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HomeMy WebLinkAbout2021/09/28 Post-Meeting Agenda PackageMary Casillas Salas, Mayor John McCann, Councilmember - District 1 Jill M. Galvez - Councilmember - District 2 Stephen C. Padilla - Councilmember - District 3 Andrea Cardenas - Councilmember- District 4 I declare under penalty of perjury that 1 am employed by the City of Chula Vista in the office of the City Clerk and that I posted the document according to Brown Act requirements. �ft A 11.& CITY OF CHUTA VISTA Maria V. Kachadoorian, City Manager Glen R. Googins, City Attorney Kerry K. Bigelow, City Clerk REGULAR MEETING OF THE CITY COUNCIL Date: September 28, 2021, 5:00 p.m. Location: Council Chambers, 276 Fourth Avenue, Chula Vista, CA View the Meeting Live in English & Spanish: chulavistaca.aov/councilmeetinos AT&T LI -verse ch. 99 (San Diego County) Cox ch. 24 (Chula Vista in English only) Welcome to your City Council Meeting The City Council has transitioned back to holding live, in-person meetings. PUBLIC COMMENTS: Public comments may be submitted to the City Council in the following ways: In -Person comments during the meeting. Join us for the City Council meeting at the time and location specified on this agenda to make your comments. How To Submit eComments: Visit www.chulavistaca.gov/councilmeeting , locate this meeting and click on the comment bubble icon. Click on the item you wish to comment on, then click on "Leave Comment." eComments can be submitted when the agenda is published and until the conclusion of public comments for the agenda item. eComments may be viewed by the City Council and members of the public as they are submitted. If you have difficulty submitting eComments email your comments to: cityclerk@chulavistaca.gov HOW TO WATCH: Live stream is available at.www.chulavistaca.ciov/councilmeetincis. To switch the video to Spanish, please click on "ES" in the bottom right hand corner. Recorded meetings are also aired on Wednesdays at 7 p.m. (both channels above in English only) and are available on the City's website in English and Spanish. ACCESSIBILITY: Individuals with disabilities or special needs are invited to request modifications or accommodations to access and/or participate in a City meeting by contacting the City Clerk's Office at cityclerkachulavistaca.gov or (619) 691-5041 (California Relay Service is available for the hearing impaired by dialing 711) at, least forty-eight hours in advance of the meeting. REGULAR MEETING OF THE CITY COUNCIL **POST AGENDA** Date:September 28, 2021, 5:00 p.m. Location:Council Chambers, 276 Fourth Avenue, Chula Vista, CA View the Meeting Live in English & Spanish: chulavistaca.gov/councilmeetings AT&T U-verse ch. 99 (San Diego County) Cox ch. 24 (Chula Vista in English only) Welcome to your City Council Meeting The City Council has transitioned back to holding live, in-person meetings. PUBLIC COMMENTS: Public comments may be submitted to the City Council in the following ways: In-Person comments during the meeting. Join us for the City Council meeting at the time and location specified on this agenda to make your comments. • How To Submit eComments: Visit www.chulavistaca.gov/councilmeetings, locate this meeting and click on the comment bubble icon. Click on the item you wish to comment on, then click on "Leave Comment." eComments can be submitted when the agenda is published and until the conclusion of public comments for the agenda item. eComments may be viewed by the City Council and members of the public as they are submitted. If you have difficulty submitting eComments email your comments to: cityclerk@chulavistaca.gov • HOW TO WATCH: Live stream is available at www.chulavistaca.gov/councilmeetings. To switch the video to Spanish, please click on "ES" in the bottom right hand corner. Recorded meetings are also aired on Wednesdays at 7 p.m. (both channels above in English only) and are available on the City's website in English and Spanish. ACCESSIBILITY: Individuals with disabilities or special needs are invited to request modifications or accommodations to access and/or participate in a City meeting by contacting the City Clerk’s Office at cityclerk@chulavistaca.gov or (619) 691-5041 (California Relay Service is available for the hearing impaired by dialing 711) at least forty-eight hours in advance of the meeting. SPEAKER TIME LIMITS: The time allotted for speakers may be adjusted by the Mayor. - Five minutes* for specific items listed on the agenda - Three minutes* for items NOT on the agenda (called to speak during Public Comments) - A group of individuals may select a spokesperson to speak on their behalf on an agenda item, waiving their option to speak individually on the same item. Generally, five minutes are allotted per person, up to a limit of 30 minutes, although the limits may be adjusted. Members of the group must be present. *Individuals who use a translator will be allotted twice the amount of time. GETTING TO KNOW YOUR AGENDA Agenda Sections: CONSENT CALENDAR items are routine items that are not expected to prompt discussion. All items are considered for approval at the same time with one vote. Councilmembers and staff may request items be removed and members of the public may submit a speaker slip if they wish to comment on an item. Items removed from the Consent Calendar are discussed after the vote on the remaining Consent Calendar items. PUBLIC COMMENT provides the public with an opportunity to address the Council on any matter not listed on the agenda that is within the jurisdiction of the Council. In compliance with the Brown Act, the Council cannot take action on matters not listed on the agenda. PUBLIC HEARINGS are held on matters specifically required by law. The Mayor opens the public hearing and asks for presentations from staff and from the proponent or applicant involved (if applicable) in the matter under discussion. Following questions from the Councilmembers, the Mayor opens the public hearing and asks for public comments. The hearing is closed, and the City Council may discuss and take action. ACTION ITEMS are items that are expected to cause discussion and/or action by the Council but do not legally require a Public Hearing. Staff may make a presentation and Councilmembers may ask questions of staff and the involved parties before the Mayor invites the public to provide input. CLOSED SESSION may only be attended by members of the Council, support staff, and/or legal counsel. The most common purpose of a Closed Session is to avoid revealing confidential information that may prejudice the legal or negotiating position of the City or compromise the privacy interests of employees. Closed sessions may be held only as specifically authorized by law. Council Actions: RESOLUTIONS are formal expressions of opinion or intention of the Council and are usually effective immediately. ORDINANCES are laws adopted by the Council. Ordinances usually amend, repeal or supplement the Municipal Code; provide zoning specifications; or appropriate money for specific purposes. Most ordinances require two hearings: an introductory hearing, generally followed by a second hearing at the next regular meeting. Most ordinances go into effect 30 days after the final approval. PROCLAMATIONS are issued by the City to honor significant achievements by community members, highlight an event, promote awareness of community issues, and recognize City employees. 2021/09/28 City Council Post Agenda Page 2 of 343 Pages 1.CALL TO ORDER 2.ROLL CALL 3.PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE 4.SPECIAL ORDERS OF THE DAY 4.1.Oath of Office - James Clark, International Friendship Commission 4.2.COVID-19 Update by the City of Chula Vista Emergency Services Manager Marlon King 9 4.3.Presentation by the Marine Corps League in Recognition of the Chula Vista Fire Department and Chula Vista Veteran, Roger Cazares, for Years of Assistance on the Toys for Tots Campaign 4.4.Recognition of the 2021 International Mixed Martial Arts Federation's Youth Mixed Martial Arts Champions from Chula Vista's One Legacy Training Center: Abigail Alvarez, David Daniels, Gavin Mitchell, Elijah Nehme, and Omar Rodriguez 4.5.Presentation of a Proclamation proclaiming Wednesday, October 6, 2021 as Clean Air Day in the City of Chula Vista 24 4.6.Presentation by County of San Diego Staff Regarding Potential Board of Supervisor Action to Authorize Microenterprise Home Kitchen Operations (MEHKOs) in San Diego County 25 5.CONSENT CALENDAR (Items 5.1 through 5.7) All items listed under the Consent Calendar are considered and acted upon by one motion. Anyone may request an item be removed for separate consideration. RECOMMENDED ACTION: Council approve the recommended action on the below consent calendar items. 5.1.Waive Reading of Text of Resolutions and Ordinances RECOMMENDED ACTION: Approve a motion to read only the title and waive the reading of the text of all resolutions and ordinances at this meeting. 5.2.Consideration of Requests for Excused Absences RECOMMENDED ACTION: Consider requests for excused absences as appropriate. 2021/09/28 City Council Post Agenda Page 3 of 343 5.3.Animal Regulations: Amending Title 6 of the Chula Vista Municipal Code to Allow the Keeping of One Miniature Pig Per Dwelling Unit 33 Report Number: 21-0154 Location: No specific geographic location Department: City Manager & Animal Care Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. RECOMMENDED ACTION: Adopt an ordinance amending Title 6, Animals, of the Chula Vista Municipal Code to restore subsection 6.04.060.C, allowing the keeping of one miniature pig per dwelling unit (Second Reading and Adoption). 5.4.Acquisition/Financing Agreement: Consider Adoption of Agreement Relating to California Municipal Finance Authority Community Facilities District No. 2021-11 (Otay Ranch Village 8 West) 40 Report Number: 21-0157 Location: Otay Ranch Village 8 West Department: Development Services Environmental Notice: The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Adopt a resolution approving an Acquisition/Financing Agreement relating to California Municipal Finance Authority Community Facilities District No. 2021-11 (Otay Ranch Village 8 West) and authorize related actions. 5.5.Consideration of Appointment of Members to the Christopher Columbus Statue Task Force 84 Report Number: 21-0167 Location: Discovery Park, 700 Buena Vista Way, Chula Vista, CA 91910 Department: Human Resources Environmental Notice: The Project qualifies for a Categorical Exemption pursuant to the California Environmental Quality Act State Guidelines Section 15301 Class 1 (Existing Facilities), Section 15302 Class 2 (Replacement or Reconstruction), and Section 15061(b)(3). 2021/09/28 City Council Post Agenda Page 4 of 343 RECOMMENDED ACTION: Adopt a resolution approving the appointment of members Brianna Conser, Angela Elliot, John Elliot, Nicole Enriquez, Roberto Hernandez, Lee Kohse, Paola Martinez-Montes, Lorise Maynard, Ricardo Medina, Erica Pinto, Grace Sardina, and Bea Zamora to the Columbus Statue Task Force. 5.6.Reimbursement Grant Program: Authorize the City’s Payment of Sewer Capacity Fees on Behalf of Businesses that have Received Approval for Reimbursement under the City’s Sidewalk Café Grant Program 90 Report Number: 21-0158 Location: Third Avenue between E and H Street Department: Economic Development Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. RECOMMENDED ACTION: Adopt a resolution authorizing the City’s payment of sewer capacity fees on behalf of businesses that have received approval under the City’s reimbursement grant program for the reimbursement of design, permitting, and construction costs for sidewalk cafés. 5.7.Master Fee Schedule Amendment: Amending Chapter 4, General Business Fees, of the City’s Master Fee Schedule to Modify Cannabis-Related Fees 95 Report Number: 20-0166 Location: No specific geographic location Department: Police Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity also qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. RECOMMENDED ACTION: Adopt a resolution adding commercial cannabis employee background review and employee background renewal fees to Chapter 4 of the City’s master fee schedule. 6.PUBLIC COMMENTS The public may address the Council on any matter within the jurisdiction of the Council but not on the agenda. *6.1.Public Comments Received for 9/28/2021 103 2021/09/28 City Council Post Agenda Page 5 of 343 7.PUBLIC HEARINGS The following item(s) have been advertised as public hearing(s) as required by law. 7.1.Year-End Accomplishments Report: Federal Housing and Urban Development Block Grant Programs 108 Report Number: 21-0150 Location: No specific geographic location Department: Development Services Department Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Council conduct the public hearing and receive the year-end accomplishments report for the Federal Housing and Urban Development Block Grant Programs. 8.ACTION ITEMS The following item(s) will be considered individually and are expected to elicit discussion and deliberation. *8.1.Middle-Income Housing Programs: Report and Discussion of Middle-Income Housing Programs Proposed by the California Statewide Communities Development Authority and the California Municipal Finance Authority 121 Report Number: 21-0152 Location: No specific geographic location Department: Development Services Environmental Notice: Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Hear the report regarding middle-income housing programs proposed by the California Statewide Communities Development Authority and the California Municipal Finance Authority and provide policy direction to staff as appropriate. 2021/09/28 City Council Post Agenda Page 6 of 343 8.2.Microenterprise Home Kitchen Operations: Consider Opposing County of San Diego Authorization of Microenterprise Home Kitchen Operations within San Diego County 171 Report Number: 21-0161 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Adopt a resolution establishing the City’s opposition to the authorization of Microenterprise Home Kitchen Operations within San Diego County and directing staff to prepare a letter for the Mayor’s signature opposing such authorization on behalf of the City of Chula Vista. 8.3.Interim Urgency Ordinance: Prohibition of Uses in Conflict with Land Use Amendment and Rezoning Initiation IR19-0026 178 Pursuant to Government Code 36937, if approved by a 4/5 vote of the City Council, this interim urgency ordinance shall take effect and be in force on the evening of its passage and shall remain in effect for 90 days. Two one-year- extensions to the interim urgency ordinance may be implemented following a public hearing and 4/5 vote of the City Council pursuant to CVMC 19.12.060 through 19.12.080. Report Number: 21-0163 Location: Approximately 50 acres located west of I-5 and east and south of the main office and distribution buildings on the Collins Aerospace/United Technology Company Campus Department: Development Services & Economic Development Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. In addition, notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. RECOMMENDED ACTION: Adopt an interim urgency ordinance prohibiting uses in conflict with land use amendment and rezoning initiation IR19-0026 on the Collins Aerospace/United Technology Company Campus thereby enacting a moratorium necessary to protect the public safety, health and welfare pursuant to CVMC Section 19.12.130. (4/5 vote required) 9.CITY MANAGER’S REPORTS 2021/09/28 City Council Post Agenda Page 7 of 343 10.MAYOR’S REPORTS 11.COUNCILMEMBERS’ COMMENTS 12.CITY ATTORNEY'S REPORTS 13.CLOSED SESSION Announcements of actions taken in Closed Sessions shall be made available by noon on the next business day following the Council meeting at the City Attorney's office in accordance with the Ralph M. Brown Act (Government Code 54957.7) 13.1.Conference with Labor Negotiators Pursuant to Government Code Section 54957.6 Agency designated representatives: Maria Kachadoorian, Glen Googins, Courtney Chase, Kelley Bacon, Simon Silva, Sarah Schoen, and Tanya Tomlinson Employee organizations: ACE, IAFF, MM/PR, NS-IAFF, POA, WCE and unrepresented employees 14.ADJOURNMENT to the regular City Council meeting on October 12, 2021 at 5:00 p.m. in the Council Chambers. Materials provided to the City Council related to an open session item on this agenda are available for public review, please contact the Office of the City Clerk at cityclerk@chulavistaca.gov or (619) 691-5041. Sign up at www.chulavistaca.gov to receive email notifications when City Council agendas are published online. 2021/09/28 City Council Post Agenda Page 8 of 343 COVID-19 Update 564 Days Since EOC Activation September 28, 2021 2021/09/28 City Council Post Agenda Page 9 of 343 Bottom Line Upfront 2021/09/28 City Council Post Agenda Page 10 of 343 Case Summary 2021/09/28 City Council Post Agenda Page 11 of 343 Case Rates by Vaccination Status 2021/09/28 City Council Post Agenda Page 12 of 343 2021/09/28 City Council Post Agenda Page 13 of 343 Community Transmission 2021/09/28 City Council Post Agenda Page 14 of 343 Chula Vista Case Rate 2021/09/28 City Council Post Agenda Page 15 of 343 SD County Vaccine Status 2021/09/28 City Council Post Agenda Page 16 of 343 SD County Vaccine Status 2021/09/28 City Council Post Agenda Page 17 of 343 2021/09/28 City Council Post Agenda Page 18 of 343 COVID-19 Vaccinations City of Chula Vista Employees September 28, 2021 Department % Vaccinated Administration 100% Mayor & Council 100% Library 96% Economic Development 95% Information Technology Services 93% Engineering 88% City Clerk 88% Human Resources 87% Finance 87% City Attorney's Office 85% Development Services 85% Public Works 84% Fire 81% CBAG 81% Parks and Recreation 80% Animal Care 72% Police 69% TOTAL 80%2021/09/28 City Council Post Agenda Page 19 of 343 Vaccine Update •Vaccines remain available •Visit myturn.ca.gov to schedule a vaccine appointment or find a walk-in clinic •Vaccines are completely FREE •Chula Vista City Hall, Building C •Every Thursday, 1pm -4pm •Appointments preferred •Walk-ins accepted •Appointment assistance (619) 476-2397 2021/09/28 City Council Post Agenda Page 20 of 343 “Booster” Vaccine •Pfizer “Booster”vaccine has been approved by FDA and CDC •Only eligible if you previously received the Pfizer vaccine •Eligibility begins 6-months after completing the primary vaccination series •Two weeks after second dose •NOT eligible if you received Moderna or J&J 2021/09/28 City Council Post Agenda Page 21 of 343 Who is eligible for boosters? Should Receive Booster (strongly recommended) •65 years and older •Residents aged 18 years and older living in long-term settings •People aged 50-64 with underlying health conditions May Receive Booster •Ages 18-49 with underlying health conditions •19-64 at increased risk of COVID exposures by occupation NOT Eligible for Booster •Persons who received a different vaccine •Anyone not yet eligible to receive the vaccine 2021/09/28 City Council Post Agenda Page 22 of 343 Mandatory Testing •Effective September 27, 2021, mandatory weekly testing for all employees not fully vaccinated •Testing offered at different City facilities to accommodate employees •Testing provided by CVFD staff in partnership with CA Department of Public Health 2021/09/28 City Council Post Agenda Page 23 of 343 2021/09/28 City Council Post Agenda Page 24 of 343 MICROENTERPRISE HOME KITCHEN OPERATIONS (MEHKO ) DEPARTMENT OF ENVIRONMENTAL HEALTH AND QUALITY (DEHQ) FOOD AND HOUSING DIVISION 2021/09/28 City Council Post Agenda Page 25 of 343 Background Prior to 2012, no home-based food businesses allowed January 2013 –Cottage Food Operations September 2018 –AB 626 signed into law (Effective January 1, 2019) February 2019 –AB 377 introduced as urgency legislation (Effective October 7, 2019) Currently seven jurisdiction have enacted a program, and one County is in a pilot program Riverside, Solano, Imperial, Alameda, Santa Barbara, Lake Counties City of Berkeley Pilot –San Mateo County 2021/09/28 City Council Post Agenda Page 26 of 343 Authorizing Entity 3 CRFC Section 114367 -“The governing body of a city, county, or city and county that is designated as the enforcement agency, as defined in Section 113773, may authorize, by ordinance or resolution, within its jurisdiction the permitting of microenterprise home kitchen operations in accordance with this chapter.” If a program is implemented, DEHQ, as the local enforcement agency, will be responsible for enforcing all applicable sections in the retail food code and providing education to operators on the state law requirements.2021/09/28 City Council Post Agenda Page 27 of 343 What is a MEHKO? 4 California Retail Food Code –Establishes requirements that cannot be modified A home (or apartment) mini -restaurant Resident can serve 30 meals per day, 60 meals per week Maximum $50,000 gross annual sales Customers can dine at the home, pick up their orders, or receive delivery by an employee of the MEHKO Health permit is required prior to operating Health inspections are limited to no more than one time per year and are scheduled with the operator Complaints regarding potential Health and Safety concerns or Foodborne Illness concerns may also be investigated 2021/09/28 City Council Post Agenda Page 28 of 343 Community Benefits of MEHKO Economic opportunities for people from a wide variety of backgrounds Economic benefits to local communities Provide “food deserts” access to healthy, home- cooked foods Farm-to -Table movement Cottage Food only allows for packaged, shelf -stable foods 2021/09/28 City Council Post Agenda Page 29 of 343 Land Use Considerations 6 CRFC Section 114367.4 “By -right Use”: A city,county,or city and county shall not prohibit the operation of, require a permit to operate, require a rezone of the property for,or levy any fees on, or impose any other restriction on,a MEHKO in any residential dwelling for zoning purposes.A MEHKO shall be a permitted use of residential property in any residential dwelling for zoning purposes. CRFC Section 114367.4 –Limited City Code Enforcement Abilities: No signage allowed Noise Ordinance can be enforced Nuisance Ordinances can be enforced2021/09/28 City Council Post Agenda Page 30 of 343 Potential Community Concerns Traffic Parking Noise Fire Fats, Oils, Grease (FOG)/Impacts to Infrastructure ADA Accessibility Serving of Alcohol 2021/09/28 City Council Post Agenda Page 31 of 343 Current Program Status 8 Board Action -September 15th DEHQ directed to: Return to the board in 120 days with an ordinance to authorize MEHKOs. Conduct community outreach and local municipality outreach. Implement a public education program for MEHKO operators. 2021/09/28 City Council Post Agenda Page 32 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Animal Regulations: Amending Title 6 of the Chula Vista Municipal Code to Allow the Keeping of One Miniature Pig Per Dwelling Unit Report Number: 21-0154 Location: No specific geographic location Department: City Manager & Animal Care Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Recommended Action Adopt an ordinance amending Title 6, Animals, of the Chula Vista Municipal Code to restore subsection 6.04.060.C, allowing the keeping of one miniature pig per dwelling unit (Second Reading and adoption). SUMMARY The proposed ordinance amendment responds to a referral from the City Council on August 24, 2021 to review the Chula Vista Municipal Code (CVMC) regarding the residential keeping of miniature “mini” pigs. Upon receiving the City Council’s referral, staff began researching the history of mini pigs in Chula Vista. This research revealed that the City Council had approved the keeping of mini pigs in 1991. However, it was determined by staff that a clerical error in 2012, when several sections of Chapter 6, Animals, were updated, resulted in the inadvertent omission of the mini pig section from CVMC 6.04.060 . Staff recommends placing the ordinance on first reading to restore subsection 6.04.060.C to the CVMC thereby allowing the keeping of one miniature pig per dwelling unit. ENVIRONMENTAL REVIEW The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is 2021/09/28 City Council Post Agenda Page 33 of 343 P a g e | 2 required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION The proposed ordinance amendment responds to a referral from the City Council on August 24, 2021 to review the Chula Vista Municipal Code (CVMC) regarding the residential keeping of miniature “mini” pigs. Upon receiving the City Council’s referral, staff began researching the history of mini pigs in Chula Vista. This research revealed that the City Council had approved the keeping of mini pigs in 1991. However, it was determined by staff that a clerical error in 2012, when several sections of Chapter 6, Animals, were updated, resulted in the inadvertent omission of the mini pig section from CVMC 6.04.060 . Via this action, staff seeks to correct the clerical error, which will allow one mini pig per dwelling not exceeding 18 inches at the shoulder or 100 pounds. Under this ordinance, breeding of mini pigs is prohibited. According to the American Mini Pig Association, the mini pig breed has been developed for the sole purpose of being raised as a pet and companion. Their even temperament, friendly disposition, intelligence and compact stature result in a pet that is suitable for indoor/outdoor homes. Additionally, mini pigs have proven to not be a problem or threat to the health or safety of the community. Since 2015, staff has received a total of 13 pig-related complaints within city limits. Those complaints include a sanitation concern, a pig left on a balcony, stray pigs running loose and a pig welfare investigation. Staff successfully resolved most of these complaints after issuing warnings. Given that the keeping of mini pigs poses no threat to public health or safety, staff seeks to correct the clerical error within Title 6 of the CVMC with appreciation to the City Council and community members for the referral. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the [Insert appropriate legislative body name, e.g., City Council/Housing Authority/Planning Commission] members do not create a disqualifying real property- related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any [Insert appropriate legislative body name] member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current year fiscal impact as a result of amending the Municipal Code to restore subsection 6.04.060.C to allow the keeping of one miniature pig per dwelling unit. 2021/09/28 City Council Post Agenda Page 34 of 343 P a g e | 3 ONGOING FISCAL IMPACT There is no ongoing fiscal impact as a result of amending the Municipal Code to restore subsection 6.04.060.C to allow the keeping of one miniature pig per dwelling unit. ATTACHMENTS None. Staff Contact: Eric C. Crockett, Deputy City Manager Daniel E. DeSousa, Interim Director of Animal Services 2021/09/28 City Council Post Agenda Page 35 of 343 SECOND READING AND ADOPTION C:\Program Files\eSCRIBE\TEMP\1405061732\1405061732,,,Ordinance .docx ORDINANCE NO. ORDINANCE OF THE CITY OF CHULA VISTA AMENDING TITLE 6 OF THE CHULA VISTA MUNICIPAL CODE TO ALLOW THE KEEPING OF ONE MINIATURE PIG PER DWELLING UNIT WHEREAS, in May 1991 the Chula Vista City Council created an exception to the longstanding ban on keeping hogs, pigs and goats in the city; and WHEREAS, in Ordinance No. 2456 the City Council unanimously amended Section 6.04.060 of the Chula Vista Municipal Code to expressly allow the keeping of one miniature pig per dwelling unit, subject to sanitation, restraint and vehicle transportation safety requirements; and WHEREAS, more than 20 years later, in February 2012 the City Council unanimously approved numerous changes to Title 6, Animals, of the Chula Vista Municipal Code; and WHEREAS, these amendments and additions in Ordinance No. 3226 were to update Title 6; and WHEREAS, staff discovered that because of a clerical error, the provision allowing the keeping of one miniature pig per dwelling unit (CVMC 6.04.060(c)) was omitted from the staff report and Ordinance No. 3226, adopted by City Council in February 2012; and WHEREAS, complaints of any nature about miniature pigs in Chula Vista are rare, according to Animal Care Facility staff, a total of thirteen (13) complaints have been received since 2015. Those complaints range from sanitation, stray pigs running loose, and to investigate the welfare of a pig. Staff successfully resolved most of these complaints with warnings; and WHEREAS, the proposed ordinance amendment responds to a referral from Council on August regarding miniature pigs; and WHEREAS, restoring Subsection C to Section 6.04.060 would correct the clerical error and ensure that Title 6, Animals, properly reflects the City Council’s May 1991 adoption of Ordinance No. 2456, as well as the state of the law allowing the keeping of one miniature pig per dwelling unit in Chula Vista, subject to specific size and weight restrictions, sanitation, restraint and vehicle transportation safety requirements. NOW THEREFORE the City Council of the City of Chula Vista does ordain as follows: Section I. 2021/09/28 City Council Post Agenda Page 36 of 343 Ordinance Page 2 Title 6, Animals, Section 6.04.060, Swine, roosters and goats prohibited – Exceptions, is amended to restore Subsection C, regarding the keeping one miniature pig per dwelling unit , as follows: Section 6.04.060 Swine, roosters and goats prohibited – Exceptions. The keeping of hogs, pigs or other swine, roosters or goats within the City is expressly prohibited: A. Where the keeping of any such animals was lawfully established and existing in an area thereafter annexed to the City, such keeping may, without enlargement, be continued for a period not to exceed three years after date of annexation of the area wherein contained; B. Such animals not exceeding two in number may be maintained for bona fide educational purposes upon application of a public or private school to the City Council and approval by the City Council, both as to the type and number of animals to be kept for such purposes and the manner of their keeping; C. One miniature pig, not exceeding 18 inches at the shoulder or 100 pounds, may be kept per dwelling unit. However, the breeding of miniature pigs, for any and all purposes, is expressly prohibited. Owners of miniature pigs shall comply with the regulations existing in CVMC 6.04.110 (sanitation) and CVMC Chapters 6.24 (restraint) and 6.26 (vehicular transport safety.) In addition to other penal sanctions, an animal control officer or peace officer of the City may, after such notice to the owner as the circumstances permit, seize and remove a miniature pig to an animal shelter. Section II. Severability If any portion of this Ordinance, or its application to any person or circumstance, is for any reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or unconstitutionality shall not affect the validity or enforceability of the remaining portions of the Ordinance, or its application to any other person or circumstance. The City Council of the City of Chula Vista hereby declares that it would have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional. Section III. Construction The City Council of the City of Chula Vista intends this Ordinance to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. Section IV. Effective Date 2021/09/28 City Council Post Agenda Page 37 of 343 Ordinance Page 3 This Ordinance shall take effect and be in force on the thirtieth day after its final passage. Section V. Publication The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted according to law. Presented by Approved as to form by _____________________________________ ____________________________________ Daniel E. DeSousa Glen R. Googins Interim Animal Care Facility Director City Attorney 2021/09/28 City Council Post Agenda Page 38 of 343 Redline/Strikeout of Existing Section 6.04.060 Section 6.04.060 Swine, roosters and goats prohibited – Exceptions. The keeping of hogs, pigs or other swine, roosters or goats within the City is expressly prohibited: A. Where the keeping of any such animals was lawfully established and existing in an area thereafter annexed to the City, such keeping may, without enlargement, be continued for a period not to exceed three years after date of annexation of the area wherein contained; B. Such animals not exceeding two in number may be maintained for bona fide educational purposes upon application of a public or private school to the City Council and approval by the City Council, both as to the type and number of animals to be kept for such purposes and the manner of their keeping.; C. One miniature pig, not exceeding 18 inches at the shoulder or 100 pounds, may be kept per dwelling unit. However, the breeding of miniature pigs, for any and all purposes, is expressly prohibited. Owners of miniature pigs shall comply with the regulations existing in CVMC 6.04.110 (sanitation) and CVMC Chapters 6.24 (restraint) and 6.26 (vehicular transport safety.) In addition to other penal sanctions, an animal control officer or peace officer of the City may, after such notice to the owner as the circumstances permit, seize and remove a miniature pig to an animal shelter. 2021/09/28 City Council Post Agenda Page 39 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Acquisition/Financing Agreement: Consider Adoption of Agreement Relating to California Municipal Finance Authority Community Facilities District No. 2021-11 (Otay Ranch Village 8 West) Report Number: 21-0157 Location: Otay Ranch Village 8 West Department: Development Services Environmental Notice: The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Adopt a resolution approving an Acquisition/Financing Agreement relating to California Municipal Finance Authority Community Facilities District No. 2021-11 (Otay Ranch Village 8 West) and authorize related actions. SUMMARY The Bond Opportunities for Land Development Program (“Bold Program”) is a program offered by the California Municipal Finance Authority (“CMFA”) to provide its members a means to accommodate formation of community facilities districts (“CFDs”) and bonding within their jurisdiction. The City of Chula Vista (“City”) is already a member of CMFA, having utilized CMFA for other types of bond financings in the past. By participating in the program, CFD formation, administration and bonding is handled by CMFA and the City’s involvement is minimized. At the August 10, 2021 City Council meeting, the City Council authorized the use of the BOLD Program and authorized CMFA to form CFDs within the boundaries of the City (Resolution No. 2021-148). Subsequently, on August 10, 2021, at the request of HomeFed Village 8, LLC (“HomeFed”), the master developer of the Otay Ranch Village 8 West development project, the City Council authorized the formation of the California Municipal Finance Authority Community Facilities District No. 2021-11 (City of Chula Vista – Otay Ranch Village 8 West) (“Village 8 West CFD”) via Resolution No. 2021-149. The Village 8 West CFD will be authorized to finance specific City public improvements (“Acquisition Improvements”) and related costs to be constructed by or on behalf of HomeFed, and certain City development impact fees. An 2021/09/28 City Council Post Agenda Page 40 of 343 P a g e | 2 Acquisition/Financing Agreement by and among the City, CMFA, for and on behalf of the Village 8 West CFD and HomeFed (the “Acquisition Agreement”) will set forth the terms and conditions to which the Acquisition Improvements may, upon completion of the construction, be acquired by the City through financing provided by the Village 8 West CFD at prices determined in accordance with the Acquisition Agreement. The Acquisition Improvements and development impact fees set forth in the agreement are authorized to be financed under the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”). This action will consider the adoption of a resolution approving the Acquisition Agreement. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of the creation of a governmental fiscal/funding mechanism which does not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION The BOLD Program The Act offers financing flexibility commonly used by cities, schools and other local agencies throughout the State of California (the “State”) to generate funds for the payment of public facilities, including development fees for facilities. Although CFDs formed through the BOLD Program would be located within the City’s jurisdiction, involvement of the City is flexible, and the amount of time City staff will spend on the administration of the CFDs will be minimal. The BOLD Program offers developers the opportunity to finance public infrastructure, as well as impact fees associated with new development through tax-exempt and/or taxable bonds payable from special taxes levied by a CFD on property within such CFD, a typical financing method for new home developments in the State. Village 8 West Otay Ranch Village 8 West, located at La Media Parkway and Main Street, is a 300 -acre site with residential and commercial land uses, community purpose facilities, open space and preserve areas, a community park, town square, neighborhood park, and one elementary school. The project’s approved tentative map allows 2,334 residential units. Residences will include affordable apartments, market rate apartments, town homes, triplexes, clustered motor court detached homes, and conventional single-family detached homes. Commercial uses will range from a low of 117,000 square feet of building space to as much as 300,000 square feet. Construction commenced in late 2018 when large scale earthwork operations began. Grading is nearing completion. Infrastructure construction is underway in many parts of the project. Infrastructure and parks 2021/09/28 City Council Post Agenda Page 41 of 343 P a g e | 3 construction will continue for three or so more years. The first residential occupancies are expected late November 2021. On August 10, 2021, the City Council approved a joint community facilities agreement (the “JCFA”) between the City and CMFA relating to the administration of the Village 8 West CFD (Resolution No. 2021-149). CMFA has initiated the proceedings to form the Village 8 West CFD. The Acquisition Agreement sets forth the terms and conditions to which the Acquisition Improvements may, upon completion of the construction thereof, be acquired by the City through financing provided by the Village 8 West CFD at prices determined pursuant to and in accordance with such agreement. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT All expenses incurred by the City in the formation of the Village 8 West CFD will be borne by the developer, HomeFed, resulting in no net impact to the General Fund or the Development Services Fund. ONGOING FISCAL IMPACT There is no ongoing fiscal impact. The City is not liable to repay the bonds issued by CMFA or the special taxes imposed on the participating properties within the Village 8 West CFD, and the City has no contractual relationship with bond owners or the bond trustee. Bonds are issued through CMFA, with no involvement of the City needed other than the duties under the JCFA and the Acquisition Agreement. HomeFed has made a deposit to cover the City’s expenses in the formation of the Village 8 West CFD, approval of the Acquisition Agreement and related actions. ATTACHMENTS 1. Acquisition/Financing Agreement Staff Contact: Tiffany Allen, Director of Development Services Kimberly Elliott, Facilities Financing Manager 2021/09/28 City Council Post Agenda Page 42 of 343 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN ACQUISITION/FINANCING AGREEMENT RELATING TO CALIFORNIA MUNICIPAL FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 2021-11 (CITY OF CHULA VISTA – OTAY RANCH VILLAGE 8 WEST) AND AUTHORIZING RELATED ACTIONS WHEREAS, the City of Chula Vista (the “City”) is a municipal corporation and charter city duly organized and existing under and pursuant to the Constitution and the laws of the State of California (the “State”) and has previously authorized the use of the California Municipal Finance Authority’s (CMFA) Bond Opportunities for Land Development Program (the “BOLD Program”) to allow the owners of property to be developed within the City to participate in the BOLD Program subject to the approval of the City Council of the City (the “City Council”); and WHEREAS, at the request of HomeFed Village 8, LLC (HomeFed), the master developer of the Otay Ranch Village 8 West development project (the “Project”), the City Council has authorized the formation of the California Municipal Finance Authority Community Facilities District No. 2021-11 (City of Chula Vista – Otay Ranch Village 8 West) (the “Village 8 West CFD”) through the BOLD Program and the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”); and WHEREAS, the Village 8 West CFD is authorized to finance City capital facilities and related costs (the “City Infrastructure”) in satisfaction of certain City development impact fees (the “City Fees”) authorized to be financed under the Act and certain City capital facilities to be constructed by or on behalf of HomeFed (the “Acquisition Improvements” and with the City Infrastructure and the City Fees, the “Facilities”); and WHEREAS, Chula Vista Municipal Code (“CVMC”) Section 2.56.160(H) (Developer- Performed Public Works) regulates the procurement of developer-performed public works within the City; and WHEREAS, HomeFed has previously awarded contracts for certain of the Acquisition Improvements in accordance with CVMC Section 2.56.160(H) and has entered into change orders for such Acquisition Improvements prior to September 28, 2021 that have been approved by the City’s field inspector, but not approved by the City Council in accordance with CVMC Section 2.56.160(H)(3)(b) (the “Post-Award Change Orders”) and HomeFed requests a waiver for the Post-Award Change Orders; and WHEREAS, CVMC Section 2.56.160(H)(6) provides that post-award waiver requests shall be considered by and subject to approval of the City Council where “the waiver is in the best interest of the public after consideration of factors including, without limitation, project costs, time for completion, and other relevant criteria, and (ii) appropriate safeguards are in place to protect the public interest;” and 2021/09/28 City Council Post Agenda Page 43 of 343 Resolution No. Page 2 WHEREAS, the Post-Award Change Orders resulted in time and cost efficiencies and have been approved by the City’s field inspector, which provides a safeguard to protect the public interest; and WHEREAS, CVMC Section 2.56.160(H)(5) provides the City may enter into an agreement with a developer to clarify, establish, or modify the procedures to be undertaken by developer and the City in connection with CVMC Section 2.56.160(H) and City Council’s approval of an agreement that clarifies and establishes such procedures constitutes the City Council’s determination and finding that such procedures satisfy all applicable requirements of CVMC Section 2.56.160(H); and WHEREAS, there has been presented to the City Council, the form of an Acquisition/Financing Agreement by and among the City, CMFA and HomeFed (the “Acquisition Agreement”) to establish the terms and conditions pursuant to which the City Fees may be reimbursed or prepaid and the Acquisition Improvements may, upon the completion of the construction thereof, be acquired by the City through financing provided by the Village 8 West CFD at prices determined pursuant to and in accordance with such agreement; and WHEREAS, the Acquisition Agreement clarifies and modifies the requirements of CVMC Section 2.56.160(H) relating to change orders for the Acquisition Improvements. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that: SECTION 1. Each of the above recitals are true and correct and are hereby incorporated into this Resolution as though fully set forth herein. After consideration of the factors in CVMC Section 2.56.160(H)(6) and the recitals above, the City Council finds that the waiver for the Post- Award Change Orders is in the best interest of the public and appropriate safeguards are in place to protect the public interest. SECTION 2. The form of Acquisition Agreement as presented to the City Council and on file with the City Clerk is hereby approved. The City Manager and such other official or officials of the City as may be designated in writing by this City Council (each, an “Authorized Officer” and together, the “Authorized Officers”) are each authorized to execute the Acquisition Agreement for and on behalf of the City with such changes thereto as such Authorized Officer, following consultation with the City Attorney, and Best Best & Krieger LLP should the City Attorney so request Best Best & Krieger LLP’s assistance, deem to be in the best interests of the City. SECTION 3. The Authorized Officers and other officers, employees and agents of the City, are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. All actions heretofore taken by the Authorized Officers and other officers, employees and agents of 2021/09/28 City Council Post Agenda Page 44 of 343 Resolution No. Page 3 the City with respect to CMFA, the BOLD Program and the Village 8 West CFD and the matters described herein are hereby approved, confirmed and ratified. SECTION 4. This Resolution shall take effect immediately upon its adoption. Presented by Tiffany Allen Director of Development Services Approved as to form by Glen R. Googins City Attorney 2021/09/28 City Council Post Agenda Page 45 of 343 60297.00061\34345525.2 1 ACQUISITION/FINANCING AGREEMENT CALIFORNIA MUNICIPAL FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 2021-11 (CITY OF CHULA VISTA – OTAY RANCH VILLAGE 8 WEST) THIS ACQUISITION/FINANCING AGREEMENT (the “Agreement”), dated as of _________ 1, 2021 (the “Effective Date”), is made and entered into by and between the CITY OF CHULA VISTA, a chartered municipal corporation duly organized and validly existing under the Constitution and laws of the State of California, (the “City”), the CALIFORNIA MUNICIPAL FINANCE AUTHORITY (the “Authority”), on behalf of itself and COMMUNITY FACILITIES DISTRICT NO. 2021 11 (City of Chula Vista Otay Ranch Village 8 West), a community facilities district formed and existing pursuant to the laws of the State of California (the “CFD”), and HOMEFED VILLAGE 8, LLC, a Delaware limited liability company (the “Developer”). WHEREAS, the Developer is the master developer of the property depicted in Exhibit “A” attached hereto and incorporated herein by this reference (the “Property”) and Developer has obtained certain land use entitlements from the City which permit the development of the Property as entitled, (the “Development Project”); and WHEREAS, as a part of the development of the Development Project, the Developer has caused, or will cause to be constructed certain public improvements to serve the Development Project that will be owned, operated or maintained by the City, including the improvements identified in Exhibit “B” attached hereto and incorporated herein by this reference (the “Acquisition Improvements”); and WHEREAS, in connection with the development of the Development Project, certain City capital improvement fees described in Exhibit “B” hereto (the “City Fees”) are required to be paid and then used by the City to pay the costs of constructing or acquiring capital improvements to be owned, operated or maintained by the City (“City Infrastructure” and with the City Fees and Acquisition Improvements, the “Facilities”), including financing costs and program administration costs; WHEREAS, the Developer requested that the City consider and the City did consider authorizing the Authority to form the CFD under the terms and conditions of the “Mello-Roos Community Facilities Act of 1982,” as amended (Government Code Section 53311 and following) (the “Act”), for the purpose of financing the acquisition or construction of the Facilities; and WHEREAS, pursuant to its Resolution Nos. _____, _____ and _____ (the “Resolutions”), the City Council authorized the City’s participation in the Authority’s program, the Authority’s formation of the CFD and the execution of this Agreement; and WHEREAS, on _______________, 2021, the governing board of the Authority adopted Resolution No. _________ (the “Resolution”) forming the CFD, under the provisions of the Act. The Authority is authorized to levy special taxes upon land within the CFD (the “Special Taxes”) and issue bonds (the “Bonds”) in one or more series to provide financing for the Facilities to be 2021/09/28 City Council Post Agenda Page 46 of 343 60297.00061\34345525.2 2 owned, operated or maintained by the City. The boundaries of the CFD are illustrated on Exhibit “A” hereto; and WHEREAS, Developer, in order to proceed in a timely way with development of the Development Project, desires to construct the Acquisition Improvements that will, following the completion of the construction thereof, be acquired, owned, operated and/or maintained by the City; and WHEREAS, the City, CFD and Developer agree that the Acquisition Improvements to be constructed by the Developer may, upon the completion of the construction thereof, be acquired by the City through financing provided by the CFD at prices determined pursuant to and in accordance with the provisions of this Agreement; and WHEREAS, the City and the Developer further agree that the Facilities shall be funded solely from (a) the proceeds of the Bonds which shall be issued by the CFD and which shall be secured by the levy of Special Taxes within the CFD and (b) Available Special Tax es (defined below) levied within the CFD; and WHEREAS, it is the intent of this Agreement that Developer shall be entitled pursuant to the provisions of this Agreement to be paid for each of the Acquisition Improvements constructed by or on behalf of the Developer at the prices as determined by the City pursuant to this Agreement upon: (a) the sale and delivery of Bonds by the CFD the proceeds of which shall be authorized and designated to make the payments to acquire such Acquisition Improvements, or the r eceipt of Available Special Taxes and (b) the completion of the construction of each such Acquisition Improvement; and WHEREAS, the City and CFD are willing to have the CFD finance the Facilities, subject to the requirements of the Act, City Council Policy No. 505-04 (Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts, the “Goals and Policies”) (except those provisions of the Goals and Policies that have been waived in accordance with the Resolutions and this Agreement), and this Agreement and Developer desires that the CFD so finance the Facilities. NOW, THEREFORE, IT IS MUTUALLY AGREED between the respective parties as follows: SECTION 1. Recitals. The above recitals are all true and correct. SECTION 2. Plans and Specifications. All plans, specifications and bid documents for the Acquisition Improvements (the “Plans and Specifications”) and all changes in the Plans and Specifications necessitated by change orders shall be prepared by the Developer at the Developer’s initial expense, subject to City approval. The costs of acquisition of such Acquisition Improvements shall include costs of the preparation of the Plans and Specifications and all related documentation as set forth in Section 7 below. Developer shall not award contracts for construction, commence construction or cause commencement of construction of any Acquisition Improvement until the Plans and Specifications for such Acquisition Improvement have been approved by the City. 2021/09/28 City Council Post Agenda Page 47 of 343 60297.00061\34345525.2 3 SECTION 3. Design, Bid and Construction of Improvements. Developer covenants and agrees that each Acquisition Improvement shall be designed, bid and constructed: (a) in substantial compliance with the approved Plans and Specifications for such Acquisition Improvement; (b) in a good and workmanlike manner by well-trained adequately supervised workers; (c) in strict compliance with all governmental and quasi-governmental rules, regulations, laws, building codes and all requirements of Developer’s insurers and lenders; (d) free of any known design flaws and defects; and (e) except as provided below, in substantial compliance with the requirements of Exhibit “D” hereto which is incorporated herein by this reference. In the event of a protest by a bidder to the award of a contract for the construction of an Acquisition Improvement or Acquisition Improvements to the apparent low bidder, the Developer may, in its sole discretion, elect to: (a) award the contract to the apparent low bidder pursuant to the provisions of Exhibit “D” hereto if the Developer has determined that the bid of the apparent low bidder was, in fact, responsive and that the irregularity upon which the protest is based was minor in nature, i.e., the irregularity did not create an unfair competitive advantage for the apparent low bidder; (b) reject the bid of the apparent low bidder if the Developer determines that the irregularity upon which the protest is based did create an unfair competitive advantage for the apparent low bidder and the bid of the apparent low bidder was, therefore, not responsive and award the contract to the lowest responsive bidder; or (c) reject all bids and solicit new bids for the construction of the applicable Acquisition Improvement or Acquisition Improvements. Should a legal action be filed challenging the validity of the Developer’s decision regarding any such bid protest and/or the award of any contract for the construction of any Acquisition Improvement, the Developer shall, at Developer’s sole expense, defend such action and shall defend, indemnify, and hold harmless the City, its officers, directors, employees and agents and the CFD and Authority and their officers, directors, employees and agents (each, an “Indemnified Party” and collectively, the “Indemnified Parties”). SECTION 4. Inspection and Acceptance of the Acquisition Improvements. The construction activities relating to the Acquisition Improvements to be constructed by the Developer shall be subject at all reasonable times to inspection by authorized representatives of City. Once an Acquisition Improvement to be acquired by City is substantially completed in accordance with the approved Plans and Specifications, then such Acquisition Improvement shall be eligible for payment of the Base Increment of the Purchase Price (as defined in Section 7 below) therefor. 2021/09/28 City Council Post Agenda Page 48 of 343 60297.00061\34345525.2 4 Prior to acceptance by the City of any Acquisition Improvement constructed by the Developer for purposes of paying the Retained Increment (as defined in Section 7 below) of the Purchase Price, the Developer shall provide to the City Engineer of the City, or his or her designee (the “City Engineer”), the documentation set forth in this Section 4 and Section 7(c)(ii) below and obtain approval of as-built drawings for the Acquisition Improvement in accordance with the process described below in this Section 4. The engineer of record for any such Acquisiti on Improvement (“Engineer of Record”) shall file form PW-E-106 (Request for Release of Bonds) with the City Engineer. Within 20 working days of such filing, the field inspector of the City or his or her designee (“Field Inspector”) shall issue and transmit to the Engineer of Record a letter requesting (i) as-built drawings and soils reports (when applicable) and (ii) a punchlist of work to be completed or corrections to work to be completed before such Acquisition Improvement will be eligible for payment of the Retained Increment. Within 20 working days of receipt of the Field Inspector’s letter, the Engineer of Record shall prepare redline as-built drawings and submit them, together with any necessary soils reports, to the Field Inspector and the Developer shall complete the items of work and/or corrections specified in the punchlist. Within 10 working days of the Engineer of Record’s submittal of the red lined as-built drawings, the Field Inspector shall review such drawings and provide comments. The Engineer of Record shall revise the redline as-built drawings per the Field Inspector’s comments and resubmit within 10 working days. The Field Inspector shall make his final review within 5 working days of the Engineer of Record’s resubmittal and notify the Engineer of Record to prepare mylar as-built drawings and a microfiche copy and submit both to the City Engineer or his designee and notify the Developer of any punchlist items which remain to be completed. The City and Developer shall make best efforts to perform within the time periods described above. The inability of City or Developer to perform within each time period, notwithstanding its best efforts, shall not constitute a breach of this Agreement. SECTION 5. Warranty of Acquisition Improvements Constructed by the Developer. At all times prior to the City’s acceptance of any Acquisition Improvement constructed by the Developer, the Developer shall be responsible for maintaining such Acquisition Improvement at the Developer’s expense. The Developer shall be obligated for the period of twelve (12) months immediately following the City’s acceptance of such an Acquisition Improvement to repair or replace, at Developer’s expense, any defects or failures resulting from the work of Developer, its contractors or agents. Upon the expiration of such twelve (12) month period, Developer shall assign to the City its rights in and to any warranties, guarantees or other evidence of contingent obligations of third persons with respect to such Acquisition Improvement. As a condition precedent to the payment of the Retained Increment (as defined in Section 7 below) of the Purchase Price, Developer shall post a maintenance bond in a form reasonably approved by the City, cause such a maintenance bond to be posted, or assign Developer’s rights under such a maintenance bond naming the City as beneficiary in an amount equal to fifteen percent (15%) of the Purchase Price of such Acquisition Improvement in order to secure Developer’s obligations pursuant to this Section. Upon posting of such maintenance bond, the City shall release any performance, labor and material bonds for such Acquisition Improvement. SECTION 6. Notice of Completion and Lien Releases. Upon completion of the construction of an Acquisition Improvement, Developer shall notify the City Engineer in writing of such completion and shall prepare and execute a Notice of Completion for such Acquisition Improvement in the form prescribed by Section 3093 of the California Civil Code and shall record 2021/09/28 City Council Post Agenda Page 49 of 343 60297.00061\34345525.2 5 such notice in the Official Records of the County of San Diego. Developer shall cause its contractors to provide unconditional lien releases for such Acquisition Improvement in accordance with Section 3262 of the Civil Code. Notwithstanding the foregoing, City may waive the requirement for a Notice of Completion and lien releases if City determines that as of the date of payment of the Retained Increment of the Purchase Price for an Acquisition Improvement, title to such Acquisition Improvement or portion thereof satisfies the requirements for Acceptable Title (as hereinafter defined). SECTION 7. Payment of Purchase Price. (a) Amount of Purchase Price. The amount to be paid by the CFD for the Acquisition Improvements to be constructed by and acquired from Developer (the “Purchase Price”) shall, as to each such Acquisition Improvement, (i) be determined by City in accordance with the provisions of this Section 7, (ii) equal the lesser of the cost or the value thereof, (iii) include the reasonable cost or value of eligible appurtenant public facilities, (iv) include the costs of the title insurance policy described in Section 9 (a), and (v) include all other costs of construction and incidental costs eligible under the Act and the Goals and Policies as a part of the cost of the Acquisition Improvements. The costs of each Acquisition Improvement to be included in the Purchase Price of such Acquisition Improvement shall include the following: (i) the actual hard costs for the construction of the Acquisition Improvement, including labor, materials and equipment costs; (ii) the costs of grading related to the Acquisition Improvement; (iii) the costs incurred in designing, engineering and preparing the plans and specifications for the Acquisition Improvement; (iv) the costs of environmental evaluation and mitigation of or relating to the Acquisition Improvement; (v) fees paid to governmental agencies for, and costs incurred in connection with, obtaining permits, licenses or other governmental approvals for the Acquisition Improvement; (vi) costs of construction administration and supervision up to one and three quarters percent (1.75%) of the total cost of the Acquisition Improvement; (vii) professional costs associated with the Acquisition Improvement, such as engineering, legal, accounting, inspection, construction staking, materials and testing and similar professional services, subject to the limitations established in the Goals and Policies; and (viii) costs of payment, performance and/or maintenance bonds and insurance costs directly related to the construction of the Acquisition Improvement. 2021/09/28 City Council Post Agenda Page 50 of 343 60297.00061\34345525.2 6 In no event shall the cost or value of the construction of the Acquisition Improvements be deemed to exceed the construction contract prices set forth in the contracts and change orders approved by City (“Approved Change Orders”) pursuant to the applicable provisions of Exhibit “D” hereto, which is incorporated herein by this reference, or otherwise authorized pursuant to this Agreement. Notwithstanding anything in this Section to the contrary, the City may elect, by written notice to the Authority and Developer, to have the audit and payment processes described in this Section 7 administered by the Authority’s third party/consultant, rather than City personnel. (b) Incremental Payment of Purchase Price of an Acquisition Improvement. The Purchase Price for any Acquisition Improvement constructed by the Developer shall be payable in not to exceed two increments: (i) the “Base Increment” which shall be an amount equal to 75% of t he audited, eligible costs as reflected in the written request for payment of the Base Increment submitted by the Developer and as approved by the Director of Development Services of the City, or his or her designee (the “DSD Director”) and shall not exceed 75% of the cost estimate set forth in Exhibit “B” for such Acquisition Improvement; and (ii) the “Retained Increment” which shall be an amount not to exceed the remaining, unpaid portion of the Purchase Price for such Acquisition Improvement determined pursuant to the provisions of (a) above. (c) Requisition for Incremental Payment of Purchase Price of an Acquisition Improvement. (i) Base Increment. The Developer may submit only one (1) written request to the DSD Director for the payment of the Base Increment for an Acquisition Improvement constructed by the Developer upon the substantial completion of the construction of such Acquisition Improvement in accordance with the approved Plans and Specifications. The criteria for determining “substantial completion” of each such Acquisition Improvement is described in Exhibit “C” and shall mean generally that construction, or work with respect to such Acquisition Improvement has progressed to the point where it is sufficiently complete so that such Acquisition Improvement can be utilized for the purpose for which it was intended. Substantial completion of such an Acquisition Improvement shall also mean that all components of such Acquisition Improvement are substantially complete, e.g., in the case of Acquisition Improvement including streets, the components are described in Exhibit “C.” Each Base Increment payment request must be in the form attached hereto as Exhibit “E,” which is incorporated herein by this reference, and conform to the requirements of (f) below. The request for payment of the Base Increment for an Acquisition Improvement shall be accompanied by a copy of the following documents related to the construction of such Acquisition Improvement: (1) each construction contract and copy of bid notice for such contract, (2) each change order, (3) each invoice submitted pursuant to such construction contracts, (4) evidence of payment of each such invoice such as copies of cancelled checks or other evidence of payment satisfactory to the City Engineer, and (5) written conditional lien releases executed by each applicable contractor, subcontractor and materialman in a form satisfactory to the City Attorney of the City (the “City Attorney”) for such Acquisition Improvement. (ii) Retained Increment. The Developer may submit only one (1) written request to the DSD Director for the payment of the Retained Increment for an Acquisition Improvement 2021/09/28 City Council Post Agenda Page 51 of 343 60297.00061\34345525.2 7 in the form attached hereto as Exhibit “F,” which is incorporated herein by this reference, upon the submission to the City Engineer of (1) as-built drawings or other equivalent plans and specifications for such Acquisition Improvement in a form reasonably acceptable to the City, (2) evidence that the Developer has posted a maintenance bond for such Acquisition Improvement as required by Section 5 hereinabove, (3) evidence of the satisfaction of the requirements of Section 9 hereinbelow directly related to such Acquisition Improvement and (4) written unconditional lien releases from all contractors, subcontractors and materialmen satisfactory to the City Attorney for such Acquisition Improvement. For any costs not included in the Developer’s written request for payment of the Base Increment but requested for payment in the Retained Increment the request shall conform to the requirements of (f) below and also be accompanied by the following documents related to such additional costs of the construction of such Acquisition Improvement if not done so with the written request for payment of the Base Increment: (1) each construction contract, (2) each change order, (3) each invoice submitted pursuant to such construction contracts, and (4) evidence of payment of each such invoice such as copies of cancelled checks or other evidence of payment satisfactory to the DSD Director. (d) Documentation. Any payment request submitted by Developer shall be properly executed and shall include copies of all supporting documents required by subsection (c)(i) or (c)(ii), as applicable. (e) Review of Payment Request for an Acquisition Improvement. The DSD Director shall review each payment request and the supporting documentation accompanying such payment request. If the City DSD Director finds that any such payment request is incomplete, improper or otherwise not suitable for approval, the DSD Director shall inform Developer in writing within twenty (20) working days after receipt thereof, the reasons for his finding. Developer shall have the right to respond to this finding by submitting further documentation after receipt of the denial. The DSD Director shall review any further documentation received from the Developer in support of a payment request and inform Developer of his approval or denial of the payment request as supplemented in accordance with this Section within ten (10) working days after receipt of the supplemental documentation. A resubmittal of a payment request shall be deemed a new payment request for purposes of this Section. Subject to the limitations set forth herein, costs incurred under a construction contract for an Acquisition Improvement entered into pursuant to the requirements of this Agreement and Approved Change Orders shall be deemed to be reasonable and, subject to the other provisions of this Agreement, shall be included in the Purchase Price for such Acquisition Improvement. After his or her approval of each payment request, the DSD Director shall immediately forward a request to the Authority and CFD notifying the Authority and CFD of his or her approval of the payment request and requesting that such payment be made to the appropriate payee. The CFD shall process any such request of the DSD Director pursuant to the applicable procedures of the Authority and shall make or authorize such payment pursuant to such procedures and subsection (h) below. 2021/09/28 City Council Post Agenda Page 52 of 343 60297.00061\34345525.2 8 (f) Payment. (i) Priority of Payment of Purchase Prices for Acquisition Improvements. The City and the Developer acknowledge and agree that the Purchase Prices of all Acquisition Improvements may exceed the aggregate amount of the Bond proceeds and special taxes which will be available for the payment of the Purchase Prices. (ii) Timing of the Payment of the Purchase Price for an Acquisition Improvement. Subject to the limitations contained in (i) above and (iii) and (iv) below, the increment of the Purchase Price for each Acquisition Improvement shall be paid to Developer within thirty (30) days after the date of the DSD Director’s approval of the payment request for any such increment; provided, however, no Retained Increment for any Acquisition Improvement shall be paid earlier than thirty five (35) days after the recording of a Notice of Completion for such Acquisition Improvement. (iii) Source of Payment. The Purchase Price or any increment thereof for an Acquisition Improvement shall be payable to the Developer from (i) those proceeds of the sale of each series of Bonds deposited in the project fund (the “Project Fund”) established pursuant to the indenture or fiscal agent agreement for the Bonds (the “Indenture”) and (ii) the Special Taxes of the CFD that have been levied directly to pay for Facilities and collected by the CFD, including prepayments allocable to Facilities (the “Available Special Taxes”). The funds deposited in the Project Fund and the Available Special Taxes shall be referred to as the “Available Amount.” (iv) Withholding of Payment. In addition to the foregoing, the City shall have the right to withhold approval of a payment request for of the Purchase Price or any increment thereof of any Acquisition Improvement if the DSD Director reasonably determines that the Developer is not then in substantial compliance with all applicable conditions and obligations imposed upon the Developer hereunder or upon the Development Project pursuant to the land use entitlements approved by the City for the Development Project, including but not limited to, payment of all applicable fees, dedication of all applicable rights-of-way or other property and construction of all applicable public improvements. The DSD Director shall provide written notice to the Developer of the decision to withhold any such approval and shall specify the reason for such decision. The notice shall specify such condition or obligation and what action will be necessary by the Developer to substantially comply with such condition or obligation. Upon the determination by the DSD Director that the Developer has substantially complied with the subject condition or obligation, the City shall forthwith provide any approval which has been withheld pursuant to the provisions of this paragraph. SECTION 8. Audit. The authorized representatives of City shall have the right, upon two (2) days prior written notice to Developer and during normal business hours, to review all books and records of Developer pertaining to costs and expenses incurred by Developer in construction of the Acquisition Improvements. 2021/09/28 City Council Post Agenda Page 53 of 343 60297.00061\34345525.2 9 SECTION 9. Ownership and Transfer of Acquisition Improvements. The conveyance of the Acquisition Improvements by Developer to City shall be in accordance with the following procedures: (a) Acquisition Improvements Constructed on Land not Owned by City. As a condition to the payment of the Retained Increment of the Purchase Price, Developer shall cause an irrevocable offer of dedication to be made to City or an outright grant of a fee interest or easement interest as appropriate, in the sole discretion of the City of the appropriate right, title and interest in and to the portion of the applicable property owned by the Developer related to the applicable Acquisition Improvement, including any temporary construction or access easements. Developer, whether or not it is the entity constructing the Acquisition Improvements, agrees to execute and deliver to the City the documents required to complete the transfer of Acceptable Title for property owned by the Developer upon or within which such Acquisition Improvements are to be located. For purposes of this Agreement, the term “Acceptable Title” shall mean title to the portion of the property to be conveyed free and clear of all taxes, liens, encumbrances, assessments, easements, leases, whether any such item is recorded or unrecorded, except (i) non-delinquent taxes and assessments and (ii) those non-monetary encumbrances and easements which are reasonably determined by the City not to interfere with the intended use of the portion of the property. As a further condition to the payment of the Retained Increment of the Purchase Price for any Acquisition Improvement, Developer at its sole initial cost and expense, subject to reimbursement pursuant to Section 7, shall cause to be issued a policy of title insurance for such portion of the property in an amount not to exceed the Purchase Price and in the form normally required by City in connection with the dedication of land for subdivision improvements and containing such title endorsements as may be reasonably requested by City. City’s final acceptance of the portion of the property and the Acquisition Improvements constructed thereon shall not be unreasonably withheld or delayed. SECTION 10. Grading and Subdivision Acquisition Improvement Bonds . Except as provided below, Developer shall be required to post or cause the posting of bonds or other security acceptable to the City to guarantee completion of the Acquisition Improvements in accordance with City’s standard subdivision requirements and conditions of approval of the Development Project (the “Conditions of Approval”). Labor and materials bonds shall also be required to be provided by the Developer’s contractor for all Acquisition Improvements to be constructed under this agreement. Such bonds shall name the City of Chula Vista as additional obligee and shall remain in effect until the final acceptance of the Acquisition Improvements by the City Engineer. The presence of Bond proceeds shall not relieve the Developer of requiring this obligat ion of the Developer’s contractor. Performance and labor and material bonds for specific Acquisition Improvements shall not be required or may be released if: (1) such Acquisition Improvements constitute a portion of the required subdivision improvements, (2) Bond proceeds equal to 125% of the estimated cost to construct or acquire such Acquisition Improvements are available and set aside for such purpose, and (3) the Acquisition Improvements are to be constructed or acquired entirely with the proceeds of the Bonds. Provided that conditions (1) and (2) are satisfied, if an Acquisition Improvement is to be constructed or acquired only in part with the proceeds of the Bonds, performance and labor and material bonds shall not be required for that portion of the Acquisition Improvements to be so constructed or acquired except with respect to the portion that will not be acquired or constructed 2021/09/28 City Council Post Agenda Page 54 of 343 60297.00061\34345525.2 10 with Bond proceeds. In the event that the Bond proceeds that are available and may be set aside to fund the cost to construct or acquire an Acquisition Improvement are less than 125% of the estimated cost thereof, the Developer shall be required to provide a performance and labor and material bond or other security satisfactory to the City Engineer and the City Attorney i n the amount of such deficiency. City will cooperate with Developer in the termination or exoneration of any performance and labor and material bonds assuring completion of Acquisition Improvements for which bonds have been sold. The City Engineer shall be the sole judge of determining release of such bonds. SECTION 11. Indemnification by Developer. Developer shall defend, indemnify and hold harmless the City, its elected and appointed officers, agents and employees (the “Indemnified Parties”), from and against any and all claims, losses, liabilities, damages, including court costs and reasonable attorneys’ fees by reason of, or resulting from, or arising out of the design, engineering, solicitation of bids, award of contracts, administration of contracts and construction of the Acquisition Improvements by the Developer, its employees, agents, independent contractors and/or representatives; provided that any claims for personal injury or property damage which relate to the Improvements shall be limited to those arising out of personal injury or property damage caused by actions or omissions by Developer or Developer’s employees, agents, independent contractors or representatives which occurred during the period prior to the transfer of title to the Acquisition Improvements by City, whether or not a claim is filed prior to the date of acceptance of the Acquisition Improvements. Nothing in this Section 11 shall limit in any manner the rights of the City against any of the architects, engineers, contractors or other consultants employed by the Developer which has performed work in connection with construction or financing of the Acquisition Improvements. Notwithstanding the foregoing, Developer shall have no obligation to defend, indemnify or hold harmless the Indemnified P arties from and against any claims, liabilities, losses or damages (including court costs and attorneys’ fees) which result from or arise out of the sole negligence or willful misconduct of an Indemnified Party. Except as set forth in this Section 11, no provision of this Agreement shall in any way limit the extent of the responsibility of Developer for payment of damages resulting from the operations of the Developer, its agents, employees or contractors. SECTION 12. Obligation of City. Neither the City nor the CFD has a legal or financial obligation to construct the Acquisition Improvements. All costs incurred for actual construction of the Acquisition Improvements, including all incidentals thereto, shall be borne by Developer, and the obligations of the City and CFD are limited to the acquisition of the Acquisition Improvements pursuant to the provisions of this Agreement. SECTION 13. Failure by Developer to Construct Acquisition Improvements. At any time following commencement of the construction of any Acquisition Improvements by the Developer the City determines that such construction is not progressing within a reasonable time in accordance with the Conditions of Approval or the Developer fails to demonstrate a continuing ability to complete the construction of such Acquisition Improvement in accordance with the Conditions of Approval, the City may give written notice of such failure of performance to the Developer. Developer shall have sixty (60) days from the date of receipt of such notice to either (i) cure such failure of performance by demonstrating to the satisfaction of the City during such cure period reasonable progress in the construction of the Acquisition Improvement and a 2021/09/28 City Council Post Agenda Page 55 of 343 60297.00061\34345525.2 11 continuing ability to complete the construction of such Acquisition Improvement in accordance with the Conditions of Approval or (ii) reasonably demonstrate that such failure of performance is due to circumstances or conditions beyond Developer’s reasonable cont rol (“Force Majeure”) including, without limitation, the City’s actions, omissions or inaction which result in a delay of performance by Developer, labor disputes, acts of God, war, riots, insurrections, civil commotions, moratoriums, inability to obtain labor or materials or reasonable substitutes for either, fire, unusual delay in transportation, and adverse weather conditions. Should Developer fail to reasonably demonstrate such reasonable progress or such continuing ability to complete the construction of such Acquisition Improvement or Force Majeure, the obligation of the City to pay the Purchase Price for the acquisition of such Acquisition Improvement pursuant to this Agreement may be terminated by the City by providing ten (10) days written notice t o the Developer. Upon termination, the City may in its sole discretion then proceed to advertise and bid the balance of the construction of such Acquisition Improvement, and there will be no further obligation on the part of the City for payment of the Purchase Price for such Acquisition Improvement due to Developer pursuant to this Agreement. In the event that the City chooses not to advertise and bid the balance of the construction of any such Acquisition Improvement following such a termination, any monies remaining in the Project Fund and set aside for the acquisition of such Acquisition Improvement shall be transferred to the redemption fund established by the Indenture and used to call outstanding Bonds. SECTION 14. Notice of Special Tax. Developer, or the successor or assigns of the Developer, shall provide written notice to all potential purchasers of lots in the form required pursuant to Government Code Section 53341.5 and/or such additional requirements as may be established by the City, so advising the potential purchaser of the fact of the CFD, with said document being executed by the potential purchaser. Such notice shall be provided to the potential purchaser a reasonable time before the potential purchaser becomes contractually committed to purchase the property so that the potential purchaser may knowingly consider the impact of the special tax in the decision to purchase the property. A copy of all such notices executed by actual purchasers shall be provided to the DSD Director. SECTION 15. Agreement Contingent. The City may, at its option, suspend the performance of its obligations under this Agreement if any legal challenge is filed relating to the validity or enforceability of this Agreement. The obligations of the City and CFD hereunder shall be reinstated upon the entry of a final judgment in any such proceedings upholding the validity and enforceability of the Agreement. In the event that a final judgment or other final and non - appealable resolution is entered invalidating or declaring unenforceable this Agreement, the City and CFD may, at their option, terminate this Agreement. SECTION 16. Limitation of Aggregate Taxes and Assessments. Owner agrees to include in any future agreement to sell all or any portion of the property to any person or entity for the purpose of constructing and marketing owner-occupied residential dwelling units (each, a “Merchant Builder”) provisions requiring the inclusion of the following “escrow instructions” in all sales by such Merchant Builder to residential home owners. (a) At or prior to the close of each such escrow with a residential homeowner, the escrow company shall apply a “calculation formula” previously approved by the DSD Director and 2021/09/28 City Council Post Agenda Page 56 of 343 60297.00061\34345525.2 12 deposited with the escrow company by the Merchant Builder to determine the aggregate of all annual ad valorem property taxes, all special taxes authorized to be levied to finance the construction or acquisition of public facilities and all assessment installments authorized to be levied to finance the construction or acquisition of public facilities (the “Total Annual Taxes and Assessments”) applicable to the parcel subject to such escrow (the “Applicable Parcel”). (b) If the Total Annual Taxes and Assessments exceed 2% of the sales price of the Applicable Parcel, the Escrow Company will make immediate written demand upon the Merchant Builder for deposit into the escrow of the funds necessary to partially prepay the special tax obligation for the CFD or any other community facilities district so that the Total Annual Taxes and Assessments will thereafter be equal to or less than 2% of the sales price of the Applicable Parcel. Such funds must be received by the escrow company prior to the close of escrow of the sale of the Applicable Parcel. The calculation of the prepayment amount for the CFD shall be in accordance with the method of prepayment of special tax as set forth in the rate and method of apportionment of special taxes approved by the qualified electors of the CFD or the other community facilities district for which the special taxes are being partially prepaid. Upon closing of such escrow, the amount so deposited by the Merchant Builder pursuant to this escrow instruction shall be sent by the escrow company to the Director of Finance, together with written instructions that such amount is to be used to partially prepay the special tax obligation of the Applicable Parcel for the CFD or shall be sent to the other community facilities district for which the special tax obligation has been prepaid with similar written instructions. The provisions of this Section 16 related to sales by Merchant Builders to residential homeowners shall also apply to any sale by Owner of a parcel to a residential homeowner. In addition to any other remedy provided for by law or in equity, the City may enforce the provisions of this Section 16 by an action for specific performance or injunctive relief or both. SECTION 17. Relationship to Public Works. This Agreement is for the construction and acquisition of certain Acquisition Improvements by City and is not intended to be a public works contract. In performing its obligations under this Agreement, Developer is an independent contractor and not the agent of City. Neither City nor the Authority shall have any responsibility for payment to any contractor or supplier of Developer. Notwithstanding the foregoing, Developer may be subject to certain public contract requirements as provided in Section 3 of this Agreement. SECTION 18. Deposit and Use of Available Amount. (a) Project Fund Held by Authority. Prior to the issuance of the first series of Bonds, Available Special Taxes collected by the Authority (including from prepayments of Special Taxes) shall be deposited in the Project Fund established by the Authority for the CFD and may be disbursed to pay or reimburse the costs of the Facilities in accordance with this Agreement. All funds in the Project Fund shall be considered a portion of the Available Amount, and upon the issuance of the first series of Bonds for the CFD, the Project Fund shall be transferred to the trustee or fiscal agent for the Bonds (the “Trustee”) to be held in accordance with the Indenture. (b) Issuance of Bonds - Project Fund Held by Trustee. Developer, the City and the Authority agree to reasonably cooperate with one another in the completion of the financing through the 2021/09/28 City Council Post Agenda Page 57 of 343 60297.00061\34345525.2 13 issuance of the Bonds in one or more series for the CFD in accordance with the California Municipal Finance Authority Policies and Procedures for Community Facilities Districts (http://www.cmfa-ca.com/bold/cmfa-cfd-policies-and-procedures/). Upon the issuance of the first series of Bonds for the CFD, the Authority will cause the Trustee to establish and maintain a separate Project Fund for the purpose of holding all funds derived from each series of Bonds for the financing of the Facilities. A separate Tax Exempt Account and Taxable Account of the Project Fund may be established for each series of Bonds into which the proceeds of tax exempt Bonds and taxable Bonds, if any, shall be deposited. All earnings on amounts in a Project Fund shall remain in such Project Fund for use as provided herein and pursuant to the applicable Indenture. Money in each and every Project Fund shall be available to respond to delivery of Payment Requests for the Base Increment or Retained Increments in the form attached hereto as Exhibits “E” and “F,” respectively, with respect to Acquisition Improvements, and a Disbursement Request Form (defined below) relating to City Fees to be paid to the City, or its designee, or the Developer, or its designee, from the Available Amount pursuant to such forms. Upon completion of the Project and the funding of all Facilities, any remaining funds in each Project Fund (less any amount determined by the City as necessary to reserve for claims against the Project Fund) shall be applied by the Authority to call Bonds or to reduce Special Taxes as the Authority shall determine. (c) City Disbursement from Project Fund for City Fees. Following the Developer’s submittal of a payment request to FAI for a prepayment of City Fees pursuant to the Financed Fees Payment Request Procedures attached hereto as Exhibit “H,” moneys on deposit in the Project Fund shall be disbursed pursuant to written disbursement requests of the City, in substantially the form attached hereto as Exhibit “G” (“Disbursement Request Form (City Fees)”) and executed by the City Manager or DSD Director, or any designee of the foregoing (each, an “Authorized Officer”), which disbursements shall be used for the payment of City Fees. In the event of such a disbursement, the City shall establish a Trust Account relating to each applicable City Fee for the benefit of the Developer or the Developer’s designees. In addition, City Fees paid previously with respect to the Project shall be reimbursed to the Developer through the Developer’s submittal of a payment request pursuant to the procedures set forth in the Financed Fees Payment Request Procedures attached hereto as Exhibit “H.” The Authority and its designees, including the Trustee holding funds in the Project Fund, may conclusively rely on such requisitions for purposes of making such disbursements. All disbursements from the Project Fund to the City shall be made by wire transfer of immediately available funds or by check payable to the City’s bank account number at a bank located within the United States on file with the Authority as part of the BOLD program, unless another method of payment is requested in writing by the City. SECTION 19. Conflict with Other Agreements. Except as specifically provided herein, nothing contained herein shall be construed as releasing Developer from any condition of development or requirement imposed by any other agreement with City. To the extent the provisions of this Agreement conflict with any provisions of such other agreement, the provisions of such other agreement shall control. SECTION 20. General Standard of Reasonableness. Any provision of this Agreement which requires the consent, approval, discretion or acceptance of any party hereto or any of their respective employees, officers or agents shall be deemed to require that such consent, approval or 2021/09/28 City Council Post Agenda Page 58 of 343 60297.00061\34345525.2 14 acceptance not be unreasonably withheld or delayed, unless such provision expressly incorporates a different standard. SECTION 21. Entire Agreement; Amendment. This Agreement and the agreements expressly referred to herein contains all of the agreements of the parties hereto with respect to the matters contained herein and no prior or contemporaneous agreement or understandings, oral or written, pertaining to any such matters shall be effective for any purpose. No provision of this Agreement may be modified, waiver, amended or added to except by a writing signed by the party against which the enforcement of such modification, waiver, amendment or addition is or may be sought. SECTION 22. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered or seventy-two (72) hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid, addressed as follows: Authority: California Municipal Finance Authority 2111 Palomar Airport Road, Suite 320 Carlsbad, CA 92011 Attn: Edward J. Becker Administrator: Francisco & Associates, Inc. Attn: Ed Espinoza 5927 Balfour Court, Suite 109 Carlsbad, CA 92008 Developer: HomeFed Village 8, LLC c/o Otay Land Company, LLC 1903 Wright Place, Suite 220 Carlsbad, CA 92008 Attn: C urt Smith With a copy to: John P. Yeager, Esq. O’Neil LLP 19900 MacArthur Blvd., Suite 1050 Irvine, CA 92612 2021/09/28 City Council Post Agenda Page 59 of 343 60297.00061\34345525.2 15 City: City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Attn: City Manager With a copy to: 276 Fourth Avenue Chula Vista, CA 91910 Attn: City Attorney Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party. SECTION 23. Severability. If any provision of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. SECTION 24. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. Developer may not assign its rights or obligations hereunder except upon written notice to City and the Authority within ten (10) days of the date of such assignment indicating the name and address of the assignee. No other Developer of property within the CFD shall have any right to receive payments with respect to any Facilities unless such right has been expressly assigned to such Developer by Developer in writing. Upon such notice and the assumption by the assignee of the rights, duties and obligations of the Developer arising under or from this Agreement, Developer shall be released by City from all future duties or obligations rising under or from this Agreement. SECTION 25. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California, Additionally, this Agreement and the construction of the Acquisition Improvements shall be subject to all City ordinances and regulations relating to the requirement of improvement agreements, land division, improvement security or other applicable development requirements. SECTION 26. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by any other party, or the failure by a party to exercise its rights under the default of any other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by any other party with the terms of this Agreement thereafter. SECTION 27. Singular and Plural; Gender. As used herein, the singular of any work includes the plural, and terms in the masculine gender shall include the feminine. SECTION 28. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. SECTION 29. Construction of Agreement. This Agreement has been reviewed by legal counsel for the City, the Authority and the Developer and shall be deemed for all purposes to have been jointly drafted by the City, the Authority and the Developer. No presumption or rule that 2021/09/28 City Council Post Agenda Page 60 of 343 60297.00061\34345525.2 16 ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. The language in all parts of this Agreement, in all cases, shall be construed as a whole and in accordance with its fair meaning and not strictly for or against any party and consistent with the provisions hereof, in order to achieve the objectives of the parties hereunder. The captions of the sections and subsections of this Agreement are for convenience only and shall not be considered or referred to in resolving questions of construction. SECTION 30. Recitals; Exhibits. Any recitals set forth above and any attached exhibits are incorporated by reference into this Agreement. SECTION 31. Authority of Signatories. Each signatory and party hereto hereby represents and warrants to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all resolutions and/or other actions have been taken so as to enable such party to enter into this Agreement. 2021/09/28 City Council Post Agenda Page 61 of 343 60297.00061\34345525.2 S-1 Signature Page to Acquisition/Financing Agreement by and between the City of Chula Vista, California Municipal Finance Authority, Community Facilities District No. 2021-11 (City of Chula Vista Otay Ranch Village 8 West) IN WITNESS WHEREOF, City, Authority and Developer have executed this Agreement as of the Effective Date thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms. “CITY” CITY OF CHULA VISTA MARIA V. KACHADOORIAN, CITY MANAGER CITY OF CHULA VISTA STATE OF CALIFORNIA APPROVED AS TO FORM: GLEN R. GOOGINS, CITY ATTORNEY CITY OF CHULA VISTA STATE OF CALIFORNIA 2021/09/28 City Council Post Agenda Page 62 of 343 60297.00061\34345525.2 S-2 “DEVELOPER” HOMEFED VILLAGE 8, LLC, a Delaware limited liability company By: Name: Its: “AUTHORITY” CALIFORNIA MUNICIPAL FINANCE AUTHORITY, a joint powers authority By: Name: Its: Authorized Signatory 2021/09/28 City Council Post Agenda Page 63 of 343 60297.00061\34345525.2 A-1 EXHIBIT “A” CFD BOUNDARY MAP 2021/09/28 City Council Post Agenda Page 64 of 343 60297.00061\34345525.2 B-1 EXHIBIT “B” DESCRIPTION OF FACILITIES A. CITY FEES 1. Sewer Capacity Charge 2. Salt Creek Sewer Basin Fee 3. Traffic Signal Fee 4. Eastern Transportation Development Impact Fee (“TDIF”) 5. Parkland Acquisition and Development Fee (“PAD”) (Community Park obligation only) 6. Public Facilities Development Impact Fees (“PFDIF”) 7. Possible Future Fee for Vehicle Miles Traveled (“VMT”) B. ACQUISITION IMPROVEMENTS 1. La Media Parkway (Town Center Arterial and 4 Lane Major) – (TDIF Facility) – Estimated Cost $14,916,788 City TDIF Road: Portion of 53A, portion of 56C Limits: From north Village 8 West boundary, south and east ending at east Village 8 West boundary Includes: Grading, drainage, surface improvements, landscape and irrigation, traffic signals, environmental mitigation, associated soft costs 2. Main Street (Town Center Arterial) – (TDIF Facility) – Estimated Cost $7,511,756 City TDIF Road: 53B Limits: From west Village 8 West boundary to east Village 8 West boundary Includes: Grading, drainage, surface improvements, landscape and irrigation, traffic signals, environmental mitigation, associated soft costs 3. Avenida Caprise (Residential Collector) – Estimated Cost $4,069,280 Limits: From westbound Main Street to southerly terminus of road Includes: Grading, drainage, surface improvements, landscape and irrigation, traffic signals, environmental mitigation, associated soft costs 2021/09/28 City Council Post Agenda Page 65 of 343 60297.00061\34345525.2 C-1 EXHIBIT “C” SUBSTANTIAL COMPLETION CRITERIA FOR ACQUISITION IMPROVEMENTS General: 1. Substantial completion of an Acquisition Improvement for purposes of determining the eligibility of such Acquisition Improvement for the payment of the “Base Increment” therefore shall mean that the construction or work with respect to such Improvement, including each component of such Improvement, has progressed to the point where it is sufficiently complete so that it can be utilized for the purpose for which it was intended. Substantial completion criteria for each Acquisition Improvement or component of an Improvement is further described below. 2. Payment for the “Retained Increment” of the Purchase Price for an Acquisition Improvement shall be in accordance with Section 7, paragraph (c)(ii) and shall be made after submittal of a payment request form, as-built plans and such other documentation as is required pursuant to Section 7 paragraph (c)(ii), posting of maintenance bonds, and submittal of lien release evidence. Substantial Completion Criteria: A. Grading: Grading shall be deemed to be complete upon (1) completion of all preliminary grading work (mobilization, site clearing, remedial grading, overexcavation, installation of subdrainage systems) (2) certification of compaction by the geotechnical engineer, quantity verification by the civil engineer, and confirmation by the Field Inspector and (3) installation of all surface grading improvements (brow ditches, retaining walls, slope protection and similar improvements) and the certification thereof by the geotechnical engineer and confirmation by the Field Inspector. B. Sewer: Sewer construction shall be deemed substantially complete upon the installation, flushing, and testing of sewer main line, laterals, cleanouts, manholes, and all other appurtenances of the sewer system as shown on the approved plans and specifications therefore and in accordance with the City standard plans and specifications and the verification of such installation by the civil engineer and confirmation of such installation by the Field Inspector. C. Storm Drain: Box culverts and headwall structures shall be deemed substantially complete upon installation as shown on the approved plans and specifications therefore and in accordance with the City standard plans and specifications and verification of such installation by the civil engineer, and confirmation of such installation by the Field Inspector. D. Drainage Facilities: Drainage structures including energy dissipation devices (rip -rap, drop structures, cut-off walls, etc.), drainage diversion structures, facilities required as part of the environmental mitigation measures, and other drainage channel appurtenances including drainage pipes connecting the brow ditches to the channel, shall be deemed substantially complete for payment of the Base Increment upon the installation thereof as shown on the approved plans and specifications therefore and in accordance with City standard plans and 2021/09/28 City Council Post Agenda Page 66 of 343 60297.00061\34345525.2 C-2 specifications and the verification of such installation by the civil engineer and confirmation of such installation by the Field Inspector. E. Dry Utility Backbone System: Dry utilities (electric, gas, telephone, CATV) shall be deemed substantially complete upon the installation of the conduits, junction boxes, payment of utility fees, and written acceptance of the facilities by the utility companies. F. Roadway Pavement and Roadway Drainage System: Roadway pavement and drainage improvements shall be deemed substantially complete upon the installation thereof as shown on the approved improvement plans therefore and in accordance with City standard plans and specifications and confirmation of such installation by the Field Inspector of all storm drain pipes, catch basins, drainage inlets and cleanouts for the roadway storm drain system, installation of roadway base material, concrete curb and gutter, and AC pavement including the preparation of the subgrade and base material. G. Other Street Surface Improvements: Street surface improvements including street lights, traffic signals and conduits, signal interconnect, street name signs, roadway signing and striping, and appurtenances shall be deemed substantially complete when installed as shown on the improvement plans and in accordance with City standard plans and specifications and upon confirmation of such installation by the Field Inspector. H. Street Landscape Irrigation and Planting: Parkway landscaping within the roadway right of way including planting, irrigation, concrete sidewalks, median maintenance strip, pedestrian ramps, channel maintenance roads and all associated subgrade and base material preparation shall be deemed substantially complete upon installation thereof as shown on the approved improvement plans therefore and in accordance with City standard plans and specifications and confirmation of such installation by the Field Inspector. I. Slope Landscaping: Landscape planting and irrigation improvements for the slopes outside of the roadway and channel right of way and the regional trail (DG) and fencing shall be deemed substantially complete upon installation thereof as shown on the approved improvement plans therefore and in accordance with City standard plans and specifications and confirmation of such installation by the Field Inspector. 2021/09/28 City Council Post Agenda Page 67 of 343 60297.00061\34345525.2 D-1 Exhibit “D” Design, Bid, Contract and Change Order Requirements 1. General These requirements shall be applied to all Acquisition Improvements proposed to be constructed by the Developer and subsequently acquired by the City through California Municipal Finance Authority CFD No. 2021-11 (City of Chula Vista-Otay Ranch Village 8 West). Except as expressly provided otherwise in the body of this Agreement itself, any deviation from these requirements must be approved in writing in advance by the DSD Director. References to the DSD Director means the DSD Director or his or her designee. The City reserves the right to make the final determination of cost of the Acquisition Improvements to be acquired in accordance with this Agreement. 2. Design Phase A. Acquisition Improvements shall be designed in accordance with City standards and regulations. B. Bidding Documents. Two complete sets of bidding documents, including improvement plans, general provisions, and bid proposal forms have been or shall be submitted to the Development Services Department of the City for review and approval within 15 working days of submittal. Advertising for bids shall not have taken place or shall not take place until the bidding documents are approved in writing by the City. This procedure shall have been followed or shall be followed for each contract proposed to be advertised. Unless otherwise noted, the bidding documents shall conform to the following minimum requirements: 1. Unless impractical due to the nature of the Acquisition Improvement, the bid proposal shall be unit priced rather than lump sum. A.C. pavement, base and sub-base shall be bid on a square foot per inch thickness basis. 2. The bidding documents shall require the bidder/contractor to provide the following bonds: a. Bid Bond - 10% of the amount of the bid. b. Material and Labor Bond - 50% of the contract amount. c. Performance Bond - 100% of the contract amount. The Contractor posted or shall post performance and labor and material bonds for all improvements as part of the bid. The City shall be named as additional obligee with the right to call such bonds if needed. Such bonds shall remain in effect until 2021/09/28 City Council Post Agenda Page 68 of 343 60297.00061\34345525.2 D-2 such time as all improvements are completed and accepted by the City Engineer. The City Engineer shall be the sole judge in determining the release of such bonds. 3. The bidding documents required or shall require the successful bidder to provide evidence of comprehensive or commercial general public liability insurance in the amount of at least $1,000,000 prior to the award of the contract. 4. The contractor is required to pay prevailing wages. Developer shall advertise the Project as requiring the payment of prevailing wage and include all provisions in the advertisement and contract documents as required by the California Department of Industrial Relations (“DIR”). 5. The bidding documents clearly stated or must clearly state the time, date, and place where bids are to be submitted and opened. 6. The bidding documents clearly stated or shall clearly state the amount of time to complete the work. The time allowed must be reasonable for the amount of work. Accelerated construction time allowances must be supplementally bid, and are not eligible for public finance unless previously approved by the City Engineer. 3. Bidding Phase A. The Notice inviting Sealed Bids was published or shall be published in the Chula Vista Star News and the San Diego Daily Transcript. The notice inviting bids stated or shall state where bidding documents are available. B. The bidding period following the advertisement of the Notice Inviting Sealed Bids was or shall be a minimum of 14 calendar days. C. Developer provided or shall provide complete sets of bidding documents to all contractors, subcontractors, or suppliers requesting them. A reasonable price may be charged for bidding documents. D. Developer kept or shall keep a log of all persons obtaining bidding documents, and their mailing address. E. Addenda were mailed or shall be mailed by first class mail to all bidding document holders and the DSD Director. If an addendum is required within five working days of the noticed bid opening date, the bid opening date shall be extended. F. Submitted bids were or shall be in sealed envelopes. G. Bids were not or shall not be accepted after the stated time for submission. H. Bid opening was or shall be conducted by the Developer at the Developer’s place of business or other site mutually acceptable to the Developer and DSD Director. 2021/09/28 City Council Post Agenda Page 69 of 343 60297.00061\34345525.2 D-3 I. Sealed bids were or shall be opened and read aloud immediately following the submission time. A City representative was or shall be invited to attend the bid opening. J. Conditioned bids, unless the bid proposal lists them for all to bid on, were not accepted or shall not be accepted. K. The bid proposals conformed or shall conform to all state and local laws governing the listing of subcontractors and suppliers. L. The arithmetic of the two lowest bid proposals received was or shall immediately be checked for errors. M. A tabulation of all bids received was or shall be provided to the DSD Director within five working days of the bid opening. N. Award was or shall be made to the lowest responsible bidder within a reasonable period of time following approval by the DSD Director. O. A preconstruction meeting was or shall be held with the contractor prior to beginning the work. A City representative was or shall be invited to attend the meeting. P. The Notice to Proceed was or shall be issued within a reasonable period of time following the contract execution. 4. Construction Phase A. The City was or shall be provided a copy of the construction schedule. B. Developer did or shall require the contractor to conduct weekly construction status meetings to which a City representative shall be invited. C. Any additional costs incurred for the benefit of the Developer, such as accelerating the construction schedule, shall not be eligible for public financing unless previously approved by the DSD Director. D. Any additional construction costs incurred due solely to delays caused by the Developer shall not be eligible for public financing. E. All contracts and construction related records shall be available to the City as and when required for the final determination of eligible costs for the public financing. This shall include trip tickets and other confirmations of material delivered to the Improvement. 2021/09/28 City Council Post Agenda Page 70 of 343 60297.00061\34345525.2 D-4 5. Change Orders A. All change orders shall be fully documented and be in a format consistent with the original bid items (i.e., show units, unit costs, extensions and total costs). The DSD Director, in his/her sole discretion shall determine the eligibility of each change order for inclusion in the Purchase Price for an Acquisition Improvement. B. Chula Vista Municipal Code (“CVMC”) Section 2.56.160(H)(6), provides that all or portions of the developer-performed public work ordinance may be waived where “the waiver is in the best interest of the public after consideration of factors including, without limitation, project costs, time for completion, and other relevant criteria, and (ii) appropriate safeguards are in place to protect the public interest.” Developer has requested and the City Council has approved a post-award waiver pursuant to CVMC 2.56.160(H)(6) for change orders for Acquisition Improvements entered into prior to September [28, 2021] and approved by the Field Inspector (the “Post-Award Waiver Change Orders”). The Post-Award Waiver Change Orders shall be eligible for inclusion in the Purchase Price subject to 5.A. above. C. The aggregate of all change orders for the Acquisition Improvements shall not increase the Purchase Price thereof so as to cause such Purchase Price to exceed the cost estimate for such Acquisition Improvement as set forth in Exhibit B by more than 25% without City Council approval. This modification of the requirements of CVMC Section 2.56.160(H)(3)(b) is made pursuant to CVMC Section 2.56.160(H)(5). D. Change orders that the Developer does not wish to include in the Purchase Price for an Acquisition Improvement do not require City approval, provided that they (i) result in no additional maintenance or overhead costs to the City; (ii) result in no material delay to the completion date; and (iii) result in no material modifications to the design or construction. E. Negotiated set price change orders are acceptable where most of the items of work in the change order have unit prices from the bids. Where change orders are for work that does not have unit prices for a substantial portion of the work contained within the bids, time and materials change orders are preferred. F. Failure to comply with the provisions herein may, in City’s sole discretion, result in a waiver of all claims for additional payments, bond drawdowns, or development credits to Developer in connection with such change order. 2021/09/28 City Council Post Agenda Page 71 of 343 60297.00061\34345525.2 E-1 EXHIBIT “E” CALIFORNIA MUNICIPAL FINANCE AUTHORITY Community Facilities District No. 2021-11 (City of Chula Vista Otay Ranch Village 8 West) Base Increment Payment Request No. ______ The undersigned (the “Developer”) hereby requests payment in the total amount of $__________ for the Base Increment for the Acquisition Improvement (as defined in the Acquisition/Financing Agreement (the “Agreement”)) by and among the City of Chula Vista (the “City”), the California Municipal Finance Authority (the “Authority”) and Developer and described in Exhibit “B” to the Agreement, all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby certifies, represents and warrants to the City as follows: A. He(she) is a duly authorized representative or signatory of Developer, qualified to execute this Payment Request for payment on behalf of Developer and is knowledgeable as to the matters set forth herein. B. The Acquisition Improvement that is the subject of this Payment Request has been substantially completed in accordance with Exhibit “C” to the Agreement. C. This request for payment of the Base Increment for the Acquisition Improvement has been calculated in conformance with the terms of the Agreement. All costs for which payment is requested hereby are eligible costs (as permitted in the Agreement) and have not been inflated in any respect. The Base Increment for which payment is requested has not been the subject of any prior payment request paid by the CFD. D. All items have been clearly delineated as DIF/Non-DIF eligible (all DIFs) and detailed backup and cost breakdown is provided supporting each item. E. Supporting documentation (such as third-party invoices, change orders and checks) is attached with respect to each cost for which payment is requested. F. The Acquisition Improvement for which payment is requested was constructed in accordance with the requirements of the Agreement. G. Developer is in compliance with the terms and provisions of the Agreement. H. No mechanics liens or other encumbrances have attached, or to the best knowledge of Developer, after due inquiry, will attach to the Acquisition Improvement. I. A cop(ies) of the letter(s) of unconditional lien release for the Acquisition Improvement for which payment is requested is included this request. Alternatively, a copy of a letter of conditional lien release for the Acquisition Improvement for which payment is requested together with a letter from the contractor(s) stating that they have been paid in 2021/09/28 City Council Post Agenda Page 72 of 343 60297.00061\34345525.2 E-2 full by the Developer for the Acquisition Improvement for which payment is requested is also included in this request. I hereby declare under penalty of perjury that the above representations and warranties are true and correct. DEVELOPER: Dated: CITY Payment Request Approved for Submission to Director of Finance Director of Development Services Dated: 2021/09/28 City Council Post Agenda Page 73 of 343 60297.00061\34345525.2 E-3 ATTACHMENT 1 SUMMARY OF ACQUISITION IMPROVEMENTS TO BE ACQUIRED AS PART OF PAYMENT REQUEST NO. _____ Improvement Purchase price Base Increment Retained Increment Disbursement Requested [List here all Acquisition Improvements for which payment is requested, and attach supporting documentation] 2021/09/28 City Council Post Agenda Page 74 of 343 60297.00061\34345525.2 F-1 EXHIBIT “F” CALIFORNIA MUNICIPAL FINANCE AUTHORITY Community Facilities District No. 2021-11 (City of Chula Vista Otay Ranch Village 8 West) Retained Increment Payment Request No. ______ The undersigned (the “Developer”) hereby requests payment in the total amount of $__________ for the Retained Increment of the Purchase Price of an Acquisition Improvement (as defined in the Acquisition/Financing Agreement by and among the City of Chula Vista (the “City”), the California Municipal Finance Authority (the “Authority”) and Developer and described in Exhibit “B” to the Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby certifies, represents and warrants to the City as follows: A. He(she) is a duly authorized representative or signatory of Developer, qualified to execute this Payment Request for payment on behalf of Developer and is knowledgeable as to the matters set forth herein. B. Developer has submitted or submits herein to the City, if applicable, as-built drawings or similar plans and specifications for the Acquisition Improvement and such drawings or plans and specifications, as applicable, are true, correct and complete. C. The Purchase Price for the Acquisition Improvement has been calculated in conformance with the terms of the Agreement. All costs for which payment is requested hereby are eligible costs (as permitted in the Agreement) and have not been inflated in any respect. The Retained Increment for which payment is requested has not been the subject of any prior payment request paid by the CFD. D. All items have been clearly delineated as DIF/Non-DIF eligible (all DIFs) and detailed backup and cost breakdown is provided supporting each item. E. Supporting documentation (such as third-party invoices, change orders, lien releases and checks) is attached with respect to each cost for which payment is requested. F. The Acquisition Improvement for which payment is requested was constructed in accordance with the requirements of the Agreement. G. Developer is in compliance with the terms and provisions of the Agreement. H. No mechanics liens or other encumbrances have attached, or to the best knowledge of Developer, after one inquiry, will attach to the Acquisition Improvement. 2021/09/28 City Council Post Agenda Page 75 of 343 60297.00061\34345525.2 F-2 I hereby declare under penalty of perjury that the above representations and warranties are true and correct. DEVELOPER: Dated: CITY Payment Request Approved for Submission to Director of Finance Director of Development Services Dated: 2021/09/28 City Council Post Agenda Page 76 of 343 60297.00061\34345525.2 F-3 ATTACHMENT 1 SUMMARY OF ACQUISITION IMPROVEMENTS TO BE ACQUIRED AS PART OF PAYMENT REQUEST NO. _____ Improvement Purchase price Base Increment Retained Increment Disbursement Requested [List here all Acquisition Improvements for which payment is requested, and attach supporting documentation] 2021/09/28 City Council Post Agenda Page 77 of 343 60297.00061\34345525.2 G-1 EXHIBIT “G” DISBURSEMENT REQUEST FORM (CITY FEES) To: California Municipal Finance Authority 2111 Palomar Airport Road, Suite 320 Carlsbad, California 92011 Attention: Travis Cooper Email: tcooper@cmfa-ca.com Tel: (760) 795-9185 Re: BOLD Program - Request for Disbursement of Bond Proceeds Community Facilities District No. 2021-11 (City of Chula Vista – Otay Ranch Village 8 West) The undersigned, a duly authorized officer of the City of Chula Vista (the “City”) hereby requests a disbursement from the [Taxable/Tax Exempt] Account of the Project Fund set forth below, and, if the disbursement is to be made from the Tax Exempt Account, certifies that the amounts of development impact fees financed thereby and listed below have been or will be spent by the City for public capital improvements as of the date indicated below or within [__] days/months thereafter Project Fund Account Amount(s) Community Facilities District No. 2021-11 $ Total: Wiring Instructions: ___________________________ The undersigned hereby additionally certifies as follows: 2021/09/28 City Council Post Agenda Page 78 of 343 60297.00061\34345525.2 G-2 1. [Tax-Exempt Only] These funds have been or will be used to acquire and/or construct capital improvements, and this disbursement is not being made for the purpose of reinvestment. 2. [Tax-Exempt Only] None of the expenditures for which payment is requested have been reimbursed previously from other sources of funds. 3. If the total amount above is greater than the funds held by the Authority on behalf of the City in the Account identified above, the Authority is authorized to pay only that portion of the amount request equal to such held funds and to pay the remainder when sufficient additional funds are deposited in the applicable Account. 4. The amounts being disbursed pursuant to this request are being used to finance or refinance certain public infrastructure and facilities, including certain financing and administrative costs (the “City Infrastructure”). City will own, and for the entire useful life of such City Infrastructure reasonably expects to own, all of such City Infrastructure. 5. [Tax-Exempt Only] To the extent any of such City Infrastructure is sold to an entity that is not a state or local government City, City will seek the advice and approval of bond counsel to the Authority for the BOLD program prior to any such sale. City will not allow any of such City Infrastructure to be used (for example, by lease or other contract) in the trade or business of any nongovernmental persons (other than in their roles as members of the general public). All of such City Infrastructure will be used in the performance of essential governmental functions of City or another state or local government City. The average expected useful life of such City Infrastructure is at least 5 years. The representations and covenants contained in this paragraph are intended to support the conclusion that the interest paid on the bonds issued to finance the City Infrastructure is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and are not required for disbursements to be made from the Taxable Account of the Project Fund. Dated: CITY OF CHULA VISTA Signature: Print Name: 2021/09/28 City Council Post Agenda Page 79 of 343 60297.00061\34345525.2 H-1 EXHIBIT “H” FINANCED FEES PAYMENT REQUEST PROCEDURES Francisco & Associates, Inc., (FAI) has been retained by the California Municipal Finance Authority (CMFA) to assist with the administration of the BOLD Program bond proceeds. The following are the procedures in place for the processing of payment requests for eligible Financed Fees. 1.) The Developer shall submit all payment requests with supporting documentation directly to FAI to expedite the audit process. 2.) Once a payment request is received, FAI will conduct an initial audit to determine if the payment request package is complete. The initial review will determine if the following essential elements are included: a. Payment Request Form with completed Attachment 1 (see attached) b. Identification of fees for prepayment to the City or for reimbursement c. Invoices, receipts, worksheets or other evidence of costs d. Proof of payment 3.) If any essential element has been omitted, FAI will prepare a letter to the Developer deeming the payment request incomplete. The letter will include a list of items required to complete the package. 4.) Upon receiving a complete payment request, FAI will begin the detailed audit of the payment request, using the following procedures: a. Invoices and proofs of payment will be compared to determine if there are any discrepancies. Invoices without proof of payment will be deemed ineligible for reimbursement. Where discrepancies occur, the lowest amount will be deemed eligible for reimbursement until additional supporting documentation can be provided by the Developer. b. FAI will confirm fee amounts with City staff for fees that are to be prepaid to the City or reimbursed to the Developer. c. A detailed worksheet will be prepared detailing the amount submitted for reimbursement under each invoice, the corresponding proof of payment for that invoice, the amounts deemed eligible and ineligible for reimbursement by FAI, the amount submitted for prepayment to the City, the corresponding documentation for prepayment and comments by FAI. d. A summary of invoices and proof of paym ent provided by the Developer will be prepared. 2021/09/28 City Council Post Agenda Page 80 of 343 60297.00061\34345525.2 H-2 5.) FAI will prepare additional information requests to the Developer as needed to facilitate the audit. 6.) FAI will prepare an audit letter for City staff review that summarizes the items above and includes FAI’s recommendation of fees that are eligible and appropriate for reimbursement to the Developer and the amount that is to be retained by the City corresponding to the prepayment of eligible fees. Such audit letter will be accompanied by all back up documentation and the detailed worksheet. 7.) FAI will prepare the Disbursement Request Form (City Fees) in the form attached as Exhibit “G” hereto, for review and approval of the City. 8.) Upon receipt of the approved Disbursement Request Form (City Fees), FAI will prepare the Certificate of the Authority Requesting Disbursement from the Project Fund required under the Indenture, for review and approval by CMFA. 9.) CMFA will transmit the executed Certificate above to the Trustee for disbursement of the bond proceeds to the Developer for reimbursement or to the City for prepayment. 10.) Approximate Review, Approval and Disbursement Timeline: a. FAI performs audit of payment request and provides the City with the audit letter and Disbursement Request Form for review and approval – Approximately 5 days b. City reviews and approves audit letter and supporting documentation and provides signed Disbursement Request Form – Approximately 30 days c. CMFA reviews, approves, and submits Certificate to Trustee – Approximately 5 days d. Trustee wires funds to the Developer for reimbursement or to the City for prepayment for deposit in Trust Account – Approximately 2 days 2021/09/28 City Council Post Agenda Page 81 of 343 60297.00061\34345525.2 H-1 California Municipal Finance Authority BOLD Program CFD No. 2021-11 Payment Request Form 1. The undersigned is an authorized representative of the Developer, qualified to execute this request for payment on behalf of the Developer and knowledgeable as to the matters set forth herein. 2. The identity and amount of the City Fees are described in Attachment 1. 3. For the City Fees for which the Developer is seeking reimbursement, the Developer has submitted or submits herewith to the CMFA Administrator evidence that City Fees referred to in the preceding paragraph have been paid in full, which evidence is in the form of copies of cancelled checks or such other form of proof of payment, such as bank statements. I hereby declare under penalty of perjury that the above representations and warranties are true and correct. Developer: By: Name: Title: Date: 2021/09/28 City Council Post Agenda Page 82 of 343 60297.00061\34345525.2 H-2 ATTACHMENT 1 City Description of City Fee Description of Lots or Parcels Amount to be Reimbursed Amount to be Prepaid 2021/09/28 City Council Post Agenda Page 83 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Consideration of Appointment of Members to the Christopher Columbus Statue Task Force Report Number: 21-0167 Location: Discovery Park, 700 Buena Vista Way, Chula Vista, CA 91910 Department: Human Resources Environmental Notice: The Project qualifies for a Categorical Exemption pursuant to the California Environmental Quality Act State Guidelines Section 15301 Class 1 (Existing Facilities), Section 15302 Class 2 (Replacement or Reconstruction), and Section 15061(b)(3). Recommended Action Adopt a resolution approving the appointment of members Brianna Conser, Angela Elliot, John Elliot, Nicole Enriquez, Roberto Hernandez, Lee Kohse, Paola Martinez-Montes, Lorise Maynard, Ricardo Medina, Erica Pinto, Grace Sardina, and Bea Zamora to the Columbus Statue Task Force. SUMMARY Human Relations Commission, Parks and the Recreation Commission, Cultural Arts Commission, Kumeyaay Nation, and the Sons and Daughters of Italy have selected members for Council to appoint to a task force to recommend (1) disposition of the statue of Christopher Columbus at Discovery Park and (2) proposals for replacement of the existing Columbus Statue with a marker/art piece at the statue site and language for site marker/art piece, (3) proposals for renaming of Discovery Park, (4) proposals for framework for receiving and/or installing of public memory, monuments and gifts, and (5) proposals for a framework for naming parks and/or other City facilities. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Categorical Exemption pursuant to State CEQA Guidelines Section 15301 Class 1 (Existing Facilities), Section 15302 Class 2 (Replacement or Reconstruction), and Section 15061(b)(3) because it can be seen with certainty that there 2021/09/28 City Council Post Agenda Page 84 of 343 P a g e | 2 is no possibility that the activity in question may have a significant effect on the environment. Thus, no further environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION At the meetings of the Human Relations Commission (HRC), Parks and Recreation Commission (P&R Commission) and Cultural Arts Commission (CAC) members of the task force were selected to be recommended to City Council for its consideration and approval. DISCUSSION At a Special Meeting of the Chula Vista City Council on May 25, 2021, with a unanimous vote from all members present, the Council adopted recommended terms for task force composition, appointment process and scope of activities. These terms are as follows: Task Force Composition/Appointment Eleven (11) total members comprised of the following will be recommended to Council for appointment:  Two (2) representatives of the Human Relations Commission (Nominated by the HRC)  Two (2) representatives of the Parks and Recreation Commission (Nominated by the P&R Commission)  Two (2) representatives of the Cultural Arts Commission (Nominated by the CAC)  Two (2) representatives of the Kumeyaay Nation (Nominated by the Kumeyaay Nation (no Chula Vista residency requirement))  One (1) representative of the Sons and Daughters of Italy (Nominated by the S and D of I (no Chula Vista residency requirement))  One (1) scholar/historian familiar with relevant history (Nominated by the HRC) (no Chula Vista residency requirement))  One (1) “at large” member of the Community (Nominated by the HRC (may consider a District 1 and/or youth representative)) Scope of Activities  Terms for disposition of the existing Columbus Statue  Proposal(s) for replacement of the existing Columbus Statue with a marker/art piece at the statue site and language for site marker/art piece.  Proposal(s) for renaming of Discovery Park  Proposal(s) for a framework for receiving and/or installing of public memory, monuments and gifts.  Proposal(s) for a framework for naming parks and/or other City facilities. By law, the Task Force will need to schedule and conduct meetings in public in compliance with the Brown Act. It is expected that meeting times, frequency and locations will be determined by the Task Force in consultation with City staff. Other meeting/member rules/standards shall be in accordance with applicable provisions of the Chula Vista Municipal Code governing City boards and commissions. 2021/09/28 City Council Post Agenda Page 85 of 343 P a g e | 3 Recommended Task Force Members Each Commission selected commissioners to recommend for appointment to the task force. The Kumeyaay nation and Sons and Daughters of Italy selected their members. The Human Relations Commission recommended the Scholar/Historian and At Large Community Member. The following is a list of the nominees: Human Relations Commission  Paola Martinez-Montes  Ricardo Medina Parks and Recreation Commission  Brianna Conser  Nicole Enriquez Cultural Arts Commission  Lee Kohse  Lorise Maynard Kumeyaay Nation  Chairwoman Erica Pinto  Chairwoman Angela Elliot  John Elliot (Alternate) Sons and Daughters of Italy  Grace Sardina Scholar/Historian  Roberto Hernandez At Large Community Member  Bea Zamora DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). 2021/09/28 City Council Post Agenda Page 86 of 343 P a g e | 4 Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT The fiscal impact is unknown. Staff will need to research any cost associated with this action. ONGOING FISCAL IMPACT The fiscal impact is unknown. Staff will need to research any cost associated with this action. ATTACHMENTS None Staff Contact: Courtney Chase, Director of Human Resources/Risk Management 2021/09/28 City Council Post Agenda Page 87 of 343 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE APPOINTMENT OF MEMBERS TO THE COLUMBUS STATUE TASK FORCE WHEREAS, at a Special Meeting of the Chula Vista City Council on May 25, 2021, with a unanimous vote from all members present, the Council adopted recommended terms for task force composition, appointment process and scope of activities; and WHEREAS, the terms are as follows; and Task Force Composition/Appointment Eleven (11) total members comprised of the following will be recommended to Council for appointment:  Two (2) representatives of the Human Relations Commission (Nominated by the HRC)  Two (2) representatives of the Parks and Recreation Commission (Nominated by the P&R Commission)  Two (2) representatives of the Cultural Arts Commission (Nominated by the CAC)  Two (2) representatives of the Kumeyaay Nation (Nominated by the Kumeyaay Nation (no Chula Vista residency requirement))  One (1) representative of the Sons and Daughters of Italy (Nominated by the S and D of I (no Chula Vista residency requirement))  One (1) scholar/historian familiar with relevant history (Nominated by the HRC) (no Chula Vista residency requirement))  One (1) “at large” member of the Community (Nominated by the HRC (may consider a District 1 and/or youth representative) Scope of Activities  Terms for disposition of the existing Columbus Statue  Proposal(s) for replacement of the existing Columbus Statue with a marker/art piece at the statue site and language for site marker/art piece.  Proposal(s) for renaming of Discovery Park  Proposal(s) for a framework for receiving and/or installing of public memory, monuments and gifts.  Proposal(s) for a framework for naming parks and/or other City facilities. WHEREAS, each Commission selected commissioners to recommend for appointment to the task force. The Kumeyaay nation and Sons and Daughters of Italy selected their members. The Human Relations Commission recommended the Scholar/Historian and At Large Community Member; and 2021/09/28 City Council Post Agenda Page 88 of 343 Resolution No. __________ Page 2 WHEREAS, the recommendations are as follows: Human Relations Commission  Paola Martinez-Montes  Ricardo Medina Parks and Recreation Commission  Brianna Conser  Nicole Enriquez Cultural Arts Commission  Lee Kohse  Lorise Maynard Kumeyaay Nation  Chairwoman Erica Pinto  Chairwoman Angela Elliot  John Elliot (Alternate) Sons and Daughters of Italy  Grace Sardina Scholar/Historian  Roberto Hernandez At Large Community Member  Bea Zamora NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it approves the appointment of the aforementioned members to the Columbus Statue Task Force. Presented by Approved as to form by Courtney Chase Glen R. Googins Director of Human Resources /Risk Management City Attorney 2021/09/28 City Council Post Agenda Page 89 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Reimbursement Grant Program: Authorize the City’s Payment of Sewer Capacity Fees on Behalf of Businesses that have Received Approval for Reimbursement under the City’s Sidewalk Café Grant Program Report Number: 21-0158 Location: Third Avenue between E and H Street Department: Economic Development Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Recommended Action Adopt a resolution authorizing the City’s payment of sewer capacity fees on behalf of businesses that have received approval under the City’s reimbursement grant program for the reimbursement of design, permitting, and construction costs for sidewalk cafés. SUMMARY This item is to support increased outdoor business operations for businesses developing sidewalk cafés along Third Avenue between E and H Streets by allowing for the City to pay sewer capacity fees on behalf of businesses that have received approval under the City’s reimbursement grant program for reimbursement of design, permitting, and construction costs for sidewalk cafés. ENVIRONMENTAL REVIEW The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA) and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Notwithstanding the foregoing, it has also been determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required. 2021/09/28 City Council Post Agenda Page 90 of 343 P a g e | 2 BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION On July 13, 2021, the City Council approved a reimbursement grant program for Third Avenue businesses for costs associated with the design, permitting, and construction of curb and sidewalk cafés. Reimbursement to businesses for curb and sidewalk cafés was approved through the appropriation of $300,000 in American Rescue Plan Act funds. Pursuant to the reimbursement grant program, businesses could be reimbursed for the permitting, design, and construction of their curb and/or sidewalk cafés. The maximum reimbursement for curb cafés was approved at $15,000 and the maximum reimbursement for sidewalk cafés was $4,000. Curb cafés are approved for a pilot period of one-to-two years and therefore the City does not require curb cafés to pay sewer capacity fees. However, sidewalk cafés permits are expected to be in place for years to come and therefore are required to pay sewer capacity fees as this expansion is a long-term expansion of the business’s occupancy. In implementing the reimbursement grant program for the first approved business, staff realized that the $4,000 maximum allowance for sidewalk cafés was not enough to cover the costs the cost of sewer capacity fees on top of City processing and inspection fees. For example, one business that established a sidewalk café added 18 additional seats to their occupancy with each seat costing the businesses more than $300 dollars per seat or about $5,400 dollars in sewer capacity fees. The payment of these fees is a benefit for the business and the property owner as the capacity remains with the building even if the restaurant or use changes over time. Given the substantial costs for sewer capacity fees, staff recommends directly paying sewer capacity fees charged to businesses that have been approved under the City’s sidewalk café grant program. Payment of the sewer capacity fees would come from the previously approved appropriation of $300,000 in American Rescue Plan Act funds for the grant program and would allow for the payment of sewer capacity fees in addition to the maximum reimbursement amount of $4,000 for the design, permitting, and construction costs. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found that, Mayor Casillas-Salas has real property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(a)(7), this item presents a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.) for the above-identified member. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no general fund impact as a result of this action. Staff has determined that the funds appropriated from the American Rescue Plan Act funds are adequate to cover the reimbursable grant and the costs of sewer capacity fees. ONGOING FISCAL IMPACT 2021/09/28 City Council Post Agenda Page 91 of 343 P a g e | 3 There would be no on-going fiscal impact to the General Fund. ATTACHMENTS None Staff Contact: Kevin Pointer, Senior Economic Development Specialist 2021/09/28 City Council Post Agenda Page 92 of 343 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING CITY’S PAYMENT OF SEWER CAPACITY FEES ON BEHALF OF BUSINESSES THAT HAVE RECEIVED APPROVAL UNDER THE CITY’S REIMBURSEMENT GRANT PROGRAM FOR SIDEWALK CAFÉS WHEREAS, on May 5, 2020, in response to the COVID-19 pandemic, the City Council approved Chula Vista’s COVID-19 90-Day Economic Recovery Plan (Plan); and WHEREAS, one feature of the Plan was the establishment of a no-fee permit that allowed businesses on Third Avenue between E and H Streets to encroach into the public right-of-way, where feasible, for expanded business operations; and WHEREAS, on July 14, 2020, the City Council formalized a process to allow for these expanded operations in the public right-of-way through the approval and creation of a ministerial permit process; and WHEREAS, on June 15, 2021, Governor Gavin Newsom announced a fully reopened economy and lifted of pandemic executive orders; and WHEREAS, Chula Vista’s economy has not fully recovered from the impacts of COVID- 19; and WHEREAS, businesses could benefit from continued use of outdoor areas and customers have become accustomed to outdoor business expansions; and WHEREAS, the City has abandoned the ministerial permit process for expanded outdoor business operations and terminated existing encroachments into the right-of-way; and WHEREAS, in 2021, the City will receive fifty-seven million dollars ($57 million) in American Rescue Plan Act funds; and WHEREAS, on July 13, 2021, the City Council authorized the establishment of a new permit process and reimbursement grant program for curb cafés and sidewalk cafés on Third Avenue through July 31, 2023 (the “Grant Program”) and appropriated $300,000 in American Rescue Plan Act funds to the Grant Program; and WHEREAS, the maximum reimbursement amount for the design, permitting, and construction of sidewalk cafés under the Grant Program is $4,000; and 2021/09/28 City Council Post Agenda Page 93 of 343 Resolution No. __________ Page 2 WHEREAS, the maximum reimbursement amount of $4,000 is insufficient to pay for required sewer capacity fees; and WHEREAS, approval of this resolution would authorize payments of sewer capacity fees from Grant Program funds in addition to the $4,000 maximum reimbursement amount that is available for design, permitting, and construction fees. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it: 1. Authorizes the use funds appropriated to the City’s reimbursement grant program for design, permitting, and construction costs for sidewalk cafes on Third Avenue (“Grant Program”) to directly pay sewer capacity fees on behalf of businesses that have received approval under the Grant Program. Presented by Approved as to form by Eric C. Crockett Glen R. Googins Deputy City Manager City Attorney 2021/09/28 City Council Post Agenda Page 94 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Master Fee Schedule Amendment: Amending Chapter 4, General Business Fees, of the City’s Master Fee Schedule to Modify Cannabis-Related Fees Report Number: 20-0166 Location: No specific geographic location Department: Police Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity also qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Recommended Action Adopt a resolution adding commercial cannabis employee background review and employee background renewal fees to Chapter 4 of the City’s master fee schedule. SUMMARY An amendment of the City’s Master Fee Schedule to add a Commercial Cannabis Employee Background Review fee and Employee Background Renewal fee for licensed cannabis businesses. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. In addition, notwithstanding the foregoing, the Director of Development Services has also determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION 2021/09/28 City Council Post Agenda Page 95 of 343 P a g e | 2 Not applicable. DISCUSSION In March 2018, the City Council voted to approve Ordinance 3418, which created a licensing and regulatory structure for the operation of lawful cannabis businesses in the City of Chula Vista; such structure is codified in Chula Vista Municipal Code Chapter 5.19. Section 5.19.290 made the effectiveness of Ordinance 3418 contingent on voter approval of a cannabis tax measure to be placed on the November 2018 ballot. A cannabis tax measure, Measure Q, was ultimately approved by voters and was certified by the City Council on December 11, 2018. As a result, Chapter 5.19 has now gone into effect. Section 5.19.080(T) states that fees and charges associated with commercial cannabis activity will be established by resolution of the City Council. Staff initially recommended and proposed the establishment of cannabis application and other cannabis-related fees to City Council, which was approved on December 18, 2018. Such application fees were utilized in the January 2019 application period. In April 2020, the City Council voted to amend the City’s Master Fee Schedule to modify phase one application fees for new applicant background review, and created a new fee for resubmittal applicant background review. Cannabis application fees to date were established solely to recover the costs of processing cannabis business applications, including the applications and background processing of owners, officers, managers, and property owners (“Principals”). In accordance with City’s rules and regulations, all licensed cannabis business employees who are not Principals also need to undergo a background review and be approved by City. The non-Principal employee background review is a less expansive background review than the background review that is conducted for Principals; such employee background reviews must be renewed on a yearly basis. As a result, staff now recommends and proposes the establishment of a commercial cannabis employee background review fee and employee background renewal fee in order to recover costs related to processing background review applications for employees of licensed businesses who are not Principals. The proposed Resolution amends Chapter 4 (General Business Fees) of the City’s Master Fee Schedule to add Cannabis Employee Background Review fee of $320 per employee background review and a Cannabis Employee Background Renewal fee of $222. These fees will recover all reasonable costs of staff processing, conducting a background review of the employee, producing and/or providing an identification permit for production, and other administrative functions. These fees will be required to be paid upon submittal of the background review and background renewal application by the employee. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). 2021/09/28 City Council Post Agenda Page 96 of 343 P a g e | 3 Staff is not independently aware, and has not been informed by any Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT Approval of the resolution will likely result in a positive fiscal impact to the General Fund as all reasonable staff and costs associated with the background review and renewal process will be reimbursed to the General Fund from the fees. The exact impact will be determined after the license process is completed. A budget amendment will be brought back to Council once the exact impacts are known. ONGOING FISCAL IMPACT There will be no material impact to the general fund in future years as a result of these fees being approved. All fees are designed to simply recover costs for staff time and consultants. ATTACHMENTS 1. Exhibit 1 to Resolution: Proposed Amended Master Fee Schedule (red-line strikeout version) 2. Cost of Service Analysis Staff Contact: Captain Eric Thunberg, Police Department 2021/09/28 City Council Post Agenda Page 97 of 343 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CHAPTER 4 (GENERAL BUSINESS FEES) OF THE CITY’S MASTER FEE SCHEDULE TO ESTABLISH CANNABIS-RELATED FEE WHEREAS, in March 2018, the City Council voted to approve Ordinance 3418, which created a licensing and regulatory structure for the operation of lawful cannabis businesses in the City of Chula Vista; and WHEREAS, the licensing and regulatory structure for the operation of lawful cannabis businesses is codified in Chula Vista Municipal Code chapter 5.19; and WHEREAS, Chula Vista Municipal Code section 5.19.080(T) states that fees and charges associated with commercial cannabis activity will be established by resolution of the City Council; and WHEREAS, the City Council wishes to establish fees for the background review and background review renewal of employees of licensed cannabis businesses who are not owners, officers, managers, or property owners; and WHEREAS, an analysis of the staff costs, and the current fully burdened hourly rates for impacted staff associated with processing cannabis employee background applications and related activities has been conducted to determine the cost of service associated with providing licensing services; and WHEREAS, in order to achieve full and equitable cost recovery for cannabis application and licensing process, the City Council wishes to amend Chapter 4 (General Business Fees) of the City’s Master Fee Schedule, as set forth in Exhibit 1, attached hereto and incorporated herein by reference as if set forth in full; and WHEREAS, the proposed fees do not exceed the estimated reasonable cost of providing the associated services; and WHEREAS, Article XIII C of the California Constitution requires a vote of the electorate to increase any levy, charge, or exaction imposed by a local government, unless specifically exempted; and WHEREAS, the proposed fees are exempt from the vote requirement per Sections 1(e)(2) and 1(e)(3); and WHEREAS, the proposed amendments to the Master Fee Schedule Chapter 4 shall become effective upon adoption of this Resolution by the City Council. 2021/09/28 City Council Post Agenda Page 98 of 343 Resolution No. __________ Page 2 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it does hereby amend Chapter 4 (General Business Fees) of the City’s Master Fee Schedule to establish Commercial Cannabis Employee Background Review and Employee Background Renewal fees as set forth in Exhibit 1 to this Resolution. Presented by Approved as to form by Roxana Kennedy Glen R. Googins Police Chief City Attorney 2021/09/28 City Council Post Agenda Page 99 of 343 MASTER FEE SCHEDULE FEE BULLETIN Chapter 4 – Business Fees 4-100 General Business Fees City of Chula Vista Finance Department 276 Fourth Avenue, Chula Vista, CA 91910 April 2020 City of Chula Vista www.chulavistaca.gov 619.691.5250 GENERAL BUSINESS 1. Business License Fees, General Duplicate license ............................................ $5.00 Change of location ............................................ $12 Home Occupation Permit ................................. $25 Business resource and energy evaluation Non-compliance fine, greater of ....................... $15 or ............................... 5% of business license fee 2. Sales, Special Closing out sale, first 60 days ............................ $30 Closing out sale, one 30-day extension ............ $15 Special sales event ............................................ $45 Temporary outside sales event ......................... $45 SPECIFIC BUSINESS (REGULATORY) 1. Bath House Application, annual ...................................... $1,400 2. Bingo Application ...................................................... $265 Annual renewal ............................................... $265 3. Commercial Cannabis Application & First Year License Fees Application Phase 1 – New Application ....... $7,493 Application Phase 1 – Resubmittal ............. $2,800 Application/Initial Compliance Inspection Phase 2 (due at license application) .................... $16,570 First Year Compliance Inspection Phase 2 (due at conditional license issuance) ..... $31,275 First Year Compliance Inspection Phase 2 includes 4 City inspections per commercial cannabis business. Additional inspections will be subject to the Commercial Cannabis License Reinspection fee. Renewal Fees Annual Renewal/Compliance Inspection, each (City) ....................................................... $28,210 Annual Compliance Inspection, each (HDL) . $6,000 Additional Fees Zoning Verification Letter ............................... $183 New Background Review ............................. $1,155 Resubmittal Background Review .................... $663 Appeal .......................................................... $3,276 Reinspection, each .......................................... $330 Employee Background Review….….….……………$320 Employee Background Renewal……………………$222 4. Card Room Work permit, application ............................... $175 Work permit, annual renewal ......................... $100 5. Casino Parties Application ...................................................... $265 6. Firearms Dealer Application ...................................................... $365 Annual renewal ............................................... $310 7. Fraternal Society Gameroom Application ...................................................... $265 8. Holistic Health Establishment Application ...................................................... $195 Annual renewal ................................................. $25 9. Holistic Health Practitioner Application ...................................................... $175 Annual renewal ............................................... $100 10. Junk Dealer Application ...................................................... $315 Renewal, every 2 years ................................... $100 2021/09/28 City Council Post Agenda Page 100 of 343 September 2019 MASTER FEE SCHEDULE  FEE BULLETIN 4-100 Page 2 of 2 City of Chula Vista www.chulavistaca.gov 619.691.5250 11. Massage Establishment Application ................................................... $1,400 Annual renewal ............................................ $1,250 Sale, transfer or change of location requires a new application, including payment of application fee. 12. Massage Technician Application ...................................................... $175 Annual renewal ............................................... $100 13. Mobile Home Park Annual Operating Fee The annual safety and health fee for operation of a mobile home park shall be as established by the State. 14. Pawnbroker Application ...................................................... $315 Renewal, every 2 years ................................... $100 Pawnshop employee ID card Application ...................................................... $165 Annual renewal ................................................. $70 Change of address/replacement ....................... $10 15. Peddler Application ...................................................... $165 16. Public Dance Application ...................................................... $175 17. Second Hand Dealer Application ...................................................... $315 Renewal, every 2 years ................................... $100 18. Solicitor Application, includes ID card .......................... $165 ID card, annual renewal .................................... $70 19. Transient Merchant Application ...................................................... $165 20. Alcoholic Beverage Control (ABC) Determination of Public Convenience or Necessity (PCN) Hearing Filing Hearing fee ........................ Full cost recovery Initial deposit ............................................... $1,500 21. Tobacco Retailer Permit fee ....................................................... $322 APPEALS 1. ABC PCN Determination Processing fee ............................. Full cost recovery Initial deposit ............................................... $1,000 2. Police Regulated Business License Processing fee ............................. Full cost recovery Initial deposit .................................................. $250 FULL COST RECOVERY For all full cost recovery fee items, an initial deposit shall be collected to cover the City’s full cost, including overhead, incurred in conjunction with review and processing as requested by applicant. Additional funds may be collected, as required, to cover City costs. Should the application be withdrawn at any time, the deposit shall be adjusted to cover the City’s actual costs, including overhead, up to that time. Any funds remaining on deposit at the time of the completion or withdrawal of the application shall be returned to the depositor, after accounting for expenses incurred to date. See Master Fee Schedule Fee Bulletins 1-100 and 1-200 for additional discussion of full cost recovery and current hourly rates. 2021/09/28 City Council Post Agenda Page 101 of 343 Classification FBHR Deputy City Attorney II 179.93$ Peace Officer 130.75$ Police Sergeant 177.50$ Police Lieutenant 207.41$ Employee Background Review Process Task Title Time Cost Download Documents and File Them (includes completeness check)Officer 10 min 21.79$ Individual Background Analysis Officer 30 min 65.38$ Discrepancy and Follow Up Time (est. 20% of 500 backgrounds with issues - 30 minutes to follow up when issues exist)Officer 6 min 13.08$ Draft Denial Letter or Create Badge Mockup Officer 15 min 32.69$ Internal Review/ Discussion Deputy City Atty II 15 min 44.98$ Sergeant 15 min 44.38$ Lieutenant 15 min 51.85$ Officer 15 min 32.69$ Send and Upload Denial Letter or Notify Applicant of Approval Officer 10 min 13.08$ Total 319.90$ Employee Background Renewal Process Task Title Time Cost Upload Documents and File Them (includes completeness check)Officer 5 min 10.90$ Individual Background Analysis Officer 30 min 65.38$ Discrepancy and Follow Up Time (est. 5% of 500 backgrounds with issues - 30 minutes to follow up when issues exist)Officer 1.5 min 3.27$ Draft Denial Letter or Create Badge Mockup Officer 15 min 32.69$ Internal Review/ Discussion Deputy City Atty II 15 min 20.00$ Sergeant 15 min 44.38$ Officer 15 min 32.69$ Send and Upload Denial Letter or Notify Applicant of Approval Officer 10 min 13.08$ Total 222.36$ Cost of Service Analysis: Police Department Cannabis Business Employee Background Review (non-owner, officer, manager, or property owner employees only) 2021/09/28 City Council Post Agenda Page 102 of 343 From: Hector Peraza <hectorperazacv@gmail.com> Sent: Tuesday, September 28, 2021 12:11 AM To: CityClerk <CityClerk@chulavistaca.gov>; tpocklington@bonitafd.org; mscott@bonitafd.org; Jmarugg@bonitafd.org; serge.dedina@imperialbeachca.gov; edward.springgs@imperialbeachca.gov; paloma.auguirre@imperialbeachca.gov; jack.fisher@imperialbeachca.gov; matthew.leyba- gonzalez@imperialbeachca.gov; jfrench@imperialbeachca.gov; Msims@bonitafd.org; Mary Salas MSalas@chulavistaca.gov>; jjmgalvez@chulavistaca.gov; Steve C. Padilla <spadilla@chulavistaca.gov>; John McCann <jmccann@chulavistaca.gov>; Andrea Cardenas <acardenas@chulavistaca.gov>; Maria Kachadoorian <mkachadoorian@chulavistaca.gov>; Glen Googins <GGoogins@chulavistaca.gov>; nora@noravargas.com Subject: Re: Is our new Ambulance Transport System performing as promised? Southwest Chula Vista Civic Association TO: Mayor Mary Salas and members of the Chula Vista City Council FR: Southwest Chula Vista Civic Association RE: Ambulance Transport System CC: Bonita Fire District, Imperial Beach City Council, San Diego County EMS Dear Mayor Salas and Councilmembers: Southwest Chula Vista Civic Association urges the city to monitor and report, in a transparent manner and on a regular basis, key performance measures related to its decision to “in-house” the ambulance transport system, including costs, revenues, fees, performance and service levels. After agreeing unanimously in 2019 to competitively bid the city’s ambulance transport service contract, this City Council changed course, deciding instead to provide these services in-house via the Chula Vista Fire Department. The rationale for eliminating the competitive bid process was an impressive list of promises made by CVFD: Better Service, More Revenue and Lower Costs for Customers. I submitted several questions about the plan in March. Additional concerns have been raised in the local news media. We also requested monitoring in a statement presented to City Council earlier this month. https://www.thestarnews.com/author/pablo-quilantan/ https://laprensa-sandiego.org/guest-commentary-chula-vista-now-paying- significantly-more-for-an-ambulance-trip-to-the-hospital/ Warning: External Email Written Communications - Acerro Public Comments - Received 9/28/2021 mailto:hectorperazacv @gmail.com mailto:CityClerk@chula vistaca.gov mailto:tpocklington@bo nitafd.org mailto:mscott@bo nitafd.orgmailto:Jmarugg@b onitafd.org mailto:serge.dedina@imperial beachca.gov mailto:edward.springgs@imperial beachca.govmailto:paloma.auguirre@imperial beachca.gov mailto:jack.fisher@imperialb eachca.gov mailto:matthew.leyba- gonzalez@imperialbeach ca.gov mailto:matthew.leyba- gonzalez@imperialbeachc a.gov mailto:jfrench@imperialb eachca.gov mailto:Msims@bo nitafd.orgmailto:MSalas@chula vistaca.gov mailto:jjmgalvez@chula vistaca.gov mailto:spadilla@chula vistaca.govmailto:jmccann@chula vistaca.gov mailto:acardenas@chula vistaca.govmailto:mkachadoorian@chul avistaca.gov mailto:GGoogins@chula vistaca.govmailto:nora@norav argas.com https://www.thestarnews.com/author/pablo- quilantan/https://laprensa-sandiego.org/guest-commentary-chula-vista-now-paying- significantly-more-for-an-ambulance-trip-to-the-hospital/https://laprensa-sandiego.org/guest-commentary-chula- vista-now-paying-significantly-more-for-an-ambulance-trip- to-the-hospital/ 2021/09/28 City Council Post Agenda Page 103 of 343 https://drive.google.com/file/d/1zsQJMo_RCWO3eqi9GEnCCh6OzLbqjJV9/view?usp sharing https://drive.google.com/file/d/1B6-LGpYdXwbTQZYtn- xPv87zgMdODtuM/view?usp=sharing Given that Chula Vista is the first jurisdiction to move from a private contractor to a system staffed by public employees, and that the previous service provider maintained a system that was economically self sustaining for more than 30 years, generated reimbursement revenues for the city that rose to $3M annually, and exceed city’s contract compliance standards, it seems appropriate to trust, but also verify, the promises made to taxpayers to justify this shift to in- housing the service. We have identified quantifiable measures that will determine if the claims made to taxpayers by this council have been kept. We would appreciate you providing these statistics on a regular basis and in a transparent manner, and to do so for the system as a whole, and for each of the three jurisdictions in which the system is operating: Chula Vista, Bonita and Imperial Beach. PROMISE #1: BETTER SERVICE? What are the staffing levels and how many units are being made available? What portion of the staffing is for sworn employees? What portion of the staffing is being met by overtime? What are the average response times? Are ambulances responding in less than 12 minutes, 90% of the time (the previous compliance standard). How many ambulances were delayed? How many times did it take 20 minutes for an ambulance to arrive? How often does the call volume exceed the capacity of the system (no ambulances available)? PROMISE #2: BETTER FOR TAXPAYERS? What is the city’s collection rate? How much money has been billed to citizens but remains unpaid? What are the system’s net revenues and expenditure monthly, including costs for overtime, errors, liability and utilization of sworth employees? How many accidents have occurred and what has been the cost to taxpayers for these accidents and other costs associated with workers compensation and liability? Do revenues from intergovernmental transfers (IGT) first responder fees meet projections? What are the revenues collected from public health agencies, insurance, individuals and other sources? To what extent are city taxpayers subsidizing the system to make up for shortfalls in projected collections, fees and transfers? PROMISE #3: LOWER COST FOR CUSTOMERS? Written Communications - Acerro Public Comments - Received 9/28/2021 https://drive.google.com/file/d/1zsQJMo_RCWO3eqi9GEnCCh6OzLbqjJV9/ view?usp=sharinghttps:// drive.google.co m/file/ d/1zsQJMo_R CWO3eqi9GE nCCh6OzLbqjJ V9/view? usp=sharing https://drive.google.com/file/d/1B6-LGpYdXwbTQZYtn-xPv87zgMdODtuM/ view?usp=sharinghttps://drive.google.com/file/d/1B6- LGpYdXwbTQZYtn-xPv87zgMdODtuM/ view?usp=sharing 2021/09/28 City Council Post Agenda Page 104 of 343 What is the average rate being billed to patients transported? What additional and incidental charges are being billed to customers? In the public interest, we hope you’ll agree that monitoring and clear reporting about the ambulance transportation system is appropriate in light of the significant claims made to justify the change. If the city continues to ignore these concerns, we will be forced to utilize the public records process to collect, compile and report these statistics independently. Sincerely, Theresa Acerro President Southwest Chula Vista Civic Association Written Communications - Acerro Public Comments - Received 9/28/2021 2021/09/28 City Council Post Agenda Page 105 of 343 2021/09/28 City Council Post Agenda Page 106 of 343 2021/09/28 City Council Post Agenda Page 107 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Year-End Accomplishments Report: Federal Housing and Urban Development Block Grant Programs Report Number: 21-0150 Location: No specific geographic location Department: Development Services Department Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Council conduct the public hearing and receive the year-end accomplishments report for the Federal Housing and Urban Development Block Grant Programs. SUMMARY The City of Chula Vista receives annual entitlement funding (i.e. non-competitive, formula funds) from the U.S. Department of Housing and Urban Development (“HUD”) for three federal block grant programs: Community Development Block Grant (“CDBG”), HOME Investment Partnerships (“HOME”) Program, and Emergency Solutions Grant (“ESG”) Program. By federal law, the City is required to submit a Consolidated Annual Performance Evaluation Report (“CAPER”) on the performance of HUD funded programs at the conclusion of the program year. The CAPER is an annual report that evaluates the City’s success in meeting its goals that are described in its Five-Year Consolidated Plan (the “Con-Plan”) and in its Annual Action Plans. A public hearing is being held to allow the public to provide input on the City’s performance under said grant funds. ENVIRONMENTAL REVIEW The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Under NEPA, the activity qualifies for a Categorical Exclusion not subject to 24 CFR 50.19(b) (3), (11), and (12) of the Code of Federal Regulations. BOARD/COMMISSION/COMMITTEE RECOMMENDATION 2021/09/28 City Council Post Agenda Page 108 of 343 P a g e | 2 Not applicable. DISCUSSION The City of Chula Vista receives, on an annual basis, CDBG, HOME, and ESG Program funds from HUD to contribute towards a number of diverse programs and services aimed at enhancing the quality of life for Chula Vista’s low to moderate income residents. HUD requires that the City report its performance regarding CDBG, HOME, and ESG grants using the HUD CAPER. The CAPER is due to HUD ninety (90) days after the conclusion of the program year and must include specific financial and performance data for the respective grants. The 2020/21 report was made available for public review from September 10 through September 27, 2021. The CAPER also includes a narrative portion describing how the City carried out its housing and community development strategies, projects, and activities during the fiscal year. The 2020/21 CAPER represents the first year of the current Con-Plan and demonstrates that the City adhered to all the required HUD regulations governing the grant funds. Specifically, the City expended the grant funds within the prescribed timeframe; funded projects meeting a HUD National Objective; and maintained the administration and public service expenditures within the mandated maximum spending limitations. While the City met all administrative requirements, significant progress was also made towards the goals and objectives identified in the Con-Plan. The funds expended during the reporting year had a tremendous impact on the community, as demonstrated by the beneficiary numbers reported below. The goal numbers represent persons or households benefitting from either Public Services or Affordable Housing. These numbers are unduplicated, meaning that they are only counted once during the reporting year, regardless of the number of times served. FUNDING SOURCES AMOUNT EXPENDED SERVICE TYPE 2020/2021 GOAL 2020/2021 SERVED CDBG & ESG $1,055,779 Public Services: (Low-Income persons including; Homeless, Youth, Disabled, Elderly) 2,000 18,775 HOME & CDBG $ 651,353 Affordable Housing: (Rental Assistance, First Time Homebuyer and Owner-Occupied Rehab) 50 45 CDBG $1,036,429 Capital Improvement Projects and Public Facilities: (Section 108 Loan Payment, Homeless Bridge Shelter, Alpine) 1,000 2,705 CDBG, HOME & ESG $ 476,353 Program Administration (Staff costs associated with oversight of the CDBG, HOME and ESG grant programs). N/A N/A Total $3,363,645 Total Served 3,050 21,525 The City’s overall performance met and exceeded the established goals, particularly under Public Services and Capital Improvement Projects. This was due to the additional funding received through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, an economic stimulus bill passed in response to the economic fallout of the COVID-19 pandemic. The CARES funding gave the City the ability to fund more projects and programs to respond to community needs resulting from COVID-19. In addition to providing additional funds, the CARES Act included a waiver of the typical cap placed on Public Services expenditures. Normally, Public Services expenditures are capped at approximately $300,000; however, with the waiver of the cap we were able to spend more than $1 million in this category. Specifically, the City funded programs which provided immediate assistance to homeless, victims of domestic violence, job training opportunities, food 2021/09/28 City Council Post Agenda Page 109 of 343 P a g e | 3 and health services. Expending the majority of these funds on food distribution and helping victims of domestic violence allowed the City to assist a significantly larger number of individuals than was originally anticipated. The production of Affordable Housing has been challenging due to construction costs and housing costs consistently rising faster than the area median income. These factors, along with the effects of the elimination of Redevelopment Low/Moderate funds have impacted the Housing Authority’s ability to fund and develop new affordable units. The Housing Division continuously seeks other funding and leveraging opportunities and continues to focus on a variety of projects and programs to address the growing housing concerns. Most recently, the City had the opportunity to partner with Chelsea Investment Corp. and utilize available HOME funds (in an amount not to exceed $2 million) to provide gap financing of the future development of a 200-unit affordable housing product located within the Millenia Sectional Planning Area (SPA). DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current fiscal impact to the General Fund as the program expenditures are completely offset by grant revenues. ONGOING FISCAL IMPACT There are no ongoing fiscal impacts as all program expenditures are completely offset by t grant revenues. ATTACHMENTS None. Staff Contact: Tiffany Allen, Director of Development Services Angélica Davis, Housing Division – Senior Management Analyst 2021/09/28 City Council Post Agenda Page 110 of 343 September 28, 2021 Presented by: Angélica Davis Sr Management Analyst Chula Vista City Council Public Hearing FEDERAL BLOCK GRANT PROGRAMS 2021/09/28 City Council Post Agenda Page 111 of 343 PUBLIC HEARING US Department of Housing and Urban Development 2021/09/28 City Council Post Agenda Page 112 of 343 2020/2021 Funding Allocations Grant 2021 Allocation CDBG $2,400,515 HOME $930,642 ESG $201,139 TOTAL $3,532,296 2021/09/28 City Council Post Agenda Page 113 of 343 2020/2021 Funding Allocations Grant 2021 Allocation CARES Allocation Total CDBG $2,400,515 $3,483,367 $5,884,152 HOME $930,642 $930,642 ESG $201,139 $4,953,937 $5,155,076 TOTAL $3,532,296 $8,437,574 $11,969,870 2021/09/28 City Council Post Agenda Page 114 of 343 Grant Disbursed CDBG $2,519,558 HOME $652,972 ESG $136,946 TOTAL $3,309,746 2020/2021 Funding Disbursed 2021/09/28 City Council Post Agenda Page 115 of 343 2020/2021 REPORT Goals and Accomplishments GOAL Public Services 2,000 Persons Affordable Housing 50 Households Capital Projects 2 Projects 2021/09/28 City Council Post Agenda Page 116 of 343 2020/2021 REPORT Goals and Accomplishments GOAL ACTUAL Public Services 2,000 Persons 18,775 Affordable Housing 50 Households 45 Capital Projects 2 Projects 5 Projects 2021/09/28 City Council Post Agenda Page 117 of 343 2020/2021 REPORT What to Expect in 2021/2022 CDBG -Bridge Shelter Construction -Completion of D Street and Third Avenue HOME -Begin development of Columba Housing -Implement First Time Homebuyer Program ESG -Completion of Bridge Shelter Ramp Up and Operations 2021/09/28 City Council Post Agenda Page 118 of 343 September 28, 2021 Presented by: Angélica Davis Sr Management Analyst Chula Vista City Council Public Hearing FEDERAL BLOCK GRANT PROGRAMS 2021/09/28 City Council Post Agenda Page 119 of 343 2020/2021 REPORT Goals and Accomplishments 4%2%2% 91% 1% Domestic Violence General PS Health Food Homeless 2021/09/28 City Council Post Agenda Page 120 of 343 OHS Draft 5/5/20 4134-7659-4982.8 RECORDING REQUESTED BY CSCDA Community Improvement Authority WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, CA 94105 Attention: Steffi Chan THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE PUBLIC BENEFIT AGREEMENT By and Between CSCDA COMMUNITY IMPROVEMENT AUTHORITY and [CITY] _________________________ Dated as of [Date] _________________________ Relating to CSCDA COMMUNITY IMPROVEMENT AUTHORITY ESSENTIAL HOUSING REVENUE BONDS, SERIES 20__[A] ([PROJECT NAME]) [and CSCDA COMMUNITY IMPROVEMENT AUTHORITY SUBORDINATE ESSENTIAL HOUSING REVENUE BONDS, SERIES 20__[B] ([PROJECT NAME])] 2021/09/28 City Council Post Agenda Page 121 of 343 4134-7659-4982.8 PUBLIC BENEFIT AGREEMENT This PUBLIC BENEFIT AGREEMENT (“Agreement ”) is dated as of [Date] by and between the CSCDA COMMUNITY IMPROVEMENT AUTHORITY a joint exercise of powers agency organized and existing under the laws of the State of California (including its successors and assigns, “Owner”) and the [CITY] (“Host”). BACKGROUND WHEREAS, Owner proposes to issue Bonds (as hereinafter defined) to finance Owner’s acquisition of the certain multifamily rental housing project (the “Project”) located at [Address], located on the real property site described in Exhibit A hereto; and WHEREAS, Owner intends to sell the Project at the instigation of the Host or upon the retirement of all Project Debt (as defined herein) pursuant to this Agreement. AGREEMENT In consideration of the mutual covenants herein contained, and such other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Owner and Host mutually agree as follows: Section 1. Right to Cause Sale. Host shall have the right to cause (“Sale Right”) Owner to sell the Property (as herein defined) upon payment by the purchaser thereof (the “Purchaser”) of the applicable Sale Price (as herein provided) within the Sale Right Term (as herein defined) as provided in Section 4 hereof or following the Sale Right Term as provided in Section 5 hereof, and in each case, in compliance with and observance of all of the terms and conditions of this Agreement. Section 2. Definitions. Capitalized terms used in this Agreement shall have the meanings assigned to them in this Section 2; capitalized terms used in this Agreement and not defined in this Section 2 or elsewhere herein shall have the meanings assigned to them in the Indenture (herein defined). (a) “Bonds” – collectively, (i) the CSCDA Community Improvement Authority Essential Housing Revenue Bonds, Series 20__[A] ([Project Name]) (the “Series [A] Bonds”), [and (ii) the CSCDA Community Improvement Authority Subordinate Essential Housing Revenue Bonds, Series 20__[B] ([Project Name]) (the “Series [B] Bonds”)], with such other series and sub- series designations as may be set forth in the Indenture, originally issued to finance Owner’s acquisition of the Project and related transaction costs. (b) “Bond Trustee” – [Trustee] or any successor trustee under the Indenture. (c) “Closing” – shall have the meaning set forth in Section 8 hereof. (d) “Conveyance” – that transaction or series of transactions by which Owner shall transfer, bargain, sell and convey any and all right, title or interest in and to the Property. 2021/09/28 City Council Post Agenda Page 122 of 343 4134-7659-4982.8 (e) “Extraordinary Costs and Expenses” – shall have the meaning set forth in the Indenture. (f) “Indenture” – the Indenture of Trust between Owner, as issuer, and Bond Trustee, as trustee, pursuant to which the Bonds were issued. (g) “Minimum Sale Price” – means the lowest price at which the Property may be sold, as described in Section 4(c) hereof. (h) “Outstanding” – with respect to Bonds, as of any given date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture, except: (i) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (ii) Bonds deemed to be paid in accordance with Article VIII of the Indenture; and (iii) Bonds in lieu of which other Bonds have been authenticated under the Indenture. (i) “Owner Indemnified Person” – Owner and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. (j) “Project Administrator” – [____________________] and its successors and assigns. (k) “Project Debt” – any debt secured by the Project and incurred to finance or refinance Owner’s acquisition of the Project and related transaction costs, including any portion of the Bonds and any bonds, notes or other indebtedness issued by Owner to improve the Project or to refund the Bonds in whole or in part. (l) “Property” – means all of Owner’s right, title and interest (which includes fee simple title to the real property) in and to all property and assets used in or otherwise related to the operation of the Project including, without limitation, all real property and interests in real property, all tangible and intangible personal property including furniture, fixtures, equipment, supplies, intellectual property, licenses, permits, approvals, and contractual rights of any kind or nature together with the right to own and carry on the business and operations of the Project. (m) “Regulatory Agreement” – means the Regulatory Agreement and Declaration of Restrictive Covenants by and between Owner and Bond Trustee, relating to the Bonds. (n) “Sale Price” – purchase price of the Property to be paid by the Purchaser upon sale of the Property by Owner pursuant to Host’s Sale Right in compliance with Section 4 hereof or sale by Owner pursuant to Section 5 hereof. (o) “Sale Right” – means the right of Host to cause Owner to sell the Property pursuant to Section 1 hereof. (p) “Sale Right Exercise Date” – the date fifteen (15) years from the issuance of the Bonds. (q) “Sale Right Term” – shall commence on the Sale Right Exercise Date and, if not exercised, shall terminate on the date on which no Project Debt remains outstanding. 2021/09/28 City Council Post Agenda Page 123 of 343 4134-7659-4982.8 (r) “Transaction Costs” – to the extent not otherwise described herein, any costs or expenses of any kind or nature associated with or incurred by Owner and/or Bond Trustee in connection with the consummation of the Conveyance, regardless of whether such costs and expenses are customarily borne by the seller or purchaser in any such transaction, including but not limited to taxes, recording fees and other impositions, Owner’s and Bond Trustee’s legal and other professional fees, fees for verification agents, bidding agents, escrow agents, custodians or trustees, assumption fees, prepayment fees, the cost of the appraisal, brokers’ fees and expenses, surveys, inspections, title commitments, title insurance premiums and other title-related fees, and all amounts required for indemnification of Owner, Bond Trustee and Project Administrator. Section 3. Effectiveness; Term and Termination. The Sale Right shall become effective on the Sale Right Exercise Date and may be exercised during the Sale Right Term. Owner agrees that it will not enter into any agreement to sell all or any part of the Property during the Sale Right Term other than as may be required by the Indenture (e.g., in the event of default), without the specific written request of the Host and delivery of an Opinion of Bond Counsel to Bond Trustee substantially to the effect that such sale will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. Section 4. Manner of Exercise. (a) Host’s Notice. To exercise the Sale Right, Host shall provide a notice (an “Exercise Notice”) to Owner (with a copy to the Project Administrator) at any time during the Sale Right Term. (b) Owner’s Best Efforts to Sell. Unless Host notifies Owner in writing that it is withdrawing its Exercise Notice within fifteen (15) business days of delivering the Exercise Notice under Section 4(a) hereof, Owner shall exercise its best efforts in selling and conveying good and marketable title to the Property within ninety (90) days following receipt of the Exercise Notice, or as soon as possible thereafter, but only if it can sell at or above the Minimum Sale Price. The obligation of Owner to sell and convey the Property shall be on a best efforts basis. Owner shall endeavor to sell the Property at a commercially reasonable price, subject to subsection (c) of this Section, by such means as it shall determine to be suitable for such purpose; provided that Host may direct Owner to sell the Property to Host, to a non-profit corporation designated by Host or to a limited partnership (that has a non-profit corporation as a general partner) designated by Host at a price less than commercially reasonable but at or above the Minimum Sale Price; provided further that Owner’s determination of the manner of sale and Sale Price shall be final and incontestable, and Owner shall incur no liability to any party as a result of or otherwise in connection with the sale or failure to sell. Subject to subsection (c), nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host. Owner shall direct the Bond Trustee in the foregoing as and to the extent necessary or appropriate. (c) Sale Price. The Sale Price shall be at least equal to the sum of the amounts set forth below (net of any adjustments or prorations of the type described in Section 8(b)) (the “Minimum Sale Price”): 2021/09/28 City Council Post Agenda Page 124 of 343 4134-7659-4982.8 i. an amount sufficient to either prepay, redeem in whole or fully defease for redemption on the earliest call date all Project Debt; plus ii. any fees or other amounts not identified in clause (i) that may be necessary to effect the complete release from and discharge of any lien, mortgage or other encumbrance on the Property; plus iii. any amounts due to Owner (including Owner Indemnified Persons, as provided in the Indenture), the Bond Trustee or any predecessor or successor, or any other Person under any indenture, loan agreement, bond, note or other instrument relating to any Project Debt (including, without limitation, indemnification amounts, Owner’s Extraordinary Costs and Expenses, recurrent and extraordinary fees and expenses, and reimbursable costs and expenses of any kind or nature); plus iv. Transaction Costs; minus v. Any funds held by or for Owner under the Indenture applied to the retirement of Project Debt. Owner may retain such portion of moneys in the Extraordinary Expense or similar fund under the Indenture it deems reasonable or a reserve against future expected costs and expenses of the type described in subparagraph (iii). Owner’s determination of this amount shall be final and incontestable. Section 5. Mandatory Conveyance. Upon the retirement of all Project Debt, Owner shall use its best efforts to effect a Conveyance within ninety (90) days thereafter, subject to Section 4(c) hereof; provided, however, that Host, by notice to Owner within two (2) weeks after notice from Owner that no Project Debt remains outstanding, shall have the option to cause Owner to sell the Property (i) to a non-profit corporation or a limited partnership (that has a non-profit corporation as a general partner) designated by Host upon payment by such non-profit corporation or limited partnership, as applicable, of a sale price approved by Host, which sale price shall be at least equal to the Minimum Sale Price, or (ii) to Host upon payment of the Minimum Sale Price. Nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host. Section 6. Surplus Cash; Surplus Conveyance Proceeds. Upon a Conveyance of the Property, Owner shall apply the proceeds of such Conveyance (i) to redeem the Bonds then Outstanding, (ii) to prepay, redeem in whole or fully defease any other Project Debt, and (iii) to pay any fees or other amounts listed in Section 4(c)(ii) – (iv). Any proceeds remaining following the foregoing payments (such remaining amounts hereinafter referred to as “Surplus Conveyance Proceeds”) shall be transferred to Host and Host shall share such Surplus Conveyance Proceeds with other taxing agencies selected by Host, and in the amounts determined by Host in its sole discretion and responsibility. Section 7. Terms of Conveyance. 2021/09/28 City Council Post Agenda Page 125 of 343 4134-7659-4982.8 (a) The Conveyance shall be in the nature of a grant deed to Purchaser in which Owner shall deliver one or more deeds, bills of sale, or other instruments of transfer without recourse or warranty of any kind or nature. (b) The Property will be conveyed to Purchaser in AS IS CONDITION, WITH ALL FAULTS, and without representations or warranties of any kind or nature as to the condition of the Property. (c) There shall be no partial transfer and that, upon consummation of the Conveyance, Owner shall be fully divested of any and all right, title or interest in and to the Property. Section 8. Closing. (a) The closing of the Conveyance (“Closing”) shall take place, in the case of a Conveyance pursuant to Section 4 hereof, not later than the ninetieth (90th) calendar day following Owner’s receipt of the Exercise Notice, or as soon as possible thereafter, and in the case of a mandatory conveyance pursuant to Section 5 hereof, not later than the ninetieth (90th) calendar day following the retirement of all Project Debt, or as soon as possible thereafter. (b) Prorations. All general and special real property taxes and assessments, and rents shall be prorated as of the Closing, with Purchaser responsible for all such items to the extent arising or due at any time following the Closing. General real property taxes shall be prorated at the time of Closing based on the net general real property taxes for the year of Closing. Section 9. Recording. This Agreement, and any amendment thereto, shall be recorded with the recorder’s office of the County; provided, that upon termination of the term of this Agreement, Host shall cooperate with Owner to remove any such recorded Agreement or amendment thereto from title to the Property upon Owner’s reasonable request therefor and, in any event, by no later than thirty (30) days after the expiration of the original term of this Agreement. In the event that, within said time, Host fails to so cooperate and provide its original signature to a termination of such recorded Agreement or amendment thereto, then Host hereby irrevocably constitutes and appoints Owner as Host’s true and lawful attorney (and agent-in-fact) to execute in Host’s name any such termination. Section 10. Subordination. This Agreement shall be subordinate to any claim, pledge or interest in the Property securing the Bonds or any Project Debt. Section 11. Maintenance of Membership. In order to preserve the Property’s exemption from property tax, Host agrees to remain a member of Owner joint powers authority so long as any Bonds remain Outstanding. Section 12. Assignment. Neither party to this Agreement shall assign its interests, obligations, rights and/or responsibilities under this Agreement without the prior written consent of the other party. 2021/09/28 City Council Post Agenda Page 126 of 343 4134-7659-4982.8 Section 13. Limitation on Liability. (a) Owner shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Agreement or any sale or Conveyance or failure or price thereof or application of proceeds thereof, except only as to moneys available therefor under and in accordance with the Indenture or this Agreement. (b) No Owner Indemnified Person shall be individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or ac countability by reason of the execution and delivery of this Agreement, or by any proceedings for the sale or Conveyance or failure or price thereof, or Host’s exercise or waiver of same, or otherwise except in the case of such Owner Indemnified Person’s own willful misconduct. Section 14. Notices, Governing Law, Binding Effect and Other Miscellaneous Provisions. (a) Notices. All notices provided for in this Agreement shall be in writing and shall be given to Owner or Host at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith: If to Owner or Designated Agent: CSCDA Community Improvement Authority 1700 North Broadway, Suite 405 Walnut Creek, California 94596 Attention: Jon Penkower Email: jpenkower@cscda.org With a copy to: [Project Administrator] [Project Administrator Address] Attention: [Project Administrator Contact] If to Host: [City] [City Address] Attention: [City Contact] Such notices shall be deemed effective upon actual delivery or upon the date that any such delivery was attempted and acceptance thereof was refused, or if mailed, certified return receipt requested, postage prepaid, properly addressed, three (3) days after posting. (b) Consents and Approvals. All consents and approvals and waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver or notice is requested. (c) Non-liability of Host or Owner Officers and Employees. No officer or employee of the Host shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by Host of any obligation of the terms of this Agreement. No officer 2021/09/28 City Council Post Agenda Page 127 of 343 4134-7659-4982.8 or employee of the Owner shall be personally liable to Host, or any successor in interest, in the event of any default or breach by Owner of any obligation of the terms of this Agreement. (d) Pronouns. Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. (e) Amendments. This Agreement may not be modified except in a written instrument signed by Host and Owner. (f) Complete Agreement; Benefits. This Agreement together with all schedules and exhibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto. This Agreement shall inure solely and exclusively to the benefit of the Owner and Host, and no other party shall have any right, remedy or claim under or by reason of this Agreement. (g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles. All claims of whatever character arising out of this Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, if and to the extent that such claim potentially could or actually does involve Owner, shall be filed and maintained in the Superior Court of California, County of Sacramento, California. By executing and delivering this Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such court; (ii) waives any defense of forum non-conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural requirements applicable to actions or claims against or involving governmental units and/or political subdivisions of the State of California that may exist at the time of and in connection with such matter. (h) Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceability of any other provisions of this Agreement, all of which shall remain fully enforceable. (i) Term. This Agreement shall terminate upon the Conveyance. (j) Captions. The captions used in this Agreement are solely for convenience, and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction. (k) Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Agreement. [SIGNATURE PAGE TO FOLLOW] 2021/09/28 City Council Post Agenda Page 128 of 343 4134-7659-4982.8 2021/09/28 City Council Post Agenda Page 129 of 343 4134-7659-4982.8 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above. CSCDA COMMUNITY IMPROVEMENT AUTHORITY By: Authorized Signatory [CITY] By: [Name] [Title] Signature Page to Public Benefit Agreement 2021/09/28 City Council Post Agenda Page 130 of 343 4134-7659-4982.8 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, , (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/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 (Seal) 2021/09/28 City Council Post Agenda Page 131 of 343 4134-7659-4982.8 EXHIBIT A LEGAL DESCRIPTION OF REAL PROPERTY The Land referred to herein is situated in the State of California, County of [County], [City], and described as follows: 2021/09/28 City Council Post Agenda Page 132 of 343 From: Jon Penkower <jpenkower@cscda.org> Sent: Monday, September 27, 2021 7:20 AM To: Tiffany Allen <TAllen@chulavistaca.gov>; Ben Haddad <benh@calstrat.com>; Craig Benedetto craigb@calstrat.com>; Bradley Griggs <bgriggs@blakegriggs.com>; Lauren Seaver lseaver@blakegriggs.com> Cc: Kelly Broughton <kbroughton@chulavistaca.gov>; Jose Dorado <JDorado@chulavistaca.gov>; Simon Silva <SSilva@chulavistaca.gov>; Stacey Kurz <SKurz@chulavistaca.gov>; Maria Kachadoorian mkachadoorian@chulavistaca.gov>; CityClerk <CityClerk@chulavistaca.gov> Subject: RE: Chula Vista Request for Additional Information - Casa Lago Good morning, I hope everyone had a nice weekend. We have reviewed the staff report in preparation for tomorrow’s council meeting and greatly appreciate all of your efforts to bring this important item before the Mayor and councilmembers. Attached, please find a letter that we believe will be helpful to the discussion on Tuesday evening. We wanted to make a few clarifications and also provide additional information in connection with CSCDA’s Workforce Housing program. Please let me know if you have any questions prior to tomorrow’s meeting. We will also be in attendance. Thanks again. Best regards, Jon Penkower Managing Director 1700 North Broadway, Suite 405 Walnut Creek, CA 94596 Direct (925) 476-5887 Cell (415) 939-8484 www.cscda.org Warning: External Email Written Communications - Penkower Item 8.1 - Received 9/27/2021 mailto:jpenkower@ cscda.org mailto:TAllen@chula vistaca.gov mailto:benh@cal strat.commailto:craigb@cal strat.com mailto:bgriggs@blake griggs.commailto:lseaver@blake griggs.com mailto:kbroughton@chula vistaca.gov mailto:JDorado@chula vistaca.govmailto:SSilva@chula vistaca.gov mailto:SKurz@chula vistaca.govmailto:mkachadoorian@chul avistaca.gov mailto:CityClerk@chula vistaca.gov http:// www.cscda.o rg/ ht tp s: // tw itt er .c o m / C S C D A _ U p d at e ht tp s:/ / w w w. lin ke di n. co m / co m p a ny /6 5 7 4 6 2 4 ? tr k =t ya h &t rk In fo = cli ck e d V er tic al % 3 A co m p a ny % 2 Ci dx % 3 A 2- 1- 3 % 2 Ct ar Id % 3 A 1 4 3 6 7 1 1 3 9 3 1 9 1 % 2 Ct as % 3 A cs cd a 2021/09/28 City Council Post Agenda Page 133 of 343 1700 North Broadway, Suite 405  Walnut Creek, California 94596 Phone (800) 531-7476  Fax (925) 391-3590  www.cscda.org Honorable Mayor Mary Salas & City Council City of Chula Vista 276 4th Avenue Chula Vista, CA 91910 TRANSMITTED ELECTRONICALLY RE: Item 8.1 – Middle-Income Housing Programs Report Dear Mayor Salas and Members of the Chula Vista City Council: We greatly appreciate staff’s effort in preparing the staff report regarding CSCDA’s Workforce Housing Program (Item Number 8.1) (the “WHP” or the “Program”) for the upcoming September 28, 2021 City Council meeting. We have enjoyed working with staff in several meetings to-date and appreciate their attention to this opportunity to bring significant rent savings to middle-income families in Chula Vista. CSCDA, comprised of 530 cities and counties, is the largest joint powers authority in California, created in 1988 by the League of California Cities (the “League”) and the California State Association of Counties (“CSAC”) to provide California’s local governments with an effective tool for the timely financing of community-based public benefit projects. CSCDA is a longtime partner to the City of Chula Vista, which has been a member since 1996 and has utilized a variety of CSCDA’s bond financing programs. CSCDA launched its Workforce Housing Program in late 2020 as a tool for cities to easily and quickly create rent-restricted middle-income housing by converting existing market-rate multifamily projects. Since December 2020, CSCDA has closed more than $2.4 billion in projects across California totaling over 4,100 units and is scheduled to add 2,000 additional units to the program by the end of the year, quickly becoming the largest workforce housing program within the State. To date, the program has been extremely successful in achieving its affordability goals. Projects are serving the critical middle-income workforce in host cities including Anaheim, Long Beach, Carson, Pasadena, Glendale, Orange, Dublin, Santa Rosa and others. Teachers, government employees, first responders, construction workers, healthcare workers and others have been able to move into the properties and are benefiting from the rent reductions. Chula Vista’s peer cities of San Marcos, Escondido and La Mesa are also in the process of evaluating specific projects within the Program and we expect them to return to their respective city councils shortly. As you may also be aware, on August 31, 2021, CSCDA, along with our sponsor partner Opportunity Housing Group (“OHG”), submitted to the City a proposal to convert a specific project, CasaLago Eastlake (427 current market-rate units located at 2816 Cielo Circulo), to Low- and Middle-Income Housing. We understand that the hearing on September 28, 2021 is a policy hearing and not targeted for the review of specific projects. However, we will refer to the Casa Lago project proposal in this letter as a means to illustrate the benefits of the Program. We would also like to highlight some substantial changes to our program since our prior submittal on August 31, 2021, which relate to some of the policy discussion points in the staff report. We are now able to accommodate the following as part of the CasaLago Project: Written Communications - Penkower Item 8.1 - Received 9/27/2021 2021/09/28 City Council Post Agenda Page 134 of 343 -2-  A “Host City Charge” of $200,000/year payable to the City of Chula Vista, escalating at 2% annually. This amount compares to the City’s foregone property tax of $196,000/year.  The City of Chula Vista can be reimbursed for any staff time and/or costs incurred in its review of the Program, inclusive of any consultant costs. This would be payable at the closing of the transaction. With these new components of the Program, the net fiscal impact of the CasaLago Project for the City would be eliminated. Having reviewed the Staff Report, we would also like to provide the below clarifications as well as additional information prior to the hearing on Tuesday September 28, 2021. 1. Regarding the Importance of Low-, Middle- and Moderate-Income Housing in Chula Vista Affordable housing is a significant issue for Chula Vista families and rents and home prices continue to increase rapidly. The below data from the 2020 American Community Survey (Census) shows that 11% of Chula Vista renters are paying 40-50% of income as rent and 29% are paying over 50% of income as rent. A total of 40% of Chula Vista renters (13,083 households) are currently extremely rent burdened. This is the critical issue the WHP is designed to address. We agree with staff that the existing Balanced Communities Policy is an excellent tool toward this achieving this goal, but recognize that given the thousands of units needed, multiple tools, including the WHP and others should be considered. To clarify in the staff report, 1/3 of the units in a WHP project would be made affordable to Low-Income families (143 units at CasaLago) in addition to Middle-Income (142 units) and Moderate-Income (142 units). The Low-Income category under the WHP is restricted to families making less than 80% of AMI (typically in the 60-80% of AMI range). These families are struggling to afford rapidly rising rents in the City and have no other viable source of new income restricted housing at this scale and quality. Under the Program, at the CasaLago project these families would have initial rent savings of approximately $562/month. Savings will further increase over time because of the rent growth restrictions. The total annual rent savings projected for the CasaLago project is $2.4 million. It is important to also note the rent control component of the program. Under the program, rent growth is capped at the lower of (i) AMI growth and (ii) 4%. Market rent growth in 2021 year-to-date is over 12.5% in Chula Vista and is projected at 6.2% for 2022 and 5.3% for 2023. Over the last 20 years, rents have only Written Communications - Penkower Item 8.1 - Received 9/27/2021 2021/09/28 City Council Post Agenda Page 135 of 343 -3- ever decreased during 2008 and 2009 (-1.25% and -0.5%, respectively).1 This indicates that the market does not historically correct to create affordability without specific interventions from policy makers. This sustained rent growth with severe spikes creates instability for middle-income families who cannot afford rent increases and are forced to move and commute. Rent control under the WHP creates stability and allows families to plan for long term residency with financial security and invest in the community. The proposed CasaLago project is ideally suited to Middle-Income housing. It is estimated that 72% of the current tenants at the Project would immediately income-qualify for rent savings under the Program without relocating. These residents are currently rent-burdened. Note there is no resident displacement under the Program and residents who do not qualify are allowed to remain at market rents. Projects like CasaLago across the state are on pace to be fully converted within the first 1-2 years of ownership by CSCDA. CasaLago is a high-quality, Class A asset with a full amenity package, completed in 2013 and is designed for families with a majority of townhouse-style two- and three-bedroom units and excellent rent savings. Its rent savings at $2.4 million (avg. $468/unit/mo.) are among the highest of any proposed or realized WHP projects in the State. 2. Regarding the Financial Impact to the City of Chula Vista As the staff report describes, under the Program a multifamily project would be acquired by CSCDA CIA (a governmental entity) and as such would be exempt from property tax. This is the indirect subsidy which enables affordability for the residents. The property coming off the tax roll is no different than in any other affordable housing project. We would like to clarify the following points regarding loss of property tax:  CSCDA is now able to include a “Host City Charge” of $200,000 paid to the City on the CasaLago project. This charge would escalate at a rate of 2% annually. The total property tax loss to the City on this project is $196,000 annually. Thus, the net fiscal impact of this project for the City would be eliminated.  CasaLago is served by three school districts: Chula Vista Elementary School District, Sweetwater Union High School District, and Southwestern Community College District. These districts will not be impacted by property tax loss from the project because they are all Local Control Funding districts which receive fixed funding from the state regardless of actual property tax receipts.  Under the Public Benefit Agreement, the City is projected to receive upwards of $400 million on sale of the asset in year 30. The City may elect to distribute these proceeds to make whole any other impacted taxing entities. While it is of course difficult to project property values 15-30 years in the future, this option creates significant future upside for the City with no investment required and while immediately providing much-needed affordability to middle-income residents. 3. Regarding JPA Considerations We would like to clarify the following points regarding “JPA Impact Considerations” raised in the Staff Report:  Restrictions and Liability: CSCDA and its Project Administrator, Opportunity Housing Group, provide ample documentation, compliance monitoring reporting and enforcements in its projects, similar to how CSCDA administers its 700+ affordable housing projects. Reporting and 1 Data from Costar  Written Communications - Penkower Item 8.1 - Received 9/27/2021 2021/09/28 City Council Post Agenda Page 136 of 343 -4- documentation is publicly disclosed to bond investors and can be submitted to the City as well. The program is designed to insulate the City from any liability, so the City is not a party to any of the bond offering documents.  JPA Requests: CSCDA is not requesting a blanket approval, only approval for the specific CasaLago project. We believe it is best practice for a City to review and approve each potential project separately and on its specific merits.  Property Tax Loss: This item is addressed above.  “B” Rated Bonds: This is a clarification. The bonds are unrated, similar to the City’s own housing bonds. The City has no liability for a project default as it is not party to the bond issuance. In short, there is no more risk here than any other bond the city would issue.  Additional Clarification re CSCDA: CSCDA was founded by, and continues to be sponsored by the League of California Cities (the “League”) and the California State Association of Counties (“CSAC”). The issuance fees received by CSCDA support League and CSAC programs, benefitting all cities and counties throughout California. We believe this is an excellent opportunity to immediately create much-needed middle-income housing in Chula Vista with no cost to the City. It is consistent with the Council’s priorities to provide diverse types of housing for Chula Vista residents and has no financial impact and a significant amount of long-term financial upside to support the City in the long-term. In conclusion, we respectfully ask that the City Council provide staff policy direction to bring back the specific WHP proposals, including CasaLago, for council consideration at your earliest opportunity, preferably in October. Thank you for your consideration and please let us know if you have any questions or would like to discuss further prior to or after the hearing on September 28th. Sincerely, Jon Penkower Managing Director cc: Maria Kachadoorian, City Manager Tiffany Allen, Director of Development Services Stacey Kurz, Acting Housing Manager Jose Dorado, Senior Management Analyst City Clerk  Written Communications - Penkower Item 8.1 - Received 9/27/2021 2021/09/28 City Council Post Agenda Page 137 of 343 September 28, 2021 Presented by: Tiffany Allen, Director of Development Services Stacey Kurz,Acting Housing Manager Jose Dorado, Senior Management Analyst Chula Vista City Council Presentation MIDDLE INCOME HOUSING 2021/09/28 City Council Post Agenda Page 138 of 343 Chula Vista Rental Market 2021/09/28 City Council Post Agenda Page 139 of 343 Middle-Income Housing Rental Community Characteristics CLASS B CLASS CCLASS A AFFORDABLE 2021/09/28 City Council Post Agenda Page 140 of 343 Middle-Income Housing Rental Communities in Chula Vista 2021/09/28 City Council Post Agenda Page 141 of 343 Middle-Income Housing City Policies & Goals Balanced Communities Policy 2021/09/28 City Council Post Agenda Page 142 of 343 Middle-Income Housing Moderate Income Housing Production For-Sale Units54 Restricted Units Village of Escaya (30) Tavera (14) Rosina Vista (10) 2021/09/28 City Council Post Agenda Page 143 of 343 30% 15% 0% 27% 3% 10%7% 11% 92% 115% 50% 18% 4%0% 17% 9% 15% 24% 0% 0% 20% 40% 60% 80% 100% 120% 140% % Moderate RHNA Goal Met (2013-2019) Middle-Income Housing SD Meeting the Need –RHNA Moderate Goals (https://soconews.org –RHNA Report Card 2019) 2021/09/28 City Council Post Agenda Page 144 of 343 Middle-Income Housing City Policies & Goals Income Category No.% Extremely Low (0-30% of AMI) 2,750 25% Very Low (0-50% of AMI) Other lower (51-80% of AMI)1,777 16% Moderate (81-120% of AMI)1,911 17% Above Moderate (>120% of AMI)4,667 42% TOTAL UNITS 11,105 100% Housing Element -RHNA Allocation (2021-2029) 2021/09/28 City Council Post Agenda Page 145 of 343 Moderate Income Middle Income Workforce Housing 2021/09/28 City Council Post Agenda Page 146 of 343 Middle-Income Housing Our Moderate-Income Workforce and Community Moderate Income (81-120% of Area Median Income) Family of 4 earning $97,000 -$114,100 2-Bedroom Rental rate $ 2,400 3-Bedroom Housing price $402,905 •Teachers, Nurses, Police Officers, Retail Workers, Child/Elder-Care Providers •Special Needs Households •Children of long-time Chula Vista residents 2021/09/28 City Council Post Agenda Page 147 of 343 Middle-Income Housing Historic Rental Affordability $1,723 $1,787 $1,843 $2,006 $2,164 $2,216 $2,176 $2,377 $1,347 $1,393 $1,393 $1,510 $0 $1,000 $2,000 $3,000 2018 2019 2020 2021 Chula Vista San Diego National2021/09/28 City Council Post Agenda Page 148 of 343 Joint Power Authorities JPAs 2021/09/28 City Council Post Agenda Page 149 of 343 Joint Power Authorities (JPAs): Location & Type of Projects •Largely suburban commuter-based communities •Large Class A complexes •Sales are typically forced: o Property not for-sale on open market;and o Deal has already been “cooked” before the City is approached. 2021/09/28 City Council Post Agenda Page 150 of 343 Joint Power Authorities (JPAs): Structure of the Deals •Non-voting alternate member •No financial expenditures, liabilities, or obligations •Execute a public benefit agreement •May force a sale of the property between years 15 and 30; and •Resulting net sale proceeds to offset the foregone property tax revenue. City Elects to become JPA Member •Not subject to property taxes since •City, County of San Diego and the local school districts Issuance of tax-exempt public purpose bonds to purchase multifamily properties •(1) for the purchase, reserves, up front Sponsor fees; and •(2) bond issuance fees and the other “B” series, to pay the Project Sponsor fees. Financial structure relies on two sets of bonds: Bonds issued indebtedness solely of the issuing Authority and payable only from revenues of the project. 2021/09/28 City Council Post Agenda Page 151 of 343 “B” Series Bonds •100% leveraged •Riskier financing •Non-compliant with City bond policy but not subject Joint Power Authorities (JPAs): Bond Structure 2021/09/28 City Council Post Agenda Page 152 of 343 Financial impacts •Property tax •City •County Other risks •Liability •Perception Joint Power Authorities (JPAs): Impacts 2021/09/28 City Council Post Agenda Page 153 of 343 Joint Power Authorities (JPAs): Examples of Other Cities Anaheim Carson Pasadena Dublin Glendale Long Beach Monrovia Santa Clarita Fairfield 2021/09/28 City Council Post Agenda Page 154 of 343 630500 665000 1245000 578000 910000 767500 1095000 890000 735000 690000 0 200000 400000 600000 800000 1000000 1200000 1400000 Median Home Price ($)5% 46% 9% 4%3%2% 20% 6%4% 15% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% % Moderate RHNA Goal Met Joint Power Authorities (JPAs): Why Join? (SoCoNews.org & Redfin.com, 2021) Meeting 5% or less of RHNA Goal for Moderate as of 2019 Median Home Price over $800,000 2021/09/28 City Council Post Agenda Page 155 of 343 2674 2323 2933 1716 3019 2734 3823 1780 2224 2325 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Average Rent ($) 76075 82305 150299 84557 66130 63017 83068 77111 99666 81272 0 20000 40000 60000 80000 100000 120000 140000 160000 Median Household Income ($) Joint Power Authorities (JPAs): Why Join? (2021 & U.S. Census, 2019 & ApartmentFinder.com, 9/2021) Average Rent over $2,400 Median Income over $90,000 2021/09/28 City Council Post Agenda Page 156 of 343 1942 234 691 174 1176 1548 715 136 504 493 0 500 1000 1500 2000 2500 Vacancy (units) Joint Power Authorities (JPAs): Why Join? (ApartmentFinder.com, 9/2021) Less than 200 vacancies 2021/09/28 City Council Post Agenda Page 157 of 343 Conclusion 2021/09/28 City Council Post Agenda Page 158 of 343 Joint Power Authorities (JPAs): Pros | Cons Pros Cons •Disposable income will be spent in City •Security from inflation (rental caps) •Potential “windfall” in years 15-30 •Loss of funds to taxing entities & resulting impacts •Does not help meet RHNA goals •Lack of city oversight: •Noticing to residents/Liability •Enforcement Risks •Deferred maintenance costs at point of sale •Bond performance •Market condition assumptions: •Consistent (straight-line) rental increases •Value in years 15-30 •Future value of money (“windfall”) 2021/09/28 City Council Post Agenda Page 159 of 343 Moderate Income Housing: Policy Direction Options Status Quo Research & Develop Policy Options* -Standalone process -HE/Balanced Community update *Funding Sources (GF v. Housing Authority) Limit Number of projects per year -First come/first serve -RFQ Process Project level analysis -Discretionary action -Restrictions developed Blanket Authority 2021/09/28 City Council Post Agenda Page 160 of 343 Moderate Income Housing: Staff Recommended Options Policy Questions What is the right product type for middle income projects? Why not offer conversion to anyone seeking vs. forced sale? Is this type of financing better applied to existing complexes or new construction? Should general fund be used for supplementing rents? Is more noticing/protections needed for residents? Are we willing to commit to bonds that do not meet city policies? Are we prepared to make a decision without other taxing entity input? Research & Develop Policy Options* -Standalone process -HE/Balanced Community update *Funding Sources (GF v. Housing Authority) 2021/09/28 City Council Post Agenda Page 161 of 343 Moderate Income Housing: Staff Recommended Options Proceed with Policy & Project(s) No net impact to City Project by Project approval Limit number of projects Limit Number of projects per year -First come/first serve -RFQ Process Project level analysis -Discretionary action -Restrictions developed 2021/09/28 City Council Post Agenda Page 162 of 343 Questions and Discussion MIDDLE INCOME HOUSING 2021/09/28 City Council Post Agenda Page 163 of 343 Next Steps 2021/09/28 City Council Post Agenda Page 164 of 343 Moderate Income Housing: Regulatory Options Protect Property •Responsive to tenants •Management Company •Not to let fall in disrepair •Have enough reserve funds for property repairs- life span of key components/structure Rents •Formula to keep rents at workforce housing rates •Number of eligible tenants-what to do if not eligible and % of eligible •Monitoring Not Encumber Property Sale to another entity prior to 15-30-year marks •Obtaining credit or use of equity •Bankruptcy-what it requires rent increases above workforce housing rates •Yearly inspections-repairs required by City •Deferral of bond payment or other obligations •Forced Sales of Property Forced Sale of Property •Timing/notice •Marketing •Due diligence costs •Time on market and competing workforce JPA bond projects? •Price •Impact to residents: Notice •Property tax loss for City and affected taxing entities •Profit beyond loss of property tax •All costs of sale borne by seller/fees? •What if property does not sell or sale at loss. •Tax consequences of forced sale and profit Binding on Successors Ensure Comparable Language to other Regulatory Agreements Enforceability Attorney’s Fees 2021/09/28 City Council Post Agenda Page 165 of 343 Backup Slides 2021/09/28 City Council Post Agenda Page 166 of 343 Affordable v. JPA: Comparison Restrictions & Benefits Affordable JPA Reduced Rents in line with City policy RHNA Goals Affordability Term 55 years 15-30 years Noticing Requirements to Community Rental Caps 2%3-4% Monitoring Fees Triggers for non-compliance (maintenance/rents) ADD DETAILS TO TABLE AND “NOTES” TEXT (JD) 2021/09/28 City Council Post Agenda Page 167 of 343 Affordable v. JPA: Documents Documents Affordable JPA Affordable Housing Agreement Deed of Trust Regulatory Agreement Bond Documents Annual Reports ADD DETAILS TO TABLE AND “NOTES” TEXT (JD) 2021/09/28 City Council Post Agenda Page 168 of 343 Middle-Income Housing Rental Community Characteristics CLASS B •one step down from Class A •generally older •lower income tenants •may or may not be professionally managed •income is typically lower than Class A •may be some deferred maintenance issues •buildings are well-maintained and many investors see these as “value-add” investment opportunities CLASS C •typically more than 20 years old •located in less than desirable locations •generally in need of renovation •lowest rental rates in a market CLASS A •highest quality buildings •generally newer properties built within the last 15 years •top amenities •high-income earning tenants •low vacancy rates •typically professionally managed •typically demand the highest rent •little or no deferred maintenance issues 2021/09/28 City Council Post Agenda Page 169 of 343 Middle-Income Housing Current Market Affordability 2 Bedroom Apts Alexan –Millenia $ 2,750 Del Oro on Broadway $ 2,795 3 Bedroom Condo/Townhome Strata Escaya $ 550,000 Pinnacle Millenia $550,000 Income Category RHNA Allocation Max Income Max Monthly Rent Max Sales Price (Family of 4)(2 Bdrm)(3 Bdrm) Moderate (81-120% AMI)1,911 17%$ 2,400 $ 402,905 2021/09/28 City Council Post Agenda Page 170 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Microenterprise Home Kitchen Operations: Consider Opposing County of San Diego Authorization of Microenterprise Home Kitchen Operations within San Diego County Report Number: 21-0161 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Adopt a resolution establishing the City’s opposition to the authorization of Microenterprise Home Kitchen Operations within San Diego County and directing staff to prepare a letter for the Mayor’s signature opposing such authorization on behalf of the City of Chula Vista. SUMMARY Adopted in 2018, Assembly Bill (“AB”) 626 established a new category of residential retail facilities – Microenterprise Home Kitchen Operations or “MEHKOs”. MEHKOs are food facilities operated by a resident in a private home, where food is stored, handled, prepared, and served to customers. In 2019, the provisions of AB 626 were refined with the adoption of AB 377. Pursuant to AB 377, MEHKOs may only operate in counties where the Board of Supervisors have specifically passed an ordinance to “opt in” to the program. If a County authorizes the permitting of MEHKOs, all cities and the unincorporated areas within that county must allow MEHKOs, regardless of any existing ordinance or other prohibition of MEHKOs. On September 15, 2021, the San Diego County Board of Supervisors (the “County Board”) took action directing the Chief Administrative Office to return to the County Board within 120 days with an ordinance authorizing MEHKOs and other implementing actions. In anticipation of the County Board’s future consideration of an ordinance authorizing MEHKOs, and in order to preserve local control of land use decision making, staff recommends that the City Council formally oppose the operation of MEHKOs within 2021/09/28 City Council Post Agenda Page 171 of 343 P a g e | 2 San Diego County and direct staff to prepare a letter for the Mayor’s signature to the County Board opposing such authorization. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION In 2018, AB 626 (Garcia, effective January 1, 2019), established MEHKOs as a new category of residential retail food facilities. The intent of this legislation was to promote locally grown, produced, and prepared foods and to create economic opportunities among low income and marginalized communities. The provisions of AB626 were refined in 2019 with the adoption of AB 377 (Garcia, effective October 7, 2019). MEHKO operators may sell individual meals directly to consumers for pickup, delivery, or onsite dining (similar to a restaurant). MEHKOs are classified and permitted separately from catering operations and cottage food operators. Catering operators provide food for events at a location separate from where the food is prepared, while cottage food operators prepare “non-potentially hazardous” food from a private home (e.g. breads, cookies, candy, etc., excluding cream, custard, meat, and other foods requiring time/temperature controls). Under AB 626, local cities had the ability to “opt out” of allowing MEHKOs, if they were authorized in their respective county. That recently changed with the adoption of AB 377, which removed the authority of cities to regulate MEHKOs. The new law gives the local enforcement agency, as defined in Health & Safety Code § 113773, full discretion to authorize MEHKOs in their jurisdiction. This authorization applies to all areas within said enforcement agency’s jurisdiction, including all cities within a county that authorizes MEHKOs, regardless of whether each city located within that county separately authorizes them. For the City of Chula Vista, the San Diego County Department of Health and Environmental Quality is our enforcement agency. Consequently, if the County of San Diego (the “County”) allows MEHKOs, the City of Chula Vista must allow them. California Health and Safety Code § 113825(a) establishes the following MEHKO operational requirements:  Operations are limited to one fulltime equivalent food employee, not including a family member or household member.  Food must be prepared, cooked, and served on the same day.  Food must be consumed onsite at the MEHKO, or offsite, if the food is picked up by the consumer or delivered within a safe time period.  Food preparation may not involve processes that require a Hazard Analysis Critical Control Point (“HACCP”) Plan, or the production, service, or sale of raw milk or raw milk products. 2021/09/28 City Council Post Agenda Page 172 of 343 P a g e | 3  The service and sale of raw oysters is prohibited.  The production, manufacturing, processing, freezing, or packaging of milk or milk products, including, but not limited to, cheese, ice cream, yogurt, sour cream, and butter, is prohibited.  Food preparation is limited to 30 meals per day and 60 meals per week.  Total gross annual sales are limited to $50,000 (adjusted annually for inflation by the California Consumer Price Index).  The operation may only sell food directly to consumers, and not to retailers or wholesalers. Health and Safety Code Section 114367.1 provides the following exemptions to standard retail food codes and regulations for MEHKOs (not an exhaustive list):  Handwashing facility requirements pursuant to Section 113953, provided that a handwashing sink is supplied with warm water and located in the toilet room and supplied, as specified in Section 113953.2.  Provisions of Health and Safety Code relating to sinks, warewashing machines, and manual or machine sanitation, provided that utensils and equipment are able to be properly cleaned and sanitized, the sink in the MEHKO has hot and cold water and is fully operable, and, if a dishwasher is used, it shall be operated in accordance with the manufacturer’s specifications.  Prohibition on the presence of persons unnecessary to the food facility operation in the food preparation, food storage, or warewashing areas, provided that the operator takes steps to avoid any potential contamination and prevents ill persons from entering the food preparation area while food is being prepared.  Limitations on employee consumption of food, drink, or tobacco outside designated areas, provided that the operator takes steps to avoid any potential contamination and prevents ill persons from entering the food preparation area while food is being prepared.  Display, guard, cover, and container requirements, provided that any food on display that is not protected from the direct line of a consumer’s mouth by an effective means is not served or sold to any subsequent customer.  Requirements to provide clean drinking cups and tableware for second portions and beverage refills.  Provisions relating to ventilation, provided that gasses, odors, steam, heat, grease, vapors, and smoke are able to escape from the kitchen.  Requirements that cold or hot holding equipment used for potentially hazardous food be equipped with integral or permanently affixed temperature measuring device or product mimicking sensors.  Limitations on the presence and handling of animals, such as domestic, service, or patrol animals, provided that all animals are kept outside of the kitchen during food service and preparation.  Any local evaluation or grading system for food facilities.  Planning and permitting provisions of Sections 114380 and 114381.2. In addition to the extensive exemptions granted to MEHKOs, the authority of the enforcement agency (the County) is severely limited. The enforcement agency cannot require MEHKOs to comply with food safety requirements that are different from, or in addition to, the provisions of the Health and Safety Code described above. Further, MEHKOs can only be inspected once per year, and by appointment only, unlike typical unannounced visits to restaurants by health inspectors. Additional inspections are only allowed in response to a complaint. 2021/09/28 City Council Post Agenda Page 173 of 343 P a g e | 4 While local interest in the MEHKO program is unknown at this time, th is new use could result in significant impacts to sanitation, traffic congestion, parking, ADA accessibility, and building and fire safety. As an example, residential plumbing systems may be insufficient to accommodate unfiltered commercial food waste and grease discharged by the proposed uses (up to 30 meals per day and 60 meals per week). Residential communities may also be unduly impacted by commercial traffic, loading, and parking impacts associated with MEHKOs. The law’s exemption from building and fire sa fety requirements also present potential life safety risks, as alarm and suppression systems, exhaust systems, and exiting requirements will not apply. In addition to these land use and building safety related concerns, the exemptions to the retail food code described above increase the potential for food-borne illness incidents. Typical safeguards are non- enforceable under AB 377, which instead mandates a “one-size fits all” approach to statewide regulation. Under this new law, the City’s ability to regulate and monitor MEHKOs is limited to investigation of code enforcement complaints by neighbors (likely complaints include odors, traffic, parking, and noise)1. While not specifically addressed by AB 377, the California Department of Alcohol Beverage Control (“ABC”) has indicated that MEHKOs are eligible to apply for licenses to sell alcohol for onsite consumption as well. It is reasonable to assume that introducing alcohol sales into residential neighborhoods will result in additional complaints and enforcement activity. As described above, MEHKOs introduce traditionally commercial uses into residential areas. Under AB 377, MEHKOs are to be considered a residence for all purposes of applying State Uniform Building Standards Code and local building and fire codes. Further, the use of a residence for the purpose of a MEHKO shall not constitute a change in occupancy, and local jurisdictions are barred from imposing any restriction on MEHKOs in residential dwellings2. Typically, such a use would require the City to issue a Home Occupation Permit, which would include certain conditions. Should the permittee not comply, the City could revoke their permit and they would be required to cease operations. Home Occupation Permit conditions include (but are not limited to): 1) not creating vehicular traffic or pedestrian traffic in excess of what is normal for a residential use; 2) not creating a nuisance by reason of noise, dust, odor, vibration, fumes, smoke, electrical interference, or other causes; 3) only the residents of the dwelling unit may be engaged in the home occupation; and 4) no sale of goods on the premises. With the limitations on local control created by AB 377, the City is most likely barred from requiring a Home Occupation Permit and would not have permit revocation as an enforcement tool. That being said, enforcement of traditional nuisance type activities by cities is preserved in the legislation. Lastly, additional legal analysis of the City’s preserved authority as a charter city may be warranted, should the County proceed with allowing MEHKOs. For the reasons stated above, it is recommended that the City council direct staff to prepare a letter for the Mayor’s signature recommending that the San Diego County Board of Supervisors vote against authorizing a MEHKO program in the County. 1 Health & Safety Code § 114367.4(a)(2) 2 Health & Safety Code § 114367.4(a)(1) 2021/09/28 City Council Post Agenda Page 174 of 343 P a g e | 5 DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current year fiscal impact as a result of this action. ONGOING FISCAL IMPACT There is no ongoing fiscal impact as a result of this action. ATTACHMENTS None. Staff Contact: Tiffany Allen, Director of Development Services 2021/09/28 City Council Post Agenda Page 175 of 343 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA OPPOSING THE COUNTY OF SAN DIEGO’S AUTHORIZATION OF MICROENTERPRISE HOME KITCHEN OPERATORS WITHIN THE COUNTY OF SAN DIEGO AND AUTHORIZING THE MAYOR TO ISSUE A LETTER IN OPPOSITION WHEREAS, in accordance with California Health and Safety Code Part 7, the “California Retail Food Code”, local agencies shall be responsible for the oversight and permitting of establishments that prepare food for retail distribution; and WHEREAS, Assembly Bill (“AB”) 626 went into effect on January 1, 2019, making certain changes to the California Retail Food Code to allow for the permitting of Microenterprise Home Kitchen Operations (“MEHKOs”); and WHEREAS, MEHKOs are residential retail food facilities that are authorized to sell individual meals directly to consumers for pickup, delivery, or onsite dining; and WHEREAS, AB 377, effective October 7, 2019 further refined the regulations that apply to MEHKOs; and WHEREAS, AB 377 provides that the local enforcement agency shall have authority to allow MEHKOs in their jurisdiction, and if such enforcement agency is a county, then that authorization shall apply to all cities within such county; and WHEREAS, the enforcement agency for the City of Chula Vista is the County of San Diego Department of Environmental Health and Quality; and WHEREAS, the County of San Diego Board of Supervisors is considering the authorization of MEHKOs in San Diego County; and WHEREAS, the applicable provisions of the Health and Safety Code severely limit the ability of the City to regulate MEHKOs; and WHEREAS, likely impacts to residential neighborhoods as a result of MEHKO operations include impacts to sanitation, traffic congestion, parking ADA accessibility, and building and fire safety; and WHEREAS, the City’s ability to regulate and monitor MEHKOs is limited to the investigation of code enforcement complains by neighbors; and 2021/09/28 City Council Post Agenda Page 176 of 343 Resolution No. __________ Page 2 WHEREAS, the California Department of Alcohol Beverage Control (“ABC”) has indicated that MEHKOs are eligible to apply for licenses to sell alcohol for onsite consumption, which can reasonably be assumed to lead to additional complaints and enforcement activity; and WHEREAS, the actions of the state relating to MEHKOs reflect a continuing assault on local control of land use decision making and severely limit the City’s ability to employ traditional tools to regulate impacts of commercial activities within residential zones. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it does hereby oppose the County of San Diego’s authorization of MEHKOs in San Diego County. BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista, that it does hereby direct staff to prepare a letter for the Mayor’s signature to the San Diego County Board of Supervisors voicing the City’s opposition to such authorization. Presented by Approved as to form by Tiffany Allen Glen R. Googins Director of Development Services City Attorney 2021/09/28 City Council Post Agenda Page 177 of 343 v . 0 03 P a g e | 1 September 28, 2021 ITEM TITLE Interim Urgency Ordinance: Prohibition of Uses in Conflict with Land Use Amendment and Rezoning Initiation IR19-0026 Report Number: 21-0163 Location: Approximately 50 acres located west of I-5 and east and south of the main office and distribution buildings on the Collins Aerospace/United Technology Company Campus Department: Development Services & Economic Development Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. In addition, notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Recommended Action Adopt an urgency ordinance prohibiting uses in conflict with land use amendment and rezoning initiation IR19-0026 on the Collins Aerospace/United Technology Company Campus thereby enacting a moratorium necessary to protect the public safety, health and welfare pursuant to CVMC Section 19.12.130. (4/5 vote required) SUMMARY On June 18, 2019, the City Council held a public hearing to consider a land use amendment and rezoning initiation request (IR19-0026) pursuant to Chula Vista Municipal Code (CVMC) Section 19.14.830. Upon the conclusion of the public hearing, the City Council adopted Resolution 2019-127 providing input and direction to staff regarding processing a General Plan Amendment and Rezone for approximately 50 acres, located west of I-5 and east and south of the main office and distribution buildings on the Collins Aerospace/United Technology Company Campus (the “Approved Initiation Request”). In order to protect the public safety, health and welfare, adoption of an interim urgency ordinance prohibiting uses which may be in conflict with the Approved Initiation Request is recommended, pursuant to CVMC Section 19.12.130. ENVIRONMENTAL REVIEW 2021/09/28 City Council Post Agenda Page 178 of 343 P a g e | 2 The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. In addition, notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Because this activity will not result in any approval or denial of any proposed potential land use plan amendments or rezoning actions and because City Council will conduct a complete review of said amendments or rezoning actions, including any required environmental analysis, along with the merits of an accompanying proposed project, the Director of Development Services has determined that the activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (CEQA) Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the CEQA Guidelines, the activity is not subject to CEQA. In addition, notwithstanding the foregoing, the Director of Development Services has also determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the CEQA Guidelines; no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION In 1999, the City of Chula Vista, the San Diego Unified Port District (the “Port District”) and the former Redevelopment Agency of the City of Chula Vista entered into a relocation agreement that contemplated the consolidation of BF Goodrich Aerospace Aero Structures Group to their real estate holdings located North of H Street. The purpose of the agreement was for the parties to work together on the creation of a “New Campus” that would create public thoroughfares, manage the environmental issues and oversee the development and use of the property. In support of the “New Campus” the City utilized its powers of eminent domain to acquire a 3.02-acre property formerly owned by the Rados Bros to facilitate the redevelopment of the North Campus as a legitimate, lawful investment. However, after more than twenty years, and with the sale of BF Goodrich Aerospace to United Technologies Aerospace Systems and the subsequent conversion to Collins Aerospace, manufacturing operations at the facility were finally terminated in 2020. Collins Aerospace has maintained their administration, engineering, research and development, and spare parts distribution center, which employs over 1,800 professionals. The wind down of manufacturing operations is estimated to have resulted in the elimination of 34 of 37 registered emissions sources, reduced greenhouse gas emissions by 25%, and have significantly reduced noise. The San Diego Regional Water Quality Control Board recently released a public review draft of Clean Up and Abatement Order R9-2021-0042 that identifies the project site as containing high levels of contamination located both in the soil and groundwater. The property can now be evaluated through a comprehensive planning effort so redevelopment of the property will protect the health and wellness of employees, contractors, and future visitors to the project site. Project Site As part of the closure of manufacturing operations at the facility, Collins Aerospace placed approximately 50 acres of their property for sale. Located east and south of the main office and distribution buildings on the Collins Aerospace Campus, the site includes approximately 41,000 square feet of office and almost one 2021/09/28 City Council Post Agenda Page 179 of 343 P a g e | 3 million square feet of old industrial buildings that sit atop environmentally impacted soil and groundwater (the “Project Site”). As shown on the Locator Map (Attachment 1), Parcel A is approximately 20 acres in size and encompasses the properties located along Bay Boulevard between F Street/ Lagoon Drive and H Street. Parcel B is approximately 30 acres in size and encompasses the property located between the remaining Collins Aerospace campus north of G Street and immediately adjacent to the Port District properties adjacent to the pending Gaylord Pacific resort hotel and convention center. The zoning for Parcel A is currently Research and Limited Industrial (I-R) between F Street/ Lagoon Drive and G Street, and Industrial General (I-G) between G Street and H Street. The zoning for Parcel B is Industrial General (I-G). With the decision to cease all industrial manufacturing operations at the site and sell the property, it was appropriate to reevaluate the long-term vision for this special property that will be surrounded by Residential, Hotel, and other visitor serving uses on the Chula Vista Bayfront. Staff worked closely with Collins Aerospace and their proposed buyer in 2019 to discuss the potential redevelopment opportunities of the Project Site. In May and June of 2019, City staff met with Collins Aerospace and their selected buyer, Penwood Wohl. At that time, the private parties expressed an interest in working with staff on a General Plan Amendment and rezone of the Project Site (Attachment 2). Staff and the selected buyer believed then, and continues to believe, that there is a higher and better use for this property and that the redevelopment of the property solely for industrial uses would not be conducive to the high-quality, regional visitor- serving environment the City and Port District are striving to achieve for the Chula Vista Bayfront. For this reason, staff presented the City Council with a general plan amendment initiation request for the Project Site on June 18, 2019. General Plan Amendment Initiation The General Plan Amendment Initiation Request process was considered and approved by the City Council on June 18, 2019 (Attachment 3). CVMC Section 19.14.840 outlines criteria by which the Planning Commission or City Council may approve a General Plan Amendment Initiation Request prior to a formal submittal of a request to amend the General Plan, Sectional Planning Area Plans, General Development Plans, Specific Plans, Precise Plans, or a rezone of any property within the City of Chula Vista. At the June 2019 public hearing, staff proposed a General Plan land use designation of Mixed-Use Transit Focus Area for Parcel A, which would allow for retail, commercial, industrial and high-density residential opportunities based on its location within the ¼ to ½ mile radius of the E Street and H Street MTS Trolley Transit Stations. The proposed General Plan land use designation for Parcel B is Mixed-Use Commercial, which prohibits residential, but allows for non-residential land uses including Industrial, Professional and Office, Commercial, and Visitor Commercial land uses such as hotels. Staff also indicated consideration of City zoning categories such as Central Commercial (CC) and Visitor Commerci al (CV), specific plan zoning categories found within the Urban Core or Bayfront Specific Plan, or through the creation of a new Specific Plan for the site. At the conclusion of the public hearing, the City Council adopted Resolution 2019-127, making the following findings: 1. That the proposed Land Use Plan Amendment is consistent with the goals and policies of the General Plan. 2021/09/28 City Council Post Agenda Page 180 of 343 P a g e | 4 2. That the proposed Land Use Plan Amendment provides equal or greater public benefit to the community as compared to the existing land use designation, density/intensity range, or plan policy. 3. Public facilities are available to serve the proposed change in land use designation or density/intensity, or their provision will be addressed as a component of the Land Use Plan Amendment. The City Council also approved Land Use Amendment Initiation Request IR19-0026 and directed staff to proceed with processing of a General Plan Amendment as more fully described in the body of the resolution. Necessity for an Interim Urgency Ordinance Since the June 18, 2019 City Council meeting, staff has been in communication with Collins Aerospace and Penwood Wohl on more than 50 separate, documented occasions with the following highlights. In August 2019, Collins and Wohl submitted three pre-applications for projects related to preparation of the site (IR20- 0027, IR20-0028, IR20-0029). In October 2019, staff provided a list of recommended land uses within a memorandum to Collins Aerospace and Penwood Wohl. In November 2019, each pre-application was subsequently closed. Also in November 2019, staff contacted Wohl and stated concerns that piecemealing the project was occurring and the larger planning effort was not underway. In April 2021, Wohl submitted a pre-application for redevelopment of the property for industrial use (IR21-0014), against the land use recommendations previously provided by staff in October 2019 and in conflict with the actions already taken by the City Council as described above. These actions are also in conflict with the larger vision for the site as a high-quality, regional visitor-serving destination on the Bayfront. In accordance with CVMC Section 19.12.130, the City Council may adopt an interim ordinance to take effect for 90-days as an urgency measure serving as a moratorium to prohibit any land uses that conflict with a contemplated zoning proposal in order to protect the public safety, health and welfare of the community. After a public hearing, said interim ordinance may be extended by the City Council, by a four-fifths vote, for one year. Not more than two such extensions may be adopted. Should the property owner view this action as an undue hardship that constitutes a taking, they may request a public hearing by the City Council. Due to the urgency of this matter and the importance of the subject property’s future development potential, s taff believes this is the most appropriate action to pursue at this time. In response to the City agendizing this same action for the June 15, 2021 City Council meeting, all active applications and pre-applications were withdrawn by the applicant on June 14, 2021. The City committed to not reintroduce an urgency zoning ordinance for at least ninety (90) days. The ninety (90) day period has expired. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. 2021/09/28 City Council Post Agenda Page 181 of 343 P a g e | 5 CURRENT-YEAR FISCAL IMPACT All costs associated with the urgency ordinance are included in the Development Services Department operating budget. No additional appropriations are required in the current fiscal year. ONGOING FISCAL IMPACT There is no ongoing fiscal impact as a result of approving the urgency ordinance. ATTACHMENTS 1. Locator Map 2. June 17, 2019 letter 3. Resolution June 18, 2019 Staff Contact: Tiffany Allen, Director of Development Services Eric Crockett, Deputy City Manager/Director of Economic Development 2021/09/28 City Council Post Agenda Page 182 of 343 BAY BLG ST LA GOON DR WOODLAWN AVMARINA PW M A R I N A P W E ST H ST PARCEL "A" PARCEL "B" L:\Gabe Files\Arcmap Locator Template\Locators\IR190026.ai.5.27.19 SCALE:FILE NUMBER: DESCRIPTION: Related cases: NoneNo Scale IR19-0026 APPLICANT:LOCATOR NORTH LAND USE AMENDMENT INITIATIONCity of Chula Vista Summary: GPA for mixed-use residential (Parcel A) and mixed-use commercial (Parcel B). CHULA VISTA DEVELOPMENT SERVICES DEPARTMENT 2021/09/28 City Council Post Agenda Page 183 of 343 Collins Aerospace I Aerostructures 850 Lagoon Drive MZ 107V Chula Vista, CA 91910-2098 U.S.A. Phone: +1 619 691 6425 Fax: +1 619 691 2222 Email: mike.grondalski@collins.com www.collinsaerospace.com Mike Grondalski Vice President, Operations Collins Aerospace I Aerostructures June 17, 2019 Ms. Tiffany Allen Assistant Director Development Services Department City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Dear Ms. Allen, Thank you for taking the time to meet with my colleagues and associates on June 13th. It was a pleasure meeting you, and we are grateful for the opportunity to discuss the development plans for our properties with you and Eric Crockett prior to the City Council meeting on June 18th. Rohr, Inc. (now a part of Collins Aerospace) and the City of Chula Vista share a rich history of collaboration dating back to the 1940’s when Fred Rohr, the company’s founder, relocated Rohr Aircraft Company from downtown San Diego to Chula Vista – a move made possible by the City’s bond issue to help finance the purchase of 10 acres on the Bayfront. Our partnership has endured throughout the years and continues to present day, as evidenced by the 1999 Relocation Agreement and our cooperation towards redeveloping Rohr’s former south Campus in furtherance of the Bayfront Master Plan. In early 2020, Rohr will cease manufacturing activities in Chula Vista. Although Rohr intends to maintain approximately 1,800 employees at its global headquarters in Chula Vista (including its engineering, research and development and spare parts distribution warehouse), the cessation in manufacturing activity will result in the consolidation of our footprint north of “G” Street. Consequently, the company plans to sell roughly 50 acres of real estate consisting of parcels located between “H” and “G” Streets together with certain parcels north of “G” Street adjacent to Bay Boulevard (collectively, the “Properties”). My colleagues and I have regularly apprised the City of this situation as it has evolved over the past three years via periodic meetings with Eric Crockett and Gary Halbert. While actively marketing the Properties during the past year, we received indications of interest from over 100 prospective buyers. In conjunction with our real estate advisor, JLL, we have undertaken a comprehensive process of evaluating prospective purchasers according to an array of criteria and have selected the team of Penwood Real Estate Investment Management and Wohl Property Group as our buyer. As the equity source, Penwood is a real estate investment advisory firm dedicated to managing value-added real estate investments for the institutional market, including state pension funds. As the developer, Wohl Property Group has a demonstrated track record of developing and operating Class “A” industrial, office and mixed-use properties throughout Southern California. On behalf of the company and our partners, Penwood/Wohl, I would like to take this opportunity to outline our intent and understanding from our June 13th meeting relative to the Properties; namely, that Rohr, the City, and Penwood/Wohl (collectively, the “Parties”) will exercise reasonable diligence and work together in good faith to explore the following: (a) Multiple potential land uses and zoning options for the Properties including industrial, commercial and mixed-use. We appreciate the Properties’ advantages afforded by the 2021/09/28 City Council Post Agenda Page 184 of 343 proximity to the “E” Street and “H” Street MTS Trolley Stations and Chula Vista Bayfront project and seek to maximize value for all stakeholders involved. (b) Implementing a Specific Plan to accommodate higher land uses along “H” Street, while preserving industrial redevelopment for the northerly section of the Properties; (c) Consulting with RIDA regarding potential synergies for development along “H” street, with the understanding that commercial/retail uses would need to complement the surrounding Bayfront uses, including uses such as restaurant/brewery, specialty/experiential retail, grocery, convenience, in addition to uses that would directly complement the proposed hotel/convention uses, e.g., convention and trade show exhibitors, staging, commercial laundry, floral suppliers, and wholesale food and restaurant suppliers, among others; (d) Designing a project that encourages the development of contemporary, clean and attractive industrial buildings that accommodate a wide range of uses, including e- commerce,1 omnichannel retail2, defense and maritime, all of which are likely to add reasonably well-paying, durable jobs to the City; and (e) Considering the flexibility of well-designed multi-tenant industrial and commercial buildings that can accommodate a broad spectrum of mixed industrial, retail and commercial uses. Timing and certainty is our primary concern. Rohr plans on recognizing the proceeds from the sale of the Properties in 2020 while our partner, Penwood/Wohl, has committed funds to this project that need to be placed at that same time, while assuming a return on its investment within a reasonable period of time thereafter. We are concerned that a General Plan Amendment and rezone of the Properties will require a significant amount of time and introduce delay and uncertainty into the project, leaving the existing buildings empty and unsightly for years to come. Instead, we propose working with the City to devise a Specific Plan that is developed in the collective best interests of the Parties. In our view, the ideal plan is one that reserves frontage along “H” Street for commercial and retail uses while reserving the northerly portions for industrial, while also maintaining flexibility of use on the vacant parcels fronting Bay Boulevard. This plan would more quickly unlock the enormous potential of the Properties and their possible synergies with the surrounding land uses of the Bayfront. Thanks again for your time on Thursday. We look forward to working with the City in continuing our collaborative and cooperative relationship as we embark on the next chapter in our shared history. Best Regards, Mike Grondalski Vice President, Operations Rohr, Inc., a part of Collins Aerospace cc: Eric Crockett, Director of Economic Development, City of Chula Vista Richard H. Chase, Penwood Real Estate Investment Management Emil J. Wohl, Wohl Property Group 1 We believe the site is an ideal “last-mile” site for e-commerce companies. Amazon recently announced one-day delivery on 10M items, and the strategic in-fill location of the Properties would be attractive to these types of companies. 2 With the emergence of e-commerce, the traditional brick and mortar retail model is being replaced with an omnichannel model that combines industrial and retail product delivery to consumers. We expect the Properties to serve the rapidly increasing demand for last-mile consumer delivery because of its immediate freeway proximity and dense surrounding consumer population. 2021/09/28 City Council Post Agenda Page 185 of 343 RESOLUTION NO. 2019-127 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA CONSIDERING A LAND USE AMENDMENT AND REZONING INITIATION REQUEST (IR19-0026), AND PROVIDING INPUT TO STAFF REGARDING PROCESSING A GENERAL PLAN AMENDMENT AND REZONE FOR APPROXIMATELY 50-ACRES LOCATED WEST OF I-5 AND EAST AND SOUTH OF THE MAIN OFFICE AND DISTRIBUTION BUILDINGS ON THE COLLINS AEROSPACE/UNITED TECHNOLOGY COMPANY CAMPUS I. RECITALS WHEREAS, the parcels of land which are the subject matter of this Resolution are depicted in Exhibit “A,” attached hereto and incorporated herein by this reference, and for purpose of general description consists of approximately 50-acres located east and south of the main office and distribution buildings on the Collins Aerospace/United Technology Company campus; and WHEREAS, on May 10, 2019, a duly verified application requesting a Land Use Amendment Initiation Request was created by the City of Chula Vista Development Services Department (Applicant); and WHEREAS, City staff requests City Council consideration of a Land Use Amendment Initiation Request to receive early input from the City Council regarding a proposed General Plan Amendment to allow for the future development of Mixed-Use Commercial and Mixed-Use Transit Focus Area and/or Regional Technology Park land use designations for the project site; and WHEREAS, this activity will not result in an approval or denial of any proposed land use plan amendment or rezoning action because City Council will conduct a complete review of a potential land use plan amendment and rezoning action, including any required environmental analysis, along with the merits of an accompanying proposed project. The Director of Development Services has determined that the activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (CEQA) Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the CEQA Guidelines, the activity is not subject to CEQA. In addition, notwithstanding the foregoing, the Director of Development Services has also determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the CEQA Guidelines. Thus, no environmental review is required; and WHEREAS, the City Clerk set the time and place for the public hearing and notice of said hearing, together with its purpose, was given by its publication in a newspaper of general circulation in the City at least 10 days prior to the hearing; and DocuSign Envelope ID: 7FFF8AA4-96FA-4A64-8A67-86A9E20A3D37 2021/09/28 City Council Post Agenda Page 186 of 343 Resolution No. 2019-127 Page No. 2 WHEREAS, the City Council held a duly noticed public hearing to consider the Land Use Amendment Initiation Request at the time and place as advertised in the Council Chambers located at 276 Fourth Avenue. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby find and determine as follows: II. INITIATION REQUEST FINDINGS FOR OF APPROVAL 1. That the proposed Land Use Plan Amendment is consistent with the goals and policies of the General Plan. City staff proposes General Plan land use designations and rezone to Mixed-Use Residential Transit Focus Area and/or Regional Technology Park for Parcel A, allowing for retail, office, and high-density residential opportunities based on its location within the to ½ mile radius of the E Street and H Street MTS Trolley Transit Stations. The proposed General Plan land use designations and rezone for Parcel B would be Mixed-Use Commercial and/or Regional Technology Park, prohibiting residential, but allowing retail, business services, office uses, and visitor serving commercial uses such as hotels. The Regional Technology Park designation would allow research and development and high- tech manufacturing, along with associated administrative and office space uses. The Mixed-Use Transit Focus Area, Mixed-Use Commercial, and Regional Technology Park land use designations are consistent with the goals and policies found within the General Plan Bayfront Planning Area and the Bayfront Master Plan. 2. That the proposed Land Use Amendment provides equal or greater public benefit to the community as compared to the existing land use designation, density/intensity range, or plan policy. The proposed land use amendment and rezone for Parcel A would enable the creation of a Mixed-Use Residential Transit Focus Area and/or Regional Technology Park west of Interstate 5, allowing for more retail and visitor commercial opportunities and more high- density residential opportunities. The proposed land use amendment and rezone of Parcel B to Mixed-Use Commercial and/or Regional Technology Park, would allow for retail, business services, office uses, and hotels to complement the RIDA hotel and convention center immediately adjacent to the west and south. The Regional Technology Park designation would allow research and development and high-tech manufacturing, with associated uses. The Mixed-Use Transit Focus Area, Mixed-Use Commercial, and Regional Technology Park land use designations provide equal or greater public benefit to the community compared to the existing land use designations of General Industrial and Limited Industrial. DocuSign Envelope ID: 7FFF8AA4-96FA-4A64-8A67-86A9E20A3D37 2021/09/28 City Council Post Agenda Page 187 of 343 Resolution No. 2019-127 Page 3 3. Public facilities are available to serve the proposed change in land use designation or density/intensity, or their provision will be addressed as a component of the Land Use Plan Amendment. Adequate public facilities are available to serve the parcels proposed for the land use designation and rezoning from General Industrial and Limited Industrial to Mixed-Use Residential Transit Focus Area, Mixed Use Commercial, and/or Regional Technology Park. Bayfront infrastructure and fee programs will fund upgraded public facilities including sewer and water mains, storm drains and laterals, which are planned to be upgraded and would be available to serve the subject parcels. Planned facilities include a new fire station on Bay Boulevard. BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it hereby approves a Land Use Amendment Initiation Request (IR19-0026) and directs staff to proceed with processing of a General Plan Amendment once formally submitted by the City as more fully described herein. SIGNATURES ON THE FOLLOWING PAGE] DocuSign Envelope ID: 7FFF8AA4-96FA-4A64-8A67-86A9E20A3D37 2021/09/28 City Council Post Agenda Page 188 of 343 Resolution No. 2019-127 Page No. 4 Presented by Approved as to form by Kelly G. Broughton, FASLA Glen R. Googins Director of Development Services City Attorney PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 18th day of June 2019 by the following vote: AYES: Councilmembers: Diaz, Galvez, McCann, Padilla, and Casillas Salas NAYS: Councilmembers: None ABSENT: Councilmembers: None Mary Casillas Salas, Mayor ATTEST: Kerry K. Bigelow, MMC, City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Kerry K. Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2019-127 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 18th day of June 2019. Executed this 18th day of June 2019. Kerry K. Bigelow, MMC, City Clerk DocuSign Envelope ID: 7FFF8AA4-96FA-4A64-8A67-86A9E20A3D37 2021/09/28 City Council Post Agenda Page 189 of 343 BAY BLG ST LA GOON DR WOODLAWN AVMARINA PW MA R I N A P W E ST H ST PARCEL A"PARCEL B"L:\Gabe Files\Arcmap Locator Template\Locators\IR190026.ai. 5.27.19 SCALE: FILE NUMBER:DESCRIPTION:Related cases: NoneNo ScaleIR19- 0026 APPLICANT:LOCATOR NORTHLANDUSEAMENDMENTINITIATIONCity of Chula Vista Summary: GPA for mixed-use residential (Parcel A) and mixed-use commercial (Parcel B). CHULA VISTA DEVELOPMENT SERVICES DEPARTMENT DocuSign Envelope ID: 7FFF8AA4-96FA- 2021/09/28 City Council Post Agenda Page 190 of 343 ORDINANCE NO. ORDINANCE OF THE CITY OF CHULA V ISTA ESTABLISHING AN INTERIM URGENCY ORDINANCE PROHIBITING USES IN CONFLICT WITH LAND USE AMENDMENT AND REZONING INITIATION IR19-0026 ON THE COLLINS AEROSPACE/UNITED TECHNOLOGY COMPANY CAMPUS THEREBY ENACTING A MORATORIUM NECESSARY TO PROTECT THE PUBLIC SAFETY, HEALTH AND WELFARE (4/5 VOTE REQUIRED) WHEREAS, in 1999 the City of Chula Vista, the San Diego Unified Port District and the former redevelopment agency of the City of Chula Vista entered into a relocation agreement to create a new campus on the BF Goodrich Aerospace Aero Structures Group campus; and WHEREAS, in order to help facilitate the development of the new campus, the Ci ty utilized its powers of eminent domain to acquire a 3.02-acre property as a legitimate and lawful investment; and WHEREAS, over the last two decades BF Goodrich sold to United Technologies Aerospace Systems which later was converted to Collins Aerospace and manufacturing operations were eventually terminated in 2020; and WHEREAS, with the decision to cease all industrial manufacturing operations at the site and sell the property, it was appropriate to reevaluate the long-term vision for this special property that will be surrounded by Residential, Hotel, and other visitor serving uses on the Chula Vista Bayfront (the “Bayfront”); and WHEREAS, on June 18, 2019 the City Council held a public hearing to consider a land use amendment and rezoning initiation request (IR19-0026) pursuant to Chula Vista Municipal Code (CVMC) Section 19.14.830; and WHEREAS, at the conclusion of the June 18, 2019 public hearing, the City Council adopted Resolution 2019-127 making the following findings: 1) That the proposed Land Use Plan Amendment is consistent with the goals and policies of the General Plan; 2) That the proposed Land Use Amendment provides equal or greater public benefit to the community as compared to the existing land use designation, density/intensity range, or plan policy; and 3) Public facilities are available to serve the proposed change in land use designation or density/intensity, or their provision will be addressed as a component of the Land Use Plan Amendment; and WHEREAS, on June 18, 2019 the City Council also approved Land Use Amendment Initiation Request IR19-0026 and directed staff to proceed with processing of a General Plan Amendment; and 2021/09/28 City Council Post Agenda Page 191 of 343 Ordinance No. Page 2 WHEREAS, since June 2019, city staff has been in communication with Collins Aerospace and Penwood Wohl, their selected buyer, on more than 50 separate, documented occasions; and WHEREAS, in October 2019, staff provided land use recommendations to Collins Aerospace and Penwood Wohl that would support the realization of the larger vision for the site as a high-quality, regional visitor-serving destination on the Bayfront; and WHERAS, in April 2021, Penwood Wohl submitted a pre-application for redevelopment of the property for industrial use (IR21-0014), against the land use recommendations previously provided by staff in October 2019 and in conflict with the actions already taken by the City Council in June 2019; and WHEREAS, such industrial uses as proposed in the pre-application are in conflict with the larger vision for the site and its adjacency to the Bayfront and surrounding residential, hotel and regional visitor-serving land uses and therefore City staff and the City Council must take urgent action to preserve the integrity of the site and protect the public safety, health and welfare; and WHEREAS, pursuant to CVMC Section 19.12.130, the City Council may adopt an interim ordinance to prohibit such uses in conflict with previous land use actions already taken. NOW THEREFORE the City Council of the Cit y of Chula Vista does hereby ordain as follows: Section I. Interim Urgency Ordinance Findings The City Council does hereby approve, accept as its own, incorporate as set forth in full herein, and make each and every one of the findings contained in this Ordinance pursuant to Gov. Code 65858(c) as follows: A. That there is a current and immediate threat to the public health, safety, and welfare, and that the approval of additional subdivisions, use permits, variances, building permits, or any other applicable entitlement for use which is required in order to comply with a zoning ordinance would result in that threat to public health, saf ety, and welfare. B. That such industrial uses as proposed in the pre-application are in conflict with the larger vision for the site and its adjacency to the Bayfront and surrounding residential, hotel and regional visitor-serving land uses and therefore City staff and the City Council must take urgent action to preserve the integrity of the site and protect the public health, safety, and welfare. C. That financial tax revenue to the City resulting from uses allowed in the general industrial zone may not support the impacts on adjacent public infrastructure including 2021/09/28 City Council Post Agenda Page 192 of 343 Ordinance No. Page 3 roads, public safety facilities, and pedestrian circulation further exacerbating the protection of the public’s health, safety and welfare. D. That previous uses of the property have resulted in significant subsurface soil and groundwater contamination that has not been fully analyzed and evaluated in order for uses allowed in the industrial zone to be determined to be safe for public occupation. E. That in response to the subsurface soil and groundwater contamination, the San Diego Regional Water Quality Control Board recently released a public review draft of Clean Up and Abatement Order R9-2021-0042 that identifies the project site as containing high levels of contamination located both in the soil and groundwater. With this Interim Urgency Ordinance in place, the property can now be evaluated through a comprehensive planning effort so redevelopment of the property will protect the health and wellness of employees, contractors, and future visitors to the project site. F. That the property being proposed for development was covered by a Specific Plan approved by the City and new proposals have not been evaluated from a planning perspective for compatible uses and adjacency conflicts since the Chula Vista Bayfront Master Plan was approved by the City, Port of San Diego, and the California Coastal Commission, again further exacerbating the protection of the public’s health, safety and welfare. G. That the current and prospective owners of the property previously committed at a public hearing to City Council that they would conduct comprehensive planning analysis of the potential redevelopment of the property prior to pursuing any development proposal in response to the City’s concern for a cohesive development pattern adjacent to the Bayfront Hotel and Convention Center. Section II. Establish Interim Urgency Ordinance An interim urgency ordinance shall be established to prohibit uses in conflict with land use amendment and rezoning initiation IR19-0026 on the Collins Aerospace/United Technology Company Campus thereby enacting a moratorium necessary to protect the public safety, health and welfare pursuant to CVMC Section 19.12.130. A 4/5 vote of the City Council is required for the interim urgency ordinance’s passage. Section III. Severability If an y portion of this Ordinance, or its application to any person or circumstance, is for any reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceabilit y or unconstitutionality shall not affect the validity or enforceabilit y of the remaining portions of the Ordinance, or its application to any other person or circumstance. The City Council of the City of Chula Vista hereb y declares that it would have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more other sections, 2021/09/28 City Council Post Agenda Page 193 of 343 Ordinance No. Page 4 sentences, clauses or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional. Section IV. Effective Date Pursuant to Government Code 36937, this interim urgency ordinance shall take effect and be in force on the evening of its passage and shall remain in effect for 90 days. Two one-year- extensions to the interim urgency ordinance may be implemented following a public hearing and 4/5 vote of the City Council pursuant to CVMC 19.12.060 through 19.12.080. Section V. Due Process Where a property owner alleges that a moratorium would cause undue hardship on his property to the extent that it would constitute a “taking” of property, the owner may request a public hearing by the City Council to determine if the property owner is entitled to relief from the effects of the moratorium. The City Council shall hold said public hearing within three weeks from receipt of a written request from the property owner. At the public hearing, the property owner shall set forth all reasons why relief is appropriate and the City Council may approve, conditionally approve or deny relief from the restrictions of the interim urgency ordinance. Section VI. Publication The Cit y Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted according to law. Presented b y: Approved as to Form by: _____________________________ ______________________________ Tiffany Allen Glen R. Googins Director of Development Services City Attorney ________________________________ Eric C. Crockett Deputy City Manager 2021/09/28 City Council Post Agenda Page 194 of 343 © 2020 Collins Aerospace, a United Technologies company. All rights reserved.© 2020 Collins Aerospace, a United Technologies company. All rights reserved. Collins Aerospace Proprietary. This document contains no export controlled technical data. COLLINS AEROSPACE AEROSTRUCTURES (ROHR) CHULA VISTA LAND SALE SEPTEMBER 28, 2021 Collins Aerospace Proprietary 2021/09/28 City Council Post Agenda Page 195 of 343 © 2020 Collins Aerospace, a United Technologies company. All rights reserved.© 2020 Collins Aerospace, a United Technologies company. All rights reserved. A B1 B2 CHULA VISTA CAMPUS –SEPTEMBER 2021 AEROSTRUCTURES LAND SALE Collins Aerospace Proprietary. This document contains no export controlled technical data.2 A ~ 13 acres –closed 9/25/2020 A2 ~ 2 acres –closed 9/28/21 B1 ~ 27 acres –closed 8/31/21 B2 ~ 9 acres –scheduled for 10/31/21 TTL ~ 51 acres Future ASG parking / expansion ~ 4.7 acres SDG&E property A2 2021/09/28 City Council Post Agenda Page 196 of 343 2021/09/28 City Council Post Agenda Page 197 of 343 2021/09/28 City Council Post Agenda Page 198 of 343 2021/09/28 City Council Post Agenda Page 199 of 343 2021/09/28 City Council Post Agenda Page 200 of 343 2021/09/28 City Council Post Agenda Page 201 of 343 2021/09/28 City Council Post Agenda Page 202 of 343 2021/09/28 City Council Post Agenda Page 203 of 343 2021/09/28 City Council Post Agenda Page 204 of 343 2021/09/28 City Council Post Agenda Page 205 of 343 2021/09/28 City Council Post Agenda Page 206 of 343 2021/09/28 City Council Post Agenda Page 207 of 343 2021/09/28 City Council Post Agenda Page 208 of 343 2021/09/28 City Council Post Agenda Page 209 of 343 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