary unit between the date of the fifteen (15) year anniversary of the initial sale and the twenty (20) year anniversary of the initial sale, the seller must repay to the City an amount equal to the sum of: (i) the City principal from the inclusionary unit; plus (ii) sixty percent (60%) of the City share of appreciation. 4. Upon resale of an inclusionary unit between the date of the twenty (20) year anniversary of the initial sale and the twenty-five (25) year anniversary of the initial sale, the seller must repay to the City an amount equal to the sum of: (i) the City principal from the inclusionary unit; plus (ii) forty percent (40%) of the City share of appreciation. 5. Upon resale of an inclusionary unit between the date of the twenty-five (25) year anniversary of the initial sale and the thirty (30) year anniversary of the initial sale, the seller must repay to the City an amount equal to the sum of: (i) the City principal from the inclusionary unit; plus (ii) twenty percent (20%) of the City share of appreciation. 6. Upon resale of an inclusionary unit after the thirty (30) year anniversary of the initial sale, the seller must repay to the City an amount equal to the City principal.

16.036.070 Enforcement A. The provisions of this chapter shall apply to all developers and their agents, successors and assigns proposing, building, selling, renting, and/or occupying a housing development project. All inclusionary units shall be rented or sold in accordance with this chapter and the Administrative Manual. It shall be a misdemeanor to violate any provision of this chapter. Without limiting the generality of the foregoing, it shall also be a misdemeanor for any person to sell or rent to another person an inclusionary unit under this chapter at a price exceeding the maximum allowed under this chapter or to rent or sell an inclusionary unit to a household not qualified under this chapter, provided that such restriction shall not prohibit a household that purchased an inclusionary unit in accordance with this chapter and the Administrative Manual from selling its unit in accordance with the terms of the equity share agreement. It shall further be a misdemeanor for any person to provide false or materially incomplete information to the City or to a seller or lessor of an inclusionary unit to obtain occupancy of housing for which he or she is not eligible.


B. Any individual who sells or rents an inclusionary unit in violation of the provisions of this chapter shall be required to forfeit all monetary amounts so obtained. Recovered funds shall be deposited into the inclusionary housing fund. C. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this chapter, including but not limited to: (1) actions to revoke, deny or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval; (2) civil actions for injunctive relief or damages; (3) actions to recover from any violator of this chapter civil fines, restitution to prevent unjust enrichment, and/or enforcement costs; and (4) any other action, civil or criminal, authorized by law or by any regulatory document, restriction, or agreement under this chapter. D. In any action to enforce this chapter or an inclusionary housing agreement recorded hereunder, the City shall be entitled to recover its reasonable attorney’s fees and costs. E. Failure of any official or agency to fulfill the requirements of this chapter shall not excuse any person, owner, developer or household from the requirements of this chapter. F. The remedies provided for herein shall be cumulative and not exclusive and shall not preclude the City from any other remedy or relief to which it would otherwise be entitled under law or equity. 16.036.080 General Provisions A. Inclusionary Housing Fund: There is hereby established a separate fund of the City, to be known as the inclusionary housing fund. All monies collected pursuant to this chapter, including Sections 16.036.040.A, 16.036.060.E, and/or 16.036.070.B, shall be deposited in the inclusionary housing fund. Additional monies from other sources may be deposited in the inclusionary housing fund. The monies deposited in the inclusionary housing fund shall be subject to the following conditions:

1. Monies deposited into the inclusionary housing fund must be used to increase and improve the supply of housing affordable to moderate, low, and very low income households in the City. Monies may also be used to cover reasonable administrative or related expenses associated with the administration of this chapter. 2. The inclusionary housing fund shall be administered by the Director of Community Development, or his or her designee, who may develop procedures to implement the purposes of the inclusionary housing fund consistent with the requirements of this chapter and any adopted budget of the City. 3. Monies deposited in accordance with this Section shall be used in accordance with the City’s Housing Element, or subsequent plan adopted by the City Council to construct, rehabilitate, or subsidize affordable housing or assist other government entities, private organizations, or individuals to do so.


Permissible uses include, but are not limited to, assistance to housing development corporations, equity participation loans, grants to renters and homeowners, pre-home ownership co-investment, pre-development loan funds, participation leases, or other public-private partnership arrangements. The inclusionary housing fund may be used for the benefit of both rental and owner-occupied housing.

B. Administrative Fees: The City Council may by resolution establish reasonable fees and deposits for the administration of this chapter. C. Appeal: Within ten (10) calendar days after the date of any Director decision, an appeal may be filed pursuant to Chapter 16.321 of this title. D. Taking Determination:

1. Commencing upon the approval or disapproval of the inclusionary housing plan by the Director pursuant to this chapter and the Administrative Manual, and within ten (10) days thereafter, a developer may request a determination that the requirements of this chapter, taken together with the inclusionary incentives, as applied to the housing development project, would legally constitute a taking of property of the housing development project without just compensation under the California or Federal Constitutions. The developer has the burden of providing economic information and other evidence necessary to establish that application of the provisions of this chapter to the housing development project would constitute a taking of the property of the proposed housing development project without just compensation. The Director shall make the determination, which may be appealed in the manner and within the time set forth in subdivision C of this Section, except that the City Council shall serve as the appeal body. 2. In making the taking recommendation or determination, the decision maker shall consider each of the following:

a. Application of the inclusionary housing requirement to the housing development project; b. Application of the inclusionary incentives; c. Utilization of the most cost-efficient product type for the inclusionary units; and d. External funding where reasonably likely to occur.

3. If it is determined that the application of the provisions of this chapter would be a taking, the inclusionary housing plan and the inclusionary housing agreement shall be modified to reduce the obligations in the inclusionary housing component to the extent and only to the extent necessary to avoid a taking. If it is determined no taking would occur through application of this chapter to the housing development project, the requirements of this chapter remain applicable.


SECTION 5. If any section, subsection, subdivision, paragraph, sentence, clause

or phrase, or portion of this Ordinance is, for any reason, held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have adopted this Ordinance and each section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance irrespective of the fact that one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional or invalid or ineffective. To this end the provisions of this Ordinance are declared to be severable.

SECTION 6. The mayor shall sign this ordinance and the city clerk shall attest and certify to the passage and adoption of it, and within fifteen (15) days, publish a summary in the Claremont Courier, a weekly newspaper of general circulation, printed, published, and circulated in the City of Claremont and one hundred and eighty (180) days thereafter it shall take effect and be in force.

PASSED, APPROVED, AND ADOPTED this _____ day of ______, 2021.

__________________________ Mayor, City of Claremont

ATTEST: __________________________ City Clerk, City of Claremont APPROVED AS TO FORM: ________________________ City Attorney, City of Claremont


Agenda Report



FROM: JEREMY SWAN, COMMUNITY SERVICES DIRECTOR


City Manager: AP


SUBJECT:

AWARD OF CONTRACT TO ELEVATORS ETC. FOR CONTRACT ELEVATOR SERVICES(FUNDING SOURCE: GENERAL FUND)

SUMMARY

The City contracts for elevator services in City-owned buildings and the parking structure. The City’scurrent contract expires in October 2021. In August 2021, a Notice Inviting Bids (NIB) was issued tosecure a new contract for elevator services. Seven proposals were received with monthly servicecosts ranging from $675 to $1,300. Staff proposes to enter into an agreement with Elevators Etc.,who was determined to have submitted the proposal with the best value to the City.

RECOMMENDATION

Staff recommends that the City Council award a contract to Elevators Etc. for monthly elevatorservices and authorize the City Manager to enter into a two-year agreement, with three optional one-year extensions, in an amount not to exceed $18,950 annually, and authorize a contingency of$2,000 per year for an annual contract amount of $20,950.

ALTERNATIVE TO RECOMMENDATION

In addition to the recommendation, there is the following alternative:

· Delay awarding contract and request more information from staff.

FINANCIAL REVIEW

The proposed agreement with Elevators Etc. is in the amount of $18,950 annually. Staff proposes toinclude an annual contingency of $2,000 for a total annual amount of $20,950. Funding for elevator



services is included in the annual operating budget of the Community Services Department.

The award of this contract complies with all City and State purchasing guidelines. Bid and contractdocuments are available for review in the City Clerk’s Office.

The costs to prepare and complete this report are estimated at $895. These costs are in staff timeallocated to the project and are included in the operating budget of the Community ServicesDepartment.

ANALYSIS

The City contracts for elevator maintenance and services under the contract include monthlyinspections and annual load testing to ensure City-owned elevators are safe and working properly.The current contract for elevator services expires in October 2021. To ensure the City receives thebest value, a Notice Inviting Bids was issued in August 2021. At the end of the bid period, sevenproposals were received. Proposals for monthly service ranged from $675 to $1,300, however, oneproposal submitted by TK Elevator offered a monthly rate that included all services within the scopeof work. Details of each proposal are provided in the chart below.

Contractor Monthly Annual LoadTest

Total AnnualCost

MaterialMarkup

Urban Elevator Service CA LLC $1,125 $7,375 $20,875 20%

AZ Tech Elevator Company $ 925 $1,950 $13,050 35%

Elevators Etc. $ 820 $1,500 $11,340 15%

GMS Elevator Services $ 675 $3,475 $11,575 15%

Performance Elevator $ 850 $3,800 $14,000 20%

TK Elevator $1,300 - $15,600 35%

AMTECH Elevator Services $ 900 $6,000 $16,800 15%

Elevators Etc. did not propose the lowest monthly inspection rate but provided the lowest annual loadtest rate. The lowest combined total of monthly inspections and annual load testing was submitted byElevators Etc. Staff recommends the award of a contract to Elevators Etc. for two-years, with threeoptional one-year extensions, for elevator services. The total annual amount of the contract is$18,950. Staff also proposes an annual contingency in the amount of $2,000 for any unforeseencosts related to elevators. The contingency will be authorized at the discretion of the City. The totalannual cost of the contract is $20,950.


Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documentsand finds that it applies to the following City Planning Documents: Council Priorities, EconomicSustainability Plan, General Plan, and 2021-22 Budget.

CEQA REVIEW

This item (awarding a contract for elevator services) is not subject to environmental review under theCalifornia Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15060(c)(2) (theactivity will not result in a direct or reasonably foreseeable indirect physical change in theenvironment) and section 15060(c)(3) (the activity is not a “project” as defined in Section 15378).



environment) and section 15060(c)(3) (the activity is not a “project” as defined in Section 15378).CEQA Guidelines section 15378(b)(2) excludes “[c]ontinuing administrative or maintenance activities”from its definition of “project.” Moreover, pursuant to CEQA Guidelines Section 15061(b)(3), CEQAdoes not apply to this item because there is no potential for causing a significant effect on theenvironment. Therefore, no additional environmental review is necessary at this time.




Jeremy Swan Cari DillmanCommunity Services Director Community Services Manager




Agenda Report





City Manager: AP


SUBJECT:

AWARD OF CONTRACT FOR PEST CONTROL AND BEE REMOVAL SERVICES (FUNDINGSOURCES: GENERAL FUND, PROPOSITION C FUND, LANDSCAPE AND LIGHTING DISTRICTFUND, AND CEMETERY FUND)

SUMMARY

The City outsources pest control and bee removal services for City-owned buildings, trees, andutilities. The City’s current contract expires in October 2021. In August 2021, a Request for Proposals(RFP) was issued for pest control and bee removal services. Six proposals were received rangingfrom $521 to $1,830 for monthly service. Staff proposes to enter into an agreement with ABBATermite & Pest Control, Inc., who was determined to have submitted the proposal with the best value.

RECOMMENDATION

Staff recommends that the City Council award a contract to ABBA Termite & Pest Control for pestcontrol and bee removal services and authorize the City Manager to execute a three-year contractwith two optional one-year extensions in an amount not to exceed $7,750 per year, and authorize acontingency of $1,000 per year for an annual total of $8,750.



· Delay awarding contract and request more information from staff.



FINANCIAL REVIEW

The proposed contract with ABBA Termite & Pest Control, Inc. is in the amount of $7,750. Staffproposes to include an annual contingency of $1,000, for a total annual amount of $8,750. Fundingfor pest control and bee removal services is included in the operating budget of the CommunityServices Department.

The award of this contract complies with all City and State purchasing guidelines. Bid and contractdocuments are available for review in the City Clerk’s Office.

The costs to carry out this project, research the issue, prepare documentation, and complete thisreport are estimated at $850. These costs are in staff time allocated to the project and are included inthe operating budget of the Community Services Department.

ANALYSIS

The City contracts for all pest control and bee removals. The City’s current contractor is SoCal BeeCo. The contract expires on October 31, 2021. The contract includes monthly external treatments forpests and bee removal from City trees, utility boxes, and buildings. An addition to the contract thisyear is the internal treatment of the Joslyn Senior Center and the Blaisdell Community Center asrequired by the health permit for meal service.

To ensure the City receives the best value for a contract, a Request for Proposals was issued inAugust 2021. Six bids were received at the end of the bid period. Bids ranged from $480 to $1,830per month. Below is a chart with each contractor and total bid amount.

Contractor MonthlyService

Bee Removal

Trees Utilities Buildings

Animal Pest Management Svcs., Inc. $1,015 $300 $200 $400

Pestmaster Services $1,289 $375 $300 $300

P.E.S.T (The Pest Group) $1,830 $325 $375 $400

So Cal Bee Co. $480 $150 $70 $350

ABBA Termite & Pest Control, Inc. $521 $115 $115 $115

California Pest Management $1,738 $255 $125 $175

So Cal Bee Co. proposed the lowest monthly rate, but a higher rate for bee removal services. ABBATermite & Pest Control proposed a higher monthly rate, but a lower rate for bee removal services. Onaverage, the City removes bees from trees ten to fifteen times per year, utilities three to five times peryear, and buildings up to three times per year. Staff applied these frequencies to the given rates andfound the pricing for service by ABBA Termite & Pest Control, Inc. to be of better value.

Staff recommends entering an agreement with ABBA Termite & Pest Control, Inc. in the amount of$7,750 per year for monthly service and as-needed bee removal. Staff also recommends an annualcontingency of $1,000 for unforeseen bee removal needs. The contingency will only be used whennecessary and authorized by staff. The total value of the contract including the contingency is $8,750annually.




Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documentsand finds this item relates to Council Priorities, Sustainability Plan, Economic Sustainability Plan,General Plan, and the 2021-22 Budget.

CEQA REVIEW

Awarding a contract for pest control and bee removal services is not subject to environmental reviewunder the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in theenvironment) and section 15060(c)(3) (the activity is not a “project” as defined in Section 15378).CEQA Guidelines section 15378(b)(2) excludes “[c]ontinuing administrative ... activities,” from itsdefinition of “project.” Moreover, pursuant to CEQA Guidelines Section 15061(b)(3), CEQA does notapply to this item because there is no potential for causing a significant effect on the environment.Therefore, no additional environmental review is necessary at this time.








Agenda Report





City Manager: AP


SUBJECT:

AWARD OF CONTRACT TO BEAR ELECTRICAL SOLUTIONS, INC. FOR ON-CALLELECTRICAL SERVICES (FUNDING SOURCES: GENERAL FUND, PROPOSITION C FUND, ANDLANDSCAPE AND LIGHTING DISTRICT FUND)

SUMMARY

The City of Claremont contracts for on-call electrical services. The contract electrician responds asneeded to a variety of issues related to streetlights, sports field lighting, interior and exterior electricalcircuits, and generators. In June 2021, the City was notified that the current contractor would notextend their contract without a rate increase.

In August 2021, a Request for Proposals (RFP) was issued to secure a new contract for on-callelectrical services. Three proposals were received. Staff recommends awarding a contract to BearElectrical Solutions, Inc. who was determined to have submitted the proposal with the best value tothe City.

RECOMMENDATION

Staff recommends that the City Council award a contract to Bear Electrical Solutions, Inc. for on-callelectrical services and authorize the City Manager to enter into a three-year contract with twooptional one-year extensions in an amount not to exceed $76,050 per year, and authorize an annualcontingency of $4,950, for a total annual contract amount of $81,000.



· Delay contract award and request additional information from staff.



FINANCIAL REVIEW

The proposed contract with Bear Electrical Solutions, Inc. is in the amount of $76,050 annually. Staffproposes to include an annual contingency of $4,950, for a total annual amount of $81,000. Fundingfor on-call electrical services is included in the 2021-22 operating budget of the Community ServicesDepartment.

The award of this contract complies with all the City and State purchasing guidelines. Bid andcontract documents are available for review in the City Clerk’s Office.

The costs to prepare documentation and complete this report are estimated at $2,000. These costsare in staff time allocated to the project and are included in the operating budget of the CommunityServices Department.

ANALYSIS

Services provided under the on-call electrical repair contract include but are not limited to installationand repair of internal and external building electrical systems, outdoor lighting, sports field lighting,and generators. Repair and replacement of streetlights is also a part of this contract. The conversionto LED fixtures has reduced repair costs; the contractor is responsible for repair to the light, wiring,and replacement of street light poles. The workload under the electrical services contract is highlyvaried and most often provided on an emergency or on-call basis to respond immediately to fix aproblem and return the City to normal operations.

The current contractor for on-call electrical services is Baker Electric, Inc. Baker Electric has beenunder contract since July 2017. The last notice for extension was sent to Baker Electric in March2021. In June 2021, Baker Electric requested an increase in their contract amount of four percent,with an additional three percent increase in January 2022. Without approval of the increases, BakerElectric was not interested in extending the contract for the final year. The City denied the requestand prepared to solicit bids for on-call electrical services. Baker Electric agreed to extend theircontract on a month-to-month basis through the RFP process.

A RFP was issued in August 2021. Three proposals were received with hourly rates ranging from alabor rate of $115 to $194.22 and supervisory rate of $125 to $209.39. Below is a chart with eachcontractor and proposed rates.

Bear Electrical is the low bidder, and references for bear Electrical were very positive. Bear Electricalhas provided electrical services for the cities of Tustin, Newport Beach, Mission Viejo, and LagunaNigel. Staff recommends entering into a three-year contract, with two optional one-year extensions,with Bear Electrical in the amount of $76,050 per year. Staff also recommends an annual contingencyof $4,950 for unforeseen electrical needs. The contingency will only be used when authorized by theCLAREMONT Printed on 9/23/2021Page 2 of 3


of $4,950 for unforeseen electrical needs. The contingency will only be used when authorized by theCity. The total annual cost of the contract including the contingency is $81,000.


Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documentsand finds that it applies to the following City Planning Documents: Council Priorities, SustainabilityPlan, Economic Sustainability Plan, General Plan, and 2021-22 Budget.

CEQA REVIEW

The item (awarding contract for custodial services) is not subject to environmental review under theCalifornia Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15060(c)(2) (theactivity will not result in a direct or reasonably foreseeable indirect physical change in theenvironment) and section 15060(c)(3) (activity is not a “project” as defined in section 15378).

CEQA Guidelines section 15378(b)(2) excludes “[c]ontinuing administrative or maintenance activities”from its definition of “project.” Moreover, pursuant to CEQA Guidelines section 15061(b)(3), CEQAdoes not apply to this item because there is no potential for causing a significant effect on theenvironment. Therefore, no additional environmental review is necessary at this time.








Agenda Report



FROM: DAVID CAIN, INTERIM FINANCE DIRECTOR


City Manager: AP


SUBJECT:

AWARD OF CONTRACT TO HDL ECONSOLUTIONS FOR ADMINISTERING THE COVID-19RELIEF AND ECONOMIC RECOVERY PROGRAM (FUNDING SOURCE: AMERICAN RESCUEPLAN ACT FUND)

SUMMARY

The American Rescue Plan Act (ARPA) will provide relief to local governments and enable them tolay the foundation for a strong economic recovery. In addition to helping local governments addressthe revenue losses they have experienced because of the pandemic, it will help cover the costsincurred from responding to the public health emergency and provide support for a recovery.

This one-time infusion of funds is welcomed as it will help mitigate losses incurred in the communityduring the pandemic, which has extended for almost two years. The sooner a recovery plan isdeveloped, the faster the City can stabilize operations, get the local economy back on track, andsupport those in the community most impacted by the pandemic.

The local recovery program must be carefully and thoughtfully administered to ensure optimal use ofthe funds in alignment with the City Council’s vision, goals, and objectives, and in compliance withARPA requirements. Given the complexities involved in administering these federal funds, as well aslimited in-house resources to assign to this program, staff recommends the City contract with HdLECONSolutions to help develop a strategy for the use of the funds for City Council consideration.

RECOMMENDATION

Staff recommends that the City Council:A. Authorize the City Manager to enter into an agreement with HdL ECONSolutions for an

amount not to exceed $49,500 to administer the COVID-19 Relief and Economic RecoveryProgram; and

B. Appropriate $49,500 from American Rescue Plan Act Fund to fully fund the cost of the



B. Appropriate $49,500 from American Rescue Plan Act Fund to fully fund the cost of theagreement with HdL ECONSolutions.


In addition to the staff recommendation, there is the following alternative:

· Request additional information from staff.

FINANCIAL REVIEW

The City of Claremont is estimated to receive $8.6 million in ARPA funding. The first of twodisbursements have been received by the City in the amount of $4,337,799 on July 13, 2021. Thetotal cost of the HdL ECONSolutions services are not to exceed $49,500 and will be paid utilizingARPA funds with no impact on the General Fund.

The staff cost to prepare this report and administer this contract is estimated at $1,500 and areincluded in the operating budget of the Financial Services Department.

ANALYSIS

The American Rescue Plan Act of 2021 is a $1.9 trillion economic stimulus bill that was signed intolaw by President Biden on March 11, 2021. Within the ARPA, the Coronavirus Local Fiscal RecoveryFund provides $350 billion for states, municipalities, counties, tribes, and territories, including $130billion for local governments to split evenly between municipalities and counties to respond to theCOVID-19 public health emergency or its negative economic impacts.

Cities may use ARPA funds for:

1. Responding to the COVID-19 pandemic;2. Covering costs incurred from the public health emergency;3. Replace lost, delayed, or decreased revenues due to COVID-19;4. Addressing the negative economic impacts on local businesses and nonprofits; and5. Make necessary investment in water, sewer, or broadband infrastructure.

The City of Claremont is estimated to receive $8.6 million in ARPA funding. For cities with populationsof less than 50,000, funds will be allocated to state governments and the State will distribute thesefunds in proportion to population. The City received its first disbursement of half of the allocatedfunding on July 9, 2021. The second half of the funds will be released under the seconddisbursement one year after the first disbursement. Funds for local governments must be “obligatedby” December 31, 2024, and “expended” by December 31, 2026.

The Treasury released their “Interim Final Rule” in May 2021. The US Treasury has been providingupdates and clarifications to this document via a Frequently Asked Questions document. The USTreasury also accepted comments on all aspects of the Interim Final Rule through July 16, 2021. Asthese rules are being tested and clarified they may change. Agencies are currently awaiting the USTreasury’s release of the “Final Rule.” Until the US Treasury adopts a final rule, and the final rulebecomes effective, the Interim Final Rule is, and will remain, binding and effective. This means thatrecipients can and should rely on the Interim Final Rule to determine whether uses of funds areeligible under this program. The US Treasury encourages recipients to use funds to meet needs in



their communities.

The local recovery program must be carefully and thoughtfully administered to ensure optimal use ofthe funds in alignment with the City Council’s vision, goals, and objectives, and with feedback andconsideration to community stakeholders. It is essential the funds be used in compliance with theextensive ARPA requirements and guidelines. Given the complexities involved in administering thesefederal funds, as well as limited in-house resources to assign to this program, staff reached out toHinderliter de Llamas & Associates (HdL), a 37-year-old consulting firm working for over 500 localgovernments, including 400 in California, specializing in sales tax, property tax, revenue analysis andeconomic development services. The City of Claremont has contracted with HdL for both sales andproperty tax services for several years.

HdL ECONSolutions (a division of HdL) has done work for 130 local governments in California andpresently is working for twenty-eight California cities on a variety of economic development relatedservices. Additionally, HdL ECONSolutions is assisting at least twelve cities with ARPA supportincluding the cities of Los Altos, Lafayette, Hawthorne, San Leandro, and El Monte.

HdL ECONSolutions believes the most effective scope of work for the project in Claremont shouldfocus on formulating a comprehensive COVID-19 Relief & Economic Recovery Program for both thenear term and lasting economic recovery including, but not be limited to the following components:

Task 1· Assist the City in calculating revenue loss per ARPA requirements.

· Assist City staff with understanding any requirements and submissions to State and FederalGovernment for ARPA funds.

· Assist the City of Claremont in designing and developing a Recovery Strategy (“Strategy”) toeffectively allocate the $8.6 million coming to the City from the American Rescue Plan Act.Tactics for doing so will include evaluation of public facilities and local circumstances, usingcitizen surveys and community outreach, and meeting with key stakeholders such as CityCouncil Members, Commissioners, the Chamber of Commerce, and local businessrepresentatives.

Task 2· Screen ARPA expenditures and serve as on-call resource, as necessary, to ensure

Claremont’s ARPA expenditures are consistent with ARPA rules and guidelines. Assist Citystaff in the development of protocols and systems that ensure expenditures are appropriateand qualify for ARPA funding.

· Assist City staff in establishing procedures for using, tracking, coding, and reporting ARPAexpenditures to the Federal Government. Provide assistance to City staff, as necessary, withany preparation of an audit or ARPA compliance reports.

HdL’s work will be billed on an hourly basis and will cover the period from the date of the contract tothe final reporting in 2026, with a cost not to exceed $49,500. All HdL’s work is eligible to be paid withARPA funding received by the City.

Staff with the support of the HdL team will:

· Develop recommendations to expend the funds with the City Council’s vision, goal, andobjectives, and in compliance with ARPA requirements.

· Meet with community stakeholders, private and public agencies on matters related to the



· Meet with community stakeholders, private and public agencies on matters related to thedevelopment of recommendations.

· Identify funding opportunities in the ARPA that can be used for Claremont communityeconomic recovery.

· Develop recommendations on how the funds will be dispersed.

· Administer the program, including outreach, referrals, tracking and reporting, and marketingactivities for local businesses.

· Provide regular updates to the City Council and the Claremont community.



CEQA REVIEW

This item is not subject to environmental review under the California Environmental Quality Act(CEQA) pursuant to CEQA Guidelines Section 15060(c)(2) (the activity will not result in a direct orreasonably foreseeable indirect physical change in the environment) and Section 15060(c)(3) (theactivity is not a “project” as defined in Section 15378). CEQA Guidelines Section 15378(b)(2), and (5)excludes “[c]ontinuing administrative or maintenance activities,” and “[o]rganizational oradministrative activities of governments that will not result in direct or indirect physical changes to theenvironment” from its definition of “project.”

The selection of a professional consulting company is an organizational activity of the government,which involves the fiscal activities but does not commit to any specific project, as such, this item isnot a CEQA project. Even if it was determined to be a CEQA project, pursuant to CEQA GuidelinesSection 15061(b)(3), CEQA does not apply to this item because there is no potential for causing asignificant effect on the environment. The adoption and approval of the agreement will not have asignificant effect on the environment because the action will not result in or lead to a physical changein Claremont. Therefore, no additional environmental review is needed at this time.



Submitted by:

David CainInterim Finance Director

Attachment:HdL ECONSolutions Proposal



City of Claremont – Proposal & Qualifications for COVID-19 Relief & Economic Recovery Program Administration for American Rescue Plan Act

Submitted By: HdL ECONSolutions 120 S. State College Blvd., Suite 200 Brea, CA 92821 www.hdlcompanies.com

Contact: Barry Foster, Principal/Managing Director 714.879.5000 [email protected]

Attachment

City of Claremont‐Proposal/Qualifications for COVID‐19 Relief & Economic Recovery Program Administration 7/13/2021

1

I. LETTER OF TRANSMITTAL July 13, 2021 RE: Proposal/Qualifications for COVID-19 Relief & Economic Recovery Program Administration David Cain, Interim Finance Director City of Claremont 207 Harvard Avenue Claremont, CA 91711 David: Thank you for the opportunity to present a proposal & our qualifications to the City of Claremont to assist with COVID-19 Relief and Economic Recovery Program Administration per the American Rescue Plan Act (ARPA). Hinderliter de Llamas Associates (HdL) is a 37-year old consulting firm with corporate offices in Brea California, along with offices in Pleasanton, Fresno, San Dimas, as well as offices outside of California in Texas, Colorado, Georgia and Alabama. HdL is a highly respected consulting firm working in sales tax, property tax, tax & fee administration, revenue analysis, economic development and cannabis management. HdL ECONSolutions was formed by HdL in 2014 to provide a variety of economic development products, services and special projects in further serving local governments. HdL ECONSolutions has done work for 130 local governments in California and presently is working for 25 California cities and a few private sector developers on a variety of economic development related services. Additionally, HdL is assisting nine cities with ARPA including Los Altos, Lafayette, Oakley, Hawthorne, Canyon Lake, Marina, San Leandro, Lodi and Hercules, along with a number more coming soon. HdL ECONSolutions is well positioned to assist Claremont with developing a Strategy for COVID-19 relief and use of federal stimulus funding coming from the recently enacted American Rescue Plan Act (ARPA), as well as administration of programs related to this program. During the past year, HdL ECONSolutions has worked with several cities to deal with the COVID-19 Pandemic and the negative economic impact it has delivered to cities and especially their business communities. HdL ECONSolutions has prepared Economic Recovery Action plans for the California cities of Eastvale, Menlo Park and Pacific Grove, as well as reopening plans for Calimesa and Cupertino. Additionally, we have assisted in several small business relief grant programs to deal with COVID-19 and the Pandemic. Again, we’re also presently working with nine cites with ARPA support including Los Altos, Lafayette, Oakley, Hawthorne, Canyon Lake, Marina, San Leandro, Lodi and Hercules. Please feel free to call me if you have questions or require additional information. I can be reached at 951.233.0414 or by email at [email protected]. If HdL ECONSolutions is selected to do the work in Claremont, I will serve as the Project Manager, with staff support from two highly qualified Senior Advisors and an Analyst.

Sincerely, Barry Foster Principal/Managing Director


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II. KEY PERSONNEL

Team of Professionals for the Claremont Project For the Claremont project, HdL ECONSolutions will use a team of four professionals that have more than 80 years of experience working in economic development and public administration. HdL ECONSolutions Team

Barry Foster

Barry Foster has more than 35 years of local government experience including 30 years in Southern California working for the cities of Moreno Valley, Rancho Mirage, Monrovia, and Loma Linda, as well as nearly 7 years with the HdL Companies. Mr. Foster has more than 29 years of economic development experience. As a Principal & Managing Director with HdL, Barry Foster started the ECONSolutions Division for HdL and has worked with 130 local governments in a variety of economic development related services. Additionally, he worked as a Development Consultant with five developers and retail advisors in Southern California. Over the years, he has helped facilitate more than 32 million square feet of new development projects including logistics-distribution, shopping centers, commercial retail/office, medical-healthcare, hotels, and auto centers. Mr. Foster is member of the International Council of Shopping Centers, as well as being a past President of the Municipal Management Assistants of Southern California (MMSASC). He holds a Bachelor of Science degree from Minnesota State University- Mankato and a Master of Public Administration from the University of Kansas.

Angela Tsui

Angela Tsui came to work for HdL in 2019 as a Senior Advisor working out the Pleasanton office. Before working for HdL, Ms. Tsui worked over 22 years in the public sector, including for the cities of Fremont and Cupertino, where she was the Economic Development Manager for 7 years. With HdL ECONSolutions, Angela has worked on numerous studies and is the primary economic development staffing person for the cities of Cupertino and Menlo Park. Additionally, Angela has recently worked on Economic Recovery Action Plans for the cities of Eastvale, Menlo Park and Pacific Grove, as well as numerous programs and issues related to the Pandemic and economic recovery efforts in Cupertino. Angela holds a Bachelor of Arts degree in Political Science from the University of California-Berkley.

Fienna Cheng

Fienna Cheng joined HdL early in 2020 as an Analyst and works on a variety of analytics and revenue analysis project, as well as supporting the divisions administration needs. Ms. Cheng has experience in the private sector in the healthcare and insurance industries. Fienna received a Bachelor of Arts in Economics from the University of California Irvine.

Sandy Meyer

Sandy Meyer joined HdL in June 2021 as a Senior Advisor. Ms. Myer worked for 32 years for the City of Walnut Creek in planning and economic development, including her last 11 years as the Community & Economic Development Director.


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III. QUALIFICATIONS AND SCOPE OF WORK

Qualifications HdL and the HdL ECONSolutions Team are uniquely qualified to assist the City of Claremont with work related to COVID‐19 relief and formulating an economic recovery program, along with administration support with funding coming from the American Rescue Plan Act (ARPA).

HdL ECONSolutions has significant experience working with California cities to help deal with

COVID‐19 and the Pandemic and economic recovery efforts including working on Economic

Recovery Action Plans (ERAP’s) for the cities of Eastvale, Menlo Park and Pacific Grove, as well as

numerous small business grant programs and focused economic recovery strategies. HdL is

currently assisting nine cities with ARPA support including Los Altos, Lafayette, Oakley, Hawthorne,

Canyon Lake, Marina, Lodi, San Leandro, Hercules, along with several more cities coming on soon.

HdL ECONSolutions is recognized as one of the leading consultants in the economic development

field in California, having worked with 130 local governments on a variety of programs and projects

during the past 7 years.

The HdL ECONSolutions Team is highly experienced in economic development and brings over 75

years of experience in economic development, along with working for and with cities. Barry Foster,

a Principal and Managing Director with HdL will serve as the Project Manager.

HdL is a premiere consulting firm in California and is presently working with over 400 local

governments and is recognized as a leader in sales tax and property tax management, budgeting

and revenue projections, tax & fee administration, economic development and cannabis

management.

References The following is a sampling of references appropriate for the Claremont project. City of Lafayette (ARPA Client)

Niroop Srivatsa, City Manager 925.299.3206

City of Hawthorne (ARPA Client)

Felice Lopez, Finance Director 310.349.2923

City of Menlo Park (ED Staffing Services & Economic Recovery Action Plan)

Starla Jerome‐Robinson, City Manager 650.330.6610

City of Oakley (ARPA Client)

Joshua McMurray, Interim City Manager 925.625.7004

City of Pacific Grove (ED Staffing Services & Economic Recovery Action Plan)

Ben Harvey, City Manager 213.364.2699


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Scope of Work The following represents the scope of work for the project. HdL ECONSolutions believes the most effective scope of work for the project in Claremont for the American Rescue Plan Act should focus on formulating a comprehensive COVID‐19 Relief & Economic Recovery Program for both near term and lasting economic recovery including but not limited to the following components. Task 1

Assist the City in calculating revenue loss per ARPA requirements.

Assist the City in designing and developing a Recovery Strategy (the ‘Strategy’) for the American

Rescue Plan Act (ARPA). Tactics for doing so will include evaluation of public facilities and local

circumstances, using citizen surveys and community outreach, and meeting with key stakeholders

such as City Council members, City staff, the Chamber of Commerce, developers and local business

representatives from the hardest hit business sectors.

Task 2

Screen ARPA expenditures and serve as on‐call resource, as necessary, to ensure that ARPA

expenditures are consistent with ARPA rules and guidelines. Assist city staff in the development of

protocols and systems that ensure expenditures are appropriate and qualify for ARPA funding.

Assist city staff in establishing procedures for using, tracking, coding and reporting ARPA

expenditures to the Federal Government. Provide assistance to city staff, as necessary, with any

preparation of an audit or ARPA compliance reports.

IV. COMPENSATION

Understanding the effort/commitment to undertake the two tasks identified above is challenging, so HdL is suggesting doing the work on an hourly basis, with a not‐to‐exceed amount, plus a 10% overall contingency. Task 1 Not‐to‐exceed amount of $31,000 Task 2 Not‐to‐exceed amount of $14,000

Hourly Consulting Rates Staff Position Hourly RatePrincipal $250Sr. Advisor $180Analyst $100

Total Estimated Cost=$45,000 10% Contingency=$4,500

Total Compensation – Not-to-Exceed $49,500


Agenda Report



FROM: JAMIE EARL, ASSISTANT CITY MANAGER


City Manager: AP


SUBJECT:

AUTHORIZATION TO AMEND THE AGREEMENT WITH LIEBERT CASSIDY WHITMORE TOINCREASE COMPENSATION FOR SPECIAL LEGAL SERVICES (FUNDING SOURCE: GENERALFUND)

SUMMARY

Since 1998, the City of Claremont has utilized Liebert Cassidy Whitmore (LCW) for special legalservices pertaining to employment relations matters.

A new agreement was entered into on June 4, 2020 and included a not-to-exceed contract amount of$100,000. Due to an increase in employment relations matters needing legal consultation, additionalcompensation is necessary. Staff recommends the City Council authorize an amendment to theexisting agreement for special legal services with LCW to add an additional $100,000 incompensation. Staff also recommends the City Council appropriate $75,000 from unassignedGeneral Fund Balance to fully fund the agreement.

RECOMMENDATION

Staff recommends that the City Council:A. Authorize the City Manager to execute an amendment to the existing agreement with Liebert

Cassidy Whitmore for special legal services pertaining to employment relations matters,increasing compensation by $100,000; and

B. Appropriate $75,000 from unassigned General Fund balance to fully fund the agreement.






FINANCIAL REVIEW

The City’s 2021-22 budget includes funding in the Personnel Division for legal services in the amountof $25,000. The budgeted amount of $25,000 is typically sufficient for most employee legal matters inan average year, however, over the last year the City has been engaged in several employmentmatters that have required more special legal services than normal. As a result, and in anticipation ofcontinuing employment matters the City is currently engaged in, staff recommends amending thecurrent special legal services agreement to increase compensation by $100,000.

Staff recommends that the City Council appropriate an additional $75,000 from unassigned GeneralFund balance to fully fund the agreement. If additional compensation is required in the future, staffwill return to the City Council to request additional funds.

The staff cost to prepare this report is estimated at $545 and is included in the operating budget ofthe Administrative Services Department.

ANALYSIS

The City of Claremont has used the law firm of Liebert Cassidy Whitmore (LCW) to provide legalservices related to employment relations for many years. LCW is one of the largest law firms inCalifornia specializing in employment relations law, representing public sector agencies. The scopeof work that LCW provides the City with includes consulting, representational legal servicespertaining to employment relations matters, including representation in negotiations and inadministrative and court proceedings, as requested by the City or as otherwise required by law.

The City’s 2021-22 budget includes funding in the Personnel Division of the Administrative ServicesDepartment for legal services in the amount of $25,000. The City regularly budgets at least $25,000for legal services to assist with employment relations, and in an average year that amount issufficient. There are occasional situations that require additional legal support, including litigation,which can span multiple years. Based on current employment relations matters involving the City atthis time, additional funding beyond the $25,000 is necessary.

Accordingly, staff recommends that the City Council authorize the City Manager to execute anamendment to the existing agreement with Liebert Cassidy Whitmore to increase compensation by$100,000. Staff also recommends that the City Council appropriate $75,000 from unassignedGeneral Fund balance to fully fund the agreement.

LEGAL REVIEW

The amendment has been drafted and approved as to form by the City’s special legal counsel.


Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents



and finds that the agenda applies to the following: 2021-22 Budget.

CEQA REVIEW

This item (amending a legal services agreement) is not subject to environmental review under theCalifornia Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15060(c)(2) (theactivity will not result in a direct or reasonably foreseeable indirect physical change in theenvironment) and Section 15060(c)(3) (the activity is not a “project” as defined in Section 15378)/CEQA Guidelines Section 15378(b)(2), (4), and (5) excludes “[c]ontinuing administrative…activities,”“government fiscal activities which do not involve any commitment to any specific project which mayresult in a potentially significant physical impact on the environment,” and “[o]rganizational oradministrative activities of governments that will not result in direct or indirect physical changes to theenvironment” from its definition of “project”.

Even if this item were a “project”, it is covered by the general rule that CEQA applies only to projectsthat have the potential for causing a significant effect on the environment in accordance with Section15061(b)(3) of the Guidelines. Amending a contract for consulting services will not, in and of itself,result in any physical changes to the environment. Thus, no additional environmental review isneeded at this time.




Jamie Earl Jason BarberAssistant City Manager Personnel Services Manager




Agenda Report



FROM: SHELLY VANDER VEEN, POLICE CHIEF


City Manager: AP


SUBJECT:

PSYCHIATRIC ASSESSMENT CARE TEAM (PACT) - SIX-MONTH EVALUATION (FUNDINGSOURCE: STATE “1991” REALIGNMENT FUNDS)

SUMMARY

In April 2021, the Police Department established a partnership with the Tri-City Mental HealthAuthority (TCMHA) in utilizing a Psychiatric Assessment Care Team (PACT) to respond to non-violent, non-criminal calls for assistance received by the Claremont Police Department.

The goal of the PACT is to utilize police resources more effectively and efficiently to respond to social-emotional/mental health needs of Claremont residents and/or visitors by using trained mental healthprofessionals to take the lead on non-violent, non-criminal calls for assistance received by the PoliceDepartment. This includes responses to persons with mental health needs who do not have apermanent residence.

Over the last five months since initial implementation, the program has been continuously evaluatedusing data, community feedback and collaborating partners’ experiences and has been adjusted ormodified as needed. The program has become an outstanding resource for both the PoliceDepartment and community, and the related data is contained within this report.

RECOMMENDATION

Staff recommends that the City Council receive, provide opportunity for community input, and file thePsychiatric Assessment Care Team (PACT) - Six-Month Evaluation report.

ALTERNATIVES TO RECOMMENDATION

In addition to the recommendation, there are the following alternatives:



A. Reject the staff recommendation.B. Delay the staff recommendation and request additional information.

FINANCIAL REVIEW

The Tri-City Mental Health Authority staff members assigned to the PACT are funded by the Tri-CityMental Health Authority’s “1991” Realignment funding. The 1991 Realignment is the result of anarrangement between the State and counties that dedicates portions of Vehicle Licensing Fees (VLF)and Sales Tax revenues to county health, mental health, and social services programs. Theapproximate total of salary and benefits for the two Tri-City Mental Health Authority employeesspecifically assigned to the PACT is $16,000 per month.

The staff cost to develop this partnership and prepare this report is estimated at $4,026 and isincluded in the operating budget of the Police Department.

ANALYSIS

The Police Department established a partnership with the Tri-City Mental Health Authority in utilizinga Psychiatric Assessment Care Team to respond to non-violent, non-criminal calls for assistancereceived by the Claremont Police Department.

Since 1960, the TCMHA has been the public mental health authority and primary provider ofoutpatient services for the residents of Claremont, La Verne, and Pomona. The TCMHA provides avariety of outpatient mental health services to include peer support, medication support, preventionand early intervention services, clinical case management, linkage and referral, and communityoutreach and training.

The purpose of the PACT is to utilize police resources more effectively and efficiently to respond tosocial-emotional/mental health needs of Claremont residents and/or visitors by using trained mentalhealth professionals to take the lead on non-violent, non-criminal calls to law enforcement forassistance, including responses to persons who do not have a permanent residence.

The PACT team is fulfilling its mission with two licensed mental health professionals who arestationed at the Police Department facility. The team includes a Licensed Marriage and FamilyTherapist and a Licensed Psychiatric Technician.

The objectives of the PACT are to:

· Provide mental health professional support during regular TCMHA business hours to thePolice Department when responding to calls for support from the community that indicate aperson is experiencing a mental health issue and/or is in need of some type of mental healthintervention, including persons who are homeless, whose behavior is non-violent, not criminaland does not require law enforcement intervention.

· Expedite access to and enrollment in appropriate levels of mental health care for personsreferred for intervention to mitigate future crises and increase likelihood of stable communityand social-emotional functioning; and reduce law enforcement encounters.

· Provide longer-term case management/follow-up for persons identified as not having housingand in need of mental health services in order to assist them to enroll in services and moreeasily access necessary support systems. These persons may be referred to the PACT by the



easily access necessary support systems. These persons may be referred to the PACT by theMeasure H Community (Homeless) Navigator assigned to Claremont. Community Navigatorsassist individuals in the Tri-City area with connecting to local resources, both informal andformal services.

· Follow-up on all calls received by the Police Department afterhours, which involve a mentalhealth need to facilitate access and increase likelihood of engagement to appropriate level ofmental health support.

· Coordinate follow-up with the Police Department for persons placed on California Welfare andInstitutions Code 5150 (Lanterman-Petris-Short Act or ”LPS”) holds afterhours or on weekendswhen the PACT is not on duty in order to facilitate access and increase likelihood of ongoingmental health care.

These objectives have been achieved by responding to calls as a team, assigned with a PoliceOfficer or called to a location by a Police Officer, to provide crisis response, screening, evaluation,referral, and assessment as needed. A response by the PACT may be requested after an initialresponse by officers when it is determined that a response by a mental health team would beappropriate. The Police Department’s Communications Officers dispatch PACT to specific locations,at officers’ or supervisors’ requests. The PACT has been trained on basic radio codes using a mobileradio to communicate with Police Department staff.

The first chart below shows the number of responses made by the PACT to assist officers and thefollowing chart shows the calls by type with a breakdown of calls involving unhoused versus housedindividuals:

As seen in the chart above, 57 of the 118 calls in which PACT responded to, or 48 percent, related tounhoused individuals. Out of the 57 calls related to the unhoused, 16 calls or 28 percent were



evaluations for mental health issues that resulted in a 5150 hold.

Regardless of the origin of the initial response, the PACT provides follow-up to those individuals andfamilies contacted to ensure they are connected to appropriate ongoing services. Officers alsocommunicate opportunities for follow-up by PACT on calls they handle after the established PACThours. The following chart shows the number of individuals who have received PACT services:

Both of the PACT staff members are Lanterman-Petris-Short (LPS) certified to write CaliforniaWelfare and Institutions Code 5150 holds. Prior to the development of the PACT, Claremont Officersconducted all mental health evaluations, wrote 5150 holds, and transported the individuals to localhospitals. With the PACT in place, the number of holds written by officers has been reduced. Overthe first four months with PACT in place, 50 holds have been written, with 52 percent completed bythe PACT.

A goal of the PACT program was to provide alternative means to transport an individual on a 5150hold, rather than being handcuffed and placed in a patrol car. PACT personnel have the ability tofacilitate transportation via ambulance. During the first four months of the program, 60 percent of thetransports have been via ambulance.

An attachment to this report provides a complete breakdown of the 5150 holds completed by bothofficers and PACT.

The PACT currently provides services Monday through Friday, 8:00 am to 5:00 pm. As staff continuesto evaluate the program, the hours of PACT services are also being evaluated to ensure that they aremeeting the needs of the community and the Police Department. Based on the analysis of the 5150holds completed, the current hours appear to be capturing a majority of the mental health responses,with 60 percent of the holds being completed during the current PACT hours. As seen in the followingchart, 30 of the 50 holds were during the current PACT hours.



Over the last five months since initial implementation, the program has been continuously evaluatedusing data, community feedback and collaborating partners’ experiences and has been adjusted ormodified as needed. The program has become an outstanding resource for both the PoliceDepartment and the community.


Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documentsand finds that it applies to the following: Council Priorities, General Plan, and the 2021-22 Budget.

CEQA REVIEW

An agreement with Tri-City Mental Health Authority, providing a mental health response team, is notsubject to the California Environmental Quality Act (Pub. Resources Code, Sec. 21000 et seq.)(“CEQA”) pursuant to Sections 15060(c)(2) (the activities will not result in a direct or reasonablyforeseeable indirect physical change in the environment) and 15060(c)(3) (the activities are not aproject as defined in section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14,Chapter 3. CEQA Guidelines Section 15378(b)(5) excludes continued administrative activities andorganization activities that will not result in a direct or indirect physical change in the environmentfrom the definition of “project.”

Moreover, even if the report were a project, it would be subject to the CEQA exemptions contained inCEQA Guideline Section 15306 because the report merely consists of information collection, andSection 15061(b)(3) because it can be seen with certainty that there is no possibility that theOrdinance will have a significant effect on the environment. An agreement with Tri-City Mental HealthAuthority, providing a mental health response team, will not have a significant effect on theenvironment because the action will not result in or lead to a physical change in Claremont.



Submitted by:

Shelly Vander VeenPolice Chief

Attachment:5150 Hold Evaluation



ATTACHMENT

During 5150

Transport Day of Time of Hold City of

Date PACT Reason for Contact: Completed Additional: Week Day Written Residence:

hours By: ~··

By:

4/3/21 Sat 4:55am Eva I in Jail PD PO LaVerne Call for service - Restraining Order

4/9/21 Fri 11:44am X Violation PACT Ambulance Claremont

2 officer transport due

4/12/21 Mon 12:10pm X Call for service-Disturbance PACT PO Pomona to behavior

4/13/21 Tues 11:10am X Call for service- Disturbance PACT Ambulance transient

4/15/21 Thurs 11:49am X Call for service- Domestic Disturbance PO PO Claremont Armed w/ a knife

4/15/21 Thurs 3pm X Citizen Response to PO for Assistance PACT Ambulance Claremont

4/20/21 Tues 10:05am X Arson Investigation PACT Ambulance transient

4/23/21 Fri 1:05pm X Call for serice- Disturbance PACT PD transient

4/25/21 Sun 4:19pm Call for service-Mental Health Crisis PD PD Claremont

4/27/21 Tues 1:30pm X Call for service-Fight in progress PACT PO transient

4/28/21 Wed 10:29am X Arson Investigation PACT PD Claremont

4/29/21 Thurs lOpm Call for service-Mental Health Crisis PD PD Claremont 12 otticer transport due

5/5/21 Wed 3:55pm X Call for service-Theft Investigation PACT PO Claremont to behavior

5/8/21 Sat 8:32pm Call for service-Mental Health Crisis PD PD transient

5/9/21 Sun 8:02pm Arson Investigation PD PD Claremont

5/10/21 Man 3:53pm X Call for service-Disturbance PACT Ambulance Claremont

5/11/21 Tues 10:02am X Call for service-Disturbance PACT Ambulance transient

5/14/21 Fri 2:51pm X Call for service-Welfare check PACT Ambulance Claremont Firearm confiscated

5/16/21 Sun 5:51pm Call for service-Domestic Disturbance PO PD Claremont

5/17/21 Man 4:34pm X Call for service-Domestic Disturbance PACT PO Claremont

5/22/21 Sat 12:17am Call for service-Mental Health Crisis PD Amb-Fire Claremont Armed w/ a knife

5/25/21 Tues 9:55am X Call for service-Mental Health Crisis PACT PD Claremont Firearm confiscated

5/25/21 Tues 3:11pm X Officer Observation PACT Amb-Fire Los Angeles

5/25/21 Tues 11:06pm Call for serice- Disturbance PO PD transient

5/27/21 Thurs 9:21am X Call for service-Disturbance PD PO Claremont

5/27/21 Thurs 12:08pm X Call for service- mental Health PACT PO Claremont - --

Page 1 of 2

During 5150

Day of Time of Hold Transport

City of Date

Week Day PACT Reason for Contact:

Written Completed

Residence: Additional:

hours By: By: - -

6/2/21 Wed 4:04pm X Call for service- mental health PACT Ambulance Claremont

6/3/21 Thurs 3:36pm X Followup by PACT w/ PO PACT Ambulance Claremont

6/7/21 Mon 5:16pm Call for service-Mental Health Crisis PO PO Ontario

6/7/21 Mon 10:34pm Call for service-Mental Health Crisis PD PO Claremont

6/9/21 Wed 5:52am Call for service-Mental Health Crisis PD PD LaVerne

6/12/2021 Sat 9:17pm Call for service-Burglary PD Amb-Fire Claremont

6/14/2021 Mon 10:09am X Suicidal Person in Jail PACT Ambulance Claremont

6/14/2021 Mon 4:40pm X Call for service-Mental Health Crisis PD Amb-Fire Claremont

6/15/2021 Tues 11:11pm Suicidal Person in Jail PD PD Claremont

6/20/2021 Sun 10:02pm Call for service-Domestic Disturbance PD PD Claremont

6/21/21 Mon 10:25am X Call for service-Mental Health Crisis PACT Ambulance Claremont

6/24/2021 Thurs 6:01pm Call for service-Mental Health Crisis PD Amb-Fire Claremont

6/26/2021 Sat 6:18am Call for service-Theft Investigation PD PD Claremont

6/28/2021 Mon 10:28am X Calls for service-Person in roadway PACT Ambulance transient

7/5/2021 Mon 9pm Eva I in Jail PD PD Claremont

7/12/21 Mon 3:08pm X Call for service-Mental Health Crisis PACT Amb-Fire Claremont

7/14/21 Wed 9:18am X Call for service-indescent exp PACT Ambulance Claremont

7/15/2021 Thurs 12:41pm X Call for service-Disturbance PD PD transient

7/16/2021 Fri 9:07pm Call for service-Suicidal Subject PD PD Claremont Firearm confiscated

7/19/2021 Mon 2:33pm X Call for service-Assault PACT PD transient

7/21/21 Wed 2:38pm X Call for service-Mental Health Crisis PACT Ambulance Claremont

7/26/2021 Mon 11:07am X Officer Observation PACT Ambulance Riverside

7/28/2021 Wed 4:46am Call for service- 9-1-1 call PD PD transient

7/30/2021 Fri 7:33am Call for serice- Disturbance PD PD ~!ansient --~ --~

Page 2 of 2


Agenda Report





City Manager: AP


SUBJECT:

EXECUTION AND DELIVERY OF A LEASE AGREEMENT FOR THE PURPOSE OF FINANCINGENERGY CONSERVATION IMPROVEMENTS - (FUNDING SOURCE: GENERAL FUND)

SUMMARY

The City of Claremont (the “City”) desires to replace aging HVAC systems, various City facility roofs,and replace and install new energy efficient lights and solar panels at the City Yard, Hughes Center,Taylor Hall and Youth Activity Center (YAC), and Police Facilities (the “Projects”).

At its January 12, 2021 meeting, the City Council awarded a contract to Trane U.S., Inc., forcomprehensive energy improvement project development services and implementation. The CityCouncil also authorized the City Manager to enter a private loan for the full cost of thecomprehensive energy improvement project.

Since the approval on January 12, 2021, Trane has developed the final project and the project isready to move to construction. However, the final project budget came in over the original estimateamount, requiring further City Council authorization, including adoption of a Resolution (AttachmentA). This report will review the final scope of work, project financials, and next steps for projectexecution.

RECOMMENDATION

Staff recommends that the City Council:A. Adopt a RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT,

CALIFORNIA AUTHORIZING EXECUTION AND DELIVERY OF A LEASE AGREEMENT INAN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $6,900,000 FOR THE PURPOSEOF FINANCING ENERGY CONSERVATION IMPROVEMENTS AND AUTHORIZING ANDDIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH; and.

B. Authorize the City Manager to negotiate and enter into a construction agreement with Trane



B. Authorize the City Manager to negotiate and enter into a construction agreement with TraneU.S., Inc., for an amount not to exceed $6,577,150 for a comprehensive energy improvementproject that meets all requirements detailed in the project scope of services.




FINANCIAL REVIEW

On January 12, 2021, the City Council authorized the City Manager to enter into an agreement in anamount not to exceed $5,580,600 with Trane if the project met all the requirements detailed in theproject scope of services. During phase two, Trane completed the in-depth analysis of all Cityfacilities and developed the final project. The final project estimate came in at $6,577,150, which ishigher than the initial approval amount.

There are several factors that have caused the increase from the initial estimate to the final cost.Since September 2020, the cost of steel is up 149 percent, the cost of aluminum and copper are bothup 30 percent, and the cost of lumber is up 62 percent. Additionally, the cost of labor is up between 3and 5 percent. A large part of this project is the installation of solar photovoltaic systems. Solar panelcosts have increased by 35 percent over the same time period, 19 percent in 2021 alone.Additionally, battery costs have increased by 88 percent in 2021.

In the original scope of services, Trane had to bring the City a cost-neutral project or better. If they didnot meet the scope of services, the City would not be responsible for any costs associated with theproject. While the final Projects are projected to be better than cost-neutral over the next thirty years,they are not cashflow-neutral during the first twenty years.

After factoring the savings achieved (including projected energy savings, SGIP incentives, andestimated O&M savings) and the costs incurred (including lease payments and measurement andverification costs), the Projects are estimated to yield a total of $4.8 million in net savings over thenext thirty years. As staff recommends a twenty-year financing period, this structure yields anestimated net annual cost to the City, ranging from approximately $350 to $26,800 during the firsttwenty years. A pro-forma analysis of the cash flows is included as Attachment B to this staff report.After the financing is fully repaid in twenty years, the City anticipates net annual savings ranging fromapproximately $386,000 to $548,000, driven by the projected energy savings of the Projects (and afinal year of estimated O&M savings in 2042).

Staff recommends moving forward with the Projects as recommended by Trane. The City hasapproximately $3,000,000 in deferred maintenance items that would have to be addressed within thenext few years if the Projects did not move forward. As part of these Projects, two roofs are beingreplaced at the Alexander Hughes Center and Joslyn Center. The roof at Alexander Hughes Centerhas at best two to three years life expectancy left, while the roof at Joslyn Center has no lifeexpectancy left. If staff contracted directly with a roofing company, it would cost at least $400,000 ontop of staff time to coordinate the roofing contractor.

As part of the Projects, there are 32 HVAC units that are being replaced. The average age of theindividual units is 22.2 years, with the oldest unit at the Police Department installed in 1990. If any ofthese units were to fail, replacements would have to be funded through the use of reserves. Lastly,CLAREMONT Printed on 9/23/2021Page 2 of 7


these units were to fail, replacements would have to be funded through the use of reserves. Lastly,the lighting control system at the Alexander Hughes Center is obsolete and parts are not available.The system is currently not working, and staff manually controls the lighting system. With the currentrecommendation, a loan would fund the Projects, and the City would allocate funds towards the loanrepayment in subsequent years, largely offset with energy and maintenance savings.

Urban Futures, Inc. (“UFI”) was selected by staff to provide municipal advisory services related to thefinancing of the Projects. UFI was involved in the City’s 2012 Lease Financing Project, along withseveral other previous City financing projects. Staff, working with UFI, provided an analysis of apublic offering versus a private placement. Due to the timing of the Projects, the size of the issuance,and the current volatile interest rate market, it was recommended that a private placement be utilized.UFI then sent out informal requests to three Bond Counsel firms. All three Bond Counsel firmsresponded with fee proposals. UFI presented an evaluation of the proposals to City staff. Ultimately,Stradling Yocca Carlson & Rauth (SYCR) was selected as Bond Counsel for this transaction.

In order to provide approximately $6.28 million to fund the Projects, the City will lease certain realproperty initially consisting generally of the City Yard (the “Leased Property”) to the Public PropertyFinancing Corporation of California (the “Corporation”) under a Site Lease in consideration of anupfront rental payment (the “Site Lease Payment”) of approximately $6.495 million (consisting of$6,280,700 million in project proceeds plus approximately $134,820 of capitalized interest, andapproximately $79,480 in costs of issuance); and the Corporation has proposed to sublease theLeased Property back to the City under a Lease Agreement in consideration of the agreement by theCity to pay semiannual lease payments paid out of the General Fund (the “Lease Payments”).

The Corporation will assign its right to receive the Lease Payments directly to Sterling National Bank(the “Bank”), under an Assignment Agreement; and in consideration of such assignment, the Bankwill provide the Corporation with the funds required to pay the Site Lease Payment to the City. Uponcompletion of the Projects and full payment of the semiannual lease payments, the Lease Agreementwill terminate, and the City Yard will be unencumbered, subject to certain conditions in the LeaseAgreement.

The Corporation is a non-profit public benefit corporation duly organized and existing under the lawsof the State. The Corporation was created for the purpose, among others, of providing assistance topublic agencies that wish to finance public improvements. The Corporation is unrelated to the Cityand has agreed to act as the counterparty to the Site Lease and the Lease Agreement in exchangefor a nominal fee.

On July 27, 2021, UFI solicited bids from a number of banks for a private placement transaction. Afterreceiving seven bids on August 10, 2021 for a twenty-year term, ranging from 2.07 percent to 3.08percent, the financing team evaluated the lowest bid against the other responding bids. SterlingNational Bank submitted the lowest bid at 2.07 percent, with a ten-year par call option, and did notrequire onerous covenants. Based on the bank rate of 2.07 percent, and assuming a borrowingamount of $6,495,000, net debt service through the term of the Lease is approximately $8,034,356with annual debt service ranging from $348,961 to $530,764. In accordance with CaliforniaGovernment Code Section 5852.1, Good Faith Estimates are provided as Attachment C to this staffreport.

After UFI completed an evaluation of the Sterling National Bank bid against all other bids, staff gavedirection to the financing team to pursue a private placement with Sterling National Bank in order tolock in the rate and mitigate interest rate risk. The Bank is ready to proceed with closing of thetransaction after City Council adoption of the Resolution. A non-binding term sheet was executed onCLAREMONT Printed on 9/23/2021Page 3 of 7


transaction after City Council adoption of the Resolution. A non-binding term sheet was executed onAugust 17, 2021, which is subject to City Council approval.

This purchase complies with all City and State purchasing guidelines. The three-phase project wascompetitively bid in 2019. Bid and contract documents are available for review. The staff cost toprepare this report and administer this project is estimated at $30,000 and is included in theoperating budget of the Community Services Department.

ANALYSIS

Scope of Services

To ensure that the City receives its highest priority deliverables to address deferred maintenanceitems, the professional services agreement with Trane will include the following minimum scope ofservices:

· Comprehensive lighting improvements at the Police Department.

· New lighting and HVAC controls at the Alexander Hughes Community Center.

· Improved roofing at the Alexander Hughes Community Center and Joslyn Center.

· Roofing solution must be approved by the City of Claremont Building Official.

· Comprehensive HVAC improvements at the following facilities:o Alexander Hughes Community Center (9 units)o City Hall (8 units)o City Yard (13 units)o Joslyn Center (3 units)o Police Department (6 units)

Because Trane has finalized the project cost and “savings guarantee,” and the projections yield netcost savings after twenty years, the City cannot terminate the construction contract without the statedbreakage fee.

Deferred Maintenance

The proposed energy improvement project has several benefits worth considering. As discussedpreviously, one of the primary project benefits is addressing necessary capital improvements andreplacing equipment that has reached the end of its useful life. During the past several years, the Cityhad to replace two units at the Alexander Hughes Community Center on an emergency basis due toequipment failure. If equipment is not replaced at the end of its useful life, it is anticipated thatmaintenance and repair costs will continue to increase and the need for emergency replacements willbecome more frequent.

Waiting for equipment to fail is not a recommended practice, as it can result in disruption to buildingusers and activities. For example, some of the more problematic HVAC units at the AlexanderHughes Community Center service the ABC for Me Preschool, Grove, Santa Fe, and computerserver rooms. If replacement is deferred and equipment is only replaced on an emergency basis, thiswould likely result in significant downtime.

Emergency replacements require City Council authorization and special coordination with the City'scontractor. Allowing for delays associated with securing City Council approval and sourcingequipment on an emergency basis, it is reasonable to expect that facilities could be without HVAC



equipment on an emergency basis, it is reasonable to expect that facilities could be without HVACservice for several weeks. If this were to happen during the height of summer programming at theAlexander Hughes Community Center, it would be very disruptive to building users, contract classinstructors, students, and City staff.

Sustainability Benefits

In addition to providing a proactive solution to deferred maintenance challenges, the proposed projectis also consistent with Claremont's Sustainable City Plan and the goals related to resourceconservation and energy efficiency. The solar systems proposed as part of the project wouldgenerate approximately 608,241 kWh annually, offsetting approximately 40 - 75 percent of the Cityfacilities' (site dependent) total annual energy use. The solar panels will be placed at the City Yard,Police Department, Alexander Hughes Center, and Youth Activity Center.

This project is one of the most tangible ways to accomplish goals outlined in the Sustainable CityPlan. The current plan lists the following relevant goals:

· Promote energy efficiency and conservation technologies and practices to reduce the use ofnonrenewable resources by both City governments and the community.

o Technologies include solar energy systems, co-generation systems for larger facilities,next generation lighting technologies, energy efficient appliances, and HVAC systems.

· Promote local installation of solar energy systems.

· Seek innovative lighting technologies that might be implemented with the cooperation of themanufacturer.

· Invest in energy savings measures necessary to attain a 20 percent reduction of City facilitiesupgrade, retrofit, and replace.

· Seek funding to install photovoltaic energy systems on additional City facilities.

· Promote a community-wide “Cool Roofs” program.

· Promote solar electric power generation where appropriate.

The proposed Projects provide an affordable mechanism to proceed with these goals in an impactfulway.

Gas Packaged Units vs Heat Pumps

As a part of the investment grade audit, Trane was asked to assess replacing existing gas-electricpackaged HVAC units and assess the effectiveness of using electric heat pumps in lieu of increasedefficiency gas-electric packaged units. Typically, in retrofit applications, the impact of structural,electrical, and mechanical upgrades required to convert to all electric heat pumps make the switchcost prohibitive. The results of the audit indicated that this was true for the projects at the City.

The proposed gas-electric HVAC units have been selected to work with the existing gas, electric, andmechanical infrastructure as well as designed to not require structural improvements to the facilities.The gas furnaces in these units are designed to meet the new South Coast Air Quality ManagementDistrict (SCAQMD) requirements for ultra-low NOx emissions which result in significantly lessnitrogen emissions than the majority of units throughout the United States. Additionally, these unitsoperate at a higher energy efficiency than the existing units and at a higher combined efficiency thanthe equivalent heat pump units, resulting in a total HVAC emission reduction of 116 metric tons of CO2

.



The proposed HVAC units and projects were designed as the best overall solution for the City toreduce emissions and leverage available funding to accomplish the City’s goals. In Trane’s recentexperience, although other public sector clients have asked Trane to evaluate the same conversionto heat pumps, all of Trane’s customers have currently made the decision to move forward withTrane’s recommendations to retrofit with new gas-electric due to their higher efficiency and cost-effectiveness while still resulting in overall greenhouse gas emission reduction

Documents to be Approved by City Council

The City Council Resolution approves all documents and actions needed to execute and deliver theLease Agreement, including the following substantially final form financing documents together withany changes or additions deemed advisable and approved by authorized staff:

· Site Lease between the City as lessor and the Corporation as lessee, whereby the City leasesthe Leased Property to the Corporation in consideration of the payment by the Corporation tothe City of an upfront rental payment of approximately $6,495,000.

· Lease Agreement between the Corporation as lessor and the City as lessee, whereby theCorporation subleases the Leased Property back to the City in consideration of the paymentby the City of semiannual Lease Payments.

· Termination Agreement between the City and BBVA USA, formerly known as CompassBank, providing for the termination of the Facilities Lease and Site Lease relating to the 2012Lease Financing Project.

· Municipal Advisor and Bond Counsel Agreements between the City and UFI and StradlingYocca Carlson & Rauth (“SYRC” or “Bond Counsel”) containing the description of MunicipalAdvisor/Bond Counsel services provided by UFI/SYCR, the term of the agreements,compensation, and expense reimbursements.

· Purchaser’s Term Sheet between the City and Sterling National Bank (the “Purchaser”)summarizing the terms of the loan, including interest rate, repayment terms, prepaymentoptions, rate lock, and covenants including annual reporting requirements.

· Good Faith Estimate provided by UFI to the City to disclose, prior to authorization of theissuance of bonds, good faith estimates of the following information: True interest cost of thebonds: the rate necessary to discount the amounts payable on the respective principal andinterest payment dates to the purchase price received for the new issue of bonds; Financecharge of the bonds: the sum of all fees and charges paid to third parties; Amount of proceedsreceived by the public body for sale of the bonds: the proceeds of the bonds net of the feesand charges paid to third parties and any reserves or capitalized interest paid or funded withproceeds of the bonds; Total payment amount: the sum total of all debt service payments onthe bonds calculated to the final maturity of the bonds plus the fees and charges paid to thirdparties not paid with the proceeds of the bonds.





CEQA REVIEW

In accordance with the California Environmental Quality Act ("CEQA"), performing energy efficiencyupgrades at public facilities is categorically exempt pursuant to Section 15301 of the CEQAguidelines. This Class 1 exemption allows for minor alteration of existing facilities or topographicalfeatures which involve negligible or no expansion of use beyond the existing at the time of the City' sdetermination. This action involves project development for energy efficiency infrastructure, with thepotential for lighting, HVAC, and roof replacements. New installations such as solar photovoltaicpanels are proposed on existing facilities; however, solar panels generate renewable energy which isa benefit to the environment and any installation will occur on existing facilities.

None of the exceptions to the categorical exemptions set forth in State CEQA Guideline Section15300. 2 applies to the proposed Projects because the proposed Projects: (1) are not located in auniquely sensitive environment; (2) are not located within a highway officially designated as a Statescenic highway; (3) are not located on a hazardous waste site; (4) would not have a cumulativeimpact; and (5) would not have a significant substantial adverse change in the significance of ahistoric resource. Therefore, the exemption applies but the exceptions do not.

COUNCIL COMMITTEE/COMMISSION REVIEW

The Sustainability Committee reviewed the Sustainability features of the Trane project and supportsthe comprehensive energy improvements and technology that Trane US, Inc. is recommending, butrecommended that heat pumps be considered instead of gas packaged units due to the 2030 Statemandate.




Jeremy Swan David CainCommunity Services Director Interim Finance Director

Attachments:A - ResolutionB - Pro-forma Cash FlowC - Good Faith Estimates



4846-4949-3490v11/022489-0011

RESOLUTION NO. 2021-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE AGREEMENT IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $6,900,000 FOR THE PURPOSE OF FINANCING ENERGY CONSERVATION IMPROVEMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH

WHEREAS, the City of Claremont (the “City”) is a public body that is duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “State”); and

WHEREAS, the City desires to finance the acquisition and/or construction of certain energy conservation improvements, including the installation of solar panels and storage, HVAC, lighting, and transformers and roof replacements on certain City-owned property (the “Projects”); and

WHEREAS, the City has determined that it would be in the best interests of the City and residents of the City to enter into a lease transaction with Public Property Financing Corporation of California (the “Corporation”) to finance the Projects; and

WHEREAS, the Corporation and the City will enter into a Site Lease (the “Site Lease”) pursuant to which the City will lease to the Corporation the real property that generally consists of a portion of the City Yard located at 1616 Monte Vista Avenue in the City, including the City Maintenance Building and City Administrative Building (the “Leased Property”), but excluding the telecommunications tower, subject to adjustment as described in Section 2 below, and a Lease Agreement (the “Lease”), pursuant to which the Corporation will sublease the Leased Property back to the City; and

WHEREAS, pursuant to the Lease, the City will pay Lease Payments (as such term is defined in the Lease) to the Corporation; and

WHEREAS, in consideration for the provision of funds to finance the Projects, the Corporation will pledge the Lease Payments to Sterling National Bank (the “Bank”) pursuant to an Assignment Agreement (the “Assignment Agreement”), by and between the Bank and the Corporation; and

WHEREAS, the City has determined that financing the Projects in the manner described above will result in a lower overall cost to the City than a public sale of bonds; and

WHEREAS, upon the execution of the Site Lease, the Lease and the Assignment Agreement, the City will cause to be recorded in the Official Records of the County of Los Angeles copies of such documents or memoranda thereof; and

WHEREAS, all acts, conditions and things that are required by the Constitution and laws of the State of California to exist, to have happened and to have been performed

ATTACHMENT A

Resolution No. 2021-__ Page 2

4846-4949-3490v11/022489-0011

precedent to and in connection with the consummation of the financing that is authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided;

NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, AS FOLLOWS:

SECTION 1. The City Council of the City hereby specifically finds and declares that each of the statements, findings and determinations of the City in the recitals that are set forth above and in the preambles of the documents that are approved herein are true and correct.

SECTION 2. The Lease is hereby approved in substantially the form presented herewith. The Mayor, the Mayor Pro Tem, the City Manager, the Finance Director, or the designee thereof (the “Authorized Officers”), acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver to the Corporation the Lease in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer or Officers executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of the Authorized Officers; provided, however, that the amount of the principal component of the Lease Payments shall not exceed $6,900,000, the scheduled interest components shall accrue at a true interest cost not to exceed 2.75 percent per annum and the final scheduled Lease Payment shall not be later than October 1, 2046 (subject to extension as provided in the Lease). In the event that it is determined by an Authorized Officer that there are limitations or restrictions on the ability of the City to lease or sublease any portion of the Leased Property as contemplated by the Lease, the Authorized Officers may designate other or additional real property of the City to be leased or subleased pursuant to the Lease, with such designation to be conclusively evidenced by the execution and delivery of the Lease by one or more of the Authorized Officers.

SECTION 3. The Site Lease is hereby approved in substantially the form presented herewith. The Authorized Officers, acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver to the Corporation the Site Lease in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer or Officers executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of the Authorized Officers.

SECTION 4. The Assignment Agreement on file with the City Clerk is hereby approved for execution and delivery by the Corporation in substantially the form on file. This Resolution shall constitute a consent of the City pursuant to Government Code Sections 5951 and 5952 for any transfer of interests in the Lease made in accordance with the Assignment Agreement and the Lease.


4846-4949-3490v11/022489-0011

SECTION 5. The City Clerk and such person or persons as may have been designated by the City Clerk to act on the City Clerk’s behalf are hereby authorized and directed to attest the signature of the Authorized Officers designated herein to execute any documents described herein, and to affix and attest the seal of the City, as may be required or appropriate in connection with the execution and delivery of the Site Lease and the Lease.

SECTION 6. The Bank has offered to provide funds to finance the Projects pursuant to the terms of a Term Sheet (the “Term Sheet”), in the form presented herewith. The Authorized Officers, each acting alone, are hereby authorized to execute the Term Sheet, if necessary, and to take any and all actions necessary to effectuate the financing of the Projects in accordance with the Term Sheet, and any such actions previously taken are hereby ratified and approved.

SECTION 7. The Lease is hereby determined to be consistent with the City’s Debt Management section of the Fiscal Policies within the City’s 2021-22 Budget, adopted on June 8, 2021, pursuant to Resolution No. 2021-27 (the “Debt Management Policy”). To the extent the Lease is not in compliance with the Debt Management Policy, such noncompliance is waived in accordance with the terms of the Debt Management Policy.

SECTION 8 The Authorized Officers are each hereby authorized and directed, acting alone, to do any and all things and to execute and deliver any and all documents which each may deem necessary or advisable to assist the City with the financing and the payment of costs of issuance approved by the Authorized Officers) in order to consummate the financing of the Projects and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, the Site Lease, the Lease and the Assignment Agreement, including but not limited to purchasing a title insurance policy with respect to the Leased Property, executing a rate lock agreement and/or Term Sheet with the Bank, executing a termination agreement with respect to the Site and Facility Lease and Lease Agreement, each dated as of March 1, 2012, between the City and BBVA USA, formerly known as Compass Bank, which was recorded against the Leased Property, and causing the recording of the documents that are described herein. Such actions heretofore taken by such officers or designees are hereby ratified, confirmed and approved.

SECTION 9. The City hereby appoints Urban Futures, Incorporated to serve as Municipal Advisor and appoints Stradling Yocca Carlson & Rauth to serve as Bond Counsel in connection with the transaction contemplated by this Resolution. The Authorized Officers are each hereby authorized to execute professional services agreements or other instruments with such consultants to provide for the provision of such services.

SECTION 10. The City hereby designates the Lease as “bank-qualified” pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.


4846-4949-3490v11/022489-0011

SECTION 11. In accordance with the requirements of Government Code Section 5852.1, the good faith estimates required by Government Code Section 5852(a)(1) have been presented to the City Council of the City and disclosed at the meeting at which this resolution is being adopted, which good faith estimates are attached to the staff report submitted herewith.

PASSED, APPROVED, AND ADOPTED this 28th day of September 2021.

________________________________ Mayor, City of Claremont

ATTEST: ____________________________________ City Clerk, City of Claremont APPROVED AS TO FORM: _____________________________________ City Attorney, City of Claremont

Stradling Yocca Carlson & Rauth Draft of 9/10/21

4835-9993-4194v8/022489-0011

RECORDING REQUESTED BY: City of Claremont AND WHEN RECORDED MAIL TO: Stradling Yocca Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attn: Vanessa S. Legbandt, Esq.

SPACE ABOVE FOR RECORDER'S USE ONLY

SITE LEASE

This SITE LEASE (this “Site Lease”), dated as of September 1, 2021, is entered into by and between the CITY OF CLAREMONT, a public body that is duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “City”), as lessor, and PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation that is duly organized and existing under and by virtue of the laws of the State of California (the “Corporation”), as lessee.

RECITALS

A. In order to finance the acquisition, construction and installation of energy conservation improvements on certain City-owned property (collectively, the “Projects”), the City has agreed to lease to the Corporation the real property described in Appendix A, which generally consists of a portion of the City Yard located at 1616 Monte Vista Avenue in the City, including the City Maintenance Building and City Administrative Building (said real property and all buildings, facilities and other improvements now or hereafter located thereon are referred to herein as the “Leased Property”), but excluding the “Excluded City Facilities Site” described in Appendix A and depicted on Appendix A-1.

B. The Corporation has agreed to assist the City with such financing by entering into a Lease Agreement dated as of the date hereof (the “Lease”), pursuant to which the Corporation will sublease the Leased Property back to the City and the City will be obligated to make payments (the “Lease Payments”) to the Corporation in consideration for the lease of the Leased Property.

C. The City and the Corporation have determined that it would be in the best interests of the City and the Corporation to assign the Lease Payments to Sterling National Bank (the “Bank”) in consideration for the Bank’s provision of funds to finance the Projects.

D. Accordingly, all rights to receive the Lease Payments are being assigned without recourse by the Corporation to the Bank pursuant to an Assignment Agreement, dated as of the date hereof (the “Assignment Agreement”), by and between the Corporation and the Bank.

2 4835-9993-4194v8/022489-0011

E. The City is authorized to enter into a lease-leaseback arrangement with the Corporation to finance the Projects under applicable State law.

AGREEMENT

In consideration of the foregoing and the material covenants herein, the City and the Corporation covenant, agree and bind themselves as follows:

Section 1. Lease of Leased Property. The City hereby leases to the Corporation, and the Corporation hereby leases from the City, for the benefit of the Bank, the Leased Property that is described in Appendix A, on the terms and conditions hereof. The City represents and covenants that it is the owner in fee of the Leased Property, subject only to Permitted Encumbrances and that the Leased Property is properly zoned or approved for the uses contemplated by this Site Lease and the Lease. The City hereby reserves to itself the right of ingress and egress across the Leased Property to access (i) the Excluded City Facilities Site defined in the Recitals hereto, as depicted on Appendix A-1 and (ii) the City-owned property located in San Bernardino County described in Appendix B.

Section 2. Term; Possession. The term of this Site Lease commences, and the Corporation becomes entitled to possession of the Leased Property, as of the date of recordation hereof. This Site Lease ends, and the right of the Corporation hereunder to possession of the Leased Property thereupon ceases, on the date on which all of the outstanding Lease Payments are paid in full, or provision is made for such payment in accordance with the Lease, and the Lease has been terminated in accordance with its terms.

Section 3. Rental. The Corporation shall pay to the City as and for rental of the Leased Property hereunder the amount of $6,495,000 on September 30, 2021. The Corporation shall cause such amount to be provided by the Bank.

Section 4. Purpose of this Site Lease; Sublease Back to City. The purpose for which the City agrees to lease the Leased Property to the Corporation hereunder is to enable the City to finance the Projects from the rental payment that the Corporation will pay to the City under Section 3. The Corporation hereby agrees to sublease the Leased Property back to the City under the Lease.

Section 5. Substitution or Release of Property. If the City exercises its option under Section 4.7 of the Lease and satisfies the conditions therein to substitute or release property for the Leased Property in whole or in part, such substitution shall also automatically operate to substitute or release property, as applicable, for the Leased Property leased hereunder. The description of the property leased under the Lease shall conform at all times to the description of the property leased hereunder.

Section 6. Assignments and Subleases. The Corporation may not assign its rights under this Site Lease or sublet all or any portion of the Leased Property, except as provided in the Lease and the Assignment Agreement, without the prior written consent of the Bank. Under the Lease, the City has consented to the assignment of this Site Lease to the Bank.

Section 7. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Leased Property, or any portion thereof, at any reasonable time to

3 4835-9993-4194v8/022489-0011

inspect the same or to make any repairs, improvements or changes that are necessary for the preservation thereof.

Section 8. Termination. The Corporation agrees, upon the termination of this Site Lease, to quit and surrender the Leased Property in the same good order and condition as the Leased Property was in at the time of commencement of the term hereof, reasonable wear and tear excepted, and agrees that all buildings, improvements and structures that are then existing upon the Leased Property will remain thereon and title thereto will vest thereupon in the City for no additional consideration.

Section 9. Default. If the Corporation defaults in the performance of any obligation on its part to be performed under the terms of this Site Lease, which default continues for 30 days following notice and demand for correction thereof to the Corporation, the City may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease shall be deemed to occur as a result thereof and this Site Lease may not be terminated by the City as a remedy for such default. Notwithstanding the foregoing, so long as the Lease remains in effect, the City shall continue to pay the Lease Payments as and when due under the Lease to the Bank in accordance with the Assignment Agreement. In the event of the occurrence of an Event of Default under the Lease, the Corporation may (i) exercise the remedies provided in the Lease, and (ii) use the Leased Property for any lawful purpose, subject to any applicable legal limitations or restrictions.

Section 10. Amendments. The Corporation and the City may at any time amend or modify any of the provisions of this Site Lease, but only with the prior written consent of the Bank.

Section 11. Quiet Enjoyment. The Corporation at all times during the term of this Site Lease shall peaceably and quietly have, hold and enjoy all of the Leased Property, subject to the provisions of the Lease and Permitted Encumbrances.

Section 12. Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Corporation are solely corporate liabilities of the Corporation, and the City hereby releases each and every member and officer of the Corporation of and from any personal or individual liability under this Site Lease. No member or officer of the Corporation or its governing board is at any time or under any circumstances individually or personally liable under this Site Lease for anything done or omitted to be done by the Corporation hereunder.

Section 13. Taxes. The City will pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, that are levied or assessed upon the Leased Property and any improvements thereon.

Section 14. Eminent Domain. If the whole or any part of the Leased Property, or any improvements thereon, are taken by eminent domain proceedings, the interest of the Corporation will be the aggregate amount of the then-unpaid principal components of the Lease Payments that are payable under the Lease and the balance of the award, if any, will be paid to the City. The City hereby waives any and all rights that it has or may hereafter have to acquire the interest of the Corporation in and to the Leased Property through the eminent domain powers of the City. The City hereby agrees, to the extent permitted by law, that the compensation to be paid in any condemnation proceedings brought by or on behalf of the City with respect to the Leased Property or any improvement thereon shall be in an amount that is not less than the total unpaid principal components

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of Lease Payments plus the interest component of Lease Payments accrued to the date of payment of all Lease Payments under the Lease.

Section 15. Notices. Any notice, request, complaint, demand or other communication under this Site Lease must be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopy, telex or other form of telecommunication, at its number set forth below. Notice will be effective either: (a) upon transmission by telecopy, telex or other form of telecommunication; (b) 48 hours after deposit in the United States first-class mail, postage prepaid; or (c) in the case of personal delivery to any person, upon actual receipt. The City, the Corporation and the Bank may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City: City of Claremont 207 Harvard Avenue Claremont, California 91711 Attn: City Manager

If to the Corporation: Public Property Financing Corporation of California 2945 Townsgate Road, Suite 200 Westlake Village, California 91361 Attn: Treasurer

If to the Bank: Sterling National Bank 500 Seventh Avenue, 3rd Floor New York, New York 10018 Attn: Public Sector Finance

Section 16. Governing Law. This Site Lease is governed by the laws of the State of California.

Section 17. Third Party Beneficiary. The Bank is hereby made a third party beneficiary hereunder with all rights of a third party beneficiary.

Section 18. Binding Effect. This Site Lease inures to the benefit of and is binding upon the Corporation, the City and their respective successors and assigns, subject, however, to the limitations herein.

Section 19. Severability of Invalid Provisions. If any one or more of the provisions of this Site Lease are for any reason held to be invalid, illegal or unenforceable in any respect, then such provision or provisions will be deemed severable from the remaining provisions of this Site Lease and such invalidity, illegality or unenforceability shall not affect any other provision of this Site Lease, and this Site Lease shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Corporation and the City each hereby declares that it would have entered into this Site Lease and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Site Lease may be held illegal, invalid or unenforceable.

Section 20. Section Headings. All section headings herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site Lease.

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Section 21. Execution in Counterparts. This Site Lease may be executed in any number of counterparts, each of which is an original but all together constitute one and the same instrument. It is also agreed that separate counterparts of this Site Lease may be separately executed by the Corporation and the City, all with the same force and effect as though the same counterpart had been executed by both the Corporation and the City.

Section 22. Defined Terms. All capitalized terms that are used herein and not otherwise defined have the respective meanings given those terms in the Lease.

Section 23. No Merger. Neither this Site Lease, the Lease nor any provisions hereof or thereof shall be construed to effect a merger of the title of the City to the Leased Property under this Site Lease and the City’s leasehold interest therein under the Lease.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the City and the Corporation have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF CLAREMONT, as Lessor

By: City Manager, City of Claremont

ATTEST:

City Clerk, City of Claremont

PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, as Lessee

By: Treasurer

4835-9993-4194v8/022489-0011

CERTIFICATE OF ACCEPTANCE OF SITE LEASE

This is to certify that the interest in real property conveyed by the Site Lease, dated as of September 1, 2021, by and between City of Claremont, as lessor, and Public Property Financing Corporation of California, as lessee (the “Corporation”), is hereby accepted by the undersigned officer on behalf of the Corporation pursuant to a resolution adopted by the Board of Directors of the Corporation on September 9, 2021, and the Corporation consents to recordation thereof by its duly authorized officer.

Dated: September 28, 2021 PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA

By: Treasurer

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ACKNOWLEDGMENT

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA COUNTY OF _______ On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity 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 foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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APPENDIX A

DESCRIPTION OF THE LEASED PROPERTY

The Leased Property consists of the following real property, together with all buildings, facilities and other improvements now or hereafter located on such real property (excluding the Excluded City Facilities Site described below):

DIVISION I

All that certain real property situated in the City of Claremont, Los Angeles County, State of California, described as follows:

PARCEL 1:

THAT PORTION OF THE WEST HALF OF THE WEST HALF OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT, DESCRIBED AS FOLLOWS:

BEGINNING AT THE INTERSECTION OF THE WESTERLY LINE OF SAID SECTION WITH A LINE PARALLEL WITH AND DISTANT SOUTHERLY 4 FEET FROM THE NORTHERLY LINE OF THE SOUTHWEST QUARTER OF SAID SECTION;

THENCE SOUTHERLY ALONG SAID WESTERLY LINE, 209 FEET;

THENCE EASTERLY PARALLEL WITH SAID NORTHERLY LINE, 418 FEET;

THENCE NORTHERLY PARALLEL WITH SAID WESTERLY LINE, 209 FEET;

THENCE WESTERLY PARALLEL WITH SAID NORTHERLY LINE, 418 FEET TO THE POINT OF BEGINNING.

EXCEPTING THEREFROM ANY PORTION LYING WITHOUT SAID COUNTY OF LOS ANGELES.

APN: 8307-002-903

PARCEL 2:

THE SOUTHERLY 209 FEET OF THE NORTHERLY 213 FEET, MEASUREMENTS ALONG THE WESTERLY LINE OF THAT PORTION OF THE WEST HALF OF THE WEST HALF OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, LYING WITHIN THE BOUNDARY LINES OF THE COUNTY OF LOS ANGELES, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE ON APRIL 29, 1875.

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EXCEPT THE WESTERLY 418 FEET, MEASURED ALONG THE NORTHERLY LINE, OF SAID LAND.

APN: 8307-002-904

PARCEL 3:

THE NORTH 2 FEET OF THAT PORTION OF THE WEST ONE HALF OF THE WEST ONE HALF OF THE SOUTHWEST ONE QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND, LYING WITHIN THE BOUNDARY LINES OF LOS ANGELES COUNTY.

APN: 8307-002-901

PARCEL 4:

THE SOUTH 2 FEET OF THE NORTH 4 FEET, EXCLUSIVE OF THE ROAD, OF THAT PART IN LOS ANGELES COUNTY OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 5 WEST.

APN: 8307-002-906

THE DESCRIPTION OF PARCEL 4 IS PROVIDED ONLY AS AN ACCOMMODATION FOR THIS REPORT. NO FURTHER USE OF THE DESCRIPTION IS AUTHORIZED WITHOUT FURTHER APPROVAL.

PARCEL 5:

THE SOUTHERLY 20 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER, SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, OF THE SAN BERNARDINO MERIDIAN, IN THE CITY OF CLAREMONT, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA.

THE PARCEL IS BOUNDED ON THE WEST BY MONTE VISTA BOULEVARD, A PUBLIC STREET, AND ON THE EAST BY THE LOS ANGELES COUNTY LINE.

APN: 8307-002-905

PARCEL 6:

THAT PORTION OF THE WEST HALF OF THE WEST HALF OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO BASE AND MERIDIAN, IN THE CITY OF CLAREMONT, WITHIN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF, BOUNDED BY THE FOLLOWING DESCRIBED LINES:

BEGINNING AT THE INTERSECTION OF THE WEST LINE OF SAID SOUTHWEST QUARTER WITH THE SOUTH LINE OF THE NORTHERLY 213 FEET “MEASURED ALONG SAID WEST LINE” OF SAID SOUTHWEST QUARTER;

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THENCE EASTERLY ALONG SAID SOUTH LINE TO THE BOUNDARY LINE OF LOS ANGELES COUNTY;

THENCE SOUTHWESTERLY ALONG SAID BOUNDARY LINE TO THE SOUTHERLY LINE OF THE NORTHERLY 323 FEET OF SAID SOUTHWEST QUARTER;

THENCE WESTERLY ALONG SAID SOUTHERLY LINE TO SAID WEST LINE;

THENCE NORTHERLY ALONG SAID WEST LINE TO THE POINT OF BEGINNING.

EXCEPT THE WEST 30 FEET OF SAID LAND CONVEYED TO THE COUNTY OF LOS ANGELES, BY DEED RECORDED ON DECEMBER 15, 1924, AS DOCUMENT NO. 966, IN BOOK 4246, PAGE 189, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 8307-002-902

The Leased Property excludes that certain real property on which the Excluded City Facilities Site is located, as follows:

(i) the site of the proposed future Waste to Hydrogen Pilot Program; and (ii) the telecommunications tower, as shown on the depiction of the Leased Property attached hereto as Appendix A-1.

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APPENDIX A-1

DEPICTION OF LEASED PROPERTY AND EXCLUDED CITY FACILITIES SITE

B-1

APPENDIX B

DESCRIPTION OF SAN BERNARDINO COUNTY PROPERTY

All that certain real property situated in the City of Upland, San Bernardino County, State of California, described as follows: DIVISION II PARCEL 1: THE SOUTHERLY 209 FEET OF THE NORTHERLY 213 FEET OF THE FOLLOWING DESCRIBED PROPERTY: THE WEST HALF OF THE WEST HALF OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST SAN BERNARDINO MERIDIAN, LYING WITHIN THE BOUNDARIES OF THE COUNTY OF SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO GOVERNMENT SURVEY. APN: A PORTION OF 1006-311-05 PARCEL 2: THE SOUTHERLY 20 FEET OF THAT PORTION OF THE SOUTH HALF OF THE NORTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, LYING WITHIN THE BOUNDARIES OF THE COUNTY OF SAN BERNARDINO, IN THE CITY OF UPLAND, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF ON FILE IN THE DISTRICT LAND OFFICE. THE PARCEL IS BOUNDED ON THE WEST BY THE SAN BERNARDINO COUNTY LINE, AND ON THE EAST BY A PROLONGATION OF THE WEST HALF OF THE WEST HALF OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF UPLAND, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA. APN: 1006-011-12 PARCEL 3: THE NORTHERLY TWO FEET OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, LYING WITHIN THE BOUNDARIES OF THE COUNTY OF SAN BERNARDINO, IN THE CITY OF UPLAND, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO GOVERNMENT SURVEY THEREOF. THE PARCEL IS BOUNDED ON THE WEST BY THE SAN BERNARDINO COUNTY LINE, AND ON THE EAST BY A PROLONGATION OF THE WEST HALF OF THE SOUTHWEST QUARTER OF SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF UPLAND, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA.

B-2

PARCEL 4: THE SOUTHERLY TWO (2) FEET OF THE NORTHERLY FOUR (4) FEET OF THE WEST ONE-HALF, OF THE WEST ONE-HALF SOUTHWEST ONE-QUARTER, SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, SAN BERNARDINO MERIDIAN. EXCEPT ANY PORTION LYING NORTHWESTERLY OF THE LOS ANGELES COUNTY AND SAN BERNARDINO COUNTY LINE. APN: A PORTION OF 1006-311-04


4819-0038-9106v11/022489-0011

LEASE AGREEMENT

Dated as of September 1, 2021

By and Between

PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA

And

CITY OF CLAREMONT

Relating to

$6,495,000 2021 LEASE AGREEMENT

(ENERGY CONSERVATION IMPROVEMENTS)

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TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS; RULES OF INTERPRETATION ................................................... 1

Section 1.1 Definitions ........................................................................................................... 1 Section 1.2 Interpretation ....................................................................................................... 4

ARTICLE II COVENANTS, REPRESENTATIONS AND WARRANTIES ............................... 5

Section 2.1 Covenants, Representations and Warranties of the City ..................................... 5 Section 2.2 Covenants, Representations and Warranties of the Corporation ......................... 7 Section 2.3 No Financial Advisory or Fiduciary Relationship ............................................... 8

ARTICLE III DEPOSIT AND APPLICATION OF FUNDS .......................................................... 9

Section 3.1 Application of Proceeds ....................................................................................... 9 Section 3.2 Acquisition Fund ................................................................................................. 9 Section 3.3 Acquisition and Construction of the Projects ...................................................... 9 Section 3.4 Changes to the Projects ........................................................................................ 9

ARTICLE IV LEASE OF LEASED PROPERTY; LEASE PAYMENTS .................................... 10

Section 4.1 Lease of Leased Property by Corporation to City ............................................. 10 Section 4.2 Reserved ............................................................................................................ 10 Section 4.3 Term .................................................................................................................. 10 Section 4.4 Lease Payments ................................................................................................. 10 Section 4.5 Quiet Enjoyment ................................................................................................ 11 Section 4.6 Title .................................................................................................................... 12 Section 4.7 Substitution or Release of Property ................................................................... 12

ARTICLE V MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS ............... 13

Section 5.1 Maintenance, Utilities, Taxes and Assessments ................................................ 13 Section 5.2 Modification of Leased Property ....................................................................... 14 Section 5.3 Public Liability Insurance .................................................................................. 14 Section 5.4 Property Insurance; Flood Coverage ................................................................. 15 Section 5.5 Rental Interruption Insurance ............................................................................ 16 Section 5.6 Worker’s Compensation Insurance ................................................................... 16 Section 5.7 Recordation Hereof; Title Insurance ................................................................. 16 Section 5.8 Form of Policies................................................................................................. 16 Section 5.9 Installation of City’s Personal Property ............................................................. 16 Section 5.10 Liens .................................................................................................................. 17 Section 5.11 Advances ........................................................................................................... 17

ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF PROCEEDS; ABATEMENT OF LEASE PAYMENTS ........................................ 17

Section 6.1 Deposit of Net Proceeds .................................................................................... 17 Section 6.2 Application of Net Proceeds .............................................................................. 17 Section 6.3 Abatement Due to Damage or Destruction ........................................................ 18

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Section 6.4 Substitution of Property under Certain Circumstances ..................................... 18 Section 6.5 Termination or Abatement Due to Eminent Domain ........................................ 19

ARTICLE VII OTHER COVENANTS OF THE CITY .................................................................. 19

Section 7.1 Disclaimer of Warranties ................................................................................... 19 Section 7.2 Access to the Leased Property ........................................................................... 19 Section 7.3 Release and Indemnification Covenants ............................................................ 19 Section 7.4 Assignment by the Corporation ......................................................................... 20 Section 7.5 Assignment and Subleasing by the City ............................................................ 20 Section 7.6 Amendments ...................................................................................................... 21 Section 7.7 Environmental Covenants .................................................................................. 22 Section 7.8 Tax Covenants ................................................................................................... 22

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES .......................................................... 23

Section 8.1 Events of Default Defined ................................................................................. 23 Section 8.2 Remedies on Default ......................................................................................... 24 Section 8.3 No Remedy Exclusive ....................................................................................... 25 Section 8.4 Agreement to Pay Attorneys’ Fees and Expenses ............................................. 26 Section 8.5 No Additional Waiver Implied by One Waiver ................................................. 26

ARTICLE IX PREPAYMENT OF LEASE PAYMENTS ............................................................. 26

Section 9.1 Security Deposit ................................................................................................ 26 Section 9.2 Optional Prepayment ......................................................................................... 27 Section 9.3 Mandatory Prepayment From Net Proceeds of Insurance or Eminent

Domain .............................................................................................................. 27

ARTICLE X MISCELLANEOUS ................................................................................................ 27

Section 10.1 Notices ............................................................................................................... 27 Section 10.2 Binding Effect .................................................................................................... 28 Section 10.3 Severability ........................................................................................................ 28 Section 10.4 Net-net-net Lease ............................................................................................... 28 Section 10.5 Further Assurances and Corrective Instruments ................................................ 28 Section 10.6 Execution in Counterparts ................................................................................. 28 Section 10.7 Applicable Law .................................................................................................. 28 Section 10.8 Captions ............................................................................................................. 28 Section 10.9 No Merger.......................................................................................................... 28 Section 10.10 Additional Provisions and Rights of the Bank .................................................. 29

APPENDIX A DESCRIPTION OF THE LEASED PROPERTY .............................................. A-1 APPENDIX A-1 DEPICTION OF LEASED PROPERTY ...................................................... A-1-1 APPENDIX B DESCRIPTION OF SAN BERNARDINO COUNTY PROPERTY ................. B-1 APPENDIX C SCHEDULE OF LEASE PAYMENTS ............................................................. C-1 APPENDIX D DESCRIPTION OF PROJECTS ........................................................................ D-1 APPENDIX E FORM OF LENDER LETTER .......................................................................... E-1

4819-0038-9106v11/022489-0011

LEASE AGREEMENT

This LEASE AGREEMENT, dated as of September 1, 2021 (this “Lease”), is entered into by and between the PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation that is duly organized and existing under and by virtue of the laws of the State of California (the “Corporation”), as sublessor, and the CITY OF CLAREMONT, a public body that is duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “City”), as sublessee.

RECITALS

A. In order to finance the acquisition, construction and installation of energy conservation improvements on certain City-owned property (collectively, and as described more fully in Appendix D, the “Projects”), the City has agreed to lease that certain real property described in Appendix A, which generally consists of a portion of the City Yard located at 1616 Monte Vista Avenue in the City, including the City Maintenance Building and City Administrative Building, but excluding the Excluded City Facilities Site.

B. The Corporation has agreed to assist the City with such financing by entering into this Lease, pursuant to which the Corporation will sublease the Leased Property back to the City and the City will be obligated to make payments (the “Lease Payments”) to the Corporation.

C. The City and the Corporation have determined that it would be in the best interests of the City and the Corporation to cause Sterling National Bank (the “Bank”) to provide the funds that are necessary to finance the Projects in consideration for the Corporation’s assignment of the Lease Payments and other rights hereunder to the Bank.

D. Accordingly, all rights to receive the Lease Payments have been assigned without recourse by the Corporation to the Bank pursuant to an Assignment Agreement, dated as of the date hereof (the “Assignment Agreement”), by and between the Corporation and the Bank.

E. The City is authorized to enter into a lease-leaseback arrangement with the Corporation to finance the Projects under applicable State law.

AGREEMENT

In consideration of the foregoing and the material covenants herein, the City and the Corporation covenant, agree and bind themselves as follows:

ARTICLE I

DEFINITIONS; RULES OF INTERPRETATION

Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease, have the meanings specified below, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined.

“Acquisition Fund” means the fund by that name established pursuant to Section 3.2.

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“Additional Payments” means any and all amounts that are payable by the City hereunder (other than Lease Payments), including rebate payments to the federal government.

“Applicable Law” means (a) all applicable common law and principles of equity and (b) all applicable provisions of all (i) constitutions, statutes, rules, regulations and orders of all Governmental authorities, (ii) applicable seismic building code requirements at the time of construction, and (iii) orders, decisions, judgments, writs, injunctions and decrees of all courts (whether at law or in equity) and arbitrators.

“Assigned Rights” means all of the Corporation’s rights under this Lease as lessor of the Leased Property (excepting only the Corporation’s rights under Section 7.3 of this Lease and its rights to notice under the Site Lease and this Lease), including, but not limited to the right to receive and enforce payment of the Lease Payments to be made by the City hereunder, and as lessee of the Leased Property under the Site Lease, as more particularly described in the Assignment Agreement, that are assigned and transferred by the Corporation to the Bank pursuant to the Assignment Agreement.

“Assignment Agreement” means the Assignment Agreement, dated as of September 1, 2021, by and between the Corporation, as assignor, and the Bank, as assignee, as originally executed or as thereafter amended under any duly authorized and executed amendments thereto.

“Bank” means Sterling National Bank, and its successors and assigns.

“Bond Counsel” means Stradling Yocca Carlson & Rauth, a Professional Corporation, or another attorney or firm of attorneys of nationally recognized expertise and acceptable to the Bank with respect to legal matters relating to obligations the interest on which is excludable from gross income under Section 103 of the Tax Code.

“Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in the State of California.

“City” means the City of Claremont, a public body that is duly organized and existing under and pursuant to the Constitution and laws of the State of California.

“Closing Date” means the date of execution and delivery of this Lease by the parties hereto, being September 30, 2021.

“Corporation” means the Public Property Financing Corporation of California, a nonprofit public benefit corporation that is duly organized and existing under and by virtue of the laws of the State of California.

“Excluded City Facilities Site” means the area on which the following facilities are located: (i) the site of the proposed future Waste to Hydrogen Pilot Program; and (ii) the telecommunications tower, as shown on the depiction of the Leased Property attached hereto as Appendix A-1.

“Event of Default” means any of the events of default that are described in Section 8.1.

“Facilities” means all buildings and other improvements at any time situated on the Leased Property.

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“Federal Securities” means any direct general non-callable obligations of the United States of America (including obligations that are issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the timely payment of principal of and interest on which are directly guaranteed by the United States of America.

“Fiscal Year” means each twelve-month period during the Term of this Lease commencing on July 1 in any calendar year and ending on June 30 in the next succeeding calendar year, or any other twelve-month period selected by the City as its fiscal year period.

“Hazardous Materials” means flammable explosives, polychlorinated biphenyl compounds, heavy metals, chlorinated solvents, cyanide, radon, petroleum products, asbestos or any asbestos containing materials, methane, radioactive materials, pollutants, hazardous materials, hazardous wastes, hazardous, toxic or regulated substances or related materials, as defined in CERCLA, RCRA, CWA, CAA, TSCA and Title III, and the regulations promulgated pursuant thereto, and in all other federal, state or local environmental laws and regulations.

“Lease” means this Lease Agreement, dated as of September 1, 2021, by and between the Corporation, as sublessor, and the City, as sublessee, as originally executed or as thereafter amended under any duly authorized and executed amendments hereto.

“Lease Payment” means all payments that are required to be paid by the City under Section 4.4, including any prepayments thereof under Section 9.2 or 9.3.

“Lease Payment Date” means April 1, 2022 and each October 1 and April 1 thereafter, continuing to and including the date on which the Lease Payments are paid in full.

“Leased Property” means the real property, described in Appendix A, located at 1616 Monte Vista Avenue in the City, together with the improvements now or hereafter located thereon, but excluding the Excluded City Facilities Site. From and after the date of any substitution of property under Section 4.7 or release of property under Section 4.8, the term “Leased Property” means the real property which remains subject to this Lease Agreement following such substitution or release.

“Maximum Lease Term” has the meaning that is set forth in Section 4.3.

“Net Proceeds” means amounts that are derived from any policy of property insurance or title insurance with respect to the Leased Property, or the proceeds of any taking of the Leased Property or any portion thereof in eminent domain proceedings (including sale under threat of such proceedings), to the extent remaining after payment therefrom of all expenses incurred in the collection and administration thereof.

“Permitted Encumbrances” means, as of any time: (a) liens for general ad valorem taxes and assessments, if any, which are not then delinquent, or which the City may permit to remain unpaid under Section 5.1 of this Lease; (b) the Site Lease, this Lease and the Assignment Agreement; (c) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (d) the exceptions that are disclosed in the title insurance policy which is required by Section 5.7 with respect to the Leased Property issued as of the Closing Date; (e) any easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing to

4 4819-0038-9106v11/022489-0011

the Corporation will not materially impair the use of the Leased Property for its intended purposes and will not materially impair the security granted to the Bank by the Assignment Agreement; and (f) the right of ingress and egress over and across the Leased Property for the purpose of providing access to (i) the Excluded City Facilities, and (ii) the City-owned property located in San Bernardino County described in Appendix B, by the City, its officers, employees, agents, representatives, contractors, sublessees, and assignees as reserved by the City in Section 1 of the Site Lease.

“Projects” means the improvements that are described in Appendix D.

“Rental Period” means the period from the Closing Date through October 1, 2022 and, thereafter, the twelve-month period commencing on October 2 of each year during the Term of this Lease.

“Site Lease” means the Site Lease, dated as September 1, 2021, by and between the City and the Corporation.

“Tax Code” means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code.

“Taxable Equivalent Rate” means 2.82%.

“Term of this Lease” or “Term” means the time during which this Lease is in effect, as provided in Section 4.3.

“Termination Date” means October 1, 2041, unless extended or sooner terminated as provided in Section 4.3.

Section 1.2 Interpretation.

(a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and includes all genders, as appropriate.

(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and do not affect the meaning, construction or effect hereof.

(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Lease; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or subdivision hereof.

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ARTICLE II

COVENANTS, REPRESENTATIONS AND WARRANTIES

Section 2.1 Covenants, Representations and Warranties of the City. The City makes the following covenants, representations and warranties to the Corporation as of the date of the execution and delivery of this Lease:

(a) the City is a political subdivision duly organized and existing under the Constitution and laws of the State of California, the City has the full power and authority to enter into, to execute and to deliver the Site Lease and this Lease Agreement, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of the Site Lease and this Lease Agreement;

(b) the Leased Property will be used in the performance of governmental functions;

(c) the Site Lease and this Lease Agreement have each been duly authorized, executed and delivered by the City and each constitutes the legal, valid and binding agreement of the City enforceable against the City in accordance with its terms;

(d) the execution and delivery of the Site Lease, this Lease and the Escrow Agreement the consummation of the transactions therein and herein contemplated, and the fulfillment of or compliance with the terms and conditions thereof and hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Site Lease, this Lease, or the Assignment Agreement or the financial condition, assets, properties or operations of the City;

(e) no consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery by the City of the Site Lease and this Lease Agreement, or the consummation of any transaction therein or herein contemplated, except as have been obtained or made and as are in full force and effect, or except as would not materially adversely affect the transactions contemplated hereby;

(f) there is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the City after reasonable investigation, threatened against or affecting the City or the assets, properties or operations of the City which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of the Site Lease or this Lease Agreement or upon the financial condition, assets, properties or operations of the City, and the City is not in default with respect to any order or decree of any

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court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Site Lease or this Lease Agreement, or the financial condition, assets, properties or operations of the City;

(g) the Leased Property and the financing pursuant to this Lease and the Assignment Agreement are important to the City’s efficient and economic operation, and are in the best interests of the City. During the term of this Lease, the Leased Property will be used by the City for the purpose of performing one or more governmental functions of the City consistent with the permissible scope of the City’s authority;

(h) the City has funds available for the payment of Lease Payments due during the current Fiscal Year and reasonably believes that sufficient funds can be obtained to make all Lease Payments and payments of other amounts required to be paid hereunder;

(i) to the actual knowledge of the City Manager of the City, after due inquiry, the City has not, within the last ten years, failed to appropriate payments or defaulted in the payment of any obligation in excess of $100,000 dollars under any financing lease of the same general nature as this Lease Agreement, or under any of its bonds, notes, or other debt obligations;

(j) to the actual knowledge of the City Manager of the City, after due inquiry, the City has not, within the last six years, defaulted in any material respects under any of its non-payment related performance obligations, either under any financing lease of the same general nature as this Lease Agreement, or under any of its bonds, notes, or other debt obligations;

(k) the City is the owner in fee of the Leased Property, and title to the Leased Property shall remain in the City, subject to the rights of the Corporation hereunder and under the Site Lease and subject to Permitted Encumbrances;

(l) no lien or encumbrance on the Leased Property materially impairs the City’s use of the Leased Property for the purposes for which it is, or may reasonably be expected to be, held, and the Leased Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien, lease or encumbrance which would prohibit or materially interfere with the City’s use of the Leased Property as contemplated in this Lease Agreement;

(m) the Leased Property is not located in a “Special Flood Hazard Area” shown on a Flood Hazard Boundary Map or a Flood Insurance Rate Map used in connection with the National Flood Insurance Program and has not been subject to material damage from flooding;

(n) the insured value of the Leased Property, based on replacement cost, is not less than the aggregate principal component of all of the Lease Payments;

(o) the buildings located on the Leased Property have a remaining useful life that extends to at least October 1, 2041;

(p) to the best of the City’s knowledge, the Leased Property is free of all Hazardous Materials that would impair the City’s use of the Leased Property for the purposes for

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which it is, or may reasonably be expected to be, held or that will materially adversely affect the ability of the City to perform its obligations under this Lease Agreement;

(q) the financial statements of the City for the year ended June 30, 2020, together with other information supplied to the Bank including without limitation the adopted budget of the City for Fiscal Year 2021-22, fairly present the City’s financial condition as of the date of the statements, and other than as described in such financial statements or otherwise disclosed to the Bank including in the City’s adopted budget for Fiscal Year 2021-22, there has been no material adverse change in the City’s financial condition subsequent to June 30, 2020;

(r) all taxes, assessments or impositions of any kind with respect to the Leased Property, except current taxes, have been paid; and

(s) the City has not made, done, executed or suffered, and warrants that it will not make, do, execute or suffer, any act or thing whereby the Corporation’s interest in any property now or hereafter included in the Leased Property shall be or may be impaired, changed or encumbered in any manner whatsoever except as permitted by this Lease Agreement.

Section 2.2 Covenants, Representations and Warranties of the Corporation. The Corporation makes the following covenants, representations and warranties to the City as of the date of the execution and delivery of this Lease:

(a) Due Organization and Existence. The Corporation is a nonprofit public benefit corporation that is duly organized and existing under and by virtue of the laws of the State of California, has full legal right, power and authority to enter into the Site Lease, this Lease and the Assignment Agreement and to carry out and consummate all transactions that are contemplated hereby and thereby, and by proper action the Corporation has duly authorized the execution and delivery of the Site Lease, this Lease and the Assignment Agreement.

(b) Due Execution. The representatives of the Corporation who execute the Site Lease, this Lease and the Assignment Agreement are fully authorized to execute such documents under official action taken by the Board of Directors of the Corporation.

(c) Valid, Binding and Enforceable Obligations. The Site Lease, this Lease and the Assignment Agreement have been duly authorized, executed and delivered by the Corporation and constitute the legal, valid and binding agreements of the Corporation, enforceable against the Corporation in accordance with their respective terms.

(d) No Conflicts. The execution and delivery of the Site Lease, this Lease and the Assignment Agreement, the consummation of the transactions that are contemplated herein and therein and the fulfillment of or compliance with the terms and conditions hereof and thereof do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the Corporation is a party or by which it or its properties are otherwise subject or bound or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Corporation, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions that

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are contemplated by the Site Lease, this Lease or the Assignment Agreement or the financial condition, assets, properties or operations of the Corporation.

(e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the Corporation, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery by the Corporation of the Site Lease, this Lease or the Assignment Agreement, or the consummation of any transaction that is contemplated herein or therein, except as have been obtained or made and as are in full force and effect, or except as would not materially adversely affect the transactions that are contemplated hereby.

(f) No Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the Corporation after reasonable investigation, threatened against or affecting the Corporation or the assets, properties or operations of the Corporation which, if determined adversely to the Corporation or its interests, would have a material and adverse effect upon the consummation of the transactions that are contemplated by or the validity of the Site Lease, this Lease or the Assignment Agreement, or upon the financial condition, assets, properties or operations of the Corporation, and the Corporation is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions that are contemplated by the Site Lease, this Lease or the Assignment Agreement or the financial condition, assets, properties or operations of the Corporation.

(g) Tax Exemption. The Corporation covenants that it will not take any action which would cause the Interest Components of the Lease Payments made by the City under the Lease to be included in gross income for federal income tax purposes or subject to California personal income taxes (other than to the extent that the Interest Components of the Lease Payments made by the City under the Lease will be included in gross income for federal income tax purposes as described in the opinion of Bond Counsel delivered in connection with the execution of this Lease).

Section 2.3 No Financial Advisory or Fiduciary Relationship.

(a) Inasmuch as this Lease represents a negotiated transaction, each of the Corporation and the City understands, and hereby confirms, that the Bank is not acting as a fiduciary of the Corporation or the City, but rather is acting solely in its capacity as a lender, for its own account. Each of Corporation and the City acknowledges and agrees that: (i) the transaction that is contemplated herein is an arm’s length commercial transaction among the Corporation, the City and the Bank and its affiliates; (ii) in connection with such transaction, the Banks and its affiliates are acting solely as principals and not as advisors including, without limitation, “Municipal Advisors” as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as amended, and the related final rules (the “Municipal Advisor Rules”); (iii) the Bank and its affiliates are relying on the bank exemption in the Municipal Advisor Rules; (iv) the Bank and its affiliates have not provided any advice or assumed any advisory or fiduciary responsibility in favor of the Corporation or the City with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (whether or not the Bank, or any affiliate thereof, has provided other services or advised, or is currently providing other services or advising the Corporation or the City on other matters); (v) the Bank and its affiliates have financial and other interests that differ from those of the Corporation and the City; and (vi) each of the Corporation and the City has consulted with its own

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financial, legal, accounting, tax and other advisors, as applicable, to the extent that it deemed appropriate.

(b) The City understands, and hereby confirms, that the Corporation is not acting as a fiduciary of the City or as a “Municipal Advisor” as such term is defined in the Municipal Advisor Rules.

ARTICLE III

DEPOSIT AND APPLICATION OF FUNDS

Section 3.1 Application of Proceeds. The proceeds of this Lease in the amount of $6,495,000 will be applied as follows: (a) $79,480.04 will be retained by the Bank and disbursed by the Bank at the direction of the City to pay the costs of entering into this Lease and related documents; (b) $6,280,700.00 will be delivered to the City and deposited in the Acquisition Fund for the purpose of financing the Projects; and (c) $134,819.96 will be delivered to the City and used by the City to pay the Lease Payments due on April 1, 2022 and October 1, 2022.

Section 3.2 Acquisition Fund. The City shall establish, maintain and hold in trust a separate fund designated as the “Acquisition Fund.” The moneys in the Acquisition Fund shall be held by the City in trust and applied to the payment of the costs of acquisition, construction and installation of the Projects and of expenses incidental thereto. All moneys in the Acquisition Fund shall be kept separate from and accounted for separately other moneys held by the City. The City agrees that it will keep records regarding the expenditure of moneys from the Acquisition Fund and the investment of moneys in the Acquisition Fund as required by and in accordance with the Tax Certificate to be executed by the City in connection with this Lease.

When the Projects shall have been constructed, acquired and installed in accordance herewith, the City shall transfer any remaining balance in the Acquisition Fund which is not needed for Acquisition Fund purposes to those funds and accounts of the City from which Lease Payments are made, and such remaining balance shall be applied to the payment of the Lease Payments. The Acquisition Fund shall then be closed.

Section 3.3 Acquisition and Construction of the Projects. The Corporation hereby agrees to cause the Projects and any additions or modifications thereto to be constructed, acquired and installed by the City as its agent. The City shall enter into contracts and provide for, as agent for the Corporation, the complete design, construction, acquisition and installation of the Projects in accordance with all applicable laws. The City hereby agrees that it will cause the construction, acquisition and installation of the Projects to be diligently performed after the deposit of funds into the Acquisition Fund pursuant to Section 3.2, upon satisfactory completion of design work and compliance with the California Environmental Quality Act and approval by the City Council of the City, and that it will use its best efforts to cause the construction, acquisition and installation of the Projects to be substantially completed by October 1, 2024, unforeseeable delays beyond the reasonable control of the City only excepted. It is hereby expressly understood and agreed that the Corporation shall be under no liability of any kind or character whatsoever for the payment of any cost of the Projects and that all such costs and expenses shall be paid by the City.

Section 3.4 Changes to the Projects. The City may add or substitute other improvements for those listed as components of the Projects in Appendix D, but only if the City first

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files with the Corporation and the Bank a statement of the City: (a) identifying the improvements to be added or substituted and (if applicable) the improvements to City facilities they replace in the Projects; (b) stating that the estimated costs of construction, acquisition and installation of any added or substituted improvements are not less than such costs for the improvements previously planned; and (c) an opinion of Bond Counsel to the effect that such addition or substitution will not affect the exclusion of the interest component of the Lease Payments from gross income for federal income tax purposes or the exemption of such interest for state income tax purposes.

ARTICLE IV

LEASE OF LEASED PROPERTY; LEASE PAYMENTS

Section 4.1 Lease of Leased Property by Corporation to City. For and in consideration of the application by the Corporation of funds in accordance with Article III, the City has leased the Leased Property to the Corporation under the Site Lease. For and in consideration of the Lease Payments to be made by the City hereunder, the Corporation hereby leases the Leased Property to the City and the City hereby leases the Leased Property from the Corporation, pursuant to this Lease upon the terms and provisions hereof.

Section 4.2 Reserved.

Section 4.3 Term. The Term of this Lease shall commence on the Closing Date and shall end on the Termination Date, unless such Term is extended or sooner terminated as hereinafter provided. If on the Termination Date the Lease Payments shall not be fully paid, or provision therefor made in accordance with Article IX, or if the Lease Payments shall remain due and payable or shall have been abated at any time and for any reason remain due and owing, then the term of this Lease shall be extended until the date upon which all Lease Payments shall be fully paid, or provision therefor made in accordance with Article IX. Notwithstanding the foregoing, the term of this Lease shall in no event be extended more than ten years beyond October 1, 2041, such extended date being the “Maximum Lease Term.” If prior to the final Termination Date, all Lease Payments shall be fully paid, or provision therefor made in accordance with Article IX, the Lease shall be discharged by its terms and all Lease Payments shall have been paid in full, and the term of this Lease shall end simultaneously therewith.

Section 4.4 Lease Payments.

(a) Obligation to Pay. Subject to the provisions of Section 6.3 and Article IX, the City agrees to pay to the Corporation, its successors and assigns, the Lease Payments (denominated into components of principal and interest) in the respective amounts that are specified in Appendix C (including any supplements thereto), to be due and payable in immediately available funds on each of the respective Lease Payment Dates that are specified in Appendix C. The Lease Payments that are payable in any Rental Period with respect to the Leased Property shall be for the use of the Leased Property during such Rental Period. The interest components of the Lease Payments have been calculated based on an interest rate of 2.07% per annum, on the basis of a 360 day year of twelve 30 day months.

(b) Effect of Prepayment. If the City prepays all Lease Payments in full under Article IX, the City’s obligations under this Section will thereupon cease and terminate. If the City prepays the Lease Payments in part but not in whole under Section 9.3, amounts so paid in respect of

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principal components shall be applied by the Corporation as prepayment to the remaining unpaid principal components of the Lease Payments owing hereunder in inverse order of Lease Payments coming due.

(c) Rate on Overdue Payments. If the City fails to make any of the payments required in this Section 4.4, the payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid, and the City agrees to pay the same with interest thereon, to the extent permitted by law, from the date such amount was originally payable at the rate set forth in Section 4.4(a).

(d) Taxable Equivalent Rate. If it is determined that any of the interest components of Lease Payments may not be excluded from gross income for purposes of federal income taxation as a result of any action or inaction by the City, the Interest Rate shall be adjusted to the Taxable Equivalent Rate for the remainder of the term of this Lease.

(e) Fair Rental Value. The Lease Payments coming due and payable during each Rental Period constitute the total rental for the Leased Property for such Rental Period, and will be paid by the City in each Rental Period for and in consideration of the right of the use and occupancy, and the continued quiet use and enjoyment, of the Leased Property during each Rental Period. The parties hereto have agreed and determined that the total Lease Payments that are due in each Rental Period are not in excess of the fair rental value of the Leased Property in the corresponding Rental Period. In making this determination, consideration has been given to the estimated fair market value of the Leased Property, the replacement costs of the Leased Property, other obligations of the Corporation and the City under this Lease, the uses and purposes which may be served by the Leased Property and the benefits therefrom which will accrue to the City and the general public.

(f) Source of Payments; Budget and Appropriation. The Lease Payments are payable from any source of legally available funds of the City, subject to the provisions of Sections 6.3 and 9.1. The City covenants to take such action as may be necessary to include all Lease Payments in each of its annual budgets during the Term of this Lease and to make the necessary annual appropriations for all such Lease Payments. The covenants on the part of the City herein contained constitute duties imposed by law and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease agreed to be carried out and performed by the City.

(g) Assignment. The City understands and agrees that all Lease Payments have been assigned by the Corporation to the Bank under the Assignment Agreement, and the City hereby consents to such assignment. The Corporation hereby directs the City, and the City hereby agrees, to pay to the Bank all payments payable by the City under this Section 4.4 and all amounts payable by the City under Article IX.

Section 4.5 Quiet Enjoyment. Throughout the Term of this Lease, the Corporation will provide the City with quiet use and enjoyment of the Leased Property and the City will peaceably and quietly have, hold and enjoy the Leased Property, without suit, trouble or hindrance from the Corporation, except as expressly set forth in this Lease. The Corporation will, at the request of the City and at the City’s cost, join in any legal action in which the City asserts its right to such possession and enjoyment to the extent that the Corporation may lawfully do so. Notwithstanding the foregoing, the Corporation has the right to inspect the Leased Property as provided in Section 7.2.

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Section 4.6 Title. At all times during the Term of this Lease, the Corporation shall hold leasehold title to the Leased Property, including all additions which comprise fixtures, repairs, replacements or modifications thereto, subject to Permitted Encumbrances and the provisions of Section 8.2.

Upon the termination of this Lease (other than under Section 8.2(b)), all right, title and interest of the Corporation in and to the Leased Property shall be transferred to and vested in the City. Upon the payment in full of all Lease Payments allocable to the Leased Property, or upon the deposit by the City of security for such Lease Payments as provided in Section 9.1, all right, title and interest of the Corporation in and to the Leased Property shall be transferred to and vested in the City. The Corporation agrees to take any and all steps and to execute and record any and all documents that are reasonably required by the City to consummate any such transfer of title.

Section 4.7 Substitution or Release of Property. With the prior written consent of the Bank, which shall not be unreasonably withheld and which shall be given if the conditions set forth in subdivisions (a) through (i) below are met, the City shall have the right to substitute alternate real property for any portion of the Leased Property or to release a portion of the Leased Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Leased Property pursuant to this subsection, there shall be no reduction in or abatement of the Lease Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Leased Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:

(a) the City shall have delivered (i) a Written Certificate to the Corporation and the Bank setting forth its findings that the Leased Property, as constituted after such substitution or release (A) has an annual fair rental value at least equal to the maximum Lease Payments payable by the City in any Rental Period; and (B) has a useful life in excess of the final Lease Payment due hereunder; and (ii) a written determination prepared by a third-party (including, for example, insured values) that the fair rental value of the Leased Property, after such substitution or release, is at least equal to the then outstanding principal components of the Lease Payments;

(b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Lease Payments of the type and with the endorsements described in Section 5.7 hereof and naming the Bank as an additional insured;

(c) with respect to a substitution, the City has certified in writing to the Corporation and the Bank that such substitute alternate property serves the essential governmental purposes of the City and constitutes property which the City is permitted to lease under the laws of the State of California. For purposes of this determination, the following City facilities are essential: the City Hall, the Police Department, Alexander Hughes Community Center, Joslyn Senior Center, Village Parking Structure, and Taylor Hall and Youth Activity Center at Cahuilla Park;

(d) with respect to a substitution, the substitute alternate property does not cause the City to violate any of its covenants, representations and warranties made herein;

(e) the City shall have provided the Corporation and the Bank with a written opinion of Bond Counsel to the effect that such substitution or release will not, in and of itself, cause

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the interest component of the Lease Payments to be included in gross income for federal income tax purposes;

(f) the City and the Corporation shall have executed, and the City shall have caused to be recorded with the Office of the Los Angeles County Recorder, any document necessary to reconvey to the City the portion of the Leased Property being released and to include any substituted real property in the description of the Leased Property contained herein and in the Site Lease;

(g) with respect to a substitution, the City has delivered to the Corporation and the Bank an Opinion of Bond Counsel to the effect that such substitution of Leased Property will not, in and of itself, cause the interest component of Lease Payments to be included in gross income for federal income tax purposes;

(h) with respect to a substitution, no event giving rise to an abatement of Lease Payments has occurred or is continuing with respect to the substitute alternate property; and

(i) No Event of Default under this Lease has occurred and is continuing at the time of the substitution or release.

ARTICLE V

MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS

Section 5.1 Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Lease, as part of the consideration for the rental of the Leased Property, all improvement, repair and maintenance of the Leased Property are the sole responsibility of the City, and the City will pay for or otherwise arrange for the payment of all utility services that are supplied to the Leased Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Leased Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof on the part of the City or any assignee. In exchange for the Lease Payments, the Corporation agrees to provide only the Leased Property, as hereinbefore more specifically set forth. The City waives the benefits of Sections 1932(1), 1932(2), 1933(4), 1941 and 1942 of the California Civil Code, but such waiver does not limit any of the rights of the City under the terms of this Lease.

The City shall not use, operate, or maintain the Leased Property (or cause the Leased Property to be used, operated or maintained) improperly, carelessly, in violation of any applicable laws or in a manner which is contrary to that contemplated hereby. The City shall provide all permits and licenses, if any, which are necessary for the Leased Property. In addition, the City agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body, including, without limitation, all anti-money laundering laws and regulations; provided that the City may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of the Corporation, adversely affect the interest of the Corporation in and to the Leased Property or its interest or rights hereunder.

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The City will pay or cause to be paid all taxes and assessments of any type or nature, if any, that are charged to the Corporation or the City which affect the Leased Property or the respective interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City is obligated to pay only such installments as are required to be paid during the Term of this Lease as and when the same become due.

The City may, at the City’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Corporation shall notify the City that, in its reasonable opinion, by nonpayment of any such items the interest of the Corporation in the Leased Property will be materially endangered or the Leased Property or any part thereof will be subject to loss or forfeiture, in which event the Corporation will promptly pay such taxes, assessments or charges or provide the Corporation with full security against any loss which may result from nonpayment, in form satisfactory to the Corporation.

Section 5.2 Modification of Leased Property. The City has the right, at its own expense, to make additions, modifications and improvements to the Leased Property or any portion thereof. All additions, modifications and improvements to the Leased Property will thereafter comprise part of the Leased Property and become subject to the provisions of this Lease. Such additions, modifications and improvements may not in any way damage the Leased Property or cause the Leased Property to be used for purposes other than those which are authorized under the provisions of State of California and federal law; and the Leased Property, upon completion of any additions, modifications and improvements made thereto under this Section, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements. The City will not permit any mechanic’s or other lien to be established or to remain against the Leased Property for labor or materials that are furnished in connection with any remodeling, additions, modifications, improvements, repairs, renewals or replacements made by the City under this Section; provided that if any such lien is established and the City first notifies the Corporation of the City’s intention to do so, the City may in good faith contest any lien that is filed or established against the Leased Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and will provide the Corporation with full security against any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to the Corporation. The Corporation will cooperate fully in any such contest, upon the request and at the expense of the City.

Section 5.3 Public Liability Insurance. The City shall maintain or cause to be maintained throughout the Term of this Lease a standard comprehensive general insurance policy or policies in protection of the City, the Corporation and their respective members, officers, agents, employees and assigns. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Leased Property. Such policy or policies must provide coverage of at least $1,000,000 per occurrence, $3,000,000 in aggregate and $5,000,000 excess liability and may be subject to such deductibles as the City deems adequate and prudent. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance.

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The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid.

Section 5.4 Property Insurance; Flood Coverage.

(a) Requirement to Maintain Property Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, property insurance against loss or damage to the Facilities by fire and lightning, with extended coverage insurance, vandalism and malicious mischief insurance and sprinkler system leakage insurance. Said extended coverage insurance shall cover loss or damage by fire, explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance, including earthquake coverage if such coverage is available at commercially reasonable cost from a reputable insurer in the reasonable determination of the City. Such insurance shall be in an amount at least equal to the greater of: (i) the replacement value of the insured Facilities; or (ii) the aggregate unpaid principal components of the Lease Payments, and may be subject to such deductibles as the City deems adequate and prudent. Such insurance may be maintained as part of or in conjunction with any other insurance coverage that is carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program of pooled insurance. The City will apply the Net Proceeds of such insurance as provided in Article VI.

(b) Flood Insurance. If at any time and for so long as the Leased Property is located in a 100 year flood area as shown on a Flood Insurance Rate Map published by the Federal Emergency Management Agency, the policy or policies of property insurance that are provided under this Section 5.4 shall include insurance against loss or damage to the Facilities due to flooding. If the City obtains an exception or waiver to the designation of the Facilities as being within a 100 year flood area from the Federal Emergency Management Agency, the City shall not be required to provide flood insurance as set forth in this subsection (b).

(c) Federal or State Disaster Aid. Should the Facilities be damaged or destroyed as a result of an event for which federal or State of California disaster aid is available, the Corporation and/or the City shall promptly apply for disaster aid. Any disaster aid proceeds which are received shall be used to repair, reconstruct, restore or replace the damaged or destroyed portions of the Facilities, or, at the option of the City and the Corporation, to prepay the Lease Payments if permitted under the disaster aid program and the law.

(d) Self-Insurance. As an alternative to providing the insurance required by this Section, the City may provide a self-insurance method or plan of protection if and to the extent that such self-insurance method or plan of protection: (i) affords reasonable coverage for the risks that are required to be insured against, in light of all circumstances, giving consideration to cost, availability and similar plans or methods of protection adopted by public entities in the State of California other than the City; and (ii) has been approved in writing by the Bank. Before such other method or plan may be provided by the City, and annually thereafter so long as such method or plan is being provided to satisfy the requirements of this Lease, there shall be filed with the Corporation and the Bank a certificate of an actuary, insurance consultant or other qualified person (who may be an employee of the City), stating that, in the opinion of the signer, the substitute method or plan of protection is in accordance with the requirements of this Section and, when effective, would afford reasonable coverage for the risks that are required to be insured against and is sufficiently funded to afford such coverage. There shall also be filed a certificate of the City which sets forth the details of such substitute method or plan. In the event of a loss that is covered by any such self-insurance

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method, the liability of the City hereunder shall be limited to the amounts in the self-insurance reserve fund or funds created under such method.

Section 5.5 Rental Interruption Insurance. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Leased Property as a result of any of the hazards covered in the insurance required by Section 5.4, in an amount at least equal to the maximum Lease Payments coming due and payable during any future 24 month period. Such insurance may be maintained as part of or in conjunction with any other insurance coverage that is carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. Such rental interruption or use and occupancy insurance shall not be self-insured and the City acknowledges that this requirement may limit its ability to self-insure under Section 5.4. The City will apply the Net Proceeds of such insurance towards the payment of the Lease Payments as the same become due and payable.

Section 5.6 Worker’s Compensation Insurance. So long as required by law, the City shall carry worker’s compensation insurance covering all employees on, in, near or about the Leased Property and, upon request, shall furnish to the Corporation certificates that evidence such coverage throughout the Term of this Lease.

Section 5.7 Recordation Hereof; Title Insurance. On or before the Closing Date, the City shall, at its expense: (a) cause the Assignment Agreement, the Site Lease and this Lease, or a memorandum hereof, to be recorded in the Office of the Los Angeles County Recorder with respect to the Leased Property; and (b) obtain an ALTA or CLTA policy of title insurance, naming the Bank as an insured, which insures the Corporation’s leasehold estate established under the Site Lease in the Leased Property, subject only to Permitted Encumbrances, in an amount equal to the original aggregate principal amount of the Lease Payments. The City shall apply the Net Proceeds that are received under such title insurance policy to prepay the remaining Lease Payments under Section 9.3.

Section 5.8 Form of Policies. All insurance policies (or riders) that are required by this Article V shall be taken out and maintained with responsible insurance companies that are organized under the laws of one of the states of the United States and qualified to do business in the State of California, and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten days before the cancellation or revision becomes effective. Each insurance policy or rider that is required by Sections 5.3, 5.4 and 5.5 shall name the City as the insured and loss payee and the Bank as additional insured and shall include a lender’s loss payable endorsement for the benefit of the Bank. Prior to the Closing Date, the City will deposit with the Bank policies (and riders and endorsements, if applicable) which evidence any such insurance that is procured by the City, or a certificate or certificates of the respective insurers which state that such insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will furnish to the Bank evidence that the policy has been renewed or replaced by another policy which conforms to the provisions of this Article V unless such insurance is no longer obtainable, in which event the City shall notify the Bank of such fact.

Section 5.9 Installation of City’s Personal Property. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Leased Property. All such items shall

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remain the sole property of the City, in which the Corporation has no interest, and may be modified or removed by the City at any time. The City must repair and restore any and all damage to the Leased Property resulting from the installation, modification or removal of any such items. Nothing in this Lease prevents the City from purchasing or leasing items to be installed under this Section under a lease or conditional sale agreement, or subject to a vendor’s lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest may attach to any part of the Leased Property.

Section 5.10 Liens. The City will not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased Property, other than Permitted Encumbrances and such other encumbrances as the City certifies in writing to the Corporation do not materially and adversely affect the leasehold estate in the Leased Property hereunder and which the Bank approves in writing, which approval may not be unreasonably withheld or delayed. Except as expressly provided in this Article V, the City will promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same shall arise at any time. The City will reimburse the Corporation for any expense that is incurred by the Corporation in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim.

Section 5.11 Advances. If the City fails to perform any of its obligations under this Article V, the Corporation may take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as Additional Payments hereunder, together with accrued interest at the rate set forth in Section 4.4(a).

ARTICLE VI

DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF PROCEEDS; ABATEMENT OF LEASE PAYMENTS

Section 6.1 Deposit of Net Proceeds. The Net Proceeds of any taking of the Leased Property or any portion thereof in eminent domain proceedings, and the Net Proceeds of any policy of insurance that is maintained under Section 5.4, shall be paid to the City or the Corporation to be applied as set forth in Section 6.2. The Net Proceeds of any policy of insurance that is maintained under Section 5.5 shall be paid to the City to be applied as set forth in Section 5.5.

Section 6.2 Application of Net Proceeds. If the Leased Property is taken in eminent domain proceedings at any time during the Term of this Lease, or if the Leased Property is damaged because of an insured casualty which is covered by a policy of insurance or a program of self-insurance that is maintained under Section 5.4, the City shall as soon as practicable after such event, with the prior written consent of the Bank, apply the Net Proceeds resulting therefrom to one of the following:

(a) repair the Leased Property to full use;

(b) replace the Leased Property, at the City’s sole cost and expense, with property of equal or greater value to the Leased Property immediately prior to the time of such destruction or damage, such replacement Leased Property to be subject to the Bank’s reasonable approval, whereupon such replacement shall be substituted in this Lease by appropriate endorsement;

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(c) substitute additional property as provided in Section 4.7; or

(d) prepay the Lease Payments in accordance with Section 9.3.

The City will notify the Corporation and the Bank of which course of action it has elected to take within a reasonable time not to exceed 60 days after the occurrence of such eminent domain proceedings or such destruction or damage. Such repair, replacement, substitution or prepayment shall commence not later than 60 days after the occurrence of such taking, destruction or damage and be pursued diligently to completion. The Corporation may (but is not required to) in its own name or in the City’s name execute and deliver proofs of claim, receive all such moneys, endorse checks and other instruments which represent payment of such moneys, and adjust, litigate, compromise or release any claim against the issuer of any such policy, and the City hereby grants to the Corporation a power of attorney coupled with an interest to accomplish all or any of the foregoing.

Section 6.3 Abatement Due to Damage or Destruction. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction (other than by eminent domain, which is provided for in Section 6.5) of, the Leased Property, or any defect in title to the Leased Property, there is substantial interference with the City’s right to use and occupy any portion of the Leased Property, Lease Payments shall be abated proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate this Lease by virtue of any such interference, and this Lease shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Corporation; provided that the Lease Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Leased Property that is available for use and occupancy by the City during such Rental Period. The City and the Corporation shall calculate such abatement and shall provide the Bank with a certificate which sets forth such calculation and the basis therefor. Such abatement shall continue for the period which commences with the date of interference resulting from such damage, destruction or title defect and, with respect to damage to or destruction of the Leased Property, ending with the substantial completion of the work of repair or replacement of the Leased Property, or the portion thereof so damaged or destroyed; and the term of this Lease shall be extended as provided in Section 4.3, except that the term shall in no event be extended beyond the Maximum Lease Term.

Notwithstanding the foregoing, to the extent that moneys are available for the payment of Lease Payments in any of the funds and accounts that are established hereunder or from Net Proceeds, Lease Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds and accounts or Net Proceeds.

Section 6.4 Substitution of Property under Certain Circumstances. In the event of damage to or destruction of all or a portion of the Leased Property due to uninsured casualty for which the proceeds of rental interruption insurance are not available, promptly after the occurrence of such event, to the extent that such action will not cause this Lease to be invalid, the City Manager of the City may bring forward a recommendation for City Council consideration to substitute and add as additional Leased Property hereunder other real or personal property of the City that is unimpaired and unencumbered, the fair rental value of which shall be at least equal to the Lease Payments that are due during each Fiscal Year for the remainder of the Term, provided that any such addition and substitution shall be subject to the approval of the City Council.

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Section 6.5 Termination or Abatement Due to Eminent Domain. If the Leased Property is taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the Term of this Lease will cease with respect thereto as of the day possession is so taken. If less than all of the Leased Property is taken permanently, or if the Leased Property is taken temporarily, under the power of eminent domain: (a) this Lease will continue in full force and effect with respect thereto and will not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary; and (b) there will be a partial abatement of Lease Payments in an amount to be determined by the City such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portions of the affected Leased Property. The abatement period shall end upon the earlier of restoration of beneficial use and enjoyment to the City of the Leased Property, replacement or substitution thereof or prepayment of Lease Payments as provided herein. The City shall apply Net Proceeds in accordance with Sections 6.2 and 6.3.

ARTICLE VII

OTHER COVENANTS OF THE CITY

Section 7.1 Disclaimer of Warranties. THE CORPORATION MAKES NO AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE THAT IS CONTEMPLATED BY THE CITY OF THE LEASED PROPERTY OR ANY PORTION THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED PROPERTY OR ANY PORTION THEREOF. THE CITY ACKNOWLEDGES THAT THE CORPORATION IS NOT A MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR A DEALER THEREIN AND THAT THE CITY LEASES THE LEASED PROPERTY AS-IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event will the Corporation be liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Lease for the existence, furnishing, functioning or use of the Leased Property by the City.

Section 7.2 Access to the Leased Property. The City agrees that the Corporation, and the Corporation’s successors or assigns, have the right at all reasonable times, following at least 48 hours written notice provided to the City, to enter upon and to examine and inspect the Leased Property or any part thereof. The City further agrees that the Corporation, and the Corporation’s successors or assigns, shall have such rights of access to the Leased Property or any component thereof, following at least 48 hours written notice provided to the City, as may be reasonably necessary to cause the proper maintenance of the Leased Property if the City fails to perform its obligations hereunder. Neither the City nor any of its assigns has any obligation to cause such proper maintenance.

Section 7.3 Release and Indemnification Covenants. The City hereby agrees, to the extent not prohibited by applicable law, to indemnify and defend the Corporation and its directors, officers, employees, agents, successors and assigns from and against all claims, losses and damages, including legal fees and expenses, arising out of: (a) the use, maintenance, condition or management of, or from any work or thing done on the Leased Property by the City; (b) any breach or default on the part of the City in the performance of any of its obligations under this Lease; (c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees

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with respect to the Leased Property; (d) any intentional misconduct or negligence of any sublessee of the City with respect to the Leased Property; (e) the acquisition, construction, improvement and equipping of the Leased Property; (f) the generation, use, presence, storage, disposal, abatement, management or clean-up of, or exposure to, any Hazardous Materials or toxic wastes at, on, in or from the Leased Property; or (g) any loss of the federal income tax exemption of the interest component of the Lease Payments, in any case, due to the City’s or the Corporation’s action or failure to take any action or the making by the City or the Corporation of any misrepresentation herein or in any certificate that is required to be given in connection with the execution and delivery of this Lease and any interest, fines, penalties and additions to tax (including all federal, state and local taxes that are imposed on the interest component of all Lease Payments due through the date of such event) by the Internal Revenue Service on the Bank in connection therewith.

Section 7.4 Assignment by the Corporation. (a) The Corporation has assigned and transferred the Assigned Rights to the Bank pursuant to the Assignment Agreement. The City hereby consents to such assignment and transfer. The Corporation hereby directs the City, and the City hereby agrees, to pay to the Bank all payments payable by the City under Section 4.4 and all amounts payable by the City under Article IX. Whenever in this Lease any reference is made to the Corporation and such reference concerns any Assigned Rights, such reference shall be deemed to refer to the Bank.

(b) The beneficial interest in the Assigned Rights, and all proceeds therefrom, may be further participated, assigned and reassigned in whole but not in part, without the necessity of obtaining the consent of the City; provided that any assignee or sub-assignee of the Assigned Rights (or any interest therein) is (i) an affiliate of the Bank or (ii) banks, insurance companies, or other financial institutions or their affiliates, and provided that the Bank may only assign its beneficial interest in the Assigned Rights, and all proceeds therefrom, so long as the assignee or sub-assignee has delivered a Lender Letter (in the form attached as Appendix E hereto) to the Corporation, the City, and Bond Counsel. The Corporation (including the Bank) and the City hereby acknowledge and agree that the restrictions and limitations on assignment of the Assigned Rights (or any interest therein) in this Section 7.4 shall apply to the first and all subsequent assignees and sub-assignees of the Assigned Rights (or any interest therein).

(c) No assignment, participation, transfer or conveyance permitted by this Section 7.4 shall be effective until the City shall have received a written notice of assignment that discloses the name, payment instructions and address of the assignee. During the Term of this Lease, the City shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Tax Code. The City shall not have the right to, and shall not, assert against the Bank or any successor thereto any claim, counterclaim or other right that the City may have against the Corporation.

Section 7.5 Assignment and Subleasing by the City. This Lease may not be assigned by the City. With the prior written consent of the Bank, the City may sublease the Leased Property, or any portion thereof, subject to all of the following conditions:

(a) This Lease and the obligation of the City to make Lease Payments hereunder shall remain obligations of the City.

(b) The City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Corporation and the Bank a true and complete copy of such sublease.

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(c) Any sublease shall be expressly subject and subordinate to this Lease.

(d) No such sublease by the City may cause the Leased Property to be used for a purpose other than as may be authorized under the provisions of the laws of the State of California.

(e) The City shall furnish the Corporation and the Bank with a written opinion of Bond Counsel stating that such sublease does not cause the interest component of the Lease Payments to become includable in gross income for purposes of federal income taxation or to become subject to personal income taxation by the State of California.

Section 7.6 Amendments.

(a) This Lease Agreement and the Site Lease may be amended and the rights and obligations of the Corporation and the City hereunder and thereunder may be amended at any time by an amendment hereto or thereto which shall become binding upon execution and delivery by the Corporation and the City. Except for amendments described in 7.6(b), amendments to this Lease Agreement and the Site Lease shall require the prior written consent of the Bank.

(b) This Lease Agreement and the Site Lease and the rights and obligations of the Corporation and the City hereunder and thereunder may also be amended at any time by an amendment hereto or thereto which shall become binding upon execution by the Corporation and the City, without the written consent of the Bank, but only to the extent permitted by law and only for any one or more of the following purposes:

(i) to add to the agreements, conditions, covenants and terms required by the Corporation or the City to be observed or performed herein or therein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the City, or to surrender any right or power reserved herein or therein to or conferred herein or therein on the Corporation or the City, and which in either case shall not materially adversely affect the interests of the Bank, as evidenced by an Opinion of Bond Counsel;

(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or therein or in regard to questions arising hereunder or thereunder which the Corporation or the City may deem desirable or necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect the interests of the Bank, as evidenced by an Opinion of Bond Counsel;

(iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of the interest component of the Lease Payments;

(iv) to provide for the substitution or release of all or a portion of the Leased Property in accordance with the provisions of Section 6.4 hereof; or

(v) to make such other changes herein or therein or modifications hereto or thereto as the Corporation or the City may deem desirable or necessary, and which shall not materially adversely affect the interests of the Bank, as evidenced by an Opinion of Bond Counsel.

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Section 7.7 Environmental Covenants.

(a) The City will not use or permit the Leased Property or any part thereof to be used to generate, manufacture, refine, treat, store, handle, transport or dispose of, transfer, produce or process Hazardous Materials, except, and only to the extent, if necessary to maintain the improvements on the Leased Property or conduct lawful activities of the City on the Leased Property and then, only in compliance with all federal, state and local laws and regulations, now or later in effect, with respect to Hazardous Materials, nor will it permit, as a result of any intentional or unintentional act or omission on its part or by any tenant, subtenant, licensee, guest, invitee, contractor, employee and agent, the storage, transportation, disposal or use of Hazardous Materials or the release or threat of release of Hazardous Materials on, from or beneath the Leased Property or onto any other property excluding, however, those Hazardous Materials in those amounts ordinarily found in the inventory of a municipal government, the use, storage, treatment, transportation and disposal of which is in compliance with all environmental regulations.

(b) City will comply with, and will cause all tenants, subtenants, licensees, guests, invitees, contractors, employees and agents on the Leased Property to comply with, all environmental regulations, and will keep the Leased Property free and clear of any liens imposed pursuant thereto; provided, however, that notwithstanding that a portion of the foregoing covenant is limited to the City’s use of its best efforts, the City will remain solely responsible for ensuring such compliance and such limitation will not diminish or affect in any way the City’s environmental compliance obligations as provided in the Lease Agreement.

(c) The City will, to the extent permitted by law, defend, indemnify and hold harmless the Bank, their partners, depositors and each of their respective employees, agents, officers, directors, trustees, successors and assigns, from and against any claims, demands, penalties, fines, attorneys’ fees (including, without limitation, attorneys’ fees and expenses incurred to enforce the indemnification contained in this Section 7.7), consultants’ fees, investigation and laboratory fees, liabilities, settlements, court costs, damages, losses, costs or expenses of whatever kind or nature, known or unknown, contingent or otherwise, occurring in whole or in part, arising out of, or in any way related to: (i) the disposal, release, threat of release, discharge, storage or transportation of any Hazardous Materials on, from or beneath the Leased Property; (ii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (iii) any lawsuit brought or threatened, settlement reached or governmental order relating to Hazardous Materials on, from or beneath the Leased Property; (iv) any violation of environmental regulations or Sections 7.7(a) or (b) by the City or any of its agents, tenants, employees, contractors, licensees, guests, subtenants or invitees; and (v) the imposition of any governmental lien for the recovery of environmental cleanup or removal costs. To the extent that the City is strictly liable under any environmental regulation, its obligation to the Bank and the other indemnitees under the foregoing indemnification will likewise be without regard to fault on its part with respect to the violation of any environmental regulation which results in liability to any indemnitee. The foregoing obligations and liabilities under will survive the payment and satisfaction of the Lease Payments.

Section 7.8 Tax Covenants. Notwithstanding any other provision of this Lease, absent an opinion of Bond Counsel that the exclusion from gross income of the interest with respect to the Lease Payments will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Tax Code necessary to preserve such exclusion from gross income with respect to interest with respect to the Lease Payments and specifically covenants, without limiting the generality of the foregoing, as follows:

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(a) Private Activity. The City will not take any action or refrain from taking any action or make any use of the proceeds of the Lease Payments or of any other moneys or property which would cause the Lease Payments to be “private activity bonds” within the meaning of Section 141 of the Tax Code;

(b) Arbitrage. The City will make no use of the proceeds of the Lease Payments or of any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action which would cause the Lease Payments to be “arbitrage bonds” within the meaning of Section 148 of the Tax Code;

(c) Federal Guarantee. The City will make no use of the proceeds of the Lease Payments and will not take or omit to take any action that would cause the Lease Payments to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code;

(d) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Tax Code necessary to preserve the exclusion of interest with respect to the Lease Payments pursuant to Section 103(a) of the Tax Code;

(e) Hedge Bonds. The City will make no use of the proceeds of the Lease Payments or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the Lease Payments to be considered “hedge bonds” within the meaning of Section 149(g) of the Tax Code unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the Tax Code to maintain the exclusion from gross income of interest with respect to the Lease Payments for federal income tax purposes; and

(f) Miscellaneous. The City will not take any action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate and will comply with the covenants and requirements stated therein and incorporated by reference herein.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

Section 8.1 Events of Default Defined. Any one or more of the following events constitutes an Event of Default hereunder:

(a) Failure by the City to pay any Lease Payment or other payment that is required to be paid hereunder when specified herein or to maintain insurance as specified in Article V.

(b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, other than as referred to in the preceding clause (a) of this Section, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Corporation or the Bank. However, if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30 day period, the Corporation and the Bank shall not unreasonably withhold their

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consent to an extension of such time (for a period not to exceed 60 days) if corrective action is instituted by the City within such 30 day period and diligently pursued until the default is corrected.

(c) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted.

(d) Any representation, warranty or certification made by the City hereunder or in connection herewith shall have been incorrect or misleading in a material respect when made.

Section 8.2 Remedies on Default. Whenever any Event of Default has happened and is continuing, the Corporation may exercise any and all remedies that are available under law or granted under this Lease; provided, however, that notwithstanding anything herein to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise to declare any Lease Payments which are not then in default to be immediately due and payable. Each and every covenant hereof to be kept and performed by the City is expressly made a condition and upon the breach thereof the Corporation may exercise any and all rights granted hereunder; provided that no termination of this Lease shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly provided. Upon the occurrence and during the continuance of any Event of Default, the Corporation may exercise any one or more of the following remedies:

(a) Enforcement of Payments Without Termination. If the Corporation does not elect to terminate this Lease in the manner hereinafter provided for in subparagraph (b), the City agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein, and the Corporation may take whatever action at law or in equity that may appear necessary or desirable to collect each Lease Payment as it becomes due hereunder. The City shall reimburse the Corporation for any deficiency arising out of the re-leasing of the Leased Property, or, if the Corporation is unable to re-lease the Leased Property, then for the full amount of all Lease Payments to the end of the Term of this Lease, but said Lease Payments and/or deficiency shall be payable only at the same time and in the same manner as hereinabove provided for the payment of Lease Payments hereunder, notwithstanding such entry or re-entry by the Corporation or any suit in unlawful detainer, or otherwise, brought by the Corporation for the purpose of effecting such re-entry or obtaining possession of the Leased Property or the exercise of any other remedy by the Corporation. The City hereby irrevocably appoints the Corporation as the agent and attorney-in-fact of the City to enter upon and re-lease the Leased Property upon the occurrence and continuation of an Event of Default, to remove all personal property whatsoever situated upon the Leased Property and to place such property in storage or other suitable place located in the City of Claremont for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Corporation from any costs, loss or damage whatsoever arising or occasioned by any such entry upon and re-leasing of the Leased Property and the removal and storage of such property by the Corporation or its duly authorized agents in accordance with the provisions herein. The City agrees that the terms of this Lease constitute full and sufficient notice of the right of the Corporation to re-lease the Leased Property in the event of such re-entry without effecting a surrender of this Lease, and further agrees that no acts of the Corporation in effecting such re-leasing shall constitute a surrender or termination of this Lease irrespective of the term for which such re-leasing is made or

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the terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of such default by the City, the right to terminate this Lease shall vest in the Corporation to be effected in the sole and exclusive manner hereinafter provided for in subparagraph (b). The City agrees to surrender and quit possession of the Leased Property upon demand of the Corporation for the purpose of enabling the Leased Property to be re-let under this paragraph. Any rental obtained by the Corporation in excess of all Lease Payments and Additional Payments due hereunder shall be paid to the City.

(b) Termination of Lease. If an Event of Default occurs and is continuing hereunder, the Corporation at its option may terminate this Lease and re-lease all or any portion of the Leased Property. If the Corporation terminates this Lease at its option and in the manner that is provided herein because of a default by the City (and notwithstanding any re-entry upon the Leased Property by the Corporation in any manner whatsoever or the re-leasing of the Leased Property), the City nevertheless agrees to pay to the Corporation all costs, loss or damages howsoever arising or occurring that are payable at the same time and in the same manner as is provided herein in the case of payment of Lease Payments and Additional Payments. Any surplus received by the Corporation from such re-leasing shall be applied by the Corporation to Lease Payments due under this Lease and, upon full payment of all Lease Payments and Additional Payments due hereunder, any such surplus shall be paid to the City as stated in paragraph (a) hereof. Neither notice to pay rent or to deliver up possession of the premises given under law nor any proceeding in unlawful detainer taken by the Corporation shall of itself operate to terminate this Lease, and no termination of this Lease on account of default by the City shall be or become effective by operation of law, or otherwise, unless and until the Corporation shall have given written notice to the City of the election on the part of the Corporation to terminate this Lease. The City covenants and agrees that no surrender of the Leased Property, or of the remainder of the Term hereof or any termination of this Lease shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Corporation by such written notice.

(c) Proceedings at Law or In Equity. If an Event of Default occurs and continues hereunder, the Corporation may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder.

(d) Remedies under the Site Lease. If an Event of Default occurs and continues hereunder, the Corporation may exercise its rights under the Site Lease.

(e) Ingress and Egress. Notwithstanding anything to the contrary in this Article VIII, the City shall retain for itself and its officers, employees, agents, representatives, contractors, sublessees, and assignees the right of ingress and egress over and across the Leased Property for the purpose of providing access to (i) the Excluded City Facilities, and (ii) the City-owned property located in San Bernardino County described in Appendix B, by the City, its officers, employees, agents, representatives, contractors, sublessees, and assignees as reserved by the City in Section 1 of the Site Lease.

Section 8.3 No Remedy Exclusive. No remedy conferred upon or reserved to the Corporation herein is intended to be exclusive, and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power that accrues upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof,

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but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Corporation to exercise any remedy that is reserved to it in this Article VIII, it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law.

Section 8.4 Agreement to Pay Attorneys’ Fees and Expenses. If either party to this Lease defaults under any of the provisions hereof and the nondefaulting party or the Bank, as applicable, should employ attorneys (including in-house legal counsel) or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party or the Bank, as applicable, the reasonable fees of such attorneys (including allocable costs and expenses of in-house legal counsel, if any) and such other expenses so incurred by the nondefaulting party or the Bank, as applicable.

Section 8.5 No Additional Waiver Implied by One Waiver. If any agreement in this Lease is breached by either party and thereafter waived by the other party, such waiver is limited to the particular breach so waived and will not be deemed to waive any other breach hereunder.

ARTICLE IX

PREPAYMENT OF LEASE PAYMENTS

Section 9.1 Security Deposit. Notwithstanding any other provision of this Lease, the City may on any date secure the payment of the Lease Payments in whole or in part by depositing with a trustee, escrow agent or other fiduciary selected by the City and acceptable to the Bank an amount of cash, which shall be held in a segregated trust or escrow fund under a trust or escrow agreement that is in form and content acceptable to the Bank, which cash so held is either: (a) sufficient to pay such Lease Payments without reinvestment, including the principal and interest components thereof, in accordance with the Schedule of Lease Payments in Appendix C; or (b) invested in whole or in part in non-callable Federal Securities in such amount as will, in the opinion of an independent certified public accountant, together with interest to accrue thereon and any cash which is so deposited, be fully sufficient, without reinvestment of any earning or income on such amounts, to pay such Lease Payments, when due under Section 4.4 or when due on any optional prepayment date under Section 9.2 as the City instructs at the time of said deposit; provided, however, that at or prior to the date on which any such security deposit is established, the City shall deliver to the Bank a written opinion of Bond Counsel (in form and substance acceptable to the Bank) to the effect that any such security deposit will not adversely affect the excludability of the interest component of Lease Payments from gross income of the owners thereof for federal income tax purposes. If the City posts a security deposit under this Section with respect to all unpaid Lease Payments, and notwithstanding the provisions of Section 4.3: (i) the Term of this Lease shall terminate; (ii) all obligations of the City under this Lease, and all security provided by this Lease for said obligations, will thereupon cease and terminate, excepting only the obligation of the City to make, or cause to be made, all of the Lease Payments from such security deposit; and (iii) the Corporation’s leasehold interest in the Leased Property will terminate on the date of said deposit automatically and without further action by the City or the Corporation. The City hereby grants a first priority security interest in and the lien on said security deposit and all proceeds thereof in favor of the Bank. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in accordance with the provisions of this Lease.

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Section 9.2 Optional Prepayment.

(a) The Lease Payments are subject to optional prepayment prior to maturity on any date, in whole or in part (subject to Section 9.2(b)), in a manner determined by the City and specified to the Corporation in writing by the City, at a prepayment price equal to the following prepayment prices stated as a percentage of the principal component of the Lease Payments being prepaid, plus accrued interest to the date fixed for redemption:

Prepayment Period (Both Dates Inclusive) Redemption Price

Any date through September 30, 2026 102% October 1, 2026 through September 30, 2031 101% October 1, 2031 and thereafter 100%

(b) Notwithstanding (a) above, any prepayment in part of the Lease Payments (i)

shall be in an amount of not less than $250,000 and not more than $1,000,000, (ii) may occur not more than once per calendar year, and (iii) shall be applied in inverse order of Lease Payments due. After any partial prepayment, the Bank will prepare and deliver to the City a revised Lease Payment schedule substantially in the form of Appendix C hereto.

(c) In order to optionally prepay the Lease Payments in accordance with section (a) above, the City shall, at least thirty (30) days prior to the date for prepayment, notify the Bank in writing of its intention to so prepay the Lease Payments.

Section 9.3 Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain. The City may prepay the unpaid principal components of the Lease Payments in whole or in part on any date, from and to the extent of any Net Proceeds to be used for such purpose under Sections 5.4 and 6.2, and shall so prepay to the extent the City does not elect to act under Section 6.2(a), (b) or (c) above, by paying a prepayment price equal to the principal components of the Lease Payments to be prepaid, together with the interest accrued to such prepayment date, without premium. The City shall give the Corporation notice of its intention to exercise its option to prepay the Lease Payments under this Section not less than 30 days in advance of the date of exercise, or such shorter period of time as is acceptable to the Corporation and the Bank.

ARTICLE X

MISCELLANEOUS

Section 10.1 Notices. Any notice, request, complaint, demand or other communication under this Lease shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by facsimile transmission or other form of telecommunication, at its number set forth below. Notice shall be effective either: (a) upon transmission by facsimile transmission or other form of telecommunication; (b) 48 hours after deposit in the United States of America first class mail, postage prepaid; or (c) in the case of personal delivery to any person, upon actual receipt. The City, the Corporation and the Bank may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

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If to the City: City of Claremont 207 Harvard Avenue Claremont, California 91711 Attn: City Manager

If to the Corporation: Public Property Financing Corporation of California 2945 Townsgate Road, Suite 200 Westlake Village, California 91361 Attn: Treasurer

If to the Bank: Sterling National Bank 500 Seventh Avenue, 3rd Floor New York, New York 10018 Attn: Public Sector Finance

Section 10.2 Binding Effect. This Lease inures to the benefit of and is binding upon the Corporation, the City and their respective successors and assigns.

Section 10.3 Severability. If any provision of this Lease is held to be invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision hereof.

Section 10.4 Net-net-net Lease. This Lease is a “net-net-net lease” and the City hereby agrees that the Lease Payments are an absolute net return to the Corporation, free and clear of any expenses, charges or set-offs whatsoever.

Section 10.5 Further Assurances and Corrective Instruments. The Corporation and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Leased Property that is leased hereby or intended so to be or for carrying out the expressed intention of this Lease.

Section 10.6 Execution in Counterparts. This Lease may be executed in several counterparts, each of which is an original and all of which constitutes one and the same instrument.

Section 10.7 Applicable Law. This Lease is governed by and construed in accordance with the laws of the State of California.

Section 10.8 Captions. The captions or headings in this Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Lease.

Section 10.9 No Merger. It is the express intention of the Corporation and the City that this Lease and the obligations of the parties hereunder are separate and distinct from the Site Lease and the obligations of the parties thereunder, and that during the term of the Site Lease and this Lease no merger of title or interest may occur or be deemed to occur as a result of the respective positions of the Corporation and the City thereunder and hereunder.

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Section 10.10 Additional Provisions and Rights of the Bank.

(a) The Bank is hereby expressly made a third party beneficiary of this Lease Agreement.

(b) The City shall provide the following ongoing information to the Bank:

(i) The City shall file with the Bank the City’s audited financial statements for each Fiscal Year, by no later than the following June 30. Posting such information to the City’s website shall satisfy this requirement.

(ii) The City shall file with the Bank the resolution of the City Council approving the final budget within 30 days of its adoption. Posting such information to the City’s website shall satisfy this requirement.

(iii) The City shall immediately notify the Bank by email, promptly confirmed in writing, of any event, action or failure to take any action which constitutes an Event of Default under the Lease, together with a detailed statement by an Authorized City Representative of the steps being taken by the City to cure such Event of Default.

(iv) The City shall promptly notify the Bank in writing in the event of any termination or cancellation of any insurance policy which the City is required to maintain under the Lease (unless such insurance policy is promptly replaced by another policy that complies with the applicable requirements of the Lease), or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any other cause (if the uninsured loss is in excess of an aggregate of $1,000,000).

(v) The City shall file with the Bank such additional documentation as the Bank may reasonably request in writing, within a reasonable period of time after the City’s receipt of such written request.

(c) The provisions of this Section 10.10 constitute a material inducement to the Bank to provide the funds that are necessary to finance the Projects, without which the Bank would be unwilling to provide such funds.

(d) In connection with the City’s compliance with any continuing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by the City on and after February 27, 2019, pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), the Bank acknowledges that the City may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its successor (“EMMA”), notice that the City has incurred obligations hereunder and notice of certain subsequent events reflecting financial difficulties in connection with this Lease Agreement. The City agrees that it shall not file or submit, or permit to be filed or submitted, with EMMA any documentation that includes the following unredacted sensitive or confidential information about the Bank or its affiliates: address and account information of the Bank or its affiliate, e-mail addresses, telephone numbers, fax numbers, names and signatures of officers, employees and signatories of the Bank or its affiliates, unless otherwise required for compliance with the Rule or otherwise required by law. The City acknowledges that the Bank is not responsible for the City’s compliance or noncompliance with the Rule or any Continuing Disclosure Agreement.

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IN WITNESS WHEREOF, the Corporation and the City have caused this Lease to be executed in their respective names by their duly authorized officers, all as of the date first above written.

PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, as Lessor

By: Treasurer

CITY OF CLAREMONT, as Lessee

By: City Manager, City of Claremont

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CERTIFICATE OF ACCEPTANCE OF LEASE AGREEMENT

This is to certify that the interest in real property that has been conveyed by the Lease Agreement, dated as of September 1, 2021 by and between the Public Property Financing Corporation of California, as lessor, and the City of Claremont, as lessee (the “City”), is hereby accepted by the undersigned officer on behalf of the City pursuant to the authority conferred by a resolution of the City Council of the City adopted on September 28, 2021, and the City consents to recordation thereof by its duly authorized officer.

Dated: September 28, 2021 CITY OF CLAREMONT, as Lessee

By: City Manager/Director of Finance, City of Claremont

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APPENDIX A

DESCRIPTION OF THE LEASED PROPERTY

The Leased Property consists of the following real property, together with all buildings, facilities and other improvements now or hereafter located on such real property (excluding the Excluded City Facilities Site described below):

DIVISION I


PARCEL 1:







EXCEPTING THEREFROM ANY PORTION LYING WITHOUT SAID COUNTY OF LOS ANGELES.

APN: 8307-002-903

PARCEL 2:


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APN: 8307-002-904

PARCEL 3:


APN: 8307-002-901

PARCEL 4:


APN: 8307-002-906

THE DESCRIPTION OF PARCEL 4 IS PROVIDED ONLY AS AN ACCOMMODATION FOR THIS REPORT. NO FURTHER USE OF THE DESCRIPTION IS AUTHORIZED WITHOUT FURTHER APPROVAL.

PARCEL 5:

THE SOUTHERLY 20 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER, SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, OF THE SAN BERNARDINO MERIDIAN, IN THE CITY OF CLAREMONT, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA.


APN: 8307-002-905

PARCEL 6:



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EXCEPT THE WEST 30 FEET OF SAID LAND CONVEYED TO THE COUNTY OF LOS ANGELES, BY DEED RECORDED ON DECEMBER 15, 1924, AS DOCUMENT NO. 966, IN BOOK 4246, PAGE 189, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 8307-002-902

The Leased Property excludes that certain real property on which the Excluded City Facilities Site is located, as follows:

(i) the site of the proposed future Waste to Hydrogen Pilot Program; and (ii) the telecommunications tower, as shown on the depiction of the Leased Property attached hereto as Appendix A-1.

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APPENDIX A-1

DEPICTION OF LEASED PROPERTY AND EXCLUDED CITY FACILITIES SITE

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APPENDIX B

DESCRIPTION OF SAN BERNARDINO COUNTY PROPERTY


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APPENDIX C

SCHEDULE OF LEASE PAYMENTS

Interest Rate: 2.07%

Lease Payment Date

Principal Component

Interest Component

Total Lease Payment

4/1/2022 $ 67,596.71 10/1/2022 67,223.25 $ 134,819.96 4/1/2023 67,223.25

10/1/2023 $ 265,000 67,223.25 399,446.50 4/1/2024 64,480.50

10/1/2024 220,000 64,480.50 348,961.00 4/1/2025 62,203.50

10/1/2025 230,000 62,203.50 354,407.00 4/1/2026 59,823.00

10/1/2026 240,000 59,823.00 359,646.00 4/1/2027 57,339.00

10/1/2027 250,000 57,339.00 364,678.00 4/1/2028 54,751.50

10/1/2028 255,000 54,751.50 364,503.00 4/1/2029 52,112.25

10/1/2029 270,000 52,112.25 374,224.50 4/1/2030 49,317.75

10/1/2030 290,000 49,317.75 388,635.50 4/1/2031 46,316.25

10/1/2031 305,000 46,316.25 397,632.50 4/1/2032 43,159.50

10/1/2032 325,000 43,159.50 411,319.00 4/1/2033 39,795.75

10/1/2033 340,000 39,795.75 419,591.50 4/1/2034 36,276.75

10/1/2034 360,000 36,276.75 432,553.50 4/1/2035 32,550.75

10/1/2035 380,000 32,550.75 445,101.50 4/1/2036 28,617.75

10/1/2036 405,000 28,617.75 462,235.50 4/1/2037 24,426.00

10/1/2037 425,000 24,426.00 473,852.00 4/1/2038 20,027.25

10/1/2038 450,000 20,027.25 490,054.50 4/1/2039 15,369.75

10/1/2039 470,000 15,369.75 500,739.50 4/1/2040 10,505.25

10/1/2040 495,000 10,505.25 516,010.50 4/1/2041 5,382.00

10/1/2041 520,000 5,382.00 530,764.00 Total $ 6,495,000 $ 1,674,175.46 $ 8,169,175.46

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APPENDIX D

DESCRIPTION OF PROJECTS

The Projects consist of the following improvements:

Comprehensive HVAC improvements and HVAC controls to the Alexander Hughes Community Center, City Hall, City Yard, Joslyn Senior Center, Police Department and the Youth Adult Center

New lighting at Alexander Hughes Community Center, City Hall, City Yard, Joslyn Senior Center, Parking Garage, Police Department, Wheeler Park and the Youth Adult Center

Transformers at the Alexander Hughes Community Center, City Yard, Parking Garage, Police Department, Wheeler Park and the Youth Adult Center

Solar improvements and battery improvements at the Alexander Hughes Community Center, City Yard, Police Department and Youth Adult Center

Improved roofing at the Alexander Hughes Community Center and Joslyn Senior Center

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APPENDIX E

FORM OF LENDER LETTER

___________, 20___

City of Claremont Claremont, California

Public Property Financing Corporation of California Westlake Village, California

Stradling Yocca Carlson & Rauth, a Professional Corporation Newport Beach, California

Re: $6,495,000 2021 Lease Agreement (Energy Conservation Improvements)

Ladies and Gentlemen:

The undersigned (the “Lender”) hereby acknowledges that (i) the City of Claremont (the “City”) and the Public Property Financing Corporation of California (the “Corporation”) have entered into a Site Lease dated as of September 1, 2021 (the “Site Lease”), pursuant to which the City has agreed to lease certain property more fully described therein (the “Leased Property”) to the Corporation; (ii) the City and the Corporation have entered into a Lease Agreement dated as of September 1, 2021, in the aggregate principal amount of $6,495,000 (the “Lease”), pursuant to which the Corporation has agreed to sublease the Leased Property to the City and the City is obligated to make payments (the “Lease Payments”) to the Corporation; and (iii) the Corporation has assigned its rights in the Site Lease and the Lease, including the right to receive the Lease Payments, to the Lender pursuant to the Assignment Agreement dated as of September 1, 2021 (the “Assignment Agreement”) in consideration for the Lender’s delivery of funds (the “Loan”) to finance the Projects (defined below). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Lease.

This letter is being provided pursuant to the Lease:

The Lender acknowledges that the proceeds of the Loan will be used to finance a portion of the costs of the acquisition, construction and installation of energy conservation improvements on certain City-owned property, as defined in the Lease (collectively, the “Projects”).

The Loan, together with interest thereon, shall be payable from the Lease Payments made by the City for use and occupancy of the Leased Property from general fund appropriations or other legally available funds.

In connection with making the Loan, the Lender hereby makes the following representations upon which you may rely:

1. The Lender has the authority and is duly authorized to extend credit by making the Loan to the City and to execute this letter and any other instruments and documents required to be executed by the Lender in connection therewith.

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2. The Lender is (a) a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or (b) an “accredited investor” as that term is defined in Regulation D under the Securities Act.

3. The Lender (a) is a bank, any entity directly or indirectly controlled by the bank or under common control with the bank, other than a broker, dealer or municipal securities dealer registered under the Securities Exchange Act of 1934, or a consortium of such entities; and (b) has the present intent to hold the right to receive Lease Payments through the termination of the Lease or earlier prepayment of the Lease, except that the Lender intends to sell a 100% participation interest in the Loan to Sterling National Funding Corp., a New York corporation and wholly-owned subsidiary of the Lender (“SNFC”). The Lender will continue to receive the Lease Payments.

4. The Lender is not extending credit by making the Loan for more than one account or with a view to distributing the Lease Payments. The Lender is extending credit by making the Loan solely as a loan made in the usual course of its lending business and not with a view to, or for resale in connection with, any distribution of the Lease Payments, and the Lender intends to hold the Lease solely for its own loan account for an indefinite period of time, and does not intend to dispose of all or any part of the Assignment Agreement, other than to SNFC. However, the Lender may assign its interest in the Lease at any time the Lender deems appropriate, subject to the assignment restrictions set forth in the Lease. The Lender understands that it may need to bear the risks of this investment for an indefinite period of time, since an assignment of the Lease, or any portion thereof, prior to termination of the Lease may not be possible.

5. The Lender understands that the Lease is not, and is not intended to be, registered under the Securities Act and that such registration is not legally required as of the date hereof, and further understands that the Lease (a) is not being registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating agency, and (d) will be delivered in a form that may not be readily marketable.

6. The Lender acknowledges that it has either been supplied with or been given access to information, including the City’s audited financial statements for the past five fiscal years, prior approved budgets and the adopted budget for fiscal year 2021-22 and related materials presented to the City Council, certain actuarial reports prepared by CalPERS, and a description of the Leased Property and its insured value, which it has requested from the City and to which a reasonable investor would attach significance in making investment decisions, and the Lender has had the opportunity to ask questions and receive answers from knowledgeable individuals, including its own counsel, concerning the City, the Corporation and the Lease Payments and the security therefor so that, as a reasonable lender, the Lender has been able to make a decision to extend credit by making the Loan. The Lender has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its prospective investment in the Lease.

7. The Lender acknowledges that the obligations of the City under the Lease are limited to funds annually budgeted and appropriated for that purpose and are subject to abatement.

8. The Lender has made its own inquiry and analysis with respect to the Lease Payments and the security therefor, and other material factors affecting the security and payment of the Lease Payments. The Lender is aware that there are certain economic and regulatory variables and risks that could adversely affect the security for the Lease Payments. The Lender has reviewed

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the documents executed in conjunction with the execution of the Lease, or summaries thereof, including, without limitation, the Assignment Agreement and the Site Lease.

9. The Lender acknowledges and agrees that the City and the Corporation take no responsibility for, and make no representation to the Lender, or any subsequent lender, with regard to, a sale, transfer or other disposition of the Lease Payments in violation of the provisions of the Lease, or any securities law or income tax law consequences thereof. The Lender also acknowledges that, with respect to the City’s obligations and liabilities, the Lender is solely responsible for compliance with any assignment restrictions under the Lease in connection with any subsequent transfer of the Lease made by the Lender.

10. The Lender agrees that it is bound by and will abide by the provisions of the Lease relating to assignment, the restrictions noted therein, and in this Lender Letter, specifically that any assignee of the Lease may only transfer the right to receive Lease Payments to an assignee who has delivered a Lender Letter to the City, the Corporation, and Bond Counsel, in the form of this letter. The Lender also covenants to comply with all applicable federal and state securities laws, rules and regulations in connection with any transfer of the Lease Payments by the Lender.

11. The Lender acknowledges that the assignment of the Lease to the Lender is made in reliance upon the certifications, representations, and warranties herein made to the addressees hereto.

12. The interpretation of the provisions hereof shall be governed and construed in accordance with California law without regard to principles of conflicts of laws.

13. All representations of the Lender contained in this letter shall survive the execution and delivery of the Lease as representations of fact existing as of the date of execution and delivery of this Lender Letter.

[LENDER]

By:

Its:

Printed Name:

4841-7749-3235v2/022489-0011

RECORDING REQUESTED BY: City of Claremont, California

AND WHEN RECORDED MAIL TO: Stradling Yocca Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attn: Vanessa S. Legbandt, Esq.

[Space above for Recorder’s use.]

THIS DOCUMENT IS RECORDED FOR THE BENEFIT OF THE CITY OF CLAREMONT AND RECORDING IS FEE-EXEMPT UNDER § 27383 OF THE GOVERNMENT CODE.

TERMINATION AGREEMENT

by and between

CITY OF CLAREMONT

and

BBVA USA, formerly-known-as Compass Bank

Dated as of August 25, 2021

1 4841-7749-3235v2/022489-0011


THIS TERMINATION AGREEMENT (this “Agreement”) is dated as of August 25, 2021 and effective as of the date of recordation hereof, by and between the CITY OF CLAREMONT, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”), and BBVA USA, an Alabama banking corporation, formerly-known-as Compass Bank (the “Bank”).

RECITALS:

WHEREAS, the City, as lessor, and the Bank, as lessee, entered into that certain Site and Facility Lease, dated as of March 1, 2012 (the “2012 Site Lease”), which was recorded on March 30, 2012 as Instrument No. 20120484143 in the Official Records of the County of Los Angeles, State of California (the “Official Records”), pursuant to which the City leased certain property and facilities described therein (as described in Exhibits A and B hereto, respectively) (the “Property”) to the Bank; and

WHEREAS, the Bank, as lessor, and the City, as lessee, entered into that certain Lease Agreement, dated as of March 1, 2012 (the “2012 Lease Agreement”), as referenced in that certain Memorandum of Lease Agreement, dated as of March 1, 2012, by and between the City and the Bank, which was recorded on March 30, 2012 as Instrument No. 20120484144 in the Official Records, pursuant to which the Bank leased the Property back to the City and the City agreed to make Lease Payments (defined in the 2012 Lease Agreement) to the Bank through January 1, 2020; and

WHEREAS, on January 1, 2020, the City paid the final Lease Payment due under the 2012 Lease Agreement such that all Lease Payments have been paid in full and therefore, pursuant to the terms of the 2012 Lease Agreement and the 2012 Site Lease, the City and Bank desire to confirm that the 2012 Lease Agreement and 2012 Site Lease have terminated pursuant to their terms.

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Termination of 2012 Site Lease and 2012 Lease Agreement. Effective as of January 1, 2020, the Bank and the City hereby acknowledge and agree that the 2012 Site Lease and 2012 Lease Agreement are terminated and fully discharged, and are of no further force or effect.

2. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall constitute one agreement. The signature and acknowledgment pages from each counterpart may be removed and attached to a single document in order to create one original instrument.

3. Recording. This Agreement may be recorded in the Official Records.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

S-1 4841-7749-3235v2/022489-0011

IN WITNESS WHEREOF, this Agreement has been executed by each party’s respective duly authorized officers, as of the date first above written.

CITY OF CLAREMONT

By: Adam Pirrie, City Manager

ATTEST:

Shelley Desautels City Clerk

BBVA USA

By:

Name:

Title:


STATE OF CALIFORNIA ) ) ss.

COUNTY OF LOS ANGELES ) On ____________________ before me, ____________________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.





STATE OF _________ ) ) ss.

COUNTY OF _____________ ) On ____________________ before me, ____________________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.




A-1 4841-7749-3235v2/022489-0011

EXHIBIT A

DESCRIPTION OF THE PROPERTY


DIVISION I:

PARCEL 1:







EXCEPTING THEREFROM ANY PORTION LYING WITHOUT SAID COUNTY OF LOS ANGELES,

APN: 8307-002-903

PARCEL 2:



APN: 8307-002-904

A-2 4841-7749-3235v2/022489-0011

PARCEL 3:


APN: 8307-002-901

PARCEL 4:


APN: 8307-002-906

THE DESCRIPTION OF PARCEL 4 IS PROVIDED ONLY AS AN ACCOMMODATION FOR THIS REPORT, NO FURTHER USE OF THE DESCRIPTION IS AUTHORIZED WITHOUT FURTHER APPROVAL.

PARCEL 5:

THE SOUTHERLY 20 FEET OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER, SECTION 2, TOWNSHIP 1 SOUTH, RANGE 8 WEST, OF THE SAN BERNARDINO MERIDIAN, IN THE CITY OF CLAREMONT, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,


APN: 8307-002-905

PARCEL 6:




A-3 4841-7749-3235v2/022489-0011




EXCEPT THE WEST 30 FEET OF SAID LAND CONVEYED TO THE COUNTY OF LOS ANGELES, BY DEED RECORDED ON DECEMBER 15, 1924, AS DOCUMENT NO. 966, IN BOOK 4246, PAGE 189, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,

APN: 8307-002.902

B-1 4841-7749-3235v2/022489-0011

EXHIBIT B

DESCRIPTION OF THE FACILITY

The Facility consists of two buildings consisting of Building A (Administration) and Building B (Maintenance). Building A is 13,620 square feet and Building B is 28,770 square feet. Additionally, there is included a refuse transfer pit, and on-site employee parking.


4847-0762-0858v2/022489-0011

RECORDING REQUESTED BY: City of Claremont, California

AND WHEN RECORDED MAIL TO: Stradling Yocca Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attn: Vanessa S. Legbandt, Esq.

[Space above for Recorder’s use.]

THIS DOCUMENT IS RECORDED FOR THE BENEFIT OF THE CITY OF CLAREMONT AND RECORDING IS FEE-EXEMPT UNDER § 27383 OF THE GOVERNMENT CODE.


by and between

CITY OF CLAREMONT

and

BBVA USA, formerly-known-as Compass Bank

Dated as of September 1, 2021

1 4847-0762-0858v2/022489-0011


THIS TERMINATION AGREEMENT (this “Agreement”) is dated as of September 1, 2021 and effective as of the date of recordation hereof, by and between the CITY OF CLAREMONT, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”), and BBVA USA, an Alabama banking corporation, formerly-known-as Compass Bank (the “Bank”).

RECITALS:

WHEREAS, the City, as lessor, and the Bank, as lessee, entered into that certain Site and Facility Lease, dated as of March 1, 2012 (the “2012 Site Lease”), which was recorded on March 30, 2012 as Instrument No. 2012-0122761 in the Official Records of the County of San Bernardino, State of California (the “Official Records”), pursuant to which the City leased certain property and facilities described therein (as described in Exhibits A and B hereto, respectively) (the “Property”) to the Bank; and

WHEREAS, the Bank, as lessor, and the City, as lessee, entered into that certain Lease Agreement, dated as of March 1, 2012 (the “2012 Lease Agreement”), as referenced in that certain Memorandum of Lease Agreement, dated as of March 1, 2012, by and between the City and the Bank, which was recorded on March 30, 2012 as Instrument No. 2012-0122762 in the Official Records, pursuant to which the Bank leased the Property back to the City and the City agreed to make Lease Payments (defined in the 2012 Lease Agreement) to the Bank through January 1, 2020; and

WHEREAS, on January 1, 2020, the City paid the final Lease Payment due under the 2012 Lease Agreement such that all Lease Payments have been paid in full and therefore, pursuant to the terms of the 2012 Lease Agreement and the 2012 Site Lease, the City and Bank desire to confirm that the 2012 Lease Agreement and 2012 Site Lease have terminated pursuant to their terms.

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Termination of 2012 Site Lease and 2012 Lease Agreement. Effective as of January 1, 2020, the Bank and the City hereby acknowledge and agree that the 2012 Site Lease and 2012 Lease Agreement are terminated and fully discharged, and are of no further force or effect.

2. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall constitute one agreement. The signature and acknowledgment pages from each counterpart may be removed and attached to a single document in order to create one original instrument.

3. Recording. This Agreement may be recorded in the Official Records.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

S-1 4847-0762-0858v2/022489-0011

IN WITNESS WHEREOF, this Agreement has been executed by each party’s respective duly authorized officers, as of the date first above written.

CITY OF CLAREMONT

By: Adam Pirrie, City Manager

BBVA USA

By:

Name:

Title:

4847-0762-0858v2/022489-0011


STATE OF CALIFORNIA ) ) ss.

COUNTY OF LOS ANGELES ) On ____________________ before me, ____________________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.




4847-0762-0858v2/022489-0011


STATE OF _________ ) ) ss.

COUNTY OF _____________ ) On ____________________ before me, ____________________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.




A-1 4847-0762-0858v2/022489-0011

EXHIBIT A

DESCRIPTION OF THE PROPERTY


A-2 4847-0762-0858v2/022489-0011


B-1 4847-0762-0858v2/022489-0011

EXHIBIT B

DESCRIPTION OF THE FACILITY

The Facility consists of two buildings consisting of Building A (Administration) and Building B (Maintenance). Building A is 13,620 square feet and Building B is 28,770 square feet. Additionally, there is included a refuse transfer pit, and on-site employee parking.

GOOD FAITH ESTIMATES

The good faith estimates set forth herein are provided with respect to the Lease in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by Urban Futures, Inc. as municipal advisor to the City (the “Municipal Advisor”), each with respect to the Lease. The following estimates assume an aggregate principal component of the Lease Payments of $6,495,000 (the “Estimated Principal Amount”).

True Interest Cost of the Lease. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by Sterling National Bank (the “Bank”) in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Lease, which means the rate necessary to discount the amounts payable on the respective Lease Payment Dates to the Estimated Principal Amount, is 2.07%.

Finance Charge of the Lease. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by the Bank in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the finance charge for the Lease, which means the sum of all fees and charges paid to third parties (or costs associated with the Lease), is $79,480.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by the Bank in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City, less the finance charge of the Lease, as estimated above, and any reserve fund or capitalized interest paid or funded with proceeds of the Lease, is $6,280,700.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by the Bank in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all Lease Payments the City will make, plus the finance charge for the Lease, as described above, not paid with the proceeds of the Lease, calculated to the Termination Date of the Lease, is $8,034,356. This total payment amount excludes $134,820 in payments to be paid with proceeds of the Lease.

The foregoing estimates constitute good faith estimates only. The actual principal component of the Lease Payments, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual closing date being different than the date assumed for purposes of such estimates, (b) the actual original principal component of the Lease Payments being different from the Estimated Principal Amount, (c) the actual Lease Payments of the Lease being different than the Lease Payments assumed for purposes of such estimates, (d) the actual interest rate being different than the one estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual closing date of the Lease and the actual principal amount will be determined by the City based on the timing of the need for proceeds and other factors. Market interest rates are affected by economic and other factors beyond the control of the City.

Energy Project w solar & roofing @ 20 years (including buy-down)

Project Option Matrix & Cash Flow Table

Project Price = $6,577,150 Cost of Capital = 2.07%Project Buy-Down = $296,450 Year 2-25 Utility Inflation Rate = 3.50%

First Price = $6,280,700 Term = 20Financing Cost = $79,480 Inflation Rate = 3.00%

CAPI Fund = $134,820 Equipment Useful Life = 30Amount to be Financed = $6,495,000 Simple Payback = 17.9

Battery O&M = $0 SP w/ Inflation = 17.0 O&M Term = 20 Project Completion Date = 10/1/22

Financing Closing Date = 9/30/21

CASHFLOW

Projected Energy Savings

SGIP Incentive O&M Savings

Total Annual Savings

Cumulative Savings Net Lease Payments

M&V Costs Total Annual Costs Annual Net Cash Flow

Cumulative Cash Flow

10/1/22 $45,805 $45,805 $45,805 $0 $0 $0 $45,805 $45,805

10/1/23 $193,900 $78,750 $100,000 $372,650 $418,455 ($399,447) $0 ($399,447) ($26,797) $19,009

10/1/24 $200,687 $19,688 $103,000 $323,374 $741,829 ($348,961) $0 ($348,961) ($25,587) ($6,579)

10/1/25 $207,711 $19,688 $106,090 $333,488 $1,075,317 ($354,407) $0 ($354,407) ($20,919) ($27,497)

10/1/26 $214,980 $19,688 $109,273 $343,941 $1,419,258 ($359,646) ($8,802) ($368,448) ($24,508) ($52,005)

10/1/27 $222,505 $19,688 $112,551 $354,743 $1,774,001 ($364,678) ($9,110) ($373,788) ($19,045) ($71,051)

10/1/28 $230,292 $115,927 $346,220 $2,120,220 ($364,503) ($364,503) ($18,283) ($89,334)

10/1/29 $238,353 $119,405 $357,758 $2,477,978 ($374,225) ($374,225) ($16,467) ($105,801)

10/1/30 $246,695 $122,987 $369,682 $2,847,661 ($388,636) ($388,636) ($18,953) ($124,754)

10/1/31 $255,329 $126,677 $382,006 $3,229,667 ($397,633) ($397,633) ($15,626) ($140,380)

10/1/32 $264,266 $130,477 $394,743 $3,624,410 ($411,319) ($411,319) ($16,576) ($156,956)

10/1/33 $273,515 $134,392 $407,907 $4,032,317 ($419,592) ($419,592) ($11,685) ($168,641)

10/1/34 $283,088 $138,423 $421,512 $4,453,828 ($432,554) ($432,554) ($11,042) ($179,683)

10/1/35 $292,996 $142,576 $435,572 $4,889,401 ($445,102) ($445,102) ($9,529) ($189,212)

10/1/36 $303,251 $146,853 $450,104 $5,339,505 ($462,236) ($462,236) ($12,131) ($201,343)

10/1/37 $313,865 $151,259 $465,124 $5,804,629 ($473,852) ($473,852) ($8,728) ($210,071)

10/1/38 $324,850 $155,797 $480,647 $6,285,276 ($490,055) ($490,055) ($9,408) ($219,479)

10/1/39 $336,220 $160,471 $496,691 $6,781,966 ($500,740) ($500,740) ($4,049) ($223,528)

10/1/40 $347,988 $165,285 $513,272 $7,295,239 ($516,011) ($516,011) ($2,738) ($226,266)

10/1/41 $360,167 $170,243 $530,410 $7,825,649 ($530,764) ($530,764) ($354) ($226,619)

10/1/42 $372,773 $175,351 $548,124 $8,373,773 $0 $0 $548,124 $321,504

10/1/43 $385,820 $0 $385,820 $8,759,593 $0 $0 $385,820 $707,324

10/1/44 $399,324 $0 $399,324 $9,158,917 $0 $0 $399,324 $1,106,648

10/1/45 $413,300 $0 $413,300 $9,572,217 $0 $0 $413,300 $1,519,948

10/1/46 $427,766 $0 $427,766 $9,999,982 $0 $0 $427,766 $1,947,714

10/1/47 $442,737 $0 $442,737 $10,442,720 $0 $0 $442,737 $2,390,451

10/1/48 $458,233 $0 $458,233 $10,900,953 $0 $0 $458,233 $2,848,684

10/1/49 $474,271 $0 $474,271 $11,375,224 $0 $0 $474,271 $3,322,956

10/1/50 $490,871 $0 $490,871 $11,866,095 $0 $0 $490,871 $3,813,827

10/1/51 $508,051 $0 $508,051 $12,374,146 $0 $0 $508,051 $4,321,878

10/1/52 $525,833 $0 $525,833 $12,899,980 $0 $0 $525,833 $4,847,711

TOTAL $10,055,442 $157,500 $2,687,037 $12,899,980 ($8,034,356) ($17,913) ($8,052,268) $4,847,711

Savings Costs Cash Flow

ATTACHMENT B

GOOD FAITH ESTIMATES

The good faith estimates set forth herein are provided with respect to the Lease in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by Urban Futures, Inc. as municipal advisor to the City (the “Municipal Advisor”), each with respect to the Lease. The following estimates assume an aggregate principal component of the Lease Payments of $6,495,000 (the “Estimated Principal Amount”).

True Interest Cost of the Lease. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by Sterling National Bank (the “Bank”) in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Lease, which means the rate necessary to discount the amounts payable on the respective Lease Payment Dates to the Estimated Principal Amount, is 2.07%.

Finance Charge of the Lease. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by the Bank in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the finance charge for the Lease, which means the sum of all fees and charges paid to third parties (or costs associated with the Lease), is $79,480.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by the Bank in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City, less the finance charge of the Lease, as estimated above, and any reserve fund or capitalized interest paid or funded with proceeds of the Lease, is $6,280,700.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming the Estimated Principal Amount, and based on the rate provided by the Bank in the Term Sheet, at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all Lease Payments the City will make, plus the finance charge for the Lease, as described above, not paid with the proceeds of the Lease, calculated to the Termination Date of the Lease, is $8,034,356. This total payment amount excludes $134,820 in payments to be paid with proceeds of the Lease.

The foregoing estimates constitute good faith estimates only. The actual principal component of the Lease Payments, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual closing date being different than the date assumed for purposes of such estimates, (b) the actual original principal component of the Lease Payments being different from the Estimated Principal Amount, (c) the actual Lease Payments of the Lease being different than the Lease Payments assumed for purposes of such estimates, (d) the actual interest rate being different than the one estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual closing date of the Lease and the actual principal amount will be determined by the City based on the timing of the need for proceeds and other factors. Market interest rates are affected by economic and other factors beyond the control of the City.

ATTACHMENT C