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HomeMy WebLinkAbout2007/03/06 Agenda Packet I declare under penalty of perjury that I am employed by the City of Chula Vista in the Office 01 the City Clerk and that I posted this document on the bulletin board accordJn~ ~ ft:. Brown Act reqUIrements. ~ '/'* 13-2-0 Si9~ ~~~~; CllY OF CHUlA VISTA Cheryl Cox, Mayor Rudy Ramirez, Councilmember Jim Thomson, Interim City Manager John McCann, Council member Ann Moore, City Attorney Jerry R. Rindone, Councilmember Susan Bigelow, City Clerk Steve Castaneda, Council member March 6, 2007 4:00 P.M. Council Chambers City Hall 276 Fourth Avenue CALL TO ORDER ROLL CALL: Councilmembers Castaneda, McCann, Ramirez, Rindone, and Mayor Cox PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE SPECIAL ORDERS OF THE DAY . INTRODUCTION BY PUBLIC WORKS OPERATIONS DIRECTOR DAVE BYERS, OF EMPLOYEE OF THE MONTH, DANNY LIMA, SENIOR PUBLIC WORKS INSPECTOR CONSENT CALENDAR (Items I through 11) The Council will enact the Consent Calendar staff recommendations by one motion, without discussion, unless a Councilmember, a member of the public, or City staff requests that an item be removed for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak" form (available in the lobby) and submit it to the City Clerk prior to the meeting. Items pulled from the Consent Calendar will be discussed immediately following the Consent Calendar. 1. APPROVAL OF MINUTES of the Adjourned Regular Meetings of November 16,2006 and January 15,2007, the Regular Meeting of January 16,2007, the Adjourned Regular Meeting of January 16,2007 and Special Meeting of the Public Financing Authority, the Adjourned Regular Meeting of January 18, 2007, the Special Meetings of February 4 and February 8, 2007, the Regular Meeting of February 13, 2007, and the Special Meeting of February 13, 2007. Staff recommendation: Council approve the minutes. 2. WRITTEN COMMUNICATIONS A. Letter of resignation from Sherry Strothers, member of the Veterans Advisory Commission. Staff recommendation: Council accept the resignation and direct the City Clerk to post the vacancy in accordance with Maddy Act requirements. 3. REPORT ON THE APPLICATION FOR THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 14-1 (OTAY RANCH VILLAGE TWO) Otay Project, L.P. submitted an application for establishing Community Facilities District No. 14-1 (CFD 14-1) to fund the acquisition or construction of certain public improvements serving the City of Chula Vista and development improvements serving the Otay Project, L.P. properties within Village Two of the Otay Ranch in the amount of approximately $127 million. Adoption of the resolution initiates the formal proceedings for the proposed CFD 14-1 (City Engineer) Staff recommendation: Council accept the report and adopt the following resolution. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE INITIATION OF PROCEEDINGS TO CONSIDER THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 14-1 (OTAY RANCH VILLAGE TWO) FOR THE OTAY PROJECT L.P., AND APPROVING THE FORM OF A REIMBURSEMENT AGREEMENT 4. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE AMENDED COOPERATIVE AGREEMENT BETWEEN THE CITY OF CHULA VISTA, THE OTAY WATER DISTRICT, AND THE SWEETWATER AUTHORITY WHICH CREATED THE INTERAGENCY WATER TASK FORCE, AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDED COOPERATIVE AGREEMENT The City Council approved the Cooperative Agreement for the Interagency Task Force in 1991. Adoption of the resolution approves an amendment to the agreement to allow the selection of a Vice Chairman, the inclusion of a Drought Management Program, the inclusion of a termination provision including clarifying language, and the revision of the frequency of meetings. (City Engineer) Staff recommendation: Council adopt the resolution. Page 2 - Council Agenda htto:/ /www.chulavistaca.2ov March 6, 2007 5. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING FUNDS FROM THE TRAFFIC SIGNAL FUND FOR COSTS INVOLVED WITH INSTALLATION OF A TRAFFIC SIGNAL AT MAIN STREET AND AUTO PARK PLACE (4/5THS VOTE REQUIRED) The City previously approved developments including two auto parks and other supporting auto related businesses on the north and south sides of Main Street. As a result of the developments, a new traffic signal was needed at the intersection of Main Street and Auto Park Place. Sunroad Enterprises paid the total project cost with the understanding that reimbursements would follow from the City and the developer upon project completion. Adoption of the resolution appropriates the City's share of the project from the City's Traffic Signal Funds for reimbursement to Sunroad Enterprises. (City Engineer) Staff recommendation: Council adopt the resolution. 6. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING DONATIONS IN THE AMOUNT OF $116,000 AND APPROPRIATING SAID DONATED FUNDS (4/5THS VOTE REQUIRED) The Fire Department has received donations in the amount of $116,000 from various community donors. These donations were made to support the department's operations and the funds will be used for equipment purchases and Fire Facility improvements that are not funded in the Fiscal Year 2007-2008 budget. Adoption of the resolution approves the appropriation of said donated funds. (Fire Chief) Staff recommendation: Council adopt the resolution. 7. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING AND APPROPRIATING $210,083 IN REIMBURSEMENTS FROM VARIOUS STATE AND LOCAL AGENCIES TO OFFSET OVERTIME AND SUPPLIES AND SERVICES COSTS IN THE FIRE DEPARTMENT (4/5THS VOTE REQUIRED) The Fire Department participates in Automatic Aid Agreements with all other agencies within San Diego County, and an Agreement for Local Govermnent Fire Suppression Assistance to Forest Agencies and the Office of Emergency Services. Through the agreements, the Department provides staff and equipment resources on a reimbursement basis. Additionally, the Department receives reimbursements for staff time from the County of San Diego State Homeland Security Office for eligible project work. Adoption of the resolution accepts and appropriates $210,083 in reimbursements from these agencies. (Fire Chief) Staff recommendation: Council adopt the resolution. Page 3 - Council Agenda htto:/ /www.chulavistaca.gov March 6, 2007 8. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DIRECTING STAFF TO BEGIN THE PUBLIC PROCESS AS REQUIRED UNDER PROPOSITION 218, TO INCREASE THE AB939 FEE TO FULLY FUND THE STATE MANDATED WASTE DIVERSION AND RECYCLING PROGRAMS AS PROVIDED FOR UNDER AB939, THE WASTE MANAGEMENT ACT Events have occurred which have placed substantial strain on the City of Chula Vista's AB939 funds. The disposal/operating costs have increased 100% as a result of the increased traffic and corresponding Household Hazardous Waste (HHW) disposal volumes as a result of new legislation. Adoption of the resolution directs staff to begin the public process to increase the AB939 fees to fully fund the State mandated waste diversion and recycling programs. (General Services Director) Staff recommendation: Council adopt the resolution. 9. A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING THE FINAL REPORT OF EXPENDITURES FOR THE EMERGENCY SEWER LINE REPAIR - OT A Y LAKES ROAD AND EASTLAKE P ARKW A Y AND RATIFYING THE ACTIONS OF THE CITY MANAGER AND DIRECTOR OF GENERAL SERVICES FOR MAKING AND EXECUTING A CONTRACT FOR SAID EMERGENCY REPAIR WITH METROPOLITAN CONSTRUCTION B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING A CAPITAL IMPROVEMENT PROGRAM PROJECT "EMERGENCY SEWER LINE REPAIR - OTAY LAKES ROAD AND EASTLAKE PARKWAY" (SW248), AMENDING THE FISCAL YEAR 2007 CAPITAL IMPROVEMENT PROJECT, AND APPROPRIATING SEWER FACILITIES REPLACEMENT FUNDS TO TRANSFER EXPENDITURES MADE FOR SAID PROJECT (4/5THS VOTE REQUIRED) On October 19, 2006 the General Services Department was informed by Public Works Operations, that the fifteen-inch sewer line at Otay Lakes Road and Eastlake Parkway was severely damaged and could lead to the undermining of the road. City crews immediately televised the sewer lines and assessed the damage. In accordance with the emergency provisions of Section 1009 of the City Charter, City staff prepared bid documents to address the repair and obtain three bids. Staff entered into an agreement with the lowest responsible bidder, Metropolitan Construction. An informational item was submitted to Council in November, the final report to be brought back after the full cost of the project was identified. The project was completed in December and this report represents the total expenditures for the repair. (General Services Director) Staff recommendation: Council adopt the resolutions. Page 4 - Council Agenda htto://www.chulavistaca.gov March 6, 2007 10. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING FUNDS IN THE AMOUNT OF $120,014 AS PAID TO THE CITY OF CHULA VISTA BY CRICKET COMMUNICATIONS TO THE GAYLE MCCANDLISS PARK CAPITAL IMPROVEMENT PROJECT (CIP PR-179) FOR FUTURE IMPROVEMENTS TO THE PARK (4/5THS VOTE REQUIRED) At the City's request, Cricket Communications (Cricket) agreed to assist with funding of future park improvements at Gayle McCandliss Park, including the installation of a wireless facility. Cricket agreed to provide full payment for the 5-year lease of the site in one lump sum and an additional $12,000 for two new light fixtures. Cricket paid the total amount agreed upon of $120,014 to the City on January 6, 2007, and adoption of the resolution appropriates these funds to the project. (General Services Director) Staff recommendation: Council adopt the resolution. 11. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $205,670 FROM THE HIGH INTENSITY DRUG TRAFFICKING AREA PROGRAM AND APPROPRIATING FUNDS THEREFOR, WANING THE COMPETITIVE BIDDING PROCESS AND AUTHORIZING A ONE-TIME PURCHASE OF MONITORING AND SURVEILLANCE EQUIPMENT FROM JSI (4/5THS VOTE REQUIRED) The High Intensity Drug Trafficking Area (HIDTA) Program has awarded the Police Department $205,670 for the purchase of monitoring and surveillance equipment for the Operation Alliance Task Force. The funding from the HIDTA program includes the $199,680 expenditure reimbursement, along with a 3% administrative fee for processing the purchase. Adoption of the resolution accepts the funds, appropriates $199,680 to the Fiscal Year 2006-2007 Police Department capital budget, waives the competitive bidding process, and authorizes a one-time purchase of monitoring and surveillance equipment from JS1. (police Chief) Staff recommendation: Council adopt the resolution. ITEMS REMOVED FROM THE CONSENT CALENDAR PUBLIC COMMENTS Persons speaking during Public Comments may address the Council/Authority on any subject matter within the Council/Authority'sjurisdiction that is not listed as an item on the agenda. State law generally prohibits the Council//Authority from taking action on any issue not included on the agenda, but, if appropriate, the Council/Agency/Authority may schedule the topic for fUture discussion or refer the matter to staff. Comments are limited to three minutes. Page 5 - Council Agenda htto:/ /www.chulavistaca.gov March 6, 2007 ACTION ITEMS The Item listed in this section of the agenda will be considered individually by the Council/Authority, and is expected to elicit discussion and deliberation. If you wish to speak on any item, please fill out a "Request to Speak" form (available in the lobby) and submit it to the City Clerk prior to the meeting. 12. CONSIDERATION OF PUBLIC lNPUT REGARDlNG DESlRED QUALIFICATIONS OF A NEW CITY MANAGER At its February 20,2007 meeting, the City Council directed staff to provide a report with recommendations for a process to obtain public input related to the selection of a new City Manager, and to indicate what would be appropriate and not appropriate to discuss in open session. As per memorandum from the City Attorney, staff is recommending public discussion be limited to general comments regarding the desired qualifications of a new City Manager, avoiding any discussion of specific candidates for the position. (Interim City Manager/City Attorney) Staff recommendation: That Council accept the report, and hear and consider any public input provided at the March 6th Council meeting regarding the qualifications desired of a new City Manager. 13. CONSIDERATION OF QUARTERLY FISCAL STATUS REPORT FOR THE QUARTER ENDED DECEMBER 31, 2006 In accordance with Charter Section 504 (t), the Fiscal Status Report covering the second quarter of Fiscal Year 2007 is submitted for approval. (Finance Director) Staff recommendation: Council accept the report and adopt the following resolution: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATlNG $450,000 FROM THE AVAILABLE BALANCE OF THE GENERAL FUND TO THE FlRE DEPARTMENT PERSONNEL SERVICES BUDGET FOR COSTS RELATED TO OVERTIME (4/5THS VOTE REQUlRED) OTHER BUSINESS 14. CITY MANAGER'S REPORTS IS. MAYOR'S REPORTS A. Ratification of Mary Helvie to the Commission on Aging. B. Ratification of Russ Hall to the Growth Management Oversight Commission. C. Ratification of Nancy Mulcahy to the International Friendship Commission. 16. COUNCIL COMMENTS Page 6 - Council Agenda hl\J}:/ /www.chulavistaca.gov March 6, 2007 CLOSED SESSION Announcements of actions taken in Closed Session shall be made available by noon On Wednesday following the Council Meeting at the City Attorney's office in accordance with the Ralph M Brown Act (Government Code 54957. 7). 17. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION SIGNIFICANT EXPOSURE TO LITIGATION PURSUANT TO SUBDIVISION (b) OF GOVERNMENT CODE SECTION 54956.9 . Five cases 18. PUBLIC EMPLOYEE APPOINTMENT PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1) Title: City Manager 19. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE 54957.6(a) Unrepresented employee: City Manager ADJOURNMENT to the Regular meeting on March 13, 2007 at 6:00 p.m. in the Council Chambers. In compliance with the AMERICANS WITH DISABILITIES ACT The City of Chula Vista requests individuals who require special accommodations to access, attend, and/or participate in a City meeting, activity, or service request such accommodation at least forty-eight hours in advance for meetings and five days for scheduled services and activities. Please contact the City Clerk for specific information at (619) 691-5041 or Telecommunications Devices for the Deaf (TDD) at (619) 585-5655. California Relay Service is also available for the hearing impaired. Page 7 - Council Agenda htto:/ /www.chulavistaca.gov March 6, 2007 DRAFT MINUTES OF ADJOURNED REGULAR MEETINGS OF THE CHULA VISTA REDEVELOPMENT CORPORATION (CVRC), REDEVELOPMENT AGENCY AND CITY COUNCIL OF THE CITY OF CHULA VISTA November 16,2006 6:00 P.M. Adjourned Regular Meetings of the Chula Vista Redevelopment Corporation, Redevelopment Agency and City Council of the City of Chula Vista were called to order at 6:08 p.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. CVRC ROLL CALL PRESENT: Directors: Castaneda, Desrochers, Lewis, Paul, Rindone (arrived at 6:12 p.m.), Rooney, and Vice Chairman McCann ABSENT: Directors: Chavez (excused), Paul (excused), Chairman Padilla (excused) REDEVELOPMENT AGENCY ROLL CALL PRESENT: Agency Members: Castaneda, Rindone (arrived at 6:12 p.m.), and Vice Chairman McCann ABSENT: Agency Members: Chavez (excused), Chairman Padilla (excused) CITY COUNCIL ROLL CALL: PRESENT: Council Members: Castaneda, Rindone (arrived at 6:12 p.m.), and Deputy Mayor McCann ABSENT: Council Members: Chavez (excused), Mayor Padilla (excused) ALSO PRESENT: Interim Executive Director/City Manager Thomson, Deputy General Counsell Deputy City Attorney Shirey, Chief Financial OfficerlFinance Director Kachadoorian, Acting Community Development Director Hix, Redevelopment Project Manager Crockett, Planning Manager Ladiana, Senior Community Development Specialist Tapia, Community Development Specialist Alvarez, Senior Deputy City Clerk Peoples, Community Development Administrative Assistant Donnelly PLEDGE OF ALLEGIANCE, MOMENT OF SILENCE Due to the lack of a quorum for the Redevelopment Agency and City Council, Vice Chairman McCann requested Items 1 and 2 be trailed, and Item 3 be heard at this time. I A-l DRAFT Items 1 and 2 were heard after Item 3. 1. APPROVAL OF MINUTES Staff Recommendation: 1.a. That the CVRC and Redevelopment Agency approve the minutes of October 26, 2006. ACTION: Vice Chairman McCann moved approval of the CVRClRedevelopment Agency minutes of October 26, 2006. Director/Agency member Castaneda seconded the motion and it carried 6-0, with Director Paul, Director/Agency member Chavez and Chairman Padilla absent. 1.b. That the Redevelopment Agency approve the minutes of October 24, 2006, and November 7, 2006. ACTION: Vice Chairman McCann moved approval of the Redevelopment Agency minutes of October 26, 2006, and November 7, 2006. Agency member Castaneda seconded the motion and it carried 3-0, with Agency member Chavez and Chairman Padilla absent. 2. WRITTEN COMMUNICATIONS 2.a. Memorandum from Stephen C. Padilla requesting an excused absence from the Joint CVRClRedevelopment Agency/City Council meeting of November 16, 2006. 2.b. Memorandum from Patricia E. Chavez requesting an excused absence from the Joint CVRClRedevelopment Agency/City Council meeting of November 16, 2006. Staff recommendation: That the CVRClRedevelopment Agency/City Council excuse the absences. ACTION: Director/Agency/Councilmember Rindone moved approval of the requests for excused absences. Director/Agency/Councilmember Castaneda seconded the motion and it carried 6-0, with Director Paul, Director/Agency/Councilmember Chavez and Chairman/Mayor Padilla absent. Page 2 - CVRC/RDAlCC Minutes http://www.chulavistaca.gov November 16,2006 /11-;)- DRAFT Item 3 was heard prior to Items 1 and 2. PUBLIC HEARINGS 3. CONSIDERATION OF A MIXED USE PROJECT WITH 167 MULTI-FAMILY RESIDENTIAL UNITS AND 3,793 SQUARE FEET OF COMMERCIAL SPACE ON THE SITE AT 914-944 THIRD AVENUE WITHIN THE MERGED CHULA VISTA REDEVELOPMENT PROJECT (ADDED AREA) Development of this site will provide high-density mixed-use housing located close to existing transit, and within a block of neighborhood-serving retail and office uses. The proposal requires the re-zoning of a 3.6-acre portion of the site and the establishment of a Precise Plan Modifying Standard for a front setback reduction from 25 feet to 20 feet. In addition, the proposal requires the issuance of a Conditional Use Permit for the mixed use, Design Review and Tentative Map Conditions for the consolidation of four lots into one lot. Notice of the hearing was given in accordance with legal requirements, and the hearing was held on the date and at the time specified in the notice. Project Manager Crockett provided an introduction of the proposed Creekside Vistas project, including the effort behind the proposed project development and the public benefits of a great housing project, including new revenues to schools and the City, and increased affordable housing units in western Chula Vista. Planning Manager Ladiana provided an overview of the project details, noting that it would be the first suburban infill redevelopment project since adoption of the General Plan in December of 2005. Senior Community Development Specialist Tapia provided an overview of the project site and surrounding uses, topography, land use designations, other discretionary actions and conditions of the project, and highlights of the residential units, commercial space, parking and open space. Terry Plowden, representative ofproject applicant, Douglas Wilson Companies, spoke in support of the project and outlined some of the highlights, including the project being an opportunity for infill redevelopment; its location adjacent to a transit stop and proximity to neighborhood serving retail and office uses. He then detailed the process his firm had taken to this point to gain support from the community which included extensive community meetings held with the hospital, country club, church and auto parts store as well as with the Northwestern Civic Group, Crossroads II, HEAC and the Chamber of Commerce Economic Development and Building Committees. Mr. Plowden stated he felt the project was well received as they were proposing to improve a property that was underutilized and in some ways blighted; developing it in a manner consistent with the General Plan; providing 10% affordable housing consisting of 2 and 3 bedroom units, and would also be preserving the Telegraph Canyon Creek. Page 3 - CVRC/RDAlCC Minutes htto://www.chulavistaca.gov November 16,2006 /A~3 DRAFT PUBLIC HEARINGS (continued) Bryan Sevy, Project Architect, provided an overview of the design solutions for the project goals which were to create building architecture for the site layout, preservation of the riparian and sensitive habitat, and the creation of a more vibrant mixed-use street scene with an urban feel along 3rd Avenue to allow for walkability. To accomplish these goals, they designed the buildings with a strong fas:ade with homes facing onto 3rd A venue to provide a safety feature, the retail spaces are located along 3rd Avenue at the northeast comer adjacent to the other commercial uses where it can be used by the residents and others of the community. The parking is provided almost entirely in a subterrarean garage under the main building which allows more space for homes and open-space. The garage has controlled access with separate areas for residential and commercial. The project is made up of a blended density of 30 units per acre with a variety of housing types, including lower density townhomes in the southwest edge, and a larger building with underground parking to efficiently utilize the site. The larger building has single-level and multi-level homes with 2-, 3- and 4-bedroom townhomes with 14 different floor plans. All homes have a private balcony or patio. There are two main courtyard spaces above the parking and a common amenity area with a tot lot and pool and the open space, riparian area with a trail system along the bank. The architecture is a mix of modern and Spanish architecture, with arches in classic Irving Gill style. Director/Councilmember Castaneda inquired about the width of the sidewalks with the street trees, expressing concerns of impeding the free flow of pedestrians. Mr. Plowden responded that the sidewalks were 10 feet wide with a wall between the sidewalk and building entryways to separate the pedestrians from the residential traffic, adding that the developer will be maintaining the street trees. Director Rooney stated that he was encouraged by the quality of the project, would like to see more retail if possible, and encouraged the use of vines to cover the front walls to break up the fas:ade. He further noted that the choice of plant materials for this project was very important, as was the relief in the fas:ade provided by the arches, balconies, and planters. Director/Councilmember Rindone inquired and Mr. Plowden responded that the allocated commercial space was approximately 4,000 square feet which could equate to four tenants at 1,000 feet each, with uses authorized by the zoning code of perhaps a coffee shop and deli. Further, that the trees being considered for use in the project are from the City approved list and will include Oaks, Alders and Sycamores back by the creek, and ornamentals such as Jacarandas or a Brisbane Box in the courtyards. Director Rindone then inquired of staff, as to whether anything was being done regarding the landscaping across the street, and how staff was going to address it, although it is not a condition of this project. Ms. Ladiana responded that staff could be directed to continue pursuing action with the applicant. Director Lewis expressed concerns with the need for protection of the site between the parking and hospital site. Mr. Plowden responded that, in addition to the trees, there would be a wall or fence along the boundary. Director Lewis then inquired about the traffic control from 3rd A venue into the commercial entry in terms of a left turn lane, and requested staff review the left turn into the project. Page 4 - CVRC/RDA/CC Minutes http://www.chulavistaca.gov November 16, 2006 1/1-+ DRAFT PUBLIC HEARINGS (continued) Director Desrochers inquired regarding the width of the sidewalk in front of the commercial space and Mr. Sevy responded that there was 20 feet from the storefront to the sidewalk. In addition, he responded to questions pertaining to the access to the recreation area for residents living on the north end of the project in the Podium building, stating it would be via elevator and a short walk from the building. Mr. Plowden responded to questions regarding landscaping noting that native plant material would be planted up to the creek and the natural habitat area would be protected possibly fencing, but that children could play along the area between the building and the property lines, in the children's play area, and in the courtyards. Director Rooney inquired as to whether the proposed pathway could go through to "L" Street. Mr. Plowden responded that due to the steepness of the area and the culvert, for safety reasons, the area would probably be secured and the pathway would not go through. Director Rooney stated he hoped on future projects that pathways would be designed to go somewhere, and then confirmed that the affordable housing units would be 2- and 3-bedroom units, identical to the market rate units, and would be located throughout the Podium building. Vice Chairman/Deputy Mayor McCann opened the public hearing. Patricia Aguilar, representing Crossroads II, spoke in support of the project, stating that the applicant had met with them and had either met or exceeded their requests. She then spoke regarding a Planning Commission request on the project, that something be done about the condition of the property across the street from the project, provided and displayed photographs of the area, and encouraged the Council to direct staff to work with the applicant to give something back to the community by improving this area. Vice ChairmanJDeputy Mayor McCann explained for the record, that although the property Ms. Aguilar had spoken about was not directly connected with this project, the applicant, Douglas Wilson Companies, had looked at the best interests for the community and contacted the Country Club and proposed that the Douglas Wilson companies would come up with a landscaping plan and along with the Country Club and the City, each pay 1/3 of the costs involved in cleaning up and landscaping of the property. Mr. Plowden verbally confirmed their commitment and stated that a confirmation letter had previously been submitted to City staff. Vice ChairmanJDeputy Mayor McCann asked staff to take this as a direction, and inquired and Redevelopment Project Manager Crockett responded, that although this project was not in the redevelopment project area, findings could be made that would allow for tax increment funds to be used. Planning Manager Ladiana noted that the area being discussed was predominantly in private ownership with a very small sliver in City right-of-way. Director/Councilrnember Rindone stated he did not feel welded to the 1/3, 1/3, 1/3, but would like to get it done and would prefer to see the Country Club pay at least 50% of the costs. Page 5 - CVRC/RDAlCC Minutes htto:llwww.chulavistaca.gov November 16, 2006 /A~5 DRAFT PUBLIC HEARINGS (continued) Vice Chairman/Deputy Mayor McCann requested staff continue to work with the Douglas Wilson Companies and set up a meeting with the Country Club to discuss this issue. Kevin O'Neill stated he was pleased to see this project come forward and spoke in favor of it. He then inquired and staff responded that no redevelopment fund participation had been used, and the project was 100% developer financed. Mr. O'Neill then spoke regarding a project he had proposed two years ago and his perception that he did not get the cooperation, help or interest he had needed to proceed with his proposed project. Lisa Cohen, representing the Chula Vista Chamber of Commerce, stated that their Economic Development Committee, as well as Board of Directors, had expressed full support of the project. Ned Ardagna, inquired and staff confIrmed, that the proposed walkway on the property along the creek had public access. Mr. Ardagna then stated that he objected to the noticing procedure as only those within 500 feet of the proposed project were notified, yet those most affected, the current property owners and neighborhood residents, live outside of the 500 square feet area and were not notified. Additionally, this project is being called a walkable neighborhood, but there are no sidewalks, and cited Moss and Naples Streets as examples having piecemeal sidewalks. Vice Chairman/Deputy Mayor McCann responded to Mr. Ardagna's comments regarding the need for sidewalks, advising him that the City has started the Castle Park sidewalk program, and has received approval of a HUD 108 loan, which will provide additional funding for additional sidewalks. With no further members of the public wishing to speak, Vice Chairman/Deputy Mayor McCann closed the public hearing. Director/Councilmember Rindone expressed his pleasure with the quality of the proposal and the participation of the independent directors. ACTION: Director Rindone moved approval of staff's recommendation on Item 3.a., read the heading, waive the text. Director Castaneda seconded the motion for discussion: Director Castaneda then expressed agreement with those speaking in support of the project. He then expressed concerns with the ushering in of a new project in southwest Chula Vista with no Specific Plan in place. Vice Chairman/Deputy Mayor McCann stated he really liked the project and the fact that it had no public subsidy and an affordable housing component. Further, in speaking about sidewalks and amenities, the tax increment over the life of this project will be $21 million that can be used for those purposes. He then thanked the Douglas Wilson Companies for taking the initiative on the property across the street, and that he was not sold on the idea that a specific plan would bring things forward to enhance the community and create revitalization and investment. Vice Chairman/Deputy Mayor McCann then publicly thanked and expressed accolades for staff and the efforts they put into this project. Page 6 - CVRC/RDNCC Minutes htto://www.chulavistaca.gov November 16, 2006 / //- (p DRAFT PUBLIC HEARINGS (continued) Vice Chairman/Deputy Mayor McCann then requested that Item 3.a. be voted on first: 3.a. That the CVRC adopt the following resolution: CVRC RESOLUTION NO. 2006-039, RESOLUTION OF THE CHULA VISTA REDEVELOPMENT CORPORATION RECOMMENDING THAT THE CITY COUNCIL (I) ADOPT MITIGATED NEGATIVE DECLARATION (IS-06-008); (2) INTRODUCE AN ORDINANCE ADOPTING REZONE PCZ-06- 04 FOR A 3.6-ACRE PORTION OF THE SITE FROM S90 COUNTYZONE TO CCP (CENTRAL COMMERCIAL PRECISE PLAN) ZONE ALONG WITH THE ESTABLISHMENT OF A PRECISE PLAN MODIFYING DISTRICT AND STANDARD; (3) APPROVE CONDITIONAL USE PERMIT (PCC-06-026); (4) APPROVE DESIGN REVIEW PERMIT (DRC-06-35); AND (5) APPROVE TENTATIVE MAP (PCS-06-06) TO ALLOW THE CONSTRUCTION OF 167 MULTI-FAMILY UNITS AND 3,793 SQUARE FEET OF COMMERCIAL SPACE ON THE SITE LOCATED AT 914-944 THIRD AVENUE The motion carried 6-0, with Directors Chavez, Paul, and Chairman Padilla absent. ACTION: Councilmember Rindone moved approval of staff's recommendations on Items 3.b. and 3.c., read the headings, waive the texts, and place the ordinance on first reading: 3.b. That the City Council adopt the following resolution: RESOLUTION NO. 2006-337, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) ADOPTING MITIGATED NEGATIVE DECLARATION (IS-06-008); (2) APPROVING A CONDITIONAL USE PERMIT (PCC-06-26); (3) APPROVING DESIGN REVIEW PERMIT (DRC-06-35); AND (4) APPROVING TENTATIVE MAP (PCS-06-06) TO ALLOW THE CONSTRUCTION OF 167 MULTI-FAMILY UNITS AND 3,793 SQUARE FEET OF COMMERCIAL SPACE ON THE SITE AT 914-944 THIRD AVENUE Page 7 - CVRC/RDAlCC Minutes http://www.chulavistaca.gov November 16, 2006 IA-1 DRAFT PUBLIC HEARINGS (continued) 3.c. That the City Council place on first reading the following ordinance: ORDINANCE OF THE CITY OF CHULA VISTA APPROVING A REZONE (PCZ-06-04) FROM S90 ZONE TO CENTRAL COMMERCIAL PRECISE PLAN (CC-P) ZONE AND ESTABLISHING A PRECISE PLAN MODIFYING STANDARD FOR A 3.6-ACRE PORTION OF A 5.5-ACRE SITE LOCATED AT 912-944 THIRD AVENUE Councilmember Castaneda seconded the motion and it carried 3-0, with Councilmember Chavez and Mayor Padilla absent. Items 1 and 2 were heard at this time. Vice ChairmanlDeputy Mayor McCann requested Item 4, Chief Executive Officer's Reports be heard at this time. PUBLIC COMMENTS Kevin O'Neill, spoke regarding two projects he has that cannot move forward because they are in the Urban Core area and detailed the steps he had taken with staff to advance them, and his request for the establishment of a pipeline policy. Mr. O'Neill then spoke regarding areas of the Urban Core Specific Plan that he felt were flawed and requested that he be given what he has by right under the existing zoning, and protect him with a pipeline policy, otherwise, the City has created a temporary taking. Acting Community Development Director Hix, stated that a pipeline policy was being worked on to be brought forward as part of the Urban Core Specific Plan, and that the City Attorney's Office had also advised staff of their preference to ABCO, but that they were also aware that they could make other policy recommendations and were working on potential language. Ms. Hix then noted that a pipeline policy needed to be consistent citywide, not just within the Urban Core plan. She then asked Mr. O'Neill if he had submitted his project or was in process as typically a pipeline will address people who are somewhere along in the process. Mr. O'Neill stated he had not as it would not be prudent to move ahead at this point. Vice ChairmanlDeputy Mayor McCann requested Attorney Shirey and Ms. Hix get together collectively with Mr. O'Neill and then update the CVRC on the pipeline policy and this particular issue, as the goal is to provide certainty to those who want to invest in Chula Vista. Director Rindone made a referral to staff to have a report on pipeline options for the CVRC and City on the next agenda. Item 4 was heard prior to Public Comments Page 8 - CVRCIRDAlCC Minutes http://www.chulavistaca.gov November 16,2006 /A-cg DRAFT 4. CHIEF EXECUTIVE OFFICER'S REPORTS Interim Chief Executive Director Thomson stated that although the CVRC usually meets on the fourth Thursday of the month, this one falls on Thanksgiving Day and therefore, rather than requesting a meeting, he wished all a Happy Thanksgiving. 5. CHAIRMAN'S REPORTS Vice Chairman McCann again thanked staff for their work on the previous project. He then requested staff continue to keep the meetings as scheduled on the second and fourth Thursdays of each month at 6:00 p.m. 6. DIRECTORS' COMMENTS Director Rindone stated that there will be times when business needs to be accelerated and a meeting will need to be moved, and staff needs flexibility. Vice Chairman McCann stated he agreed with the need to have flexibility, but wants to stay on task. Director Rindone clarified it was not his intention to hurt any civic meeting, but that the business of the CVRC needs to be moving at a most judicial rate. He then stated he would be requesting a re-opening of the applicant-filing period for the position of City Manager and that it be extended to December 5, 2006. Director Desrochers noted for the record that Director Paul was not present, as he could not vote on the Creekside Vistas item, as his firm was involved in the project planning. He then expressed frustration and requested consistency with the meeting scheduling. Director Lewis stated that one of the reasons for the creation of the CVRC was due to the lack of a focused plan and concurred with Director Castaneda's on the need to get a specific plan and take control to become a fully active body. Director Castaneda stated that a specific plan looks at all kinds of things and tells people what the long-term, long-reaching vision of the City is. He then expressed concerns with why some people seem to get projects through and others cannot. ADJOURNMENT At 7:54 p.m., Deputy MayorNice Chairman McCann adjourned the City Council to its regularly scheduled meeting on November 21, 2006, at 6:00 p.m., and the Chula Vista Redevelopment Corporation and Redevelopment Agency to their regularly scheduled meetings on December 14, 2006, at 6:00 p.m. ~ t-t( .~ Dana M. Smith, Secretary Page 9 - CVRC/RDAlCC Minutes htto://www.chulavistaca.gov November 16,2006 /Il-q DRAFT MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA January 15, 2007 6:00 P.M. An Adjourned Regular Meeting of the City Council of the City of Chula Vista was called to order at 9:43 a.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Castaneda (arrived at 10:00 a.m.), McCann, Ramirez, Rindone and Mayor Cox ABSENT: Councilmembers: None ALSO PRESENT: City Attorney Moore, and Senior Deputy City Clerk Peoples PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE PUBLIC COMMENTS There were none. CLOSED SESSIONS Council convened Closed Session at 9:44 a.m. 1. PUBLIC EMPLOYEE APPOINTMENT PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1) Title: City Manager No reportable action was taken. 2. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54957.6(a) Unrepresented employee: City Manager This item was not discussed. ADJOURNMENT At 6:30 p.m., Mayor Cox adjourned the meeting to the Regular Meeting on January 16, 2007, at 6:00 p.m. in the Council Chambers. Cf?t~ ~ ~~ Lori Anne Peoples, MMC, Senior Deputy City Clerk 16- I DRAFT MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA January 16, 2007 6:00P.M. A Regular Meeting of the City Council of the City of Chula Vista was called to order at 6:01 p.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Castaneda, McCann, Ramirez, Rindone, and Mayor Cox ABSENT: Councilmembers: None ALSO PRESENT: Interim City Manager Thomson, City Attorney Moore, Senior Deputy City Clerk Peoples, and Deputy City Clerk Bennett PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE SPECIAL ORDERS OF THE DAY . PRESENTATION BY DEPUTY MAYOR RINDONE OF A PHOTOGRAPH OF DECORATED TUSKAGEE PILOT CAPTAIN CLAUDE A. ROWE TO THE CITY OF CHULA VISTA Deputy Mayor Rindone presented the Council with the photograph of Captain Rowe. . OATHS OF OFFICE Kevin O'Neill- Growth Management Oversight Commission Mayor Cox stated that Mr. O'Neill was administered the oath and received his certificate of appointment earlier in the day in the City Clerk's office. CONSENT CALENDAR (Items 1 through 5) 1. APPROVAL OF MINUTES of the Adjourned Regular Meeting of December 14, 2006, and the Regular Meeting of December 19, 2006. Staff recommendation: Council approve the minutes. 2. WRITTEN COMMUNICATIONS A. Letter of resignation from Majed Al-Ghafry, member of the Safety Commission. B. Letter of resignation from Susan 0' Shaughnessy, Commission on Aging. Staffrecommendation: Council accept the resignations and direct the City Clerk to post the vacancy in accordance with Maddy Act requirements. \ C. -I DRAFT CONSENT CALENDAR (continued) 3. ORDINANCE NO. 3058, ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHULA VISTA MUNICIPAL CODE TO PROHffiIT SMOKING WITHIN FIFTY (50) FEET OF THE ENTRANCE TO ANY EATING ESTABLISHMENT, AND TO MAKE OTHER REVISIONS AS NECESSARY TO MAKE THE CHAPTER PROVISIONS CONSISTENT (SECOND READING) Adoption of the ordinance prohibits smoking within 50 feet of the entrance to any eating establishment and makes additional clerical corrections to the Municipal Code section. This ordinance was introduced on January 9,2007. (City Attorney) Staff recommendation: Council adopt the ordinance. 4. A. RESOLUTION NO. 2007-012, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING AN AGREEMENT WITH THE GAS TECHNOLOGY INSTITUTE, A NOT FOR PROFIT RESEARCH & DEVELOPMENT ORGANIZATION, TO ANALYZE ENERGY, ECONOMIC AND ENVIRONMENTAL IMPACTS OF BOTH PLANNED AND ALTERNATIVE BUILDING DESIGN OPTIONS FOR THE DEVELOPMENT OF THE WAKELAND AFFORDABLE HOUSING PROJECT AND AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENTS B. RESOLUTION NO. 2007-013, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING AN AGREEMENT WITH THE GAS TECHNOLOGY INSTITUTE, A NOT FOR PROFIT RESEARCH & DEVELOPMENT ORGANIZATION, TO ANALYZE ENERGY, ECONOMIC AND ENVIRONMENTAL IMPACTS OF BOTH PLANNED AND ALTERNATIVE BUILDING DESIGN OPTIONS FOR THE DEVELOPMENT OF THE CREEKSIDE VISTAS MIXED-USE RESIDENTIAL PROJECT AND AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT Adoption of the resolutions approves agreements with the Gas Technology Institute to analyze energy, economic, and environmental impacts of both planned and alternative building design options for the Wakeland affordable housing project and the Creekside Vistas mixed-use residential project in western Chula Vista, as required under the San Diego Gas & Electric partnership grant program. (Acting Community Development Director) Staff recommendation: Council adopt the resolutions. 5. RESOLUTION NO. 2007-014, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT TO THE PHASE II AGREEMENT WITH STRATUS, A DIVISION OF HEERY INTERNATIONAL AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDMENT Adoption of the resolution extends the agreement for additional consultant services related to the formalization of charter university partners and the development of key collaboration, business and academic plans between and among those partners as entered into as of March 8, 2005. (Acting Community Development Director) Staff recommendation: Council adopt the resolution. Page 2 - Council Mioules \C - 2... htto:! /www.chubvistaca.l2:oy January 16, 2007 DRAFT CONSENT CALENDAR (continued) ACTION: Councilmember McCann moved to approve staffs recommendations and offered the Consent Calendar, headings read, texts waived. Deputy Mayor Rindone seconded the motion, and it carried 5-0. ITEMS REMOVED FROM THE CONSENT CALENDAR There were none. PUBLIC COMMENTS Gloria McLean, attorney representing Mr. Bisharat, owner of a gas station at the comer of Halecrest and Telegraph Canyon Road, asked the Council to direct staff to bring back an agendized item to allow banner signs within service bays that face public streets and, pending that action, to stop enforcing that portion of the Municipal Code. Mayor Cox asked staff to contact Ms. McLean Patricia Aguilar, representing Crossroads II, asked if the committees formed by the Council several weeks ago would be meeting in public. Mayor Cox asked Attorney Moore to provide clarification to Ms. Aguilar. BOARD AND COMMISSION REPORTS 6. CONSIDERATION OF THE DRAFT ARTS MASTER PLAN After 20 months of effort, an Arts Master Plan has been drafted which, if approved, will guide the growth of arts and culture in the City for the next decade. It will also begin to implement the policies, goals and objectives contained within the 2005 General Plan Update that specifically call for the City's increased promotion and support of arts and culture. (Cultural Arts Commission/Cultural Arts Manager/Assistant City Manager/Library Director) Assistant City Manager/Library Director Palmer introduced the item. Cultural Arts and Fund Development Manager Reinhardt and Cultural Arts Commissioners Redo, Bolles and Deavenport presented an overview of the draft Arts Master Plan, followed by recommendations for implementation. The following people spoke in support of the draft Arts Master Plan: Joan Hansen, Chula Vista resident and artist Betsy Keller, Chula Vista resident, OnStage Playhouse, Frederika Manor, and T A VA (Third Avenue Village Association) Dency Souval, Chula Vista resident Colleen Finnigan, San Diego resident, City of Carlsbad Arts Office \C-3 Page 3 - Council Agenda htto:/ Iwww.chulavistaca.gov January 16, 2007 DRAFT BOARD AND COMMISSION REPORTS (continued) Joanne Tawfilis, Oceanside resident, Executive Director of United Nations Association- Balboa Park, and Executive Director and Founder ofthe Art Miles Mural Project Susan O'Shaughnessey, Healthy Spirit and TA V A Dr. Susan Mahler Sharon Hyde, Chula Vista resident, Chula Vista Art Guild Sara Deavenport, Chula Vista resident, California Ballet Bobby Hartman, San Diego resident, Program Director, Fern Street Circus Thomas Vandeveld, Chula Vista resident, musician in "The Players" Kevin McCully, San Diego resident, musician in "The Players" William Virchis, teacher, Sweetwater Union High School District Lupita Jimenez, Chula Vista resident Phani Peesapati, Chula Vista resident, parent of child who benefited from a fine arts grant provided by City of Chula Vista Martha Ehringer, San Diego resident, Director of Public Relations for the Mingei International Museum Alan Ziter, Naval Training Center Foundation Bethany Lockhart, San Diego Junior Theatre Dalouge Smith, San Diego resident, San Diego Youth Symphony Marti Kranzberg, San Diego resident, Creative Class Rebecca Radn and Cynthia Stokes, San Diego Opera Barry Parr, Chula Vista resident and teacher, Sweetwater Union High School District Chris Davenport, Chula Vista resident, Mountain West Real Estate Bob Christiansen, OnStage Playhouse Brian Patterson, San Diego Museum of Art Laura Withers, Playwrights Project Tommy Aros, Chula Vista resident and musician, requested support for live music venues in the City. Paul Vaucheley, Barrio Logan East Village Arts District, spoke in support of the plan and urged that an art colony be incorporated into the plan. Patricia Aguilar, Crossroads II, spoke in support of the plan and suggested that the plan include what the Urban Core Specific Plan calls the "Downtown Promenade" as an "Arts Promenade." The following persons submitted speaker slips in support of the plan but did not speak: JoAnn Fields, National Federation of Filipino Americans Association and military community Veronica Serrano, Chula Vista resident, San Diego Cesar E. Chavez Committee David Hoffman Jerry Livingston, representing the Building Industry Association and the National Association of Office and Industrial Properties, spoke in opposition to the plan, citing significant concerns about the use of development fee funding to implement and support the plan. Lisa Cohen, Chula Vista resident and Chief Executive Officer of the Chula Vista Chamber of Commerce, stated that the Board supports the plan as long as the proposed "2% for Public Art" policy is voluntary, rather than mandatory. IC--4 Page 4 - Council Minutes hUn:'! Iwww.chulavistaca.gov January 16, 2007 DRAFT BOARD AND COMMISSION REPORTS (continued) Mayor Cox declared a brief recess at 8:43 p.m. She reconvened the meeting at 8:54 p.m. with all Councilmembers present. Councilmember Castaneda requested further dialogue on the particulars of moving forward with the plan, including funding strategies. Councilmember Ramirez stated that the main public library renovation should be a priority, expressed concerns with the funding mechanism, and asked staff to come back with recommendations for funding that include what other cities have done. Councilmember McCann requested a financial analysis of how pipeline projects might be affected, and asked staff to look for alternative funding sources that would have less of an impact on revitalization. He then suggested that Coors Amphitheatre be looked at as a consistent stream of revenue to be used, versus capital improvement projects. Deputy Mayor Rindone stated that he was notified that the Taste of the Arts event was being eliminated. Since then, however, he received information that the program will continue but be held in a different venue. Deputy Mayor Rindone concurred with the referral to staff to perform a financial analysis and suggested a bifurcated scale be considered as welL Lastly, he inquired about the status of the Otay Baptist Church, which he thought would be studied and included in the report. Mr. Reinhart stated that the church was not included in the report because the consultant did not feel qualified to make a specific recommendation about it. Assistant City Manager/Library Director Palmer stated that a cost analysis was previously provided by the General Services Department, along with input received from residents near the church expressing opposition to moving it. Deputy Mayor Rindone asked staff to provide the report to the Council for a final decision. Mayor Cox stated that the plan was extraordinary, and the Council needed to work with staff towards as creative a solution as possible. She expressed the need to look at ways to increase the revenues, noting that it is very important to have the program drive the budget, rather than have the budget drive the program. Mayor Cox requested creativity in the solutions staff would be bringing back for consideration. ACTION: Mayor Cox moved to accept the staff report and asked staff to look at what 1 % of the projects in the 2005/2006-year means to the bottom line of economics in order to share the creativity among a broader base if possible. Deputy Mayor Rindone seconded the motion, and it carried 5-0. Deputy Mayor Rindone noted that the art fund created by the Coors Amphitheatre tickets is expended in its totality annually, and he advised Commissioners that they could request that the funds be carried over if needed to save for a particular event. \C.-s Page 5 - Council Agenda httn:/ /www.chulavistaca.lZov January 16, 2007 DRAFT OTHER BUSINESS 7. CITY MANAGER'S REPORTS There were none. 8. MAYOR'S REPORTS A. Ratification of appointment of Tim Jones to the Growth Management Oversight Commission. ACTION: Mayor Cox moved to appoint Tim Jones to the Growth Management Oversight Commission. Councihnember Castaneda seconded the motion, and it carried 5-0. B. Discussion to clarify policies with regard to members of the public addressing the City Council under the Public Comments portion of the agenda, and possible direction to staff to prepare an ordinance to amend the Municipal Code accordingly. Mayor Cox presented Chula Vis:ta Municipal Code Section 2.04.230, titled "Addressing the Council by Individuals," and explained that the purpose of oral communications under the existing code was for members of the public to bring up issues in public on items not on the agenda. The current ordinance limits their time to speak to three minutes. She noted that due to the Council's strict adherence to the Brown Act, the Council is not able to engage the public under oral communications. Speakers have five minutes to address the Council regarding items on the agenda, and if they wish to gather their comments together, they can have up to 30 minutes to speak. Mayor Cox further explained that it was not her intent, or that of the Council, to eliminate oral communications or the public's right to address the Council. Frank Zimmerly, representing the Northwest Civic Association, read into the record a letter previously submitted by Association President Pamela Bensoussan expressing opposition to amending the ordinance to limit oral communications to 3 minutes. Kit Gardner stated that he did not understand the issue but opposed any change to the existing system. Patricia Aguilar, representing the Board of Directors and members of Crossroads II, stated she, too, was mystified as to why the item was being discussed. She had understood that the presiding officer could extend the time limit on a case-by-case basis if deemed appropriate. She said she realized this was in part a legal issue, but that the current system has worked fine, and she opposed any changes. Peter Watry recommended the ordinance be kept as is and administered with common sense. Jackie Lancaster, representing Save Our Bayfront, appealed to the Council to allow the ceding of time under oral communications, and suggested it be spelled out in the Chula Vista Municipal Code. lC-~ Page 6 - Council Minutes htto:/lwww. chula vistaca. 2:0V January 16, 2007 DRAFT OTHER BUSINESS (Continued) Sandy Duncan stated that she understood the three-minute rule and that there was a gentleman's agreement for people to cede time to those wishing to speak. Ms. Duncan then stated that she had spoken with City Consultant Terry Amnsler, who also opposed Council action on this item. Earl Jentz spoke in support of keeping the ability to cede time to a speaker under oral communications and asked that the ordinance not be changed. Jose Preciado, President of South Bay Forum, stated he was open to hearing discussion regarding the need for a change to prior policy, and expressed concern from group members about limiting the ability to combine minutes under oral communications. Ted Kennedy stated that the purpose of oral communications was to allow the public to participate and gather information, thus providing an early warning system. However, if the system is going to be changed, he asked that statistics be provided to the public to show how many times the current system has been abused. Mayor Cox clarified that this particular agenda item was on public comments, and although she appreciated the public's confidence in her exercising appropriate discretion, she had a sense that if she were to suggest that someone had gone on too long, or could not cede minutes after three or four times doing so, she would be duly criticized for exercising favoritism. Under public comments, the Council cannot engage with the audience, and the ordinance only allows groups to speak under agendized items. If the Council determined that the ordinance was to be left as is, she would take the Chair's prerogative and use the Chair's discretion in deciding whether to allow the public to gift minutes to one another or to surpass their time. She expressed concern, however, that as soon as she said no to one person, she would be thought of as an unfair person. City Attorney Moore confirmed that time limitations could be imposed as long as they allow individuals the right to speak, and the presiding officer can provide more time as long as it is applied fairly to everyone. Councilmember Ramirez stated that wherever possible, the greatest amount of latitude should be provided to allow people to speak their minds. He then asked that the ordinance be expanded to allow the sharing of time at the discretion of the presiding officer, and to require people to state their City of residence when addressing the Council. Councilmember Ramirez also expressed an interest in holding a workshop to address procedural aspects of the Council Office as a department. City Attorney Moore stated that everyone has a constitutional right to speak at a public meeting in a public setting, and the Council cannot limit someone who is not a resident of Chula Vista from speaking. To identifY a person as a resident of Chula Vista would not be a problem, as long as they are not provided any extra privilege, such as extra time that is not provided to someone who is not a resident. Deputy Mayor Rindone stated the only necessary change to the ordinance would be to request the speaker to state whether or not he or she was a resident of Chula Vista, and the rest should be at the prerogative of the Chair. 1C--l- Page 7 - Council Agenda htto:llwww.chulavistaca.gov January 16, 2007 DRAFT OTHER BUSINESS (Continued) In response to a question by Councilmember Castaneda, Mayor Cox stated that her understanding of the purpose of public comments was for people to address the Council for three minutes on an issue that is not on the agenda, and although she appreciated being given discretion by her colleagues, she was concerned that there would be a point in time when her actions would not be considered as fair. Councilmember Castaneda stated he understood the Mayor's concerns, however, he believed those not wanting to speak should be able to cede their time to a representative to speak for them. Further, he believed a clarification was required in the ordinance to remove the requirement for stating the speaker's address, to request a speaker to state whether he or she is a resident of Chula Vista, if they choose to do so, and to augment the first sentence that delineates the period of time to say "three minutes, unless further time is granted by the presiding officer." Councilmember McCann stated he believed that as a general rule, as a Council, and as voters, faith has been put into the Mayorship, the ability to preside over meetings with discretion, whether written into the ordinance or not. ACTION: Councilmember Ramirez moved to add language giving the Mayor discretion to grant additional time to speakers during public comments and to allow speakers to share time; and that the Council request speakers to indicate whether or not they are Chula Vista residents. Mayor Cox suggested including the phrase "unless further time is granted by the presiding officer" in the oral communications section regarding the three minutes, and requested that the City Attorney come up with language to request that speakers provide their city of residence. Councilmember Castaneda pointed out that Councilmember Ramirez had previously made the motion, and Mayor Cox stated that, with his concurrence, she would credit authorship of this motion to Councilmember Ramirez. Councilmember Ramirez accepted. Councilmember Castaneda seconded the motion, and it carried 5-0. 9. COUNCIL COMMENTS Deputy Mayor Rindone spoke of the recent loss of a major community leader, Ms. Diane Carpenter, and requested adjournment ofthe Council meeting in her memory. Councilmember Castaneda expressed heartfelt thoughts to the Carpenter family. He then expressed continued interest in exploring possibilities to locate a Charger facility in Chula Vista. A. Councilmember Ramirez Consideration of support of the appointment of Councilmember Castaneda to the California Coastal Commission. Councilmember Ramirez stated he wished to withdraw this item from the agenda. He also offered his condolences to the Carpenter family and requested information as to when the services would be held. Deputy Mayor Rindone stated that the services would be held at 3:00 p.m. on Friday, January 19, at the Bayview Baptist Church, located at the comer of 61 5t and Benson. He also said he planned to bring forward a proclamation next Tuesday for presentation to the Carpenter family. \C-q Page 8 - Council Mioules hUn:,! /www.chulavistaca.llov January 16, 2007 DRAFT OTHER BUSINESS (Continued) Councilmember Ramirez mentioned that he had attended the League of California Cities' training for new Councilmembers and had a lot of ideas and thoughts about what needed to be done, including putting together a Council workshop to discuss procedures, as well as use of flexibility and discretion on the order agenda items are taken, should there be large groups of people wishing to speak. Councilmember McCann asked to assist Deputy Mayor Rindone in the presentation of the proclamation to the Carpenter family. Mayor Cox stated that there would be a Chargers relocation subcommittee meeting on January 17 at 6:00 p.m. in the main conference room of City Hall. At 10:48 p.m., Mayor Cox recessed the meeting to the adjourned regular meeting of the City Council and special meeting of the Public Financing Authority. At II :04 p.m., Mayor Cox reconvened the Council meeting, with all members present, and recessed to Closed Session. CLOSED SESSION 10. CONFERENCE WITH LEGAL COUNSEL REGARDING ANTICIPATED LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(c) . One case No reportable action was taken. ADJOURNMENT At 11:45 p.m., Mayor Cox adjourned the meeting in memory of Diane Carpenter to an adjourned regular meeting on January 18, 2007, at 4:00 p.m., and thence to the regular meeting on January 23,2007, at 6:00 p.m. in the Council Chambers. q~~ Lori Anne Peoples, MMC, Senior Deputy City Clerk Ic-q Page 9 - Council Agenda hlto:/ /www.chulavistaca.goy January 16, 2007 DRAFT MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL AND SPECIAL MEETING OF THE PUBLIC FINANCING AUTHORITY OF THE CITY OF CHULA VISTA January 16, 2007 6:00 P.M. An Adjourned Regular Meeting of the City Council and a Special Meeting of the Public Financing Authority of the City ofChula Vista were called to order at 10:48 p.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Council! Authority Members: Castaneda, McCann, Ramirez, Rindone, and Mayor/Chair Cox ABSENT: Council!AuthorityMembers: None ALSO PRESENT: Interim City Manager Thomson, City Attorney Moore, Senior Deputy City Clerk Peoples, and Deputy City Clerk Bennett PUBLIC COMMENTS Steve Pavka, Chula Vista resident, expressed concern about a new ordinance used as tax revenue, resulting in an unfair, unjust tax or fee. He asked how to place an item on the agenda to allow the Council to discuss changes that need to be made. Council!Authority Member Ramirez asked Mr. Pavka to contact his office to make an appointment to discuss his concerns. ACTION ITEMS 1. CONSIDERATION OF AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2006 Presented for Council! Authority information and acceptance are the audited financial statements for the fiscal year ended June 30, 2006, as prepared by the independent audit firm of Moreland and Associates, Inc. The City's annual financial reports received an unqualified (clean) opinion from the independent audit firm. (Finance Director/Treasurer) Finance Director/Chief Financial Officer Kachadoorian introduced Kathryn Beseau, partner in the firm of Moreland and Associates, who stated that the City received a clean opinion and offered to answer any questions. Council! Authority Member McCann asked what was meant by a clean opinion. Ms. Beseau responded that a clean opinion meant that nothing had come to the auditors' attention during their review that indicated any misstated information in the books. Part of the audit included a review of internal controls to check their reliability, and no material weaknesses or insufficiencies were found. The auditors did, however, find some minor housekeeping items that were presented to staff in a management letter. Council/Authority Member McCann asked if the reference under management suggestions to make sure the most recent pay document was on file could include an electronic file format. Ms. Beseau responded affirmatively. ITI-\ ACTION ITEMS (continued) Chair Cox thanked staff and Ms. Beseau for providing the information and clarification on the audit process, and expressed hope that the independent financial review would provide a much better feeling of where the City will be in the next 10 years. ACTION: Council/Authority Member Castaneda., moved to accept the fiscal year 2005-2006 financial statements. Council/Authority Member McCann seconded the motion, and it carried 5-0. OTHER BUSINESS 2. CITY MANAGERlDIRECTOR'S REPORTS There were none. 3. MAYOR/CHAIR'S REPORTS There were none. 4. COUNCIL/AUTHORITY MEMBERS' COMMENTS There were none. ADJOURNMENT At 11 :04 p.m., Mayor/Chair Cox adjourned the Council to an adjourned regular meeting on January 18, 2007, at 4:00 p.m., and the Public Financing Authority until further notice. q~~~ Lon Anne Peoples, MMC, Senior Deputy City Clerk \[)-2.. Page 2 - Jt. Council/PF A Minutes htto://www.chulavistaca.l!ov January 16, 2007 DRAFT MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CONCURRENT WITH A MEETING OF THE BOARD OF PORT COMMISSIONERS OF THE SAN DIEGO UNIFIED PORT DISTRICT January 18, 2007 4:00 p.m. An adjourned regular meeting of the City Council of the City ofChula Vista, concurrent with a meeting of the San Diego Unified Port District Board of Commissioners, was called to order at 4:06 p.m. in the Council Charobers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Castaneda, McCann, Ramirez, and Mayor Cox Port Commissioners: Rios (Chair), Bixler (Vice Chair), Vilaplana, Cushman, Najera, Valderrama ABSENT: Councilmembers: Rindone (excused) Port Commissioners: Spane (excused) ALSO PRESENT: Interim City Manager Thomson, City Attorney Moore, Deputy City Clerk Benoett, Port President/CEO Hollingsworth, Port Attorney Bennett, and Port Docket Manager Nicholson. PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE PUBLIC COMMENTS There were none. WORKSHOP 1. PRESENTATION REGARDING THE SOUTH BAY POWER PLANT REPLACEMENT PROJECT APPLICATION CURRENTLY BEFORE THE CALIFORNIA ENERGY COMMISSION The purpose of the meeting was to allow the City Council, Port Commissioners, and the public to hear from key entities that have jurisdiction and influence over the potential siting and permitting of the proposed facility. Assistant City Manager Madigan presented an outline of the proposed South Bay Power Plant replacement project. IE -\ DRAFT WORKSHOP (Continued) Randa Goniglio, Real Estate Manager, San Diego Unified Port District, presented background on the project replacement plan that included the Port District's acquisition of the South Bay Power Plan; existing agreements between the District and LS Power; the Chula Vista Bayfront Master Plan; Port Board and City Council policy direction; and the Port District as Land Owner/Land Use Jurisdiction. Michael Meacham, Chula Vista Director of Conservation and Environmental Services, spoke about activities City staff has taken on past Council direction and policy on related energy issues that included work with all local stakeholders, state energy agencies, and regional agencies; the focus on energy strategy priorities; and the energy strategy that became public in 2000. Kevin Johnson, Vice President of Development for LS Power, presented the South Bay Power Plant replacement project. Bill Pfanner, Project Manager, California Energy Commission, presented an overview of the Energy Commission's role in the proposed project. Councilmember Ramirez stated that a number of questions have been received from staff and the community on the subject of the power plant, and he requested that the questions be addressed by those agencies present at the meeting. Mayor Cox suggested that questions not addressed during the presentations be addressed towards the end of the meeting. Richard Smith, Director, San Diego County Air Pollution Control District, spoke about the District's role in air pollution control. Gary DeShazo, Director of Regional Transmission North and Acting Director of Regional Transmission South, California Independent System Operator (CAISO), spoke about what CAISO does and its relationship with regard to the transmission and generation within its control. Mayor Cox asked whether or not the study investigated the siting of a replacement generation plant at an off-bayfront, off-port property site. Mr. Johnson, representing LS Power, responded that a number of alternative sites were evaluated and rejected for the replacement project, and that the location on the LNG site was the preferred site due to existing components that included utilization of existing infrastructure, no disturbance to other previously disturbed sites, and voltage stability. At 5:57 p.m., Mayor Cox declared a lO-minute recess. The meeting reconvened at 6:18 p.m., with Port Commissioner Vilaplana absent from the dais. He did not return for the remainder of the meeting. Councilmember McCann asked whether SDG&E had committed to purchasing power from the LS Power Plant and the likelihood of purchasing power from the plant, if constructed. James A very, Senior Vice President, San Diego Gas and Electric (SDG&E), responded that SDG&E had not made any commitments and did not foresee contracting with the applicant. IE-2.. Page 2 - Council Minutes http://www.chulavistaca.gov January 18, 2007 DRAFT WORKSHOP (Continued) Commissioners Najera and Cushman requested that LS Power provide information to the Port on the 27 potential sites that were considered for location of a new power plant. Commissioner Cushman stated that he wanted to do what was right for the City and was hopeful that the City Council could meet at the earliest date possible to discuss what Chula Vista wanted. Mayor Cox directed staff to calendar a date to bring the matter back to the Council for further discussion. Port Chair Rios pointed out that no solution had been reached regarding the Reliability Must Run (RMR) status, and what plans SDG&E has to compensate for removal of the existing plant. She suggested that the City Council address such issues prior to making any decisions. Councilmember Castaneda asked the Council to ask the Port District to stave off any decision on the lease option for 100-180 days, whatever is acceptable to the Port; and volunteered to serve on a subcommittee consisting of a member of the City Council to address questions with respect to the agencies of the state that hold the key and to identify exactly what SDG&E's long-term resource needs, where those needs could be fulfilled, and if there is a possibility that LS Power could build some generation at the site being negotiated. Commissioner Bixler asked if CAISO, upon evidence that SDG&E does not need this plant, would remove the RMR status of the present South Bay Power Plant. Mr. DeShazo replied that if San Diego procured enough generation inside the San Diego load pocket to meet the location capacity needs that have been identified, and the South Bay unit was not included in that procurement, then they would not renew the RMR contract for that unit. Mr. Avery, representing SDG&E, further addressed some of the questions raised by Port Commissioners Rios and Bixler, explaining that the existing power plant is not a base-load power plant, but a very inefficient peaker plant. He spoke about the Otay Metro power loop proposed to be in service in summer 2007, which would give SDG&E, from a reliability standpoint, the capability to satisfy the needs of the City for about the next 20 years. He stated that the long-term objective of SDG&E is to eliminate the need of having to pay any kind of subsidies to keep older power plants alive. Councilmember McCann questioned whether a power plant was the highest and best use of the bayfront land, requested further information on alternatives for the power plant site, and expressed the need for policy direction by the Council sooner rather than later. Mayor Cox suggested a meeting with Councilmember Castaneda to discuss who on the Council would be interested in participating with him on a power plant subcommittee. The following individuals addressed the CouncillPort with varying viewpoints regarding the South Bay Power Plant: Lisa Cohen, Chula Vista Chamber of Commerce Cindy Gompper Graves, South County EDC Laura Hunter, Environmental Health Coalition Melanie McCuthan, Environmental Health Coalition Georgette Gomez, Environmental Health Coalition Mike McCoy, Imperial Beach resident \E-3 Page 3 - Council Minutes http://www .chulavistaca.gov January 18, 2007 DRAFT WORKSHOP (Continued) Mayor Cox interrupted public comments in order to offer concluding comments by agency representatives who needed to leave to catch flights. Kevin Johnson of LS Power and Gary DeShazo of CAISO gave concluding comments. Public comments were resmned with the following individuals addressing the Council/Port regarding the South Bay Power Plant: Pati Krebs, Industrial Environmental Association Lupita Jimenez, Green Party of South Bay Jerry Scott Commissioner Rios left the dais as 7:39 p.m., and Commissioner Bixler left the dais at 7:42 p.m., during which time no quorum was present for the Port Commission. Commissioners Rios and Bixler returned to the dais at 7:45 p.m. Councihnember McCann thanked both Port and City staff and agencies present for discussing the various issues. Mayor Cox thanked Port Commissioners and staff for their participation. She stated that remaining questions would be incorporated into a future workshop. Port Chair Rios thanked everyone for their hospitality. Councilmember Ramirez thanked the Port Commissioners for their participation. He also thanked LS Power for bringing the project to the area and said he looked forward to working with them. He stated that the Council would be working hard to ensure the best possible decision for the community. ADJOURNMENT At 7:45 p.m., Mayor Cox adjourned the meeting to the regular meeting of January 23,2007, at 6:00 p.m. in the Council Chambers. ~ Lorraine Bennett, CMC, Deputy City Clerk Page 4 - Council Minutes Ig-4 http://www.chulavistaca.gov January 18, 2007 DRAFT MINUTES OF A SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA February 4, 2007 9:30 A.M. A Special Meeting of the City Council of the City ofChula Vista was called to order at 9:35 a.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councihnembers: Castaneda (arrived at 9:40 a.m.), McCann, Ramirez, Rindone (arrived at 9:45 a.m.) and Mayor Cox ABSENT: Councihnembers: None ALSO PRESENT: Senior Deputy City Clerk Peoples, Executive Secretary Toledo PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE PUBLIC COMMENTS There were none. CLOSED SESSION Council convened into closed session at 9:38 a.m. 1. PUBLIC EMPLOYEE APPOINTMENT PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(I) Title: City Manager No reportable action was taken on this item. 2. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE 54957.6(a) Unrepresented employee: City Manager This item was not discussed and no action was taken. ADJOURNMENT At 3:20 p.m., Mayor Cox adjourned the Special Meeting to the Regular Meeting on February 6, 2007 at 4:00 p.m. in the Council Chambers. a~ ~.y~ Lori Anne Peoples, MMC, Senior Deputy City Clerk IF -I DRAFT MINUTES OF A SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA February 8, 2007 6:00P.M. A Special Meeting of the City Council of the City of Chula Vista was called to order at 8: 14 p.rn.. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Castaneda, Ramirez, Rindone, and Mayor Cox ABSENT: Councilmembers: McCann ALSO PRESENT: City Attorney Moore, Senior Deputy City Clerk Peoples PUBLIC COMMENTS There were none. CLOSED SESSION Council convened into closed session at 8:30 p.m. 1. PUBLIC EMPLOYEE APPOINTMENT PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1) Title: City Manager No reportable action was taken on this item. 2. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE 54957.6(a) Umepresented employee: City Manager No reportable action was taken on this item. ADJOURNMENT At 10:15 p.m., Mayor Cox adjourned the Special Meeting to the Regular Meeting on February 13, 2007 at 6:00 p.m. in the Council Chambers. ~OOP~i~l~k 11;-1 DRAFT MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA February 13, 2007 6:00P.M. A regular meeting of the City Council of the City ofChula Vista was called to order at 6:01 p.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Castaneda, Ramirez, Rindone, and Mayor Cox ABSENT: Councilmembers: McCann (excused) ALSO PRESENT: Interim City Manager Thomson, City Attorney Moore, City Clerk Bigelow, and Deputy City Clerk Bennett PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE Deputy Mayor Rindone led the pledge in honor of the country's servicemen and servicewomen, who have made a difference. SPECIAL ORDERS OF THE DAY . OATHS OF OFFICE David Turner, Board of Appeals and Advisors Ann Tucker, Commission on Aging Jesse Navarro, Safety Commission City Clerk Bigelow administered the oaths of office to David Turner and Jesse Navarro, and Deputy Mayor Rindone presented them with certificates of appointment. Ms. Tucker was not present at the meeting, as she was administered her oath of office on a prior date. . PRESENTATION OF A PROCLAMATION BY MAYOR COX TO DEBI SCHWARZ, REPRESENTING GOODRICH AEROSTRUCTURES EMPLOYEES, RECOGNIZING THEIR CONTRIBUTIONS TO THE CHULA VISTA CARES PROGRAM Mayor Cox read the proclamation, and Deputy Mayor Rindone presented it to Debi Schwarz. . DID YOU KNOW...THAT THE ENTERPRISE GIS - IS THE INFORMATION HUB FOR OUR CITY? Presented by Tom McDowell, Applications Support Manager, and Bob Blackwelder, Lead Program Analyst Tom McDowell gave a presentation on the Enterprise GIS Information Hub for the City of Chula Vista; and Bob Blackwelder demonstrated the Chula Vista Mapper application. 11-\ -I CONSENT CALENDAR (Items 1 through 3) 1. A. RESOLUTION NO. 2007-040, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING CLOSURE OF THIRD AVENUE FROM "E" STREET TO "G" STREET FOR THE CINCO DE MAYO CELEBRATION ON APRIL 29, 2007 FROM 4:00 A.M. TO 10:00 P.M., WAIVING PROHffiITION ON SIDEWALK SALES, AND WAIVING BUSINESS LICENSE TAXES FOR THIRD AVENUE VILLAGE ASSOCIATION AND VENDORS PARTICIPATING IN THE EVENT 1. B. RESOLUTION NO. 2007-041, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING CLOSURE OF THIRD A VENUE FROM "E" STREET TO "H" STREET FOR THE CHULA VISTA LEMON FESTIVAL ON AUGUST 12,2007 FROM 4:00 A.M. TO 10:00 P.M., WAIVING PROHffiITION ON SIDEWALK SALES, AND WAIVING BUSINESS LICENSE TAXES FOR THIRD AVENUE VILLAGE ASSOCIATION AND VENDORS PARTICIPATING IN THE EVENT 1. C. RESOLUTION NO. 2007-042, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING CLOSURE OF THIRD A VENUE FROM "D" STREET TO "I" STREET AND "H" STREET BETWEEN SECOND AND FOURTH AVENUE, AND PORTIONS OF INTERSECTING STREETS FOR THE ANNUAL STARLIGHT PARADE ON DECEMBER 1, 2007 FROM 1:00 P.M. TO 10:00 P.M., AND WAIVING PROHffiITION ON SIDEWALK SALES, AND WAIVING BUSINESS LICENSE TAXES FOR THIRD AVENUE VILLAGE ASSOCIATION AND VENDORS PARTICIPATING IN THE EVENT 1. D. RESOLUTION NO. 2007-043, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE THIRD A VENUE VILLAGE ASSOCIATION FOR SPECIAL EVENTS FOR 2007 AND AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT The Third Avenue Village Association (TA VA) requested the closures of Third Avenue and other various streets for annual special events in 2007. (Communications Director) Staff recommendation: Council adopt the resolutions. 2. A. ORDINANCE OF THE CITY OF CHULA VISTA ESTABLISHING A FOUR-HOUR PARKING LIMIT ALONG LAZO COURT AND UPDATING SCHEDULE VI OF THE REGISTER MAINTAINED IN THE OFFICE OF THE CITY ENGINEER TO INCLUDE THIS TIME-LIMITED PARKING ZONE (FIRST READING) 2. B. ORDINANCE OF THE CITY OF CHULA VISTA PROHffiITING PARKING ALONG LAZO COURT FROM 2:00 AM TO 6:00 AM AND UPDATING SCHEDULE IV OF THE REGISTER MAINTAINED IN THE OFFICE OF THE CITY ENGINEER TO INCLUDE THIS PARKING RESTRICTION ZONE (FIRST READING) ll-t - 2.. Page 2 - Council Minutes htto://www.chulavistaca.eov February 13, 2007 CONSENT CALENDAR (Continued) Staff received requests to establish time-limited parking zones from business owners concerned with the on-street parking of heavy trucks along Lazo Court. Adoption of the ordinances establishes four-hour parking and the posting of "No Parking 2:00 A.M. to 6:00 A.M." signs along Lazo Court. (City Engineer) Staff recommendation: Council place the ordinances on first reading. 3. A. ORDINANCE OF THE CITY OF CHULA VISTA ESTABLISHING THE SPEED LIMIT ON FIRST AVENUE BETWEEN PALOMAR STREET AND QUINTARD STREET AT 25 MPH (FIRST READING) 3. B. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING THE SPEED LIMIT ON FIRST AVENUE BETWEEN QUINTARD STREET AND THE SOUTHERN TERMINUS OF FIRST AVENUE AT 25 MPH (FIRST READING) Based on provisions of the California Vehicle Code, pursuant to authority under the Chula Vista Municipal Code, and in accordance with speed surveys conducted, a speed limit of 25 mph should be established and posted at these locations. (Engineering Director) Staff recommendation: Council place the ordinances on first reading. ACTION: Councilmember Castaneda moved to approve staffs recommendations and offered the Consent Calendar, headings read, texts waived. Deputy Mayor Rindone seconded the motion, and it carried 4-0. ITEMS REMOVED FROM THE CONSENT CALENDAR There were none. PUBLIC COMMENTS Joaquin Castro spoke with reference to property owned by Sergio Arevalo at 309 V alley Avenue, stating that the City's proposed project to widen Valley Street from 15 to 52 feet to service 11 homes was a misapplication of a City standard. He explained that Mr. Arevalo would face costs of about $35,000 to rebuild a garage on his property, as would other residents in the area who would want to upgrade their homes, due to new property line and setback requirements for the proposed street widening. He stated that staff informed him off the record that this project would not happen. He requested that the proposed project be waived, or alternatively, an alley be constructed if the City needed to beautify the area. Mayor Cox directed Interim City Manager Thomson to refer the concerns to staff and report back to Council on the matter. Sergio Arevalo, 309 V alley Avenue, informed the Council of a petition submitted to the City by affected property owners inquiring about the legitimacy and/or practicality of widening Valley Avenue. \~-3 Page 3 - Council Agenda httv:/ /www.chulavistaca.gov February 13, 2007 PUBLIC COMMENTS (Continued) Laura Hunter, representing the Environmental Health Coalition, said she attended a recent scoping session regarding alternatives to the Sunrise Powerlink. She stated that some of the alternatives discussed would have a heavy reliance on the LS Power proposal and other peakers and projects in Chula Vista. She believed that LS Power had not understood the message from the City about discussions on alternatives. She expressed concern about the window of opportunity for the public to address this matter, which closes on February 24, and she recommended that the Council send its message to the regulators, stating their intentions clearly and formally; take the matter off the table to focus on better alternatives; and get the California Public Utilities Commission process focused on something that is credible. Councihnember Ramirez thanked Ms. Hunter for bringing the matter forward, and expressed the importance of the Council subcommittee taking an official position for the City on the project. Peter Watry gave follow-up comments on discussions at last week's Chula Vista Redevelopment Corporation meeting, commenting that he believed that market conditions were what drove development. He also believed that Chula Vista's balanced growth between public and private facilities was largely due to threshold standards and growth managernent policies, and he was hopeful that the Council subcommittee would support balanced growth for the City. PUBLIC HEARINGS 4. PUBLIC HEARING TO CONSIDER THE ADOPTION OF AN ORDINANCE AMENDING ORDINANCE NO. 2892 RELATING TO PEDESTRIAN BRIDGE DEVELOPMENT IMPACT FEE AND AREA OF BENEFIT FOR OTAY RANCH VILLAGES ONE, FIVE, AND SIX TO INCLUDE VILLAGE TWO Adoption of the resolution accepts a report recommending an update to the Pedestrian Bridge Development Impact Fee, and adoption of the ordinance amends Pedestrian Bridge Ordinance No. 2892 to include Village Two to pay for its fair share of bridge improvements. The fee is payable at issuance of building permits. (Engineering Director) Notice of the hearing was given in accordance with legal requirements, and the hearing was held on the date and at the time specified in the notice. Mayor Cox opened the public hearing. There being no members of the public who wished to speak, Mayor Cox closed the public hearing. Deputy Mayor Rindone directed staff to provide an information memorandum to Council as to the timeline for the completion of the two bridges proposed for the eastern urban areas. ACTION: Councilmember Castaneda moved to adopt Resolution No. 2007-044 and place the ordinance on first reading, headings read, texts waived: PUBLIC HEARINGS (Continued) l\-\ -4 Page 4 - Council Minutes htto:/ /www.chulavistaca.l!OV February 13, 2007 A. RESOLUTION NO. 2007-044, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING A REPORT PREPARED BY DEVELOPMENT PLANNING AND FINANCING GROUP RECOMMENDING AN UPDATE OF THE EXISTING PEDESTRIAN BRIDGE DEVELOPMENT IMPACT FEE AND AREA OF BENEFIT FOR OTAY RANCH VILLAGES ONE, FNE, AND SIX TO INCLUDE VILLAGE TWO B. ORDINANCE OF THE CITY OF CHULA VISTA AMENDING ORDINANCE NO. 2892 RELATING TO PEDESTRIAN BRIDGE DEVELOPMENT IMPACT FEE AND AREA OF BENEFIT FOR OTAY RANCH VILLAGES ONE, FNE, AND SIX TO INCLUDE VILLAGE TWO TO PAY FOR PEDESTRIAN BRIDGE IMPROVEMENTS AS A CONDITION OF ISSUANCE OF BUILDING PERMITS (FIRST READING) Deputy Mayor Rindone seconded the motion and it carried 4-0. OTHER BUSINESS 5. CITY MANAGER'S REPORTS Interim City Manager Thomson provided an update on Deputy Mayor Rindone's referral regarding police response times as they pertained to People's Chevrolet. He stated that the Police Department had been in touch with People's Chevrolet, and the issue was not so much about response times as it was situations of fraudulent vehicle purchases and false credit application information. He stated that the Police Department was working with the District Attorney's office to ascertain whether the matter was civil or criminal, and would follow up with an informational memorandum to Council. 6. MAYOR'S REPORTS Mayor Cox spoke about her recent interview on a news show that included a question about what the City was going to do about the bayfront power plant. She stated that once the RMR (Reliability Must Run) was removed from the power plant or resource advocacy was determined, the plant would come down. In order to make her position positively clear, she stated that at the power plant subcommittee meeting on February 14, 2007, she would be recommending that the lease currently held by LS Power not be renewed and that the City's representative on the Port Commission be asked to take the matter back to the Port Commission, with the knowledge that the recommendation from the subcommittee might well be to dedicate the City's efforts to the decommissioning and demolition of the existing power plant and to then cooperate with the various agencies in finding a power plant off the bayfront. \~-S Page 5 - Council Agenda htto://www.chulavistaca.!<ov February 13, 2007 7. COUNCIL COMMENTS CounciImember Castaneda stated that once the subcommittee has met, it would be his intention to get formal action by the Council on the City's position on the lease agreement. He then thanked City staff, particularly the Recreation and Public Works Departments, who worked collaboratively with volunteer surgeons representing the American Academy of Orthopedic Surgeons to build an accessible playground facility at Eucalyptus Park with funding from the Kaboom grant program. Mayor Cox recognized Council Aide Wagner for her participation in the Eucalyptus Park event. Mayor Cox added that each year, the American Academy of Orthopedic Surgeons dedicates one day of its convention to build a park in a community. Deputy Mayor Rindone asked staff to monitor the numerous potholes resulting from the recent rains, particularly on E Street from Third Avenue to Love's Restaurant. He believed there were paving defects in that area. Deputy Mayor Rindone also said he would express his views on the power plant at the upcoming workshop. CounciImember Ramirez stated that the City Manager deliberation process should be a more public process to assist the Council move in a direction that ensures the best possible outcome for the City. He then complimented Mayor Cox on her one-on-one meetings with various community leaders and Councilmembers to provide them the opportunity to address issues and for her to get to know the community. CLOSED SESSION 8. CONFERENCE WITH LEGAL COUNSEL--ANTICIPATED LITIGATION SIGNIFICANT EXPOSURE TO LITIGATION PURSUANT TO SUBDIVISION (b) OF GOVERNMENT CODE SECTION 54956.9 . Three cases No reportable action was taken on these items. 9. CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a) · Get Outdoors II, L.L.C. v. City of Chula Vista (Ninth Circuit Court of Appeals No. 05-56696) No reportable action was taken on this item. ADJOURNMENT At 8:55 p.m., Mayor Cox adjourned the meeting to the regular meeting of February 20, 2007 at 6:00 p.m. in the Council Chambers. ~w~~ Susan Bigelow, MMC, City Clerk \H-l.p Page 6 - Council Minutes htto:/ /www.chulavistaca.aov February 13, 2007 DRAFT MINUTES OF A SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA February 13,2007 6:00 p.m. A Special Meeting of the City Council of the City of Chula Vista was called to order at 7:02 p.m., in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Councilmembers: Castaneda, Ramirez, Rindone, and Mayor Cox ABSENT: Councilmembers: McCann (excused) CLOSED SESSION Mayor Cox announced that in the absence of Councilmember McCann, the following items would be postponed to the Council Closed Session Meeting of February 20, 2007. These items were not discussed and no action was taken. 1. PUBLIC EMPLOYEE APPOINTMENT PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1) Title: City Manager 2. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE 54957.6(a) Unrepresented employee: City Manager ADJOURNMENT At 7:02 p.m., Mayor Cox adjourned the meeting to the Regular Meeting on February 20,2007 at 6:00 p.m. in the Council Chambers. - ~"4a..(...o - Susan Bigelow, MMC, \T-I Page 1 of 1 Lori Peoples From: Lorraine Bennett Sent: Tuesday, February 27, 2007 11 :43 AM To: Lori Peoples Subject: FW: Veterans Advisory Commission - COMMISSION RESIGNATION -----Original Message----- From: Jennifer Quijano Sent: Tuesday, February 27, 2007 11:35 AM To: Lorraine Bennett Cc: 'Price, Bobby R.' Subject: FW: Veterans Advisory Commission - COMMISSION RESIGNATION Lorraine, As discussed, please see the below email from Sherry Strothers advising of her resignation effective immediately from the Veterans Advisory Commission. Sherry is no longer a resident of Chula Vista and is an active duty Warrant Officer who is moving to Norfolk, VA. Please place the resignation on the agenda at the March 6 Council meeting for ratification and upon approval, please post the vacancy and let me know so I can move forward with interviews to fill the vacancy. If you have any questions, please let me know. Respectfully, Jennifer Quijano Constituent Services Manager Office of the Mayor City of Chula Vista, CA (619) 691-5044 From: Sherry [mailto:sdstrothers@yahoo.com] Sent: Monday, February 26, 2007 10:26 PM To: Jennifer Quijano Subject: COMMISSION RESIGNATION Hello, My name is Sherry Strothers, I was a member of the Chula Vista's Veteran Commission. Is this e-mail sufficient enough to resign my commission? If not, please advice me on the proper procedure. Sincerely, Sherry Strothers 2-A 2/27/2007 CITY COUNCIL AGENDA STATEMENT ~\'f::.. CIIT OF -lftj CHULA VISTA ITEM TITLE: SUBMITTED BY: REVIEWED BY: 03/06/07 Item-L REPORT ON THE APPLICATION FOR THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 141 (OT A Y RANCH VILLAGE TWO) RESOLUTION APPROVING THE INITIATION OF PROCEEDINGS TO CONSIDER THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 141 (OTAY RANCH VILLAGE TWO) FOR THE OTAY PROJECT L.P. AND APPROVING THE FORM OF A REIMBURSEMENT AGREEMENT. CITY ENGINEER c:::;:. ,.--- ~ INTERIM CITY MANAGER ,I 4/5THS VOTE: YES NO X BACKGROUND In compliance with Council Policy, Otay Project, L.P. ("Otay"), has submitted an application for establishing Community Facilities District No. 141 (Otay Ranch Village Two) ("CFD 141") to fund the acquisition or construction of certain public improvements serving the City of Chula Vista and development improvements serving the Otay Project, L.P. properties within Village Two of the Otay Ranch in the amount of approximately $127 million. This amount may change as a result of detailed analyses to be performed during district formation. Staff has reviewed the Application and determined that the financial information provided is preliminary and general in nature and that a complete analysis on the financial feasibility of the project cannot be made at this time. Staff believes that adequate information and analysis will be generated during district formation and prior to the issuance of bonds for evaluating the developer's financial ability to bring the project to completion in compliance with City's criteria. Therefore, staff is recommending that Council accept the report and initiate the formal proceedings for the proposed CFD 141. Tonight, Council will consider authorizing the initiation of the formation proceedings for this CFD 141 and providing direction to City staff to proceed with the formation requirements, boundaries and other pertinent elements. 3-1 03/06/07, Item~ Page 2 of7 ENVIRONMENTAL REVIEW The Environmental Review Coordinator 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 creation of government funding mechanism is not considered a project; therefore, pursuant to Section l5060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION It is recommended that Council: 1) Accept the report on the Application for the formation ofCFD 141; and 2) Adopt the resolution initiating proceedings for the formation of CFD14I and approving the form of a Community Facilities District Reimbursement Agreement. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The "Mello-Roos Community Facilities Act of 1982" (the "Mello-Roos Act") allows for the creation of Community Facilities Districts (CFD) and the issuance of bonds to provide for financing the construction and/or acquisition of public facilities needed for the City or development. In addition, a CFD may also finance a broad range of services, including fue, flood control maintenance, landscaping, library, open-space facilities, parks, parkways, recreational services and school facilities maintenance. Any public facilities, which the City may own, operate or contribute money to, and which have a useful life of five or more years, are eligible to be financed through a CFD. Debt service on the bonds issued to finance such improvements are secured through the imposition of a Special Tax (explicitly not ad valorem) on properties solely within the CFD. The special tax is collected with the property taxes. There is no direct cost to the City. Expenses related to the ongoing CFD administration (including levying and collecting the special taxes) are also to be funded from the proceeds of the special taxes levied by the CFD. The ultimate security behind the bonds would be the properties located within the CFD, not the City's General Fund or its ability to tax other property within its jurisdiction. Council has previously approved agreements with the financing team to be utilized in the processing of this type of Community Facilities District. Agreements are with the professional consulting teams of McGill Martin Self, Inc. (Special Tax Consultant and Project Management), Best Best & Krieger LLP (Bond Counsel), Stone & Youngberg 3-2 03/06/07, Item~ Page 3 of7 LLC (Underwriters) and Fieldman, Rolapp, & Associates (Financial Advisor) to provide services to the City related to infrastructure financing. In addition, Council has approved Bruce Hull & Associates (Appraiser) and The Sullivan Group (Market Absorption) as support to the financing team. The selection of the consultant team and their proposed fees are comparable to those charged for existing financing districts and will have no direct impact on the General Fund or the City, but will be funded by the developer and/or property owners in proportion to the relative benefits received from the improvements being financed. The agreements are substantially in the form of the City's standard two-party agreement and have been reviewed and approved by the City Attorney as to form. Approval of the accompanying resolution will start the formation process and set in motion the required steps and schedules necessary to form CFD 141 and to authorize the levy of special taxes within CFD 141 and to incur a bonded indebtedness of CFD 141 payable from the proceeds of such special taxes. It is anticipated that if CFD 141 is formed, such bonds will be issued in late 2007. Upon approval oftonight's actions, City staff will begin discussion with the developers to enter into an agreement entitled "AcquisitionlFinancing Agreement" to establish, among other things, the public facilities authorized to be financed by CFD 141 and the terms and conditions pursuant to which the authorized facilities will be constructed and acquired and bonds for CFD 141 will be issued. This agreement will lay the groundwork to which Otay will agree to undertake the design and construction of certain transportation and development improvements. It also specifies what the responsibilities and cost sharing obligations of Otay will be for constructing those improvements. Procedure for formation of Communitv Facilities District No. CFD 141 Following are the key actions that Council would take during the proceedings for CFD 141: 1. Approval of the report on the Application and initiation of proceedings for formation of the proposed CFD and approval of a Reimbursement Agreement with Otay to require that Otay advance funds to the City to pay for all costs incurred by the City in undertaking the proceedings to form CFD 141 and issuing bonds ofCFD 141. Adopting the boundaries of the CFD. 2. Approval of Resolution ofIntention (ROI) to establish the CFD 141. 3. Ordering the preparation of the Special Tax Report. 4. Holding public hearings, voter's election, and levy of the special taxes. 5. Bond sale and issuance. Description of the proposed CFD 141 Exhibit I presents the boundaries of the proposed CFD141, which includes parcels located within Otay Ranch Village Two (844.6 gross acres). At build out there will be 3-3 03/06/07, Item~ Page 4 of7 2,639 residential units, 147 mixed-use units and 11.9 acres for commercial development in Village Two. The special tax allocations proposed by Otay to be levied by CFD 141 appear to be below the "2% maximum tax" criteria established by Council Policy. Otay is proposing CFD financing of the following improvements: . Heritage Road-Olympic Parkway to Main Street . PFDIF Facilities- Including Rancho Del Rey Library and Civic Center Renovation Phase III . Pedestrian Bridges . Backbone StreetslUtilities/Bus Shelters . Traffic Signals . Slope Landscaping . Public Landscaping Corridor . Rock Mountain Road/Main Street (partial) . Environmental Mitigation . Waterlines-Non CIP . Open Space Preserve Land . Community Park Improvements . Town Square . Town Center Drive (Otay portion of the cost) Inclusion of waterlines which would be owned by the Otay Water District (the "Water District") is possible only with the consent and agreement of the Water District. In addition to the above improvements, this CFD's bonding capacity may be used to finance the acquisition or construction of facilities within the greater eastern territories of Chula Vista, which are authorized to be financed from the City's Development Impact Fees imposed upon the development of Village Two. The construction cost of the developer improvements is estimated at approximately $127 million, which would be financed by CFD 141. Based on the actual interest rate and final value to lien ratio, the bond sale amount could be increased substantially. Report on the Application for CFD 141 In a previous action, Council adopted "The City of Chula Vista Statement of Goals and Policies Regarding The Establishment of Community Facilities Districts" ("CFD Policy"). The CFD Policy provides guidelines for the use of CFDs for financing the construction or acquisition of public infrastructure or the provision of authorized public services to benefit and serve existing or new development in the City. Prior to Council initiating any formal proceedings for formation of the CFD, the developer is required to 3-4 03/06/07, Item~ Page 5 of7 submit an "Application", which would include all the necessary information (business plan, percent of ownership requesting the CFD, etc.) demonstrating the applicant's financial ability to carry the project. The Application shall be reviewed by a committee (the "Review Committee") composed of the City Manager, City Attorney, Director of General Services, City Engineer, Planning Director, Finance Director and such additional persons as the City Manager deems necessary. Otay representatives, staff, and consultants met several times to discuss the processing, to clarify the intent of the Council policy, determine the format of the Application, and identify the required financial information. The Application was submitted on October 31,2006, (See Exhibit 2). The Review Committee met on January 17,2007 to review the content of the Application and determine the applicant's financial ability to successfully construct the project and pay the special taxes during build out. The committee has concluded that 1) the information provided is preliminary and general in nature, 2) the developer's business plan, appears to be consistent with the current conditions of the real estate market, and 3) compliance with CFD Policy can not be confirmed until various documents such as appraisal, market absorption study, Special Tax Report, and Preliminary Official Statement are complete. These documents will be prepared during the district proceedings and brought to Council for consideration prior to bond sale. The report with findings and recommendation on the Application is presented in Exhibit 3. In essence, the Review Committee recommends that Council approve proceeding with the formation of CFD 141. Extensive due diligence will be required as the district proceeds to ensure compliance with the CFD Policy. Discussion ofKev Policv Issues During the proceedings, several analyses will be performed to ensure that the proposed CFD conforms to the requirements of the Mello-Roos Act and the CFD Policy. Following is a brief discussion on how some key policy issues will be addressed during the proceedings: 1. Proposed Improvements: The majority of the improvements which Otay has requested to be financed through CFD 14 I are backbone streets and associated improvements (Le., sewer, surface improvements, storm drain, landscaping, dry utilities) providing local or regional benefit. Staff believes that all these improvements meet the requirements of the CFD Policy. Certain other improvements, e.g., the acquisition of open space preserve land, community park improvements and the town square are not expressly included among the improvements authorized by the CFD Policy to be fmanced through a CFD. The CFD Policy does, however, allow the financing of "other improvements as may be authorized by law and which the City Council determines are consistent with" the CFD Policies. If the City Council determines that fmancing these improvements would be appropriate the City Council may either categorize these improvements as other improvements consistent with the CFD Policies or amend the CFD Policies to include these types of improvements. 3-5 03/06/07, Item~ Page 6 of7 A final recommendation on the improvements to be fmanced by the proposed CFD will be brought later to Council in conjunction with the AcquisitionlFinancing Agreement. 2. Value to Lien Ratio: The CFD Policy requires a minimum 4:1 value-to-lien ratio. A ratio of less than 4:1, but equal to or greater than 3:1, may be approved, in the sole discretion of Council, when it is determined that a ratio of less than 4:1 is financially prudent under the circumstances of a particular CFD. The appraisal and value to lien ratio analysis will be available for Council consideration prior to bond sale, which is planned for late 2007. If the final analysis shows parcels which fail to meet the 4:1 ratio, the developer would be required to either provide cash or letters of credit to maintain the value to lien ratio consistent with the CFD Policy, the principal amount of the bonds to be issued for CFD 141 will be reduced to comply with City policy or the developer would be required to provide sufficient information to convince Council that a lesser lien ratio is prudent. 3. Maximum Tax: Council Policy establishes that the maximum annual CFD special taxes applicable to any newly developed residential property shall be no more than I % of the sale price of the house. In addition, the aggregate of all annual taxes and assessments is limited to 2% of the sale price of the house. A preliminary calculation of the maximum tax, using estimated house prices, will be available for Council consideration at the Public Hearing. A fmal test will be performed at escrow closing using the actual sale price of the house. Council Policy requires that at or prior to each closing of escrow, the escrow company shall apply a "calculation formula" previously approved by the City Engineer to determine the aggregate of regular County taxes, CFD taxes, and assessment installments (the "Aggregate Tax Burden"). If the 2% limit were exceeded, the developer would be required to provide cash to buy down the Aggregate Tax Burden to an amount sufficient to meet the 2% ceiling. Compliance with this procedure would ensure that the aggregate tax to be paid by the purchaser of the house meets the CFD Policy criteria. Currently, the developer anticipates that this CFD will be in the range of 2%. Finally, it should be mentioned that the use of CFDs for public financing, like many other financial decisions, involves a calculated risk and nothing can completely insulate the City from the possibility of future problems. Future owners of the property may express displeasure with paying the special tax; a downturn in the real estate market may cause delinquencies. Indeed, even the master developer or merchant builders may become delinquent when the project is no longer economically feasible. Nevertheless, staff believes that strict adherence to the CFD Policy together with extensive scrutiny by the financing team would minimize the occurrence and consequences of any potential problems. 3-6 03/06/07, ItemL Page 7 of7 DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 50.0 feet of the boundaries of the property, which is the subject of this action. FISCAL IMPACT The developer will pay all costs and has deposited money to fund initial consultant and City staff costs in accordance with the proposed Reimbursement Agreement (Exhibit 4). Such monies are eligible for reimbursement upon a successful sale of bonds. The City will recover the full cost of staff time expended in district formation and administration activities (estimated at $60,000). ATTACHMENTS Exhibits: I. Proposed Boundary Exhibit 2. Application, dated October 31, 2006 3. Review Committee Report 4. Reimbursement Agreement Prepared by: Boushra Salem, Senior Civil Engineer, Engineering Department J:\EngineerlLANDDEV\ProjectsIOtay Ranch Village 2\CFD\CFD~14I\CASfor application report. doc 3-7 RESOLUTION NO. 2007- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, APPROVING THE INITIATION OF PROCEEDINGS TO CONSIDER THE FORMATION OF PROPOSED COMMUNITY FACILITIES DISTRICT NO. 14 I (OTA Y RANCH - VILLAGE TWO) FOR VILLAGE TWO OF THE OTAY RANCH AND APPROVING THE FORM OF A REIMBURSEMENT AGREEMENT WHEREAS, the CITY OF CHULA VISTA, CALIFORNIA, has been presented with and has received an application from Otay Project, L.P. (the "Applicant"), requesting that this City Council initiate proceedings pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Government Code Section 53311 and following)(the "Act") to form a community facilities district preliminarily designated as Community Facilities District No. 141 (Otay Ranch Village Two) (the "District") for the purpose of financing all or a portion ofthe cost of the acquisition of certain public facilities necessary to serve proposed development within the District; and WHEREAS, the Applicant has requested that the District encompass that territory within Village Two of the Otay Ranch owned by and to be developed by affiliates of the Applicant; and WHEREAS, such application has, as required by the City ofChula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities District (the "Goals and Policies") previously adopted by this City Council, been reviewed by the community facilities district application review committee (the "Review Committee") designated in such Goals and Policies; and WHEREAS, based upon such review and pursuant to the Goals and Policies, the City Manager has recommended that this City Council accept the report of the Review Committee and authorize the initiation of proceedings to consider the formation ofthe District subject to subsequent compliance of the proposed District with the Goals and Policies, including without limitation, the improvements proposed to be financed through the District, the financial feasibility of the District and the development of the property within the District; and WHEREAS, the form of a Community Facilities Reimbursement Agreement pursuant to which the Applicant has agreed to advance funds to the City to pay for all costs incurred by the City in undertaking the proceedings to consider the formation ofthe District and the issuance of Bond by the District has been presented to this City Council for its consideration. NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: SECTION I. The above recitals are all true and correct. SECTION 2. This City Council hereby accepts the report of the Review Committee. 3-8 Resolution No. 2007- Page 2 SECTION 3. This City Council hereby authorizes the initiation of proceedings to consider the formation ofthe District as requested by the Applicant subject to all requirements of the Act and the Goals and Policies. The decision of this City Council to form the District is an exercise of the legislative authority of this City Council. The adoption ofthis Resolution does not, therefore, obligate this City Council to exercise its legislative discretion in a particular manner. This Resolution does not in any way create a contractual, legal or equitable obligation of or commitment by this City Council to approve the formation of the District. This City Council expressly reserves the right to abandon the proceedings to consider the formation of the District for any reason at any time prior to the completion thereof. SECTION 4. The form of the Reimbursement Agreement by and between the City and Otay Project, L.P. is hereby approved. The City Manager or the Assistant City Manager is hereby authorized to execute such agreement for and on behalf of the City with such changes thereto as such officer, following consultation with the City Attorney and Best Best & Krieger LLP, deem to be in the best interests ofthe City. SECTION 5. This Resolution shall become effective upon its adoption. Presented by Approved as to form by Scott Tulloch City Engineer H:\ENGINEER\RESOS\Resos2007\03-06~07\Resolution Initiating Proceedings to Fonn CFD 14I.DOC 2 3-9 . - - . - I-- ~ I - CD 50 ! ~~ - Bf :J: ~ )( W ~l. i " i v, J 1'1 I." 1'i!I' 011;1' I 111111 I --' \ , " , , V " " // " Y 1/: (B/ , , -~ 'J""" "\ /,' ( c.2l I II ! . ,I /i " N · ~dm!l;m, , 1/ ';" ~ !mmmm~ i,,/I,' ,'''' ...J "~d~..~u.n. II : : I ==, ."m,',.,..! /' " y > ~ ~~.;;a~.~;~'.'-'- I I -- -~. , ;"ai...:a..;: ,J I:I::: I (I' i u;' i __~, // ~ 'I uun"'u~u. -~ >-01 ~ ~ :m;:!hm:~ :m!~.;!.~n I o ~ :=cc:= ~== i i \l I \ \ , \ nun!! i! II II m ! I. ... . ""il '" . , =';1 :I III ill .~.:~ iliilii!l - !I; .. I lllL I.. !!!l!!l sms HI I . . Iii - .. ~, ;;Inn i ...... III , -. SUUI ~ihi ! IlII1l1U :xlo:;!::- ~~ I~ di" !n!~~~~!ml ~ EXHIBIT "2" li~li I~I v-- .Jf'. "<l I .............:-~-~--~. NDV - 7 ZDD5 THE OTAY RANCH COMPANY October 31, 2006 Mr. Jim Thomson Interim City Manager CITY OF CHULA VISTA 276 Fourth Avenue Chula Vista, California 91910 Re: City of Chula Vista Community F acUities District Application for Otay Ranch V2 CFD \ 4r Dear Mr. Thomson Attached you will find Otay Project, L.P. 's Application for the Establishment of a Community Facilities District ("CFD") for Village 2 of Otay Ranch. Please consider this our formal request to the City of Chula Vista to initiate the process to form a CFD pursuant to the City's "Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts". A list offacilities proposed to be financed through the District is included in Exhibit "I" of the Application. We have retained the services of Development Planning and Finance to perform preliminary research and analysis to determine bonding capacity, prepare a financing plan and assist in preparation of CFD formation documents. If you have any questions, please do not hesitate to contact me. Sincerely, THE OTAY RANCH COMPANY M~~ ~~ Public Finance Manager ent Executive Vice President Attachment cc: Ms. Boushra Salem, The City of Chula Vista Mr. Sylvester Evetovich, The City of Chula Vista Mr. Ronald P. Therrien, The Otay Ranch Company Mr. Ken Lipinski, The Otay Ranch Company Mr. Curt Smith, The Otay Ranch Company Mr. Peter Piller, Development Planning & Finance Ms. Eva Torre, Development Planning & Finance 610 W. ASH STREET, SUITE 1500, SAN DIEGO, CA 92101 . PH: (619) 234-4050 . FX: (619) 234~40aa . WWW.OTAYRANCH.COM 3-11 CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT APPLICATION REVIEW COMMITTEE APPLICATION FOR EST ABLISBMENT OF COMMUNITY FACILITIES DISTRICT OWNERSIDP Name ofJandowner: Otay Project, L.P. and various builder entities as noted in Exhibit "E". Please describe the ownership structure of the landowner (Le., individuals, family trust, partnership, corporation, etc.). Please include resumes of key individuals responsible for making decisions for landowner. Please include copies of partnership agreements, articles of incorporation and bylaws, family trusts, etc. See Exhibit "A", "B" and "C". If the landowner is not the current owner of the property, please provide evidence satisfactory to the City Manager that the landowner represents or has the consent of the owners not less than 67%, by area, of the property proposed to be subject to the levy of the special tax. See Exhibit "D". PROPERTY INFORMATION List the following regarding the property to be included within the proposed Community Facilities District: Number of gross acres: Otay Ranch Village Two - approximately 622.20 acres, excluding the industrial portion ofthe project. Number of gross acres owned by the landowner: See Exhibit "E". Number of gross acres owner by others: For each parcel within the boundaries of the proposed Community Facilities District which is owned by an entity other than the landowner, provide the following information: The name(s), addressees), telephone number(s) and contact(s) for each such owner. See Exhibit "E". The number of gross acres owned by each such owner. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 1 3-12 See Exhibit "E". The Assessor's Parcel Numbers for each such parcel. See Exhibit "E". Number of acres proposed for development: See Exhibit "Q". Number of acres developed to date, if any: None. List the Assessor's Parcel Numbers for the property: See Exhibit "E". How long have you owned the property? See Exhibit "E". What was the purchase price you paid for the property? See Exhibit "E". Have you entered into any option or other form of agreement to sell all or a portion of the property? YES X NO. If YES, please describe arrangement and attach copies of any agreements describing arrangement. Descnbe the existing land use of the property: The majority of the land is farm land; however, a portion of the land has been used as a temporary off road racing site. Is the property proposed for residential development, commercial development, or both? RESIDENTIAL COMMERCIAL X BOTH. Please state the estimated total number of any residential units proposed and the estimated total square footage of commercial development proposed. Single Family and Multi-Family Residential Units - 2,725 units. Mixed Use - 60 units. Commercial- 12.5 acres. Future Annexable Area - 52 units. See Exhibit "Q". Please attach a copy of a business plan for the development proposed on the property? See Exhibit "F". To be provided. G:IGdrive docs\M:oralCFDlVilIage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 2 3-13 Do you intend to develop the property yourself? X YES NO. If YES, describe the expected timing for development of the property. If available, please list projected sales by year, listing commercial and residential development separately. See Exhibits "F and G". What is the status of land use approvals, subdivision maps and environmental review for the development of the property (i.e., describe the current zoning and the status of any Development Agreements, Specific Plans, tentative maps or final maps for the property)? See Exhibit "H". List improvements proposed to be financed through the Community Facilities District and their estimated cost. List the public agency that will own, operate and maintain the improvements when completed. See Exhibit "I". Are any public services to be financed through the proposed Community Facilities District? If so, list those services. See Exhibit "I". Have any environmental studies or reports been prepared for the property? X YES NO. If YES, list those reports. See Exhibit "H". Are any impact fees owed to the City as a condition to develop the property? X YES NO. If YES, please describe the type of impact fees, amount ofthe fees and when fees must be paid. Condition of Map Approval- PAD Fee, Drainage Fees. Building Permit Fees to include - TDIF, PFDIF, Traffic Signal Fees, Pedestrian Bridge Fees, Sewer Fees. Are there any endangered species habitats on the property? X YES NO. If YES, please identify the endangered species, describe the location of their habitat(s) on the property and describe any mitigation measures which must be completed as a precondition to the subdivision or development of the property. See Exhibit "J". Are there any legal impediments to the planned development of the property? If so, please describe the nature of the legal impediment(s) and how such impediments will impact the planned development of the property. None. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revIsed.doc Page 3 3-14 Is any development currently underway on the property? If YES, please give a general description. X YES NO. Earthwork operations are well nnderway on the eastern residential parcels. Underground utilities will commence in late 2006 in this area. Grading for Heritage Road will commence in 4th quarter of 2006. Grading of other residential development areas will start in November which will be followed by infrastructure construction. What are your long term plans for the property; i.e., sale of raw land, sales of improved parcels to merchant builders, sale of product to end users, long term hold, etc? Developable acreage was sold to Affiliate Builders. The AffIliate Builders will build and sell the product to end users. Besides Community Facilities District financed improvements, what public and private improvements are necessary to develop the property and how are they proposed to be financed? Intract roads, utilities and public parks will be developed within the property. Improvements will be owner financed or financed with revolving development loans. Public schools constructed within the property will be financed by the school district's CFD 17. Please attach the most recent copy of your financial statements, including audited statements, if available. If you are a publicly held company, please list the date of your last IOQ or IOK filing and enclose a copy of your most recent Annual Report. See Exhibit "K". To be provided. Include at least one reference from a bank or financial institution, including name, address and telephone number. First Bank & Trust - 4301 MacArthur Blvd., 2"d Floor, Newport Beach, CA 92660 (949) 475-6315, Acct. Rep. Brian 0' Conner. Are there any existing trust deeds/loans on the property? Please state the name, address and telephone number of the lending institution and the approximate loan amount. See Exhibit "L". Has construction financing for any of the proposed development, been obtained? YES NO. If YES, please describe the source and amount of such loan. See Exhibit "L". What is the current status of property taxes, special taxes and assessments on the property? X PAID DELINQUENT. Have any property taxes or assessments on the property been delinquent at any time during the past 3 years? If YES, please explain. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 4 3-15 There have been no delinquencies in the past 3 years. All of the parcels are paid current. See Exhibit "M". Is the landowner, any subsidiary entity or affiliated or related entity of the landowner currently delinquent or has the landowner or any subsidiary entity or affiliated entity of the landowner in the last five (5) years been delinquent in the payment of any property taxes, special taxes or assessments on property owned outside of the proposed boundaries of the Community Facilities District? YES X NO. If YES, please identify the entity which is delinquent in such payments, the nature of such entity if the entity is not the landowner and its relationship to the landowner, the jurisdiction in which the delinquent property is located, the amount of the delinquency, the duration of the delinquency and any legal actions which have been initiated by or on behalf of the jurisdiction to recover the delinquency. Is the landowner (or any subsidiary entity or affiliated or related entity of the landowner) now delinquent or in default on any loans, lines of credit or other obligation related to the property or other development projects? YES X NO. Has the landowner (or any subsidiary entity or affiliated or related entity of the landowner) been in default on any loans, lines of credit or other obligation in the past two years related to the property or other development projects? YES X NO. If YES, please explain. Has the landowner or any subsidiary entity or affiliated or related entity of the landowner ever filed for bankruptcy or been declared bankrupt? X YES NO If YES, specify entity which filed or bankruptcy or has been declared bankrupt, the date and location of court where bankruptcy action took place, the case title and the status of the bankruptcy proceedings: See Exhibit "N". The filing date was 7/15/95 in US Bankruptcy Court, Central District of California, Northern Division. Has any claim been made or suit been filed, or is any claim or suit now threatened against the landowner with respect to the proposed development of the property? YES X NO If YES, please attach a copy of the complaint, or if unavailable, please list the court in which the action is pending and the case number and summarize the current status of the litigation, or if the claim or action has not yet been filed please attach any documents summarizing the claim or action: Are there any other foreseeable circumstances not described above that could prevent or significantly delay the proposed development of the property or adversely impact the ability of the landowner to pay the anticipated special taxes to be levied on the property owned by the landowner during the development of the property? YES X NO. If YES, please explain... Please attach a copy of your most recent preliminary title report for the property. See Exhibit "0". G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 5 3-16 Please attach a copy of the most recent tax bill(s) for the property and evidence that current installments due have been paid. The tax bill will also be reviewed to determine overlapping tax total. See Exhibit "M". Have you provided a deposit to the City to pay organizational and formation costs? No. RELATED PROJECT INFORMATION Has an absorption study been done for the proposed development of the property within the last two years? If so, please provide a copy. No. Has an appraisal been done for the property within the last two years? If so, please provide a copy. Ifnot, please provide current year assessed values for all parcels. See Exhibit "P". To be provided. EXPERIENCE OF LANDOWNER GROUP Describe the development experience of the landowner. Briefly describe any current or recently completed developments undertaken by the landowner. See Attached Marketing Brochure on Otay Ranch. Please provide corporate literature and sales brochures, if available. See Attached Marketing Brochnre on Otay Ranch. PAYMENT OF TAXES/ASSESSMENTS. Describe the source of funds that you will use to pay special taxes to be levied on your property in connection with the Community Facilities District (i.e., bank savings, land .sale proceeds, loan proceeds, etc.). Land Sale Proceeds. Do you foresee any difficulty in your ability to make timely payment of the special taxes to be imposed? YES X NO. If YES, please explain. G:\Gdrive docslMora\CFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 6 3-17 If we have additional questions regarding your property, who is the appropriate person to contact? Name: Title: Address: Phone Number: Name: Title: Address: Phone Number: Mr. Kent Aden Executive Vice President Otay Proj ect, L.P. 610 West Ash Street, Suite 1500 San Diego, CA 92101 (619) 234-4050, Ext. 112 Ms. Mora de Murguia Public Finance Manager OTAYPROJECT, L.P. 610 West Ash Street, Suite 1500 San Diego, CA 92101 (619) 234-4050, Ext. 105 PLEASE RETURN THE COMPLETED FORM AND ATTACHMENTS TO: Mr. Jim Thomson Interim City Manager CITY OF CHULA VISTA 276 Fourth Avenue Chula Vista, California 91910 Ms. Boushra Salem Senior Civil Engineer CITY OF CHULA VISTA 276 Fourth Avenue Chula Vista, California 91910 Mr. Sylvester Evetovich Principal Civil Engineer CITY OF CHULA VISTA 276 Fourth Avenue Chula Vista, California 91910 G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 7 3-18 The undersjgned hereby certifies that the foregoing information is true and correct as of the da.te set forth below, LAl'<'DOWNER: Date: By: OTAYPROJECTL.P" a Califomla limited partnership By: OT A Y PROJECT, LLC, a California limited liability company, General Parmer By: OT A Y RANCH DEVELOPMENT, LLC a Delaware limited liability company, its managing member By: Ki By: {;! Ronald p, Therrien , G:IGdrive docslMoralCFDlVilIage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 8 3-19 NOTICE REGARDING DISCLOSURE. The Securities and Exchange Commission recently adopted amendments (the "Amendments") to Rule 15c2-12 under the Securities Exchange Act of 1934 relating to certain required disclosure information that must be made available to prospective purchasers of municipal bonds. Under the Amendments and other federal and state securities laws, certain material information must be disclosed (i) in connection with the initial offering of bonds with respect to "material persons"; and (ii) on an ongoing basis with respect to "obligated persons." Whether a property owner/developer might be a material person or an obligated person will depend on all of the facts and circumstances. If the information you provide in response to this questionnaire indicates this might be the case, the financing team will review with you the information that may need to be disclosed to potential Bond investors in order to satisfy the Amendments and other federal and state securities laws. If information on the proposed development of your property is disclosed in connection with the sale of the Bonds, you will be required to certify at that time that the information is true and correct and does not omit to state any material fact. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 9 3-20 EXHIBIT "A" Ownership and Structure of Landowner The primary business of the company is to own, develop and sell the project known as Otay Ranch. The Developer consists of two entities, Otay Project, LLC, a California limited liability company, and Otay Project, L.P., a California limited partnership. Otay Project, LLC was formed August 15, 1997 by South Bay Project, LLC and Otay Ranch Development, LLC. Otay Project L.P. was formed on January 20, 1999 by Otay Project, LLC as its general partner and South Bay Project, LLC and Olay Ranch Development, LLC, as its limited partners. The property was purchased by South Bay Project on August 26, 1997 and immediately contributed to Otay Project, LLC at its net fair market value. As of May 1, 2001, South Bay Project, LLC ceased to be a member of Olay Project, LLC and ceased to be a limited partner of Otay Project, L.P. The Landowner is Otay Project L.P. In mid 2006, land was sold to various builder entities as shown in Exhibit "E". G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 10 3-21 EXHIBIT "A" (Continued) Attached are the first and last pages of the Operating Agreement for Otay Ranch Development, LLC and the Agreement of Limited Partnership of Otay Project, L.P. In addition, I have provided a copy of the First Amendment to Agreement of Limited Partnership of Otay Project, L.P. and the Certificate of Amendment to Certificate of Formation ofEI Toro, LLC. G:IGdrive docslMoralCFDlViIlage 2 CFD\ApplicationlV2 September 2006 Application-revised.doc Page 11 3-22 Exhibit "A" (Continued) FIRST AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF OTAY PROJECf L.P., A CALIFORNIA LIMITED P ARTNERSHll' ("Pannenhip") This First Amendment ("First Amendment") 10 the Agreement of Limi~d Plll'tIlezship of OlaY Project L.P., a California Limited PartnerShip is e1l1ered into as of this ~!-J. day of ~ 2002 by and between Otay Project, LLC, a California limited liiibility company, ("General Plll'tIler") and Otay Ranch Development. LLC, a Delaware limited liability compllOY ("Limited Partner"). RECIT ALS A. General Parmer, Limited Parmer, and Southbay Project, LLC, IS Delaware limited liability company entered into lhat certain Agreement of Limited Partnership of Olay Ptoject L.P. dared January 20, 1999 ("Partnership Agreement"). B. Section 5 of the Pannership Agreement of Otay Project L.P. provided that the Partnt:IShip shall dissolve and its affairs shall be terminated on August 1 g, 2017. C. South Bay Project, LLC has reSigned from the Pannership ancl there remains the General Panner and Limitel1 Partner as the only partners of the PanneIShip. D. At this time, the General Panner and Limited Partner wish w ~d the term of the Partnership to December 31. 2053. NOW, THEREFORE, for and in consideration ofme mutual covenants contained herein the Getleral Partner and Limited Panner hereby agree as follows; 1. The Partnership Agreement of Olay Project L.P. is hereby amendeci by cieleting the date ~August 18,2017" from Section 5 and inserting in itS place the date "December 31, 2053". 2. and effect. The Parmership Agreement as amended hereinabove remains in full force G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 12 3-23 Exhibit "A" (Continued) IN WnNc~~ WJ:iJ:iliJ::Ur, lienerall'armer ana Lumtea J:'artner nave c:xecutel1 tIllS rorr:st . Anlendment as of the day and year first above written. "General panner" DTAY PROJECT, LLC, a California limited liabilitY C01llpan y By: Dray Ranch Development, LLC, a Delaware limited liability company, Managing Member By: Soulhwind Development, LLC, a Delawue limited liability company, Its Member //, ~ By: a ~U~ .. . Baldwin, Manage:r By: Forsrar, llC, a Delaware limited liability company, Its Member By: ~;;aI~~-; By: Oriole Management,llC, aCaIifomia limited liability company, Member By: ~.'t?~r "Limited Parmer" OTAY RANCH DEVELOPMENT, LLC, a Delaware limited liability company By: Southwind Dc:vc:lopment, LLC, a Delaware limited liability company Its Member By: ~ IrQ 6'} Alfre E. Bald ts . g Member By: Forstar, LLC, a Delaware limited liability company, Its Member By: t;Z - /BM---- Games P. Baldwin, Its Managing Member G:IGdrive docslMoralCFD\Village 2 CFDlApplication\V2 September 2006 Application-revised.doc Page 13 3-24 Exhibit "A" (Continued) AGREEMENT OF LIMITED P AR1NERSillP QE OT A Y PROJECT L.P. This AGREEMENT OF LIMITED P AR1NERSillP OF OTA Y PROJECT L.P. .Agreement") is entered into as of January 20,1999, by and between OTA Y PROJECT, LLC, a ~alifornia limited liability company ("General Partner"), as general partner, SOUTH BA Y 'ROJECT, LLC, a Delaware limited liability company ("SBP"), as limited partner, and OT A Y lANCH DEVELOPMENT, LLC, a Delaware limited liability company ("ORD"), as limited lartner. SBP and ORD are referred to herein collectively as the "Limited Partners" and the }eneral partner and the Limited Partners are referred to herein collectively as the "Partners." 'be Partners hereby form a limited partnership pursuant to and in accordance with the California tevised Limited Partnership Act (California Corporation Code ~ 15611, et. seq.) (the "Act"), and lereby agree as follows: I . ~. The name of the limited partnership formed pursuant to this Agreement is Otay Project L.P." (the "Partnership"). 2. P~se. The purpose of the Partnership is to engage in any lawful activity for "hich a limited partnership may be organized under the Act Notwithstanding the foregoing, vithout the consent of all of the Partners, the Partnership shall not engage in any business other han the following: a. The ownership, entitlement, development, management and sale of certain .roperty partially located in the City of Chula Vista, California which has been contributed to the 'artnership by the General Partner (the .Property"); and b. Such other activities directly related to and in furtherance of the foregoing IUSiness as may be necessary, advisable or appropriate, in the reasonable opinion of the General 'artner. 3. Office and Altent. The Partnership shall continuously maintain an office and egistered agent in the State of California. The principal office of the Partnership shall be 2600 .1ichelson, Suite 250, Irvine, California 92715, or as the General Partner may otherwise letermine. The Partnership may also have such offices, anywhere within and without the State If California, as the General Partner may determine from time to time, or the business of the 'artnership may require. The registered agent shall be as stated in the Certificate of Limited 'artnership for the Partnership, or as otherwise determined by the General Partner. G:IGdrive docs'MoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 14 3-25 Exhibit "A" (Continued) 24. Notices. Any notice to be given or to be served upon the Partnership or any Partner in COlll1ection with this Agreement must be in writing (which may include facsimile) and will be deemed to have been given and received when delivered to the address specified by the party to receive the notice. Such notices will be given to a Partner at the address specified in Section 4 of this Agreement Any party may, at any time, by giving five (5) days' prior written notice to the other parties, designate any other address in substitution of the foregoing address to which such notice will be given. 25. Governinll' Law. This Agreement shall be governed by and construed under the laws of the State of California. " 26. Count~. This Agreement may be executed in multiple counterparts. Each counterpart shall be an original, but altogether shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of the date first set forth above. OT A Y PROJECT, LLe, a California limited liability company By: By: SOUTII BAY PRo!;Y1CT' LL , Delaware limited liability company . By: Harold Bcral, its mem By: G:IGdrive docslMoralCFDlVillage 2 CFDlApplication\V2 September 2006 Application-revised.doc Page 15 3-26 Exhibit "A" (Continued) OTA Y RANCH DEVELOPMENT, LLC, a Delaware limited liability company By: El Toro, LLC, a Delaware limited liability company, its member J.. By: By: Forstar, LLC, a Delaware limited liability company, its member - BY:~A 6~' J es Ba1d~ its managing member G:IGdrive docslMoralCFD\Village 2 CFDlApplication\V2 September 2006 Application-revised.doc Page 16 3-27 Exhibit "A" (Continued) OPERATING AGREEHENT FOR OTAY RANCH DEVELOPMENT, LLC THIS OPERATING AGREEMENT is entered into as of JULY 7, 1997 by FORSTAR, LLC., a Delaware limited liability. company, and El Taro, LLC, a Delaware limited liability company (referred to individually as a "Member" and collectively as the "Members"). A. The Members desire to form a limited liability company (Company) under the Delaware Limited Liability Company Act. . B. The Members enter into this Operating Agreement in order to form and provide for the governance of the Company and the conduct of its business and to specify their relative rights and obligations. NOW ~EREFORE, the Members hereby agree as follows: ARTICLE I: DEFZNrTIONS The following capitalized terms used in this Agreement have the meanings specified in this Article or elsewhere in this Agreement and when nDt SD defined shall have the meanings set forth in the Act (defined belDw) . 1.1 "Act" means the Delaware Limited Liability Company Act (Chapter 18 Df the Delaware General cDrporation Law ~~18-101 et seg.), including amendments from time to time. 1.2 "Additional Capital Contribution" of a Member shall mean any amount cDntributed to the capital of the Company by the Member pursuant to the provisiDns of Section 3.8 hereof. 1.3 The "Adjusted-Capital contribution. of a Member shall mean the excess, if any, Df such Member's Capital Contribution over distributions (other than payments of loans) received by such Member pursuant to Section 4.5 or 11.2 hereof. 1.4 "Agreement" means this operating agreement, as originally executed and as amended from time to time. 1.5 .Certificate of Formation" is defined in Delaware General Corporations Law section 18-201. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 17 3-28 Exhibit "A" (Continued) ~b .~:.l 'L'J.me J.s at the essence at every provJ.sJ.on ot 1:nJ.s Agreement that specifies a time for performance. 15.13 This Agreement is made solely for the benefit of the ' parties to this Agreement and their respective permitted successors and assigns, and no other person or entity shall have or acquire any right by virtue of this Agreement. 15.14 The Members intend the Company to be a limited liability company under the Act. No member shall take any action inconsistent with the express intent of the parties to this agreement. - . . IN WITNESS WHEREOF, the parties have exe~uted or caused to be executed this Agreement on the day and year first above written. EL TORO, LLC a Delaware limited liability company By: Al~~j{J6fana;: FORSTAR, LLC a Delaware limited liability company By: ames P. Baldwin, Manager G:IGdrive docs\MoraICFD\Village 2 CFDlApplication\V2 September 2006 Application-revised.doc Page 18 3-29 Exhibit "A" (Continued) CERTIFICATE OF AMENDMENT TO CERTIFICATE OF FORMATION OF E1 Taro. u.c E Toro. UC (berclnafier called the '~'). I limited liabiliJ:y company Ol'g;ln;7"q and exisling IIIldl:r lIlliI by vinue of rbt Limited Liabil!ly Gompauy Act of tile 5rzre ot Delaware. dOC3 Il8reby ccrQfy: . 1. !hI: IllU7le of tile ~ liabllk.y company Ii El Toro, UC. 2. TIle ~ otformalioD or We t:ol:IJP2IlY is bcrcby ............... by miking out Ani.cle(~l 1 th=reot and by substiuilIng In &u of ui4 Anic1c[s) 1llc fo1Iowing new AItIcle{S]: 1. The IW&C of ~Ile lllIIitd l1abUl.cy C01llPallY 1s SOUJ;bll1nd"~velopaeDt. llC. Ii. F"~lred on rldsjf day of A.t1EUSt ~2. AIIthowed Fe:uon' .19 97. G:IGdrive docslMoralCFDlVillage 2 CFDlApplication\V2 September 2006 Application-revised.doc Page 19 3-30 ~UCl,"CE _ TH1!3 FI(l'Nl~O;JS ~"Me 'ST"'T'S.~ENTiIPn~iS f1Y'~ ~'tEItRS FROM Wi !JAjl: IT 'flU F1Ui:CJ IN 1..-1 OFF1C~ Of."i1t1i ~l;lOuwr'f CLeRK. A N~W 1'-1cm1OllS BUSlr1Ei~S ru.II'; &TATil!Elfl. . ,..1.1$1' BE. FILfD 8F.FORF.11-I,U TU",E.. lhll IIlt'1g oj 11:111 -",tamt'l'!l ~ [01 i:/ II:6;l1f .3&:lht:1it8 Ule U$"..n ltjs: !:l&bI!IIllII.. rKlDt;.:n.8 b~,t'lI2105'ni.r~.-t! ., ...lDliillk::n 1;11 tI-.l:' 1i(llICS 01 !I[Y.l1~r Lindo! ~1!f6!. ala18, "" ~rn'1,,'bw.{l!li!Ii!' . . s<<:t'"'t4400t!':k~_13~sl~t1rr.1pn::lreflBlC'nI:C'O'Je.l '. ...... ~.',' "11.* - f1L(.iSFPnINl'onnl'l:' ... . ''"K~( :-- " ....~. :. . -'7:-.. .. &t!:REmslsl:.lc;:~qlr.lSTRlll:TlOI'i~ n~\'.j'.I1)!1 J...;1..J\.-'" -', .: ..:.... .,' DAiLY JOURN At..C,O.~'P ORA no N . Exhibit "A" (Continued) f\. . "'.1n. f.I.ED DOC L!}:"Erl'!"S TCl: . , fllEtilrsrfV..'FI.R~COROER1eOllNTY C:l.Ef!')I;'ti; FI.JHdM,ijii, "1997-02653:; Ns\M;: ~r:ol.\' Rime" Prt'ju;~ I'COn~El 17] .~r.l.lptlrt: C:an~er I}r1vli!. Ste 200 CITYJS.TlZlr !.!!'t.po,.t 8ei1cb. elf, 9?liofiD oc, J., '3 :t";Jj.'9--:" l::.=?';:22 . r. 'n.$.JiP,~ 1. a1IT~ :I'tl I\I;E.JJ' ~1/ I'ITV P.~"5q1'l..a.IOI.' Fe.::;-; . lJ.OO ...1 ..S\ I'J;..~~t!: I:tJ JJ 2'19'" C"1Jl\"'''I.ir.!l!C~ij!.; DAYT t~E .?I'OOC. (7 14 I eolA-(2"J2 1 rli!="I51J:i!i'lg o Rnnr.wal Fli'19 U IMU, Ch'9ll;l4~ B PUBLISH 1M CI,.lIfIH'II Fh:"':tIi!llrlSl:onNo NEWSPA'PEJ!; 5,\11 1'l1ega Coor.e'l'(2" F1C1'II1IMlS -1W8IN~S8 NAII~. .&T~~E_1E1'/I r... E FOLLOWII'IIO fsl=iROOt.ll:S; ~~.!~~E:I D~OO BUBlMES6.AS" 2 .. ri;;liU~~I3lJBI'lEl6,H..'mn(r.l 1. rhe! 01.<lY Rap~h 2. _ I"'''''' ~ h~'...~:'.ro""~~ti~ N""''''' ~".'I.,;~.i' Slr981 Adt:Ir~~. il S1/l,l4:....' pnn."!~llI' Plac:a rJ [llJsi'l~ ~ C81k:1rrtla Zip Code 119,') ~1 C:uniT\l'J Rl''''l. Sllll;~ 11')01., S-;:t'1 l)~eiCl. (A. 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R.r;ti$1lZlIIl tlllll tK:lI ~e1 ~fglln 1D 1liJns~ 111.&1"85:8 UMQr'~ Hl;lIlIDI.':1 ~usin~tl!Il'l!Im.<< IIwnlWllll;llld h.II!HI. 71.1~'"-I~~~'';':;:''WsI.'.~bcII''' ..' 7A r-1-'.l!lIIsJ'~'di.$.~,;;ilm,~. 1'11I=1dJ..L;illre.:mp:lc'?i' SbloNl~"" lttilY P'l'D~ect. LlC ,,~~ Ot.!.)' Ranch Ih!vel ~Pnll!' ~ ,lLC SoJllo\l'J"C ''''l'ti.-:.nFI'lTl''N.i.wE~' u""i:-N~'lunoll""":e 6 BON,I.TJFE 1'1f"1e.Oftr.l'lthll"tWI'E <ilJw,o"T:tr:cIIITLE 8::tUTU'E l"rl'.!:00" FfttlT"N'Ml ROIIII!r[ f1'. lhp.p.den 1't'PEo..~.ff,'~.QI!t".-.:lTJI"I.E 8' Ttti h'Kll:m~nl'fNl,lk;J ,;ltl1~1I ~tyOl::lI\DI __ . O:.r.l'IWQItJ(Illllltlll:ltlrltr/IJ.II$U'lO.......",lI!. , " II-F.RBi!-"(::EJ=l:'I\~";:rHr.TTHa OClt"'fJSI+ t'I(lnnl::::T OCI"'t'(;f "lHE.U".s:c,N'l !,n'sl.'TEM6"./Tt;.t.. nl FIN L'l'fCFFI::l:l. :u,BSYAAFI R~o~r.rw.:tmNI ,..&..Ettji . rr-L_ ""'"'" Ilo'ln!,I'.cL'J) G:IGdrive docslMoralCFDlVillage 2 CFDlApplication\V2 September 2006 Application-revised.doc Page 20 3-31 EXHIBIT "B" James Baldwin Alfred Baldwin Family Family I I I I Oriole Development, LLC Otay Ranch Development LLC I Otay Project, LLC Otay Project L.P. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationIV2 September 2006 Application-revised.doc Page 21 3-32 EXHIBIT "C" The Otay Ranch Company Headquarters: 610 West Ash Street, Suite 1500 San Diego, California 92101 Telephone: (619) 234-4050 Facsimile: (619) 234-4088 Homepage: http//www.otayranch.com Description of Operations: The Otay Ranch Company is a land development firm, established in 1997 to undertake the development of the 5,300-acre Otay Ranch in South San Diego County over the next 30 years. Project Description: Otay Ranch, the largest master-planned community in San Diego County, is planned to include more than 9,000 homes, abundant recreational facilities, commercial establishments and community services. It is part of the 22,899-acre Otay Ranch General Planning Area (ORGP A), which includes property under several ownerships. "Otay Ranch" Is a registered service mark owned by The Otay Ranch Company. Management Team: The Otay Ranch Company operations are being directed by a small team of highly experienced planners and land developers: Executive Vice President Mr. Aden has had a distinguished 26-year career in community planning and development that has resulted in approvals for 15,000 residences in South County and numerous industry awards. Since 1994, he has been actively involved in the planning and development of the initial phases of Otay Ranch. Previously, he was a vice president for EastLake Development Company. Earlier, he was associated with The Hill Partnership, Inc. of Newport Beach in various capacities, including project director. Mr. Aden holds an architectural degree from Cal Poly San Luis Obispo and a MBA degree from California State University, Fullerton. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationg..'.2jig>tember 2006 Application-revised.doc Page 22 He is a licensed architect and 2003 President of the San Diego Building Industry Association. An active community leader, he is a current director of San Diego International Sports Council, The Building Industry Association and past Director ofNAIOP. Executive Vice President Mr. Cameron, an attorney responsible for the negotiation of all land acquisitions and sales for Otay Ranch, has accumulated extensive expertise in land development and land use issues during his 23-year career. In the past few years, he has been responsible for land sales transactions valued at close to $1 billion. Involved with Otay Ranch since its acquisition in 1988, he was responsible, in conjunction with other senior managers, for obtaining entitlements for the largest general plan amendment in the history of San Diego County. He also was instrumental in negotiating a Resource Management Plan for the Il,375-acre Otay Ranch preserve. Between 1983 and 1988, Mr. Cameron was an attorney with Luce, Forward, Hamilton & Scripps, specializing in real estate transactions and land use law. He began his career as a legislative aide to New York Senator Daniel P. Moynihan. He graduated cum laude from Harvard Law School in 1983, and holds a bachelor's degree in government from Harvard University. His academic career was highlighted by a number of academic and athletic honors. Mr. Cameron served on the Carmel Valley Community Planning Board for 10 years and is currently a resident of Rancho Santa Fe. G:IGdrive docslMoralCFDlVillage 2 CFDIAPPlication~ie~'iftember 2006 Application-revised.doc Kim John Kilkenny Executive Vice President A recognized authority on land planning, environmental regulation and land use law, Mr. Kilkenny has been active in land development issues, in both the public and private sectors, for 27 years. Beginning in 1989, he was involved with the initial planning ofthe entire 22,899-acre Otay Ranch General Planning Area (ORGP A) and conducted more than 100 community meetings during the planning process. Currently, he is responsible for securing entitlements for Otay Ranch, in cooperation with other senior management. Throughout the 1980's, Mr. Kilkenny was legislative counsel for the Construction Industry Federation of San Diego. He began his career in public service, serving as the executive assistant to San Diego County Supervisor Lucille Moore and the legislative assistant to County Supervisor Jack Walsh. He has a bachelor's degree from San Diego State University, Juris Doctorate degree from Thomas Jefferson College of Law and is a member of the California Bar Association. He is also a member of the San Diego Regional Economic Development Corporation Executive Committee and Board of Directors, San Diego County Taxpayer Association Board of Directors, San Diego Center City Development Corporation Board of Directors and President of the Alliance for Habitat Conservation. G:\Gdrive docslMora\CFD\Village 2 CFD\Applicatio~3'5Ptember 2006 Application-revised.doc Page 24 EXHIBIT "D" Secretary certificates giving consent for Otay Project, L.P. to represent bnilder entities in the proposed Village Two financing district. G:\Gdrive docs\Mora\CFD\Village 2 CFD\ApplicatiOI~ptember 2006 Application-revised.doc Page 25 EXHIBIT "D" (Continued) ACTION BY UNANIMOUS WRITTEN CONSENT OF THE GENERAL PARTNER OF OTA Y PROJECT, L.P. The undersigned, constituting the sole general partner of Olay Project L.P., a California limited partnership, does hereby adopt the following recitals and resolutions by unanimous written consent: "RESOLVED, that Otay Ranch Development, LLC, as manager ofOtay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two CommWlity Facilities District ("CFD"), including but not limited to any consents or waivers and any other docwnentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. FURTHER REOL VED, that the general partner ofthe Partnership is authorized to take such actions as are necessary in its discretion to effectuate the purpose of each of the above resolutions. This Consent shall be effective for all purposes on October 2, 2006 GENERAL PARTNER: OT A Y PROJECT, LLC, .a California limited liability company By: OTAYRANCHDEVELOPMENT,LLC,a California limited liability company, managing member By: Forstar, LLC, a Delaware limited liability company Member BY.~ By: Southwind Development, LLC a Delaware limited liability company Member By: ' G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationg.L23''1Ptember 2006 Application-revised.doc Page 26 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OT AY RANCH DEVELOPMENT, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch Development, LLC a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27,2006. "RESOL YED, that Company as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("cro"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOL YED, that Cheryl A. Fiege, Kim Kilkenny Kenneth Lipinski or Ronald P. Therrien, any of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 3rd day of October, 2006. ~~ G:IGdrive docslMoralCFDlVillage 2 CFDlApplicatioI13lU~tember 2006 Application-revised.doc Page 27 EXHIBIT "D" (Continued) SECRETARY'S CERTIFlCATE FOR OTAY RANCH INVESTMENT, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch Investment, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members ofthe Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District C"CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. I>~~~ G:IGdrive docslMoralCFDlVilIage 2 CFDlApplication9'.l3'S'tember 2006 Application-revised.doc Page 28 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH 11 SUN 6/8, LLC. a Delaware limited liability company The undersigned, Secretary of atay Ranch II Sun 6/8, LLC, a Delaware limited liability company (the "Company''), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "REsaL VED, that Otay Ranch Development, LLC, as manager of atay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Conununity Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESaL VED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone arc hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~~ ~ ~<dl Cheryl A iege ~ G:IGdrive docslMoralCFDlVillage 2 CFDlApplicatior(3'l2,faptember 2006 Application-revised.doc Page 29 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAYRANCH II SUN 12, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch n Sun 12, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27,2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiegc or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~~<t G:IGdrive docslMoralCFD\Village 2 CFD\APPlication~ii~tember 2006 Application-revised.doc EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH II PC-I3, LLC, a Delaware limited liability company The undersigned, Secretary of Olay fumch II PC-13, LLC, a Delaware limited liability company (the "Company"), does hercby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Olay fumch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including hut not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the wldersigned has executed this Certificate as of the 28th day of September, 2006. ~fft-':i' ' Cheryl Fiege ~ G:\Gdrive docslMora\CFDWillage 2 CFD\ApplicatiorS~ptember 2006 Application-revised.doc Page 31 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH II PC-IS, LLC, a Delaware limited liability company The undersigned, Secretary ofOtay Raneh II PC-IS, LLC, a Delaware limited liability eompany (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Olay Ranch Development, LLC, as manager ofOtay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf ofthe Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as ofthe 2Sth day of September, 2006. Gvu.+,*;~ Cheryl A. ege G:IGdrive docslMoralCFDlVillage 2 CFDlApplication'3'2~'3'tember 2006 Application-revised.doc Page 32 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH SEVENTEEN, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch Seventeen, LLC, a Delaware limited liability company (the "Company'), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chura Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the tmdersigned has executed this Certificate as of the 28th day of September, 2006. "" ~~~~ G:IGdrive docslMoralCFDlVillage 2 CFDlApplication~4'.ilPtember 2006 Application-revised.doc Page 33 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH TWENTY, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch Twenty, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27,2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Flege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing ofthe application to fonn the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~~~ G:IGdrive docslMoralCFDlVillage 2 CFDlApplication'g'.245'tember 2006 Application-revised.doc Page 34 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH TWENTY TWO, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch Twenty Two, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the ChuJa Vista Village Two Community Facilities District ("crn"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28'" day of September, 2006. ~~~~ Cheryl . Fiege 't G:IGdrive docslMoralCFD\Village 2 CFD\Application~24!U'tember 2006 Application-revised.doc P'age 35 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH JC R-5, LLC, a Delaware limited liability company The undersigned, Secretary ofOtay Ranch JC R-5, LLC, LLC, a Delaware limited liability company (the "Company"), does hereby certifY the following resolution was adopted by members of the Company on September 27, 2006. "RESOL YED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~. Cheryl . Flege <;l ~ G:IGdrlve docslMoralCFDlVilIage 2 CFD\Applicatio~4!'lPtember 2006 Application-revlsed.doc l:lage% EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OT A Y RANCH JC R-7, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch JC R-7, LLC, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf ofthe Company any documents necessary to facilitate the filing ofthe application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~~<{ G:IGdrive docslMoralCFDlVillage 2 CFDlApplicatio~tember 2006 Application-revised.doc Page 37 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH JC R-9, LLC, a Delaware limited liability company The undersigned, Secretary ofOtay Ranch JC R-9, LLC, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by membern of the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~'t-hq - Cheryl <iege - ~ G:IGdrive docslMoralCFDlVillage 2 CFDlAppJication$f24'9'tember 2006 AppJication-revised.doc Page 38 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OT A Y RANCH FIFTEEN, LLC, a Delaware limited liability company The undersigned, SecretaryofOtay Ranch Fifteen, LLC, a Delaware limited liability company (thc "Company"), docs hereby certify the following resolution was adopted bymcmbers of the Company on September 27,2006. "RESOL YED, that Otay Ranch Development, LLC, as manager ofOtay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone arc hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. , 0k~~'>*,~ Chery . Fiege G:IGdrive docslMoralCFDlVillage 2 CFDlApplicatiOI1jl25'9'tember 2006 Application-revised.doc Page 39 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH EIGHTEEN, LLC, a Delaware limited liability company The undersigned, Secretary of Olay Ranch Eighteen, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing ofthe application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ('~~~ Cheryl Fiege G:IGdrive docslMoralCFDlVillage 2 CFD\Applicatio~tptember 2006 Application-revised.doc Page 40 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OT AY RANCH TWENTY ONE, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch Twenty One, LLC, a. Delaware limited liability company (the "Company"), does hereby certifY the following resolution was adopted by members of the Company on September 27,2006. "RESOLVED, that Olay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD''), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITh'ESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~~ G:IGdrive docslMoralCFDWillage 2 CFD\Application'41.2~'JPtember 2006 Application-revised.doc P'age 41. EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTAY RANCH JC R-4, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch JC RA, LLC, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members of the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager ofOtay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege or Ronald P. 111enien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to fonn the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~cA~~ Cheryl Wiege z.t G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationgL25'3'tember 2006 Application-revised.doc Page 42 EXHIBIT "D" (Continued) SECRETARY'S CERTIFICATE FOR OTA Y RANCH JC R-6, LLC, a Delaware limited liability company The undersigned, Secretary of Otay Ranch IC R-6, LLC, LLC, a Delaware limited liability company (the "Company"), does hereby certify the following resolution was adopted by members 0 f the Company on September 27, 2006. "RESOLVED, that Otay Ranch Development, LLC, as manager ofOtay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and ''FURTHER RESOLVED, that Chetyl A. Fiege or Ronald P. Therrien, either of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the 28th day of September, 2006. ~Cb8-~' Chef); '. Fiege ~ G:IGdrive docs\M:oralCFDlVillage 2 CFD\APplication~ie~rember 2006 Application-revised,doc EXHIBIT "D" (Continued) ACfION BY UNANIMOUS WRITTEN CONSENT OF THE GENERAL PARTNER OF RANCHO MESA, L.P. The undersigned. constituting the sole general partner of Rancho Mesa L.P., a Delaware limited partnership, does hereby adopt the following recitals and resolutions by unanimous written consent "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LLC, is hereby authorized to execute and deliver on behalf of the Partnership any documents necessary to file the application far the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any ather documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege, Kim Kilkenny, or Ronald P. Therrien, any of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to farm the CFD. This Consent shall be effective for all purposes an October 3, 2006 GENERAL PARTNER: RANCHO MESA OP, LLC, a Delaware limited liability company BY:~e; -- G:IGdrive docslMoralCFDWillage 2 CFD\Applicatio~~ptember 2006 Application-revised.doc Page 44 EXHIBIT "D" (Continued) ACTION BY UNANIMOUS WRITTEN CONSENT OF THE GENERAL PARTNER OF VILLAGE n OF OTA Y HB SUB The undersigned, constituting the sole general partner of Village II ofOtay HB Sub., a California general partnership, does hereby adopt the following recitals and resolutions by unanimous written consent: "RESOLVED, that Otay Ranch Development, LLC, as manager ofOtayProject, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Conununity Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOL YED, that Cheryl A. Fiege, Kenneth Lipinski or Kim Kilkenny, any of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the CFD. FURTHER REOL VED, that the general partner of the Partnership is authorized to take such actions as are necessary in its discretion to effectuate tbe purpose of each of the above resolutions. This Consent shall be effective for all purposes on October 2, 2006 GENERAL PARTNER: VILLAGE IT OF OTAY, L.P. a Delaware limited partnership By: Village II ofOtay GP, LLC, A Delaware limited liability company, enetal Partner By. Its: C-r-/ By: Otay Ranch II Sun-5, LLC :~~ G:IGdrive docslMoralCFDlVillage 2 CFD\APPlication~~~tember 2006 Application-revised.doc EXHIBIT "D" (Continued) ACTION BY UNANIMOUS WRITTEN CONSENT OF THE GENERAL PARTNER OF VILLAGE II OF OTAY, L.P. The W1dersigned. constituting the sole general partner of Village II ofOtay L.P., a Delaware general partnership, does hereby adopt the following recitals and resolutions by W1animOUS written consent: "RESOLVED, that Otay Ranch Development, LLC, as manager of Otay Project, LP, is hereby authorized to execute and deliver on behalf of the Company any documents necessary to file the application for the Chula Vista Village Two Community Facilities District ("CFD"), including but not limited to any consents or waivers and any other documentation required; and "FURTHER RESOLVED, that Cheryl A. Fiege, Kenneth Lipinski or Kim Kilkenny, any of them acting alone are hereby authorized to execute and deliver on behalf of the Company any documents necessary to facilitate the filing of the application to form the C:FD. FURTHER REOL VED, that the general partner of the Partnership is authorized to take such actions as are necessary in its discretion to effectuate the purpose of eaeh of the above resolutions. This Consent shall be effective for all purposes on October 4, 2006 GENERAL PARTNER: VILLAGE II OF OTAY, GP, LLC a Delawar limited liability company B. It Kenneth Lipins Agent G:\Gdrive docs\Mora\CFDWillage 2 CFD\Applicatio~5"9Ptember 2006 Application-revised.doc Page 46 EXHIBIT "E" VILLAGE TWO OWNERSHIP Land Gross Lot# Builder Owner Neiahborhood Use Acres Portion APN I Sunrise Otav Ranch II Sun 12, LLC R-12ICPF-5) MF 24.393 644-030-18 & 21 2 PCC Otav Ranch Village II-PC-13, LLC R-13 MF 10.386 644-030-21 3 Oakwood Otav Ranch Twenty-Two, LLC R-30 MF 10.344 644-030-21 & 23 4 UDATT Otav Proiect L.P. MU-3 MFIC 4.300 644-030-21 & 23 5 UDATT Otav Proiect L.P. C-IICPF-4) C 15.201 644-030-21 & 24 6 Oakwood Otav Ranch Eighteen, LLC R-14 MF 13.029 644-030-21 & 24 7 PCC Otav Ranch Village II-PC-15, LLC R-15, Por CPF-3 SF 8.258 644-030-21 8 Oakwood Otav Ranch Fifteen, LLC R-15 SF 10.862 644-030-21 & 24 9 UDATT Otav Proiect L.P. MU-2 MFIC 2.400 644-030-21 10 Oakwood Otav Ranch Twenty-One, LLC R-29 MF 7.096 644-030-21 11 UDATT Village II of Olav HB SUB, OP See (4) See (4) 44.218 644-030-19 & 21 12 UDATT Otav Proiect L.P. S-I School 10.342 644-030-21 13 Oakwood Otav Ranch Twenty, LLC R-28 MF 5.183 644-030-21 14 UDATT Otav Proiect L.P. MU-I MFIC 1.801 644-030-21 15 UDATT Otav Proiect L.P. P-I Park 1.414 644-030-21 16 Kane Otav Ranch IC R-5, LLC R-5 SF 12.008 644-030-21 17 Oakwood Otav Ranch Seventeen, LLC R-IO MF 1.069 644-030-21 18 Oakwood Otav Ranch Seventeen, LLC R-IO MF 0.931 644-030-21 19 Kane Olav Ranch IC R-5, LLC R-5 SF 1.629 644-030-21 20 Kane Otav Ranch IC R-9, LLC R-9 SF 2.805 644-030-21 21 Kane Otav Ranch IC R-9, LLC R-9 SF 4.060 644-030-21 22 Sunrise Otav Ranch II SUN 618, LLC R-6 SF 1.418 644-030-21 23 Kane Otav Ranch IC R-6, LLC R-6 SF 24.073 644-030-21 24 Kane Otav Ranch IC R-7, LLC R-7 SF 28.380 644-030-19 & 21 25 UDATT Otav Proiect L.P. CPF-I CPF-I 1.199 644-030-21 26 UDATT Village II ofOtav HB SUB, OP R-4 SF 48.179 644-030-10 27 Kane Otav Ranch IC R-4, LLC R-4 SF 38.075 644-030-10 28 UDATT Village II of Otav, L.P. Ind l-rNAP) Ind 49.408 644-030-10 29 UDATT Rancho Mesa, L.P. Ind I INAP) Ind 26.030 644-030-10 30 UDATT Otav Ranch Investments, LLC See 11) Seer 1\ 106.171 644-030-07 & 21 31 UDATT Village II ofOtav HB SUB, OP See (2) See (2) 63.595 644-030-07 & 21 32 UDATT Rancho Mesa, L.P. See (3) See (3) 47.104 644-030-21 33 UDATT Village II of Otav, L.P. Por R18A & B SF 4.464 644-030-21 34 UDATT Otav Proiect L.P. OS OS .62 644-030-16 35 City of SD City of San Diego Pineline Pineline Pineline 21.58 644-030-15 36 City of SD City of San Diego Pineline Pine line Pipeline .90 644-030-17 A UDATT Otav Project L.P. P-3 Park 6.929 644-030-21 B UDATT Otav Proiect L.P. P-2 Park 7.095 644-030-21 C UDATT Otav Proi ect L.P. P-4 Park 50.538 644-030-24 D UDATT Otav Proiect L.P. OS OS 32.701 644-030-24 Total 750.18 *UDA TT - undetermined at this time. NAP - Not a part. These are final map acreage numbers. O:\Odrive docslMora\CFDlVillage 2 CFD\Application~g;"'tember 2006 Application-revised.doc Page 47 EXHIBIT "E" VILLAGE TWO OWNERSHIP (Continued) Lot# Owner Address TeleDhone Number 1 Otav Ranch II Sun 12, LLC 280 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 640-8300 2 Otav Ranch Villaoe II-PC-l3, LLC 280 Newnort Center Drive #200Newnort Beach, CA 92660 (949) 640-8300 3 Otav Ranch Twentv- Two, LLC 270 Newoort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 4 Otav Proiect L.P. 610 Ash Street, #1500 SaD Die2o, CA 92101 (619) 234-4050 5 Otav Proiect L.P. 610 Ash Street, #1500 San Die~o, CA 92101 (619) 234-4050 6 Otav Ranch Ei~hteen, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 7 Otav Ranch Villaoe II-PC-15, LLC 280 Newnort Center Drive #240Newoort Beach, CA 92660 (949)640-8300 8 Otav Ranch Fifteen, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 9 Otav Proiect L.P. 610 Ash Street, #1500 San Die~o, CA 92101 (619) 234-4050 10 Otav Ranch Twentv-One, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 II Villa~e II of Otav HB SUB, GP 280 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 640-8300 12 Otav Proiect L.P. 610 Ash Street, #1500 San Die~o, CA 92101 (619) 234-4050 13 Otav Ranch Twe;;N, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 14 Otav Proiect L.P. 610 Ash Street, #1500 San Die~o, CA 92101 (619) 234-4050 15 Otav Proiect L.P. 610 Ash Street, #1500 San Diego, CA 92101 (619) 234-4050 16 Otav Ranch IC R-5, LLC 270 Newoort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 17 Otav Ranch Seventeen, LLC 270 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 18 Otav Ranch Seventeen, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 19 Otav Ranch IC R-5, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 20 Otav Ranch IC R-9, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 21 Otav Ranch IC R-9, LLC 270 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 22 Otav Ranch II SUN 6/8, LLC 280 Newoort Center Drive #240Newnort Beach, CA 92660 (949) 640-8300 23 Otav Ranch IC R-6, LLC 270 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 24 Otav Ranch IC R-7, LLC 270 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 25 Otav Proiect L.P. 610 Ash Street, # 1500 San Die2o, CA 9210 I (619) 234-4050 26 Villaoe II ofOtav HB SUB, GP 280 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 640-8300 27 Otav Ranch IC R-4, LLC 270 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 644-4202 28 Villaoe II ofOtav, L.P. 280 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 640-8300 29 Rancho Mesa, L.P. 270 Newoort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 30 Otav Ranch Investments, LLC 270 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 31 Villa~e II ofOtav HB SUB, GP 280 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 640-8300 32 Rancho Mesa, L.P. 270 Newnort Center Drive #240Newoort Beach, CA 92660 (949) 644-4202 33 Vil1a~e II ofOtav, L.P. 280 Newnort Center Drive #240Newnort Beach, CA 92660 (949) 640-8300 34 Otav Proiect L.P. 610 Ash Street, #1500 San Die~o, CA 92101 (619) 234-4050 35 City of San Dieoo 202 "C" Street, San Die~o, CA 92101 (619) 544-6806 36 City of San Dieoo 202 "C" Street, San Die.o, CA 92101 (619) 544-6806 A Otav Proiect L.P. 610 Ash Street, #1500 San Die2o, CA 92101 (619) 234-4050 B Otav Proiect L.P. 610 Ash Street, #1500 San Die2o, CA 92101 (619) 234-4050 C Otav Proiect L.P. 610 Ash Street, #1500 San Die2o, CA 92101 (619) 234-4050 D Otav Proiect L.P. 610 Ash Street, #1500 San Die2o, CA 92101 (619) 234-4050 G:IGdrive docslMoralCFDlVillage 2 CFD\APplication~~e~~ember 2006 Application-revised.doc EXHIBIT "E" VILLAGE TWO OWNERSHIP (Continued) Lot ACQuisition # Owner Date Purchase Price I Otay Ranch II Sun 12, LLC June 15,2006 64,398,578.67 2 Otav Ranch Village II-PC-l3, LLC June 15,2006 32,536,739.73 3 Otav Ranch Twenty-Two, LLC Mav 31,2006 36,409,718.40 4 Otav Proiect L.P. Julv 30, 1999 OPLP Owner 5 Otav Pro;ect L.P. Julv 30, 1999 OPLP Owner 6 Otav Ranch Eighteen, LLC Mav 31,2006 $27,187,425.17 7 OtavRanch Village II-PC-15, LLC June 15, 2006 $7,487,200.00 8 Otav Ranch Fifteen, LLC Mav 31, 2006 $6,394,080.00 9 Otav Pro;ect L.P. Julv 30, 1999 OPLP Owner 10 Otav Ranch Twenty-One, LLC Mav 31,2006 $29,943,781.12 11 VillaQe II ofOtav HB SUB, GP June 15, 2006 UDATT 12 Otav Proiect L.P. Julv 30, 1999 OPLP Owner 13 Otav Ranch Twenty, LLC Mav 31,2006 $18,487,518.13 14 Otav Proiect L.P. Julv 30 1999 OPLP Owner 15 Otav Proiect L.P. Julv 30, 1999 OPLP Owner 16 Otav Ranch JC R-5, LLC Mav 31,2006 $25,089,152.00 17 Otav Ranch Seventeen, LLC Mav 31,2006 $9,144,549.33 18 Otav Ranch Seventeen, LLC Mav 31, 2006 A Dortion of 17, above 19 Otav Ranch JC R-5, LLC Mav 31,2006 A nortion of 16,above 20 Otav Ranch JC R-9, LLC Mav 31,2006 $18,505,888.43 21 Otav Ranch JC R-9, LLC Mav 31, 2006 A Dortion of 20, above 22 Otav Ranch II SUN 6/8, LLC June 15,2006 $2,780,960.00 23 Otav Ranch JC R-6, LLC Mav 31,2006 $22,166,144.00 24 Otav Ranch JC R-7, LLC Mav 31, 2006 $17,853,895.25 25 Otav Proiect L.P. Julv 30, 1999 OPLP Owner 26 VillaQe II ofOtav HB SUB, GP June 15,2006 UDATT 27 Otav Ranch JC R-4, LLC Mav 31, 2006 $26,485,497.28 28 VillaQe II ofOtav, L.P. June 30, 2006 UDATT 29 Rancho Mesa, L.P. June 30, 2006 UDATT 30 Otav Ranch Investments, LLC Januarv 19, 2006 $11,500,000.00 31 VillaQe II of Otav HB SUB, GP June 15, 2006 UDATT 32 Rancho Mesa, L.P. June 30, 2006 UDATT 33 VillaQe II ofOtav, L.P. June 30, 2006 UDATT 34 Otav Proiect, L.P. Julv 30, 1999 OPLP Owner 35 City of San DieQo Pending Citv of San DieQo 36 City of San DieQo Pending City of San DieQo A Otav Proiect L.P. Julv 30, 1999 OPLP Owner B Otav Proiect L.P. Julv 30, 1999 OPLP Owner C Otav Proiect L.P. Julv 30 1999 OPLP Owner D Otav Proiect L.P. Julv 30, 1999 OPLP Owner *UDA TT - undetermined at this time. G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationg,L26'9'tember 2006 Application-revised.doc Page 49 EXHIBIT "E" VILLAGE TWO OWNERSHIP (Continued) (1) Lot 30 Industrial 2 Ind (NAP) Industrial 3 Ind (NAP) R-20 SF R-2l SF R-23 SF R-24 SF R-25B SF R-26 SF (2\ Lot31 Por R-16 MF Por R-17 SF Por R-18A SF PorR-19 SF R-20 SF Por R-2l SF Por R-24 SF R-25A SF Por R-25B SF Por R-26 SF R-27 MF CPF-2 CPF-2 (3\ Lot 32 Por R-16 MF Per R-17 SF Por R-2l SF Por R-18A SF Por R-18B SF PorR-19 SF (4\ Lot 11 Portion R-5 SF R-8 SF Portion R-9 SF Portion R-IO MF Portion R-ll MF CPF-6 CPF-6 G:IGdrive docslMoralCFDlVillage 2 CFDlApplication'ql2. ~"f'tember 2006 Application-revised.doc Page 50 EXHIBIT "F" Village Two Permit Pull Absorption Schedule oUs Jain47 160 130 63 44 50 101 31 11 55 " 63 " " Fub.o1 Mar...07 A .., Mom ""n-OT Jul..e7 A .., S .., Oct,07 Nov.,()7 oocm s , " 18 , 2. 1$ , 20 21 , 25 3 " 1$ S Total 2007 3 s. .. s '" .. " , . 'l'oC;il Maltl.ram ou. ,...., F1l'b-07 .r.o7 r,(l7 MlI. -01 JurHI7 ,,1-07 Au .., S .., Octm Nov..(l7 Ooem - .1G-P C Oakwood " , 1 .. Rw11..pc 144 , 1$ 2 R-12- ,'''' 295 3 , fHJ- C ". , 1$ 21 R_14 """" '" 33 30 30 30 .. '" R-I6-pce Oakwood 74 . R.27,-Sutu1~ii 110 R.2a-Qakwood " R-29-QakwOOd '" . kwood 160 ,. 32 32 32 " '66 "" A . 71 . 2 - T"'" Mi;l(ltdUsa 011. ......., Feb-07 MIlIr-D7 A N>1 ..,. Jun.{J7' Jul-Q7 Au , , Oct.., Nov~7 Doc'" - MU.1 10 Ml).2 mmen::lsl 12 M .3 . ... . . . . O:~~Ktrrllmts Tofal S !e ~amlJv ou. Jan..Q7 Feb4i7 Mar-ol A (,.fJ7 Mav.oT JlIn..07 Jul..07 Au ..(11 act-O, """.., 0&(:..07 2001 R20 .. 29 . R-i1 , 3J R.23 71 - f-- R.24 41 . R.25 '" . R.26 " T"" 254 . . . G:IGdrive docslMoralCFDlVillage 2 CFDlApp1ication'gT2/l'i!'tember 2006 Application-revised.doc Page 51 EXHIBIT "F" Village Two Permit Pull Absorption Schedule (Continued) Total .. III Faml OUS ;an... Feb.o8 Mar-08 ... .o. Jun..Qa Jul..Q8 Au ..(13 so ""'... Nov..Qa cGC-oa - -4, , r.e 160 Z4 Z4 . R~5 .sunrise, Kane 130 18 " " 8(1 -e.Kane, Sunrise 63 18 .1. R-7.Kane 44 R..a.Sunl'!se 8(1 22 22 R.g-pCC or Kane '"' ,. 18 32 ,1 C, akwo(,ld " " 12 34 R~17-Kane, SwlJistl 11 3 18 " R-1SA-PCC Oa. 65 ,. 10 R-18B-Kane .. 3 " 21 R.t$-pee Kane 83 . 18 21 "",p 54 , 18 " R.21-PCC, ~M '" , 18 " R.23 ,24 - R.2S-PCC ,. , 18 21 5-unfise- " 3 18 1 0 1 48 48 1 , 11 TOtal MLllti.Fmnll "U, "",... Feb.oa ...,... r-08 Jun-0.8 Jul..(J8 .o. So . Oet.oe Nov'" "",.o. 2006 R.10.PCC, OakWOOd '" ,. " ,. R-11-PCC 144 18 18 ,. R-12.Sumisa 26' 18 " 42 ~ 149 18 18 36 R~140 " '" .Ul. C Oakv.ocod 74 , 3 R-tT. unrlStl 110 , , R-2S ,""""" as , , R .29-0akwoc:d 152 , " 20 " .SO- akwooo 180 14 1 7018 1. . . - 'T<<at Mixed Un """ JllMl8 Feb-oB Mar.oo .o. ... J",,'" J..... "" . .o. Oct... Nov-OU Oec..08 - MU,1 " MlJ..2Commercial " - , ,. "'" - OR Investme.rlt:!l Total $111 Ill' Familv OUS Jan43 Fe-b-l>fl Mar.;)S Apr..olJ. M .os Juo-08 Juj..Ql3 Au -'Is .o. Ocl-DB N(JII.{l8 ""'.o. 2006 R2D " - , " 17 R-ll " - , 18 21 R"23 n , , ia 21 R-24 41 , ,. 21 R-25 34 , 18 21 R..26 .. , 16 21 018 2.. 14 - G:IGdrive docslMoralCFDlVillage 2 CFD\ApplicationillV.2~tember 2006 Application-revised.doc llag;; r2 EXHIBIT "F" Village Two Permit Pull Absorption Schedule (Coutiuued) TQtal SIll ~F.T)l1 D'" .la<Hl9 FeI)..otl I\ltlI;r..(l9 ,~. M ~. .Jt.lil.;(J9 Jul.oo . ~, Oct.a9 "ov... Doc'" ""'" R-..4.PCC Kane 1$0 24 " .. R-5- unrilm,Kan./l '''' 20 " 31 R.t..Kane. Sunri:lle " R-T-Kane " R.B. unrise '"' . R-9-PCC or Kane 10 10 8 24 R-15-P C,Oakwood ., R-H-Kane Sunrise ". is " 36 1eA-PC . Oakwood " ,. " " 55 R-18B-Kane " " . ;a R_lg-pCC. Kane " is " " 0- C 54 " " " R-21-PCC, Kane: 29 , , R.'" . R-Z4 . R-:!S-PCC 34 1 13 -2fl-unrlse 29 , , 10 " ,., 1 . , .. " . . Mult!..fo ou. Jan... Feb...QS Mar-'J9 ,... ... Jun-09 Jul.;(J9 ... So , Oct... Nov-4)9 Ooc~' ""'. R-tQ.pee Oakwood 90 is , " R.ll.pee '" " " " 54 R-12.SiMlrise ". " 24 . R.13-PCC ,.. " is ,. R.14-0akv.ood '" R.16-PCC Oakwood 74 " " ,. R.Z7-Sunrlae 110 " " '38 .2s"oakwood .. " " , R-29-Oakwood 152 " " 52 R-30-alIwood ,,. Total ". , 1 " " 0 Mixed U~ ou. Jan49 F-eb-08 ....... A r.tl8 ... JunMl Jel..J)$ ~ ... S. , Od-Qe Nov.o9 D..... 290' MU-l 10 ,. MU-' mercia! " " " M- 38 38 36 ota , OR JnV1lstmt,lnta Total SlnnteFamllu "'" Jan..Q$ ,...., ...,... Ar..Q9 M. ... Juo..oQ Jul.o9 ... So . Get-OS Nov-G9 D..... '00' R"20 " 12 " '1':21 " 12 " !R';'~;] 71 Hi " 38 R<?4 41 " 22 R-25 34 " 13 R-26 .6 " " " '54 . , 1 G:IGdrive docslMoralCFDWillage 2 CFDlApplicationW1S2l'tember 2006 Application-revised_doc P'age 5~ EXHIBIT "F" ViII age Two Permit Pull Absorption Schedule (Continued) T""" Sin leFaml ou, Jan-iO Feb.1t1 rq,r-10 10 Ma .10 Jun-10 J1.iJ-10 Au -10 $&.10 Oct.H' NaY.10 O$c-1D 2010 R4.PCC Kana 16' 24 24 13 61 R.5 -Sunrise, Kane '" R.IS-Kane Sunli$e '" R.7.Kane 44 R.8.suniis.e 50 R.g.PCC or Kane 101 - R.1S.pee OakwOOd 37 R.17-Kane. SUnrise 119 18 18 '" R-teA- C O..kwood 6' - R.1SB-Kane .. R.1$l-PCC, K;me ., " , 26 H2O-pee 54 R-21.PCC Kane 26 - R.23 1'1:.24 R-ZS-PCC " - R-26 " 2. "'" 1 24 18 " , 1 1 0 Multi..f-amll DIJs Jan.10 Feb-10 MaMO A r-10 Ma .10 Jun.10 .k,t1-10 .10 -10 Oct.to Nev-i0 Dee.10 201Q R.lO.PCC, Oakwood '" R.11-PCC 144 18 15 :lS R-12 "rise 29. 24 24 24 72 R-1:3-PCC 14' " 18 '" R.14-0.1MOOd 14' R-16-PCC, Oakwood 74 18 17 '" R.27-5unrlse 110 18 18 " R-2$.Oakwood 85 18 18 R-29- akwood 152 25 20 .. R..J(l. aKWOOd 100 1 . - 15 " 24 2 0 Mb.ed Un D(Jo Jan-10 F",O Mar-10 .10 M -10 Jun-10 Jut.iO -10 Se -10 Od-fO NoY-10 Oee-10 2010 MU.' 10 MU-2Ccrmll1eJciaI 12 MU-3 " ... 0 - - ORlnvef>tmltnts Total Sln"IoFamHII D(Jo ""'~. Oec.oa "'*"" 0",'" 0",'" Oec..o9 """" Doc'" Otl.l;-09 00<00. o.c-09 D9C~ 2010 ,R20 20 R.21 " .-.. "--ci- R.2~ " '" R.24 <1 R.2S 34 -26 " . G:IGdrive docslMoralCFDlVillage 2 CFD\Applicatio~16~tember 2006 Application-revised.doc !lage S"4 EXHIBIT "F" Village Two Permit Pull Absorption Schedule (Continued) B'Y9nd Sl "Fami ou. 20HI 4- " R-5..sumise Kane 130 R.$-Kans Sunrise- " R-7- , ... R-8-SUnrlae 50 .g. em Kane '0' R.15.PCC. OakWood 37 R.17.~ne,Sunrise 1.19 ,. R. ~ aA.p kwooC " R.1eB-K8ne- .. R-019-PCC Kane 83 R..21-P .""', '" R-23 R.24 -,..5-PCC 34 .,. ,. "". Multi-Faml OU. ""0 R-10-PCC. Oakwood 110 R-il-PCC 144 R.12-SunI1W "5 '''' R-,2 C '" 20 R-lli-Oakwood , R.,e. ."''''''''' 74 R.27 "on.. '10 37 R-28..QaKWOOd " '" R-2Q..Qakwoori 152 ..JO-Oa W'CIOd '" ... 425 MIxed Uae OU, 20'0 MU-l 10 MU-2 Commerdal 12 MU. 311 ... ORlnvutmtlnts '""""[)U';- s:~,. $,....,. Fa;;a:.- R20 " R-2l 33 R-23 71 R.24 4t R-Z5 " ." .. ... '54 G:IGdrive docslMoralCFDlVillage 2 CFDlApplicationW.2ewtember 2006 Application-revised.doc P'age 5"5 EXHIBIT "G" TIMING OF DEVELOPMENT The Otay Ranch Village 2 project received several approvals in May of 2006. They include approval of the Tentative Map, certification of the EIR, approval of the SPA Plan, approval of PC District Regulations, and approval of the project's first Final "A" Map and associated Subdivision Improvement Agreement and Supplemental Subdivision Improvement Agreement. The Village 2 community is broken down into four phases. These phases are identified as Village 2 East, North, South, and West. They vary in size and number of dwelling units. General timing of each phase: EAST: Rough grading is complete, underground utilities are underway at this time with surface improvements planned to be in place in the spring of2007. NORTH: Rough grading is underway at this time, underground utilities are planned to start in April of 2007, and surface improvements are planned to be in place by fall of 2007. SOUTH: Rough grading may begin as soon as early summer 2007. Underground utilities will follow with completion of surface improvements in fall 2008. WEST: Rough grading is expected to start here early 2008. Underground utilities will follow with completion of surface improvements expected in the fall of2008. G:IGdrive docslMoralCFDlVillage 2 CFD\ApplicationW.2~"}'tember 2006 Application-revised.doc fage 56 EXHIBIT "H" The district includes the Developers ownership which has several levels of entitlements as follows: . City of Chula Vista General Plan designation of Planned Community (PC) (October 23, 1993). . City ofChula Vista General Development Plan (GDP) (October 23, 1993). . Environmental Impact Report for the Chula Vista General Plan and GDP, October 23, 1993. (Affirmed by the California Superior Court, Court of Appeals and Supreme Court. Chaparral Greens v. Baldwin Builders) . Preannexation Development Agreement between the City of Chula Vista and Otay Project, LLC March 4,1997 vesting the Otay Ranch GDP. . Otay Ranch final program EIR, Ogden, Dec. 1992 Technical Studies and Plans Completed for Village Two include: . Summary of Existing Biological Resources Data for Otay Ranch Village Three, prepared by Dudek & Associates, January 2006 . Biological Resources Report and Impact Assessmentfor Otay Ranch Villages Two and Three, prepared by Dudek & Associates, February 2006 . A Report of An Archaeological Evaluation of Cultural Resources at the Otay Ranch Village Two SPA, prepared by Brian Smith and Associates, February 3,2004 . Air Quality Report for the Otay Ranch Villages Two and Three, Planning Areas I8B and a Portion of Village Four SPA, prepared byRECON Environmental, Inc., December 19,2005 . Revised Noise Technical Reportfor Otay Ranch Villages Two and Three, Planning Area 18B & a Portion of Village Four, prepared by RECON Environmental, Inc., December 19,2005 . Traffic Impact Analysis, Otay Ranch Village 2,3 and Planning Area 18B, prepared by Linscott, Law & Greenspan, November 22, 2005 . Preliminary Investigation, Otay Ranch Village Two, prepared by Geocon, Inc., August 18, 2003 . Phase 1/11 Environmental Site Assessment, Otay Ranch Village 2, prepared by Geocon Consultants, Inc., November 4, 2002 . Phase 1 Environmental Assessment, Otay Ranch Village Two East, prepared by Geocon, Inc., June 30, 2004 . Master Drainage Study for Otay Ranch Villages 2, 3, and 4, prepared by Hunsaker & Associates, July 14, 2005 . Overview of Sewer Service for Otay Ranch Villages Two and Three and a Portion of 4 and Planning Area I8b, prepared by Wilson Engineering, February 2006 . Overview of Water Service for Otay Ranch Villages 2 and 3, prepared by Wilson Engineering, November 2005 . Otay Ranch Villages 2, 3 and a Portion of 4 SPA Water Conservation Plan, prepared by Wilson Engineering, February 2006 G:IGdrive docslMoralCFDlVillage 2 CFD\Application~2. ~'R'tember 2006 Application-revised.doc J:l"age si EXHIBIT "H" (continued) . Water Quality Technical Reportfor Otay Ranch Villages 2,3 and 4, prepared by Hunsaker & Associates, October 28, 2005 . Otay Water District Water Supply Assessment and Verification Report, Otay Ranch Village Two, Three and portions of Villages Four, Seven and Planning Area i8h Sectional Planning Area Plan, prepared by Otay Water District, December 2003 . Otay Ranch Village Two, Three, and a Portion of Village Four Final Second Tier Environmental impact Report, prepared by City of Chula Vista, May 2006 Map and Plan Status: . Village Two General Plan Amendment - Approved May 23,2006 . Village Two Tentative Map - Approved May 23, 2006 . Village Two "A" Map - Approved May 26, 2006 . Village Two SPA Plan - Approved May 23, 2006 . Village Two EIR - Final EIR May 2006 . Village Two Map Conditions issued . First "B" Map approvals anticipated April 2007 G:IGdrive docslMoralCFDlVillage 2 CFD\APplication~iIJftember 2006 Application-revised.doc EXHIBIT "I" PROPOSED FACILITY LIST Improvements Cost Estimates Heritage Road - Olympic Parkway to Main Street $29,767,362 Rock Mountain RoadlMain Street (Heritage Rd to La Media) $28,238,875 City 2005 TDlF estimate PFDlF Facilities - Rancho Del Rey Library $20,671,475 Pedestrian Bridges $2,750,018 Backbone StreetslUtilities/Bus Shelters $29,197,502 Traffic Signals Included with Backbone Street estimate Slope Landscaping $9,890,620 Public Landscaping Corridor $150,000 Environmental Mitigation $1,500,000 allowance Waterlines - Non-CIP $3,614,000 Open Space Preserve Land $7,825,170 Community Park Improvements $3,245,525 Town Square $555,785 TO"l1 Center Drive (Otay portion of the cost) $500,000 The City ofChula Vista will own and maintain all improvements with the exception of the waterlines which will be owned by the Otay Water District. The public landscaping corridor could be used by MTDB; otherwise it will remain a public landscape corridor maintained by the Open Space District. Heritage Road and Rock Mountain Road are the two TDIF improvements on the proposed facility list. G:\Gdrive docslMora\CFD\Village 2 CFD\Applicatio~V.1-AAPtember 2006 Application-revised.doc ~agJ ~ EXHIBIT "J" Village Two Endangered Species Findings Two species of plants, the Otay tarplant (Deinandra canjugens) and San Diego thornmint (Acanthamintha itlicifalia) which are both listed as endangered by the California Department of Fish and Game (CDFG) and threatened by the U.S. Fish and Wildlife Service (USFWS) were detected onsite. No other listed plant species were detected onsite. Recent wildlife surveys have confirmed the presence of 14 pairs of the federally-listed threatened coastal California gnatcatcher (Polioptila califarnica calif arnica), as well as several State Species of Concern including sharp-shinned hawk (Accipiter straitus), white-tailed kite (Elanus leucurus), coastal cactus wren (Campylorhynchus brunneicapillus causei), mountain bluebird (Sialia currucoides), southern California rufous-crowned sparrow (Aimaphila ruficeps), loggerhead shrike (Lanius ludovicianus), California homed lark (Eremaphila alpestris actia), and San Diego black-tailed jackrabbit (Lepus californicus bennettii). One raptor nest was observed in the central portion of the Village Two site. The EIR was approved 5/23/06 and includes a Mitigation Monitoring and Reporting Program that details required mitigation for impacts to sensitive species identified on the project site and described above. G:IGdrive docslMoralCFDWillage 2 CFD\APPlication~;. ~~tember 2006 Application-revised.doc EXHIBIT "K" OTA Y PROJECT, L.P. (A Califorllia Limited Partnership) FINANCIAL STATEMENT- ESTIMATED CURRENT VALUE BASIS (Internally Prepared) June 30, 2006 G:IGdrive docslMoralCFDWillage 2 CFDlApplicationWl''!Ptember 2006 Application-revised.doc Ifage 51. EXHIBIT "K" (Continued) INDEX TO FINANCIAL STATEMENTS Statement of Assets, Liabilities and Partners' Capital- Estimated Current Value Basis (Internally Prepared) ..................................................... 1 Notes to Estimated Current Value Basis Statement (Internally Prepared)...................... 2 G:IGdrive docslMoralCFDWillage 2 CFDlApplication\:V.2/'!'J'tember 2006 Application-revised.doc P'age 6'2 EXHIBIT "K"(Continued) OTAY PROJECT, L.P. (A Califomia limited partnership) STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL Estimated Current Value Basis (Internally Prepared) June 30, 2006 ASSETS Cash Receivables Due from affiliates Real estate project Investment in unconsolidated entities Other assets $ 5,519,004 1,562,557 5,069,419 306,643,000 1,096,145,317 99,010 $1,415,038,307 LIABILITIES AND PARTNERS' CAPITAL Accounts payable and accrued liabilities Due to related party Estimated liability for completion of uncompleted land sales contracts $ 3,646,762 5,132,575 173,000,000 181,779,337 Commitments and Contingencies Partners' capital 1,233,258,970 $1,415,038,307 Page 63 3 - 7 4The accompanying notes are an integral part of statement. EXHIBIT "K"(Continued) 1. ORGANIZATION Otay Project, L.P., a California limited partnership (the "Partnership"), was formed on January 20, 1999. As of June 30, 2006, Otay Project, LLC, a California limited liability company and Otay Ranch Development, LLC, a Delaware limited liability company ("ORD") had a 99.9% and 0.1 % ownership interest in the Partnership, respectively. The primary business of the Partnership is to own, develop and sell the Otay Ranch Project (the "Property"). Profits, losses and distributable cash are allocated to the partners III accordance with the Partnership agreement. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The statement has been prepared by management to present the estimated current value basis of assets, liabilities and partners' capital of the Partnership, which is not intended to be a presentation in conformity with accounting principles generally accepted in the United States of America. Management believes that current value information provides more meaningful information to the users of the financial statements including lenders, bonding agencies and investors. The estimated current value of the assets and liabilities presented do not represent their liquidation values. Further, the estimated current value basis statement of assets, liabilities and partners' capital is not intended to measure the net realizable value or market value of the Partnership taken as a whole; rather, the estimated current value basis statement of assets, liabilities and partners' capital present the estimated current values of those assets and liabilities included in the cost basis statement of assets, liabilities and partners' capital and do not reflect other factors which may impact the market value of the Partnership taken as a whole. In addition, amounts ultimately realized by the Partnership from the disposal of properties may vary significantly from the estimated current value presented. ~,;gl ~4 EXHIBIT "K"(Continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Principles of Valuation The estimated ,current value of the Real Estate Project was based upon an appraisal report prepared as of December 31, 2005 by an independent Member Appraisal Institute ("MAl") appraiser and represents the estimated current market value based on a bulk sale of the fee simple interest in the Property, adjusted for land sales and managements estimate of remaining current land values, The estimated current value of the uncompleted land sales contracts was based upon the billings on the contracts received less cost actually incurred and cost estimated to be incurred to complete the improvements required by the contracts. Other assets and liabilities are presented at their historical income tax basis amounts because these amounts do not differ materially from their current values. Concelttration of Risk The Partnership's financial instruments that potentially expose the Partnership to a concentration of credit risk consist of cash. The Partnership places its cash with high credit quality institutions. From time to time, the Partnership maintains cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation ("FDIC") limit of $100,000. As of June 30, 2006, the Partnership's cash is held in three accounts with one financial institution, of which, $5,717,803 was in excess of FDIC insurance limits. The Partnership consistently reviews the collectibility of its receivables and provides an allowance for doubtful accounts when appropriate. Management believes that the Partnership will collect all receivables at the balance sheet date, and; accordingly, the accompanying financial statement does not include an allowance for doubtful accounts. The Property owned by the Partnership is located in Chula Vista, California. Accordingly, there is a geographic concentration of risk subject to fluctuations in the local economy. Additionally, the Partnership's operations are dependent upon the real estate industry, which is historically subject to fluctuations in the local, regional and national economies. Income Taxes Under provisions of the Internal Revenue Code ("IRC") and applicable state laws, partnerships are not subject to income taxes. Accordingly, no provision has been made for such taxes in the Partnership's financial statement as the partners report their share of the Partnership's income or loss in their individual income tax returns. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of Estimates 3-76 Page 65 EXHIBIT "K"(Continued) The preparation of the Partnership's Statement of Assets, Liabilities and Partners' Capital - Estimated Current Value Basis requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of June 30, 2006. Actual results could materially differ from those estimates in the near term. 3. ESTIMATED LIABILITY FOR COMPLETION OF UNCOMPLETED LAND SALES CONTRACTS Land sales contracts with merchant homebuilders obligate the Partnership to complete improvements such as grading, water and sewer lines, storm drains, roads and parks. In addition, the Partnership is required to provide utilities to each site and to construct certain common area walls and landscaping. As of June 30, 2006, the Partnership estimated the remaining costs to be incurred to complete the improvements required by the land sales contracts and land transfers to be approximately $173,000,000. 4. INVESTMENT IN UNCONSOLIDATED ENTITIES The Partnership is an 80% member in AB FINCO, LLC, a Delaware limited liability company ("AB FIN CO") and an 80% member in JB FINCO, LLC, a Delaware limited liability company ("JB FINCO"). AB FINCO's operations primarily consists of making, purchasing, and collecting loans as well as investing in other entities. AB FINCO holds a 45% interest in Village Nurseries Wholesale LLC, a California limited liability company ("VNW"), a 44.415% interest in Village Nurseries L.P., a California limited partnership ("VN"), a 90% interest in Glenn Ranch, LLC, a Delaware limited liability company ("Glenn Ranch"), and a 35% interest in Carmel Valley Partners I, a California general partnership ("CVPI "). The operations of VNW consist of growing, selling, and distributing nursery products at wholesale to the nursery and landscaping industries throughout the western United States. The operations of VN consist of selling nursery products to landscape contractors and walk-in retail customers primarily in the southern California area. The operations of Glenn Ranch consist of land development activities in the Portola Hills Project in Lake Forest, California and the Otay Ranch Project in Chula Vista, California. CVPI owns a shopping center located in San Diego, California. 4. INVESTMENT IN UNCONSOLIDATED ENTITIES (continued) JB FINCO's operations primarily consisted of making, purchasing, and collecting loans as well as investing in other entities. JB FINCO holds a 45% interest in VNW, a 44.415% interest in VN, a 90% interest in Rancho Portola, LLC, a Delaware limited liability company ("Rancho Portola") and a 35% interest in CVPl. The operations of Rancho Portola consist of land development activities in the Portola Hills Project in Lake Forest, California and the Otay Ranch Project in Chula Vista, California. CVPI owns a shopping center located in San Diego, California. ~a~n6 EXHIBIT "K"(Continued) The investment balances in these entities were as follows as of June 30, 2006: AB FINCO, LLC JB FINCO, LLC $ 566,651,389 529,493,928 $ 1,096,145,317 Unaudited condensed, combined tax basis financial information of AB FINCO and JB FINCO is as follows as of June 30, 2006 and for the six months then ended: ASSETS Cash Notes Receivable - Related Parties Investments in unconsolidated entities $ 27,312 954,749,308 321,871,185 $ 1,276,647,805 LIABILITIES AND CAPITAL Accounts payable and accrued liabilities Capital Net Income The Partnership's share in net earnings $ 1,276,647,805 $ 1,267,647,805 $ 26,364,420 $ 26,348,820 $ 18,261,283 Revenues 5. RELATED PARTY TRANSACTIONS Affiliates of the Partnership were reimbursed by the Partnership for payroll in the amount of $136,40 I for the six months ended June 30, 2006. The Partnership has provided unsecured advances to related parties in the amount of $5,069,419 as of June 30, 2006. The advances bear interest ranging from 5 % to 10%. The advances are due on demand and are included in due from affiliates in the accompanying statements of assets, liabilities and partners' capital. An affiliate of the Partnership has provided advances to the Partnership totaling $5,132,575 as of June 30, 2006. The advances bear an interest rate of 5%. In April 2006, the Partnership contributed land with an estimated fair market value of $81,262,000 and $82,183,600 for an additional investment in AB FINCO and JB FINCO, respectively (see note 4). 3-78 Page 67 EXHIBIT "K"(Continued) In May and June of 2006, the Partnership contributed related party notes totaling $278,648,230 and $263,192,016 from the sale of property for an additional investment in AB FINCO and JB FINCO, respectively (see note 4). A significant portion of the Partnership's land sales are to affiliated entities. Other related party transactions are disclosed elsewhere in these financial statements. 6. COMMITMENTS AND CONTINGENCIES The Partnership is liable for obligations incurred in the normal course of business for completion of contracts relating to the improvement of the Property. Management believes that these matters will not have a material adverse effect on the financial statements. Protected and Endangered Species Certain protected or endangered plants and wildlife may inhabit portions of the Property. Consequently, certain mitigation measures may be required; however, it is not currently possible to estimate the scope or magnitude of such measures. Management does not believe the mitigation measures that may ultimately be required beyond those included in current budgets and costs will have a material adverse effect on the Partnership's financial position. Performance Bonds The Partnership has performance bonds outstanding of approximately $68,701,000 as of June 30, 2006, securing completion of various infrastructure improvements. 6. COMMITMENTS AND CONTINGENCIES (continued) Infrastructure Financing In the jurisdictions in which the Partnership is developing the Project, assessment district and community facilities district bonds are issued by government instrumentalities to [mance major infrastructure improvements. As a land owner benefited by these improvements, the Partnership is responsible for the assessments on its land. Generally, when the land parcels are sold, the assessments are either repaid or the buyers assume the responsibility for the related assessments. Encumbrances A portion of the Property in Village 13 has been encumbered by a deed of trust in favor of a third party (the "ORD Deed of Trust") to secure the obligation of one or more of ORD's predecessors. ORD is responsible for payment and performance under the ORD Deed of Trust and has indemnified the Partnership against any claims, losses and costs arising there from. The outstanding balance of the obligation was $5,668,036 as of June 30, 2006. 3-79 Page 68 EXHIBIT "L" Existing Trnst Deeds, Loans and Constrnction Financing on Project OWNER Parcel Lender Loan Amount Lender's Address Otay Ranch IC R-4, LLC R-4B R.E. Loans, LLC $16,750,000. 201 Lafayette Circle 2nd Fir, Lafayette, CA 94549 Otay Ranch IC R-6, LLC R-6B First Bank & Trust $24,500,000 4301 MacArthur Blvd 2nd FIr., Newport Beach, CA 92660 Otay Ranch IC R-7, LLC R-7 Chinatrust Bank $24,170,000 22939 Hawthorne Blvd. Torrance, CA 90505 Otay Ranch IC R-9, LLC R-9B Central Pacific Bank $23,500,000 220 S. King St, 2nd Fir Honolulu HI 96813 Otay Ranch Eighteen, LLC R-14 Keybank National Assoc. $21,000,000 2 Park Plaza, Suite 750, Irvine, CA 92614 Otay Ranch Twenty Two, LLC R-30 United Commercial Bank $30,800,000 711 Van Ness Ave. San Francisco, CA 94111 Otay Ranch Investments, LLC Lot 30 First Bank & Trust $33,500,000 4301 MacArthur Blvd 2nd FIr., Newport Beach, CA 92660 Rancho Mesa, LP IND IB R.E. Loans, LLC $16,750,000. 20 I Lafayette Circle . loan encumbers both R-4B and IndustriallB 3-80 Page 09 EXHIBIT "M" VILLAGE TWO PROPERTY TAX BILLS 200512006 APN's Villa~e 2 Acreue 200512006 Tax 2006/2007 Tax Notes 644-030-07 Cut to 644-030-25, 26 $14,237.56 $15,347.32 2005/2006 Property Taxes Pd. . 644-030-25 31.08 $0.00 $0.00 New as of7/28/06 . 644-030-26 76.93 $0.00 $0.00 New as of 7/28/06 644-030-10 174.72 $29,053.96 $50,617.74 2005/2006 Property Taxes Pd. Portion includes Industrial - NAP 644-030-14 Cut to 644-030-24 $34,617.20 $0.00 2005/2006 Property Taxes Pd. . 644-030-24 126.50 $0.00 $17,604.84 New 7/28/06 (Wolf Canyon, Community Park, MSCP) 644-030-15 21.58 Paid $1,079.26 City of SD Pipeline 644-030-16 .62 $499.74 $586.58 2005/2006 ProoerlY Taxes Pd. 644-030-17 .90 $0.00 $0.00 Portion of City of SD Pineline 644-030-18 13.27 $31,619.84 $33,719.80 2005/2006 ProoerlY Taxes Pd. 644-030-19 3.24 $227.14 $621.70 2005/2006 Property Taxes Pd. 644-030-21 387.13 $64,436.38 $112,216.50 2005/2006 ProoerlY Taxes Pd. 644-030-23 .90 $0.00 $0.00 2005/2006 Property Taxes Pd. Total Ownershio 836.87 $174,691.80 $231,793.70 ]" and 2" installments are paid in full for 2005/2006 tax year. I" and 2" installments for 2006/2007 taxes due 12/11/06 and 4/10/07, respectively. 3-81 Page 70 EXHIBIT "M" (Continued) TOJ:.l FRfE .. FAX: PAY ONUNE: (871) TAX4SOC (8294732' (619) 531_ wWw.sdtreutax.com PROPERTY AODREi'SS a DESCRIFnONa SUBDIVISION Mailing and Situs Address Cannot Be Snown In Campl1i1oce To Government Code SectIon 6254.21 Current BIRCH STEPHEN&MARY FOUNDATION OWner IHe MAP NO DESCRIPTION VALUes .. EXEMmONS 000862 LAND $ 1042833 DOCUMENT IMPROVEMENTS 0 NO 2.1970 TOTAL llU 1042833 DOCUMENT PERSONAL PROPERTY DATE 0 05130/97 EXEMPnONS HOMEOWNERS $ 0 OTHER 0 NET TAXABLE VALUE 1042833 OWNmop' RECORD ON BIRCH STEPHEN&.MARY ].t.NUARY 1, . FOUNDATION tNC :100. PARCEL NO TAX RATE AREA CORTAC NO FIRST INSTALLMENT SECOND INSTALLMENT TOTAL DUE 644-<l3<l.Q7 -00 0125< AGENCY 1% TAX ON NET VALUe 7,673.66 + YOUR TAX DISTRIBUTION BASE NET VOTER APPROVED BONDS: GEN BOND CHUtA VISTA GLEM SCHOOL 1999A GEN BOND CHUtA VISTA ELEM SCHOOL 2000B GEN BOND CHUtA VISTA ELEM SCHOOL ,..DC GEN BOND CHULA VISTA ELEM SCHOOL 19980 GEN BOND CHUtA VISTA ELEM SCHOOL 1998E Gel BONO CtiULo\ VISTA ELEM SCHOOL 1998F GEN BONO CHULA VISTA ElEM SCHOOL 1998G GEN BOND CHULA VlSTA ElEM SCHOOL 2005 REF HI BOND SWEElWA TER 2000A HI BOND SWEETWATER 200<18 HI BONO SWEETWATER 2000C SOUTHWESTERN COMMUNITY COLLEGE BONO 2000 SOUTHWESTERN COMMUNITY COLLEGE 80ND200012004 SOUTHWESTERN COMMUNITY COLLEGE BOND REFUND 20058 MWO DIS REMAINDER OF SDCWA 1501999. TOTAL ON NET VALUE FIXED CHARGE ASSMTS: CWA WTRAVAJlAB1UTY MWO WTR STANDBY CHRG WATER AVAltABlLITY MOSQUITOIDISEASE CTR CO.MOSQUlTOfRAT CTRL TOTAL AMOUNT PHONE 858-522.eiOO 800-755-6864 619-8TQ..221l4 800-273-5167 aOQ..2.T3-5167 NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET 3-82 Page 71 7,673.68 = 15,:>47.32 RATE TAX AMOUNT 1.00000 10.4~8.J3 0.00316 32.95 0.00000 0.00 9.OQ1n 18.4. 0.00264 27.53 0.00269 28.05 0.00343 35.76 0.00408 42.54 0.00885 92.29 0.00696 72.58 0.00537 56.00 0.00783 81.65 0.00511 53.29 0.00000 0.00 0.00894 93.22 0.00470 49.01 1.06553 11112.00 1342.50 1546.S8 1342.50 1.78 2.23 15347.32 EXHIBIT "M" (Continued) SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 Check one or both boxes to indicate which installments(s) you will be paying online. Then click Add Selected Installmant{s} to Cart 10 continue. The second installment can be paid at the same 1ime or after the first Installment. INSTALLMENT DUe DATE DELINQUENT AFTER PAYMENT STATUS A"!OUN First Installment 12-11-2006 12-11.2006 DUE 7 t673.66 Second Installment 04.10-2007 04-10-2007 DUE 7,673.66 Total 15,347.32 I? Pay First Installment OR n Pay Both Installments 15,347.32 -- ~ ~ ~ f.~e!ll!Y._.Asked ouestions Technical Support for OnUne Services If you need technical support for this online services application, please email the Treasurer .Tax Collector. 3-83 Page 72 EXHIBIT I'M" (Continued) TOLL FREE: fAX~ PA.Y ONL1NE~ (8m TAJ<.4S0C (82H732) (819) 531-6056 www.$dtreastax.com PIl.OPERTY ADDRESS . DESCRJPTION~ SUBDM5ION Mailing and Situs Address Cannot B. Shown In Compliance To Government Code Section 6254.21 Current OTA Y PROJECT LP AND aT AY PROJECT Owner LP AND QTAY PROJECT LP MAP NO PMl8471 DOCUMENT NO 527487 DOCUMENT DATE 07/30/99 DESCRIPTION VALUES .. EXEMPT10NS $ 1790510 o 1790510 o LAND IMPROVEMENTS TOTAL Lr.I PERSONAL PROPERTY EXEMPTIONS HOMEOWNERS OTHER NET TAXABLE VALUE $ 0 o 1790510 OWNIR 0' R"CO"" ON DTAY PROJECT LP AND DTAY ,JANUARV 1, PROJECT LP AND OTAY PROJECT LP 2006 PARCEL NO TAX RATE AREA COkTAC NO FIRST INSTALlM!:N" SECOND INSTALLMENT TOTAL Due 644-4)30-10-00 01265 25.308.11 + YOUR TAX DISTRlBUTION BASE NET AGENCY 1% TAX ON NETYALUE VOTER APPROVED BONDS: GEN BOND CHULA VISTA ELEM SCHOOL 1!l99A NET GEN BOND CHULA VISTA ELEM SCHOOL 2000B NET GEN BOND CHULA VISTA ELEM SCHOOL 1998C NET GEN BOND CHULA VISTA ELEM SCHOOL 19980 NET GEN BCHO CHULA VISTA ELEM SCHOOL 1998E NET GEN BONO CHULA VISTA ELEM SCHOOL 1998F NET GEN BOND CHULA VISTA ELEM SCHOOL NET 199aG GEN BOND CHULA VISTA ELEM SCHOOL 2005 NET REF HI BOND SWEETWATER 2000A NET HI BOND SWEETWATER 2000B NET HI BOND SWEETWATER 2000c NET SOUTHWESTERN COMMUNITY COUEGE NET IlOND 2000 SOUTHWESTERN COMMUNITY COLLEGE NET BOND 2000I2004 SOUTHWESTERN COMMUNITY COLLEGE NET BOND REFUND 2OO5Il OTAY WATER IMP DIST NO 22. DEBT SERVICE N.ET OTAV WATER IMP OIST NO 'l:l ~ OEBT SERVICE NET MWD [)IS REMAINDER OF SOCWA 15019999 NET TOTAL ON NET VALUE FIXED CHARGE ASSMTS: PHONE CWA WTR AVAlLABIUTY MWD WTR STANDBY CHRG WATER AVAlLABIUTY CFO 98-1_0TAY PROJ 85S-522-<l900 800-15'-6864 61lHm1-2284 80Q..616-7516 3-84 Page 73 25,308.61 ... 50,817.74 RATE TAX AMOUNT 1.00000 17.905.10 0.00316 56." 0.00000 0.00 0.00177 31.69 0.00264 41.26 0.00268 48.16 0.00343 61.041 0.00408 73,05 0.00885 158.46 0.00696 124.61 0.00537 96.15 0.00753 14Q.19 0.00511 91.49 0.00000 0.00 0.00894 160.07 0.00000 0.00 0.00700 125.33 0.00470 84.15 1.07253 19204.00 1147.20 2012.74 5241.60 22407.84 EXHIBIT "M" (Continued) MOSQUITO/OISEASE CTR co MOSQUITO/RAT CTRL 800-273-5167 800-273-5167 2.34 2.28 TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 50617.74 Check one or both boxes to Indicate which Installments(s) you will be paying online. Then click Add Selected lnstallment(s} to Cart to continue. The second inslallment can be paid at the same time or after 1he first installment. INSTALLMENT DUE DATE DEUNQUENT AFTER PAYMENT STATUS AMOUNT First Installment 12.11.2006 12-11-2008 DUE 25,308.87 Second Installment 04-10-2007 04-10.2001 DUE 25,308.87 Total 50,617.74 Pi Pay First I"stallmant OR C Pay Both Instillllmenls 50.617.74 - .. J$J~" &"IillO;'ll . .. ~~ " . ...':." ...., ~~ FreQuentlv Asked OUestjOI~ Techuical Support for Online Services If you need technical support for this online services. application, please email the Treasurer -Tax. Collector. 3-85 Page 74 EXIDBIT "M" (Continued) TOU fRI!!"~ : FA)(, PAY ONUNE: (877) TAX4SOC (829-4732) (619} 531-6056 www.sdtreastax.com PROPERTY AODRE55 - DESClUPnON- SUBDMSION Mailing and Situs Address Cannot Be Shown In CompllalWe To Government Co<ie Seetion 6254.21 Current Own~ OTAY PROJECT LP MAP NO DESCRIPTION VALUES .. EXIlMPlIONS PM18471 LAND $ 1387732 DOCUMENT IMPROVEMENTS 0 NO 527467 TOTAL L&I 1387732 DOCUMENT PERSONAL PROPERTY 0 DATE 07/30/99 EXEMPTIONS HOMEOWNERS $ 0 OTHER 0 NET TAXAIJLE VALUE 1387732 OWNER OF RECORD ON OTAY PROJECT LP JANUARY 1, 2006 PARCEL NO TAX RATE AREA. CORTAC NO f1R.ST INSTALLMENT 644-030-24-40 0126$ 8,802.42 + YOUR TAX DISTRIBUTION BASE NET AGENCY 1% TAXON NET VAlUE VOTER APPRoveD BONDS: GEN BONO CHULA VISTA ELEM SCHOOL 1999A NET GEN BOliO CHULA VISTA ELEM SCHOOL 2OO0B NET GEN BONO CHULA VISTA ELEM SCHOOL 1998C NET GEN BOND CHULA VISTA ELEM SCHOOL 19S8D NET GEM BOND CHULA VlST A ELEM SCHOOL 1998E NET GEN BOND CHIJL.A VISTA ELEM SCHOOL 1998F NET GEN BOND CHULA VISTA ELEM SCHOOL NET 19980 GEN BOND CHULA VISTA ELEM SCHOOL 2005 NET REF HI BOND SWEETWATER 200QA NET HI BOND SWEETWATER 20006 NET HI BOND SWEETWATEIl200QC NET SOUTHWESTERN COMMUNITY COLLEGE NET BOND 2000 SOIffilWESTERN COMMUNITY COLLEGE NET BOND 2OOQ/2004 SOUTHWESTERN COMMUNITY COLLEGE NET BOND REFUND 20058 OTAYWATER IMP CIST NO 22. CEBT SERVICE NET OTAYWATER IMP DIST NO 21-DEBT SERVICE NET MWD DIS REMAINDER OFSDCWA 15019999 NET TOTAL ON NET VALUE FIXED CHARGE ASSMTS: CWA WTR AVAJLABIUTY MWD WfR ST AHDBY CHRG PHONE 8sa..522..&900 800~ 155-6864 TOTAL AMOUNT 3-86 Page 75 SECOND INSTALLMENT TOTAL DU1! 8,B02.42 ::I: 17,604.84 RATE TAX AMOUNT 1.0??oo 13,.877.32 0.00316 ~.85 0.00000 0.00 0.001n 2".56 0.00264 36.63 0.00289 37.32 0.00343 47.SS 0.00408 56.61 0.00$85 122.31 0.00696 96.53 0.00537 14.52 0.00783 108.65 O.D0511 70.91 0.0??oo 0.00 0.00894 124.06 0.0??oo 0.00 0.00700 97.14 0.00470 6$.22 1.07253 14884.00 1265.00 1456.00 17604.54 EXHIBIT "M" (Continued) SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 Check. one or both boxes to Indicate wtlich installments{s) you will be paying online. Then clIck Add SelectEtd Installment(s) to Cart 10 continue. The second inataHme!lt can be paid at the same time or after !he first installment INSTALLMENT DUE DATE DELINQUENT AFTER PAYMENT STATUS AMOUNT First installment 12.11-2006 12-11-2006 DUE 8.802.42 Second Installment 04-10-2007 04-10-2007 DUE 8,802.42 Total 17,604.84 p' Pay First Installment OR [j Pay 80th Installments 17,604.84 ~- golf. ~.......~... . - . .. '.~.n~1iI f..reaucn1!v Ask~d Ouestions Teclnuc:al Support for Onllne Services If you need technical support for this online services application, please email the Treasurer -Tax Collector. 3-81 Page 76 EXIDBIT "M" (Continued) TOLL FREe: : FAX: PAY GNUME: (877) T AXASQC (829-4732) (810' 53HO.. www_adtreastax.com PROPERTY ADDRI!SS" DESCRlPT10N- $tJBDMSION MaUlng and SItus Address C.nnot Be Shown In Compliance To Government Code Section 6254.21 Current OWner erN OF SAN OIEGO MAP NO DESCRIPTION LAND IMPROVEMENTS TOTALLIU PERSONAL PROPERTY EXEMPTIONS HOMEOWNERS OTHER NET TAXABLE VALUE VALUES .. I!XEMP110NS $ 16303 o 16303 o 000862 DOCUMENT NO 021369 DOCUMENT DATI 00/00/00 $ 0 o 16303 OWNER Of UCORD ON ,ANUAR.Y 1., ~~~~ CITY OF SAN DIEGO PARCEL NO 'tAX RATI AREA CORTAC NO FIRST INSTAlLHE!NT seCONDtNSTALLMENT TOTAL DUE 64.4..030.15-00 0128~ 539.63 + 539.63 . 1,019.26 YOUR TAX DISTRIBUTION AGENCY BASE RATE TAX AMOUNT 1% TAX ON NET VALUE NET 1.0??oo 163.03 VOTeR APPROVED BONDS: GEN 80NO CHULA VISTA ELEM SCHOOL 1!l!l9A NET 0.00316 0.51 GEN 80NO CHULA VISTA El..EM SCHOOL %0008 NET 0.??oo0 0.00 GEN 8ONO CHULA VISTA ELEM SCHOOL 1998C NET O.coln G.28 GEM 8ONO CHULA VISTA ELEM SCHOOL 19980 NET 0.00264 0.43 GEN 80NO CHULA VISTA ELEM SCHOOL 1998E NET 0.00269 0.43 GEN 8ONO CHULA VISTA ELEM SCHOOL 1998F NET 0.00343 0.55 GEN BOND CHULA VISTA ELEM SCHOOL NET 0.0040Il '(M8G 0.68 GEM BOND CHULA VISTA ELEM SCHOOL 2005 NET 0.00885 REF 1.44 HI BOND 5W~ETWA TER 2000A NET Q.00696 1.13 HI BOND SweETWA rER 20008 NET 0.01)537 0.87 HI 80NO SWEETWATER 2000c NET 0.00783 1.27 SOUTHWESTERN COMMUNITY COLLEGE NET 0.00511 BOND 2000 0.83 SOUTHWESTERN COMMUNITY COLLEGE NET 0.0??oo 8ON0200012004 0.00 SOUTHWESTERN COMMUNITY COLLEGE NET 0.00894 80NO REFUND 20056 t.45 OTAY WATER IMP OIST NO 22. DEBT SERVICE NET 0.0??oo 0.00 OTAY WATER IMP OIST NO rr. OE8TSERVlCE NET 0.00700 1.104 MWD OIS REMAINDER OF SOCWA 15019990 NET 0.Q0.470 0.76 TOTAL ON NET VALUE 1.07253 175.00 FIXED CHARGE ASSMTS: PHONE MWD WTR STANDBY CHRG 800-755-6864 248.38 WATER A.VAlLASIUTY 619-670..2284 647.40 MOSQUfTOfOlSEASE CTR B00-27:J.5167 6.36 co MOSQUITOlRAT CTRL lKlO-21:J..5161 2.28 3-88 Page 77 EXHIBIT "M" (Continued) TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 1079.26 Check one or both boxes to indicate which inSlallmenls(s) you will be paying online. Then click Add Sel&etOd Installment(sl to Cart to continue. The second installment can be paid at the same time or after the fi"t installment. INSTALLMENT DUE DATE DEUNoUENT AFTER PAYMENT STATUS AMOUNT First Installment 12-11-2006 12-11~2006 DUE 539.63 Second Installment 04.10-2007 04-10.2007 DUE 539.63 otal 1,079.26 R1 Pay Fil'$t Installment OR n PayBothlns:tallments 1,079.26 - ~ ~ . -. ^.- ....- ,- ., . - Freouently Asked Ouestions Technical Support for Online Services Tf you need technical support for this online services application, please entail the Treasurer -Tax Collector. 3-89 Page 78 EXHIBIT "M" (Continued) TOLL FREE: FAX: PAY ONUN!.~ (877) TAX4SDC (82'..1732) (619) 531-8056 www.sdtreaatax.com PROPI:RTY ADDRESS. DESCRIPTJON- SUBDIVISION Mailing and Situs Address Cannot Be Shown In Compliance To Government Code Section 6254.21 Current Own.r OrA Y PROJECT MAP NO 000862 DOCUMENT NO 440600 DOCUMIENT DATE 08/18/00 OWNER Of RECORD ON JANUARY 1, 200~ PARCEL NO TAX RATE AREA CORTAC NO nRST INSTAlLMENT 644-030-1 s.o<l 01265 2&3.29 ... YOUR TAX DISTRIBUTION BASE AGENCY 1% TAX ON NET VAl.UE VOTER APPROVED BONDS: GEN BOND CHULA VISTA ELEM SCHOOll999A GEN BOND CHULA VISTA ElEM SCHOOl2000B GEN BOND CHULA VISTA ElEM SCHOOl1998C GEN BOND CHULA VISTA ElEM SCHOOl 19980 GEN BONO CHULA VISTA ELEM SCHOOll999E GEN BONO CHULA VISTA ElEM SCHOOll998P GEN BOND CHULA VISTA ELEM SCHOOL 19980 GEN BONO CHULA VISTA ElEM SCHOOL 2005 REF HI BONO SWEETWATER 2000A HI BONO sWEETWATER 20008 HI SOND SWEETWATER 20QOC SOUTHWESTERN COMMUNITY COLLEGE BOND 2000 SOUTHWESTERN COMMUNITY COlleGE BONO 2000/2004 SOUTHWESTERN COMMUNITY COllEGE BONO REFUND 2'105B OTAY WATER IMP DIST NO 22. OEBT SERVICE OTAYWATER IMP DlST NO 27. DEBT SERVICE MWD DIS REMAINDER OF SOCWA 15019999 TOTAl. ON NET VAlUE NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET FIXED CHARGE ASSMTS: PHONE CWA WTR A,VAJlABIUTY MWO WTR STANDBY CHRG WATER AVAlLABtUTY CFD 9a.1_DTAY PROJ 858-522-6900 800-155-6864 619-670..2284 800-616-7516 3-90 Page 79 D!SCRIPTION VALUES .. EXEMPTIONS $ 44103 o 44103 o LAND IMPROVEMENTS TOTAL Ltu PERSONAL PROPERTY EXEMPTIONS HOMEOWNERS OTHER NET TAXABLE VALUE $ 0 o 44103 (1TAY PROJECT SECOND INSTAlLMENT TOTAL DUE 293.29 . 586.58 RATE TAX AMOUNT 1.0??oo .....1.03 0.00316 1.39 0.00000 0.00 0.001T7 0.78 0.00264 1.18 0.00289 1,'8 0.00343 1.51 0.00408 1.79 0.00885 3.90 0.00696 3.Q6 (1.00537 2.36 0.00783 3.45 0.00511 2.25 0.0??oo a.oo 0.00894 3.94 0.0??oo a.oo 0.00700 3.08 0.00470 2.07 1.07253 473.00 10.00 11.50 10.00 78.22 EXHIBIT "M" (Continued) MOSQUITOIDISEASE CTR co MOSQUITO/RAT CTRL 800.273-5167 800-273-5167 1.58 2.28 TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July"1,2006 and Ending June 30,2007 586.58 Check one or both boxes to indicate whiCh installmenls(s) yoo wDl be paying online. Then click Add Selected Installmsnt(s) to Cart to continue. The second installment can be paid al the same lime or after the first installment. INSTALLMENT Due DATE DELINQU ENT AFTER PAYMENT STATUS AMOUNT First Installment 12~11.2006 12~11~2006 DUE 29329 Second Installment 04-10-2007 04.10-2007 DUE 29:1.29 Total 586.58 ~ Pay First Installment OR o Pay Both Installments 586.58 ~- ~iil.. ,-~,~ ~ FrcQuentl'(A-sked OuestiQ~ Technical Support for Online Services If you need technical support for this online services application, please email the Treasurer -Tax Collector. 3-91 Page 80 EXHIBIT "M" (Continued) TOLL FREE: FAX: PAY ONUNE: (877) TAl(.OSI)C (029-4732) (61.1531_ www.sdtreastax.c.om PROPERTY ADDRESS. OESCRIPTION- SUBDIVISION Mailing and Situs Address Cannot Be Shown In Compliance To Govemment Code Stdlon 6254.21 Current Ownet OlAY PROJECT M,APNO DESCRIPTION VALUES .. EXEMPT10N$ 000862 LAND $ 0 OQCUMENT IMPROVEMENTS 0 NO 440600 TOTAL LAI 0 DOCUMENT PERSONAL PROPERTY 0 DATE 08/18/00 EXEMPTIONS HO....eOWNERS $ 0 OTHER 0 NET TAXABLE VALUE 0 OWNER or RECORD ON OTAY PROJECT JANUARY 1, 200~ 644-030-17-00 01265 PARCEL NO TAX RATE AREA CORTAC NO FIRST INSTALLMENT AGENCY 1% TAX ON NET VAlUE 0.00 . YOUR TAX DISTRIBUTION BASE NET VOTER APPROVED BONDS: GEN BOND CHULA VISTA ELEM SCHOOL ,...A GEN BOND CHULA VISTA aEM SCHOOL 200.B GEN BONO CfiULA VISTA EL.EM SCHOOL 1998C GEN BOND CHULA VISTA aEM SCHOOL 190aD GEN BOND CHULA'VlSTA ELEM SCHOOL 1998. GEN BOND CHULA VISTA ELEM SCHOQl1998F GEN BOND CHULA VISTA ELEM SCHOOL ,998G GEN BONO CHUlA. VlSTA ELEM SCHOOL 2005 REP HI BONO SWEETWATER 2000A HI BOND sWEETWATER 20006 HI BOND SWEETWATER 200QC SOUTHWESTERN COMMUNITY COLLEGE BONO 2000 SOUTHWESTERN COMMUNtTY coLLEGE BOND 200012004 SOUTHWESTERN COMMUNITY COLLEGE BOND REFUND 2D05B OTAY WATER IMP D1ST NO 22 - OEBT SERVICE OTAV WATER IMP OIST NO xt. OEST SERVICE MWD DlS REMAINDER OF SDCWA ,5.19999 TOTAL ON NET VALUE NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET SECOND INSTALLMENT TOTAL DUE .... . 0.00 RATE 1.00000 TAX AMOUNT 0.00 0.00316 0.00000 0.00177 0.00264 0.00269 0.003.43 0.00408 0.00 .... 0.00 ...0 ...0 ..00 0.00 0.00885 0.00 0.00 0.00 ..00 0.00696 0.00531 0.00783 0.00511 0.00 ..00000 ..00 ..00894 ..00 ..00 ..00 ..00 ..00 0.00000 0.00700 ..0047. 1.07253 ..00 TOTAL AMOUNT SAN DIEGO COUNTY 2006~2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,.2007 3-92 Page 81 EXHIBIT "M" (Continued) INSTALLMENT DUE DATE DELINQUENT AFTER PAYMENT STATUS AMOUNT First Installment 12.11.2006 12.11.2006 PAID 0.00 Second Installment 04-10-2007 04-10-2007 PAID 0.00 Total 0.00 -,,~ ~~ ~~ iIl~ Er.~L!_t:_lli!Y.~_ked ~~:!lions Technical Support for Online Sen-Ices If you need technical support fOT this online services application, please email the Treasurer _Tax Collector. 3-93 Page 82 EXHIBIT "M" (Continued) TOLL FREE: fAX: PAY OHUNE: (an) T AX4SOC (829-41321 (619) 531-<!OS. www.sdtreastax.c:om PROPERTY ADDJU!S$ ~ DesauPnON- SUBDIVJSION Mailing and Situs Addtl!SS Cannot Be Shown In Compliance To Government Code SKtion 6254.21 Cummt Owner OT A Y PROJECT L P HAP NO PMl8481 DoaJHENT NO 642800 DOCUMENT DATI! 09/07/01 DUCRtPTION VALUES . I!:XEMPTlONS $ 2940315 o 2940315 o LAIlD IMPROVEMENTS TOTAl. L&J: PERSONAL PROPERTY EXEMPTIONS HOMEOWNERS OTHER NETTAXABLEVAWE $ 0 o 2940375 OWNER 01" RECORD ON JANUARY " OTAY PROJECT L P :IlI.S PARCEL NO TAX RAT! AREA CORTAC NO FIRSTINSTALLMENT SECOND INSTALLMENT TOTAL DUE 644.o30-1a-oo 01262 16,859.90 + YOUR TAX DISTRIBUTION BASE NET AGENCY 1% TAX ON NET VALUE VOTER APPROVED BoNOS: GEN BOND CHULA VISTA ELEM SCHOOL 1999A NET GEN BONO CHULA VISTA Elaf SCHOOL 20008 NET GEN BOND CHULA VISTA ELEM SCHOOL 1998C NET GEN BONO CHULA VISTA ELEM SCHOOL 19980 NET GEN BOND CHULA VISTA ELEM SCHOOL 1996E NET GEN BOND CHULA VISTA ELEM SCHOOL 1998F NET GEH BOND CHULA VlSTA ElEM SCHOOL NET 1996G GEN BOND CHULA VISTA ELEM SCHOOL 2005 NET Ref HI BONO SWEE1WATER 2000A NET HI BOND SWEETWATER 20008 NET HI BOND SWEETWATER 200QC NET SOUTHWESTERN COMMUNITY COLLEGE NET BONO 200Q soUTHWESTERN COMMUNITY COLLEGE NET BOND 2000/2004 SOUTHWESTERN COMMUNITY COLLEGE NET BONO REFUND 20058 MWO DiS REMAlNDER OF SDCWA 1501999. NET TOTAL ON NET VALUE FIXED CHARGE ASSMTS: r::NA WTR AVAILABILITY MWD WTR STANDBY CHRG WATER AVAlLABIUTY CFD 9S-1_0TAY PROJ MOSQUITOfDISEASE. eTR CO MOSQUtTOlRAT CTRL PHONE 656-'522-6900 llOO-75S-6B64 619..&70-2284 800-616--7516 600-"13-5161 800-21J,..S167 3-94 !'age 83 16,659.90 = 33,719.80 RATE TAX AMOUNT 1.0??oo 29,4.03.75 0.00316 92.91 0.0??oo 0.00 O.OO1n 52.0. 0.00264 n.62 0.00269 79.09 0.00343 100.85 0.004ll8 119.96 0.00885 260.22 0.00696 204.65 0.00537 157.89 0.00763 230.23 0.00511 150.25 0.0??oo 0.00 0.00694 262.86 0.00410 136.19 1.06553 31331.00 132.70 152.72 398.10 1701.86 1.58 >.28 EXHIBIT "M" (Continued) TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 33719.80 Check one or both boxes to indicate which Installments(B) you wi" be paying online. Thiln click Add Selected ImJtallment(a) to Carito continue. The second installment can be paid at Ihe same time or after the flrsl installment. INSTALLMENT DUE DATE DEUNQUENT AFTER PAYMENT STATUS AMOUNT First Installment 12-11-2006 12-11002006 DUE 16.859.90 Second Installment 04-10.2007 04-10-2007 DUE 16,859.90 Total 33,719.80 R: Pay Flm Installmenl OR r PaySoth Installment. 33.719.80 l'iIIi!~ - liii ~ ......'... ~..!1I;!ll,;,mt".'llil ~ Freouently Asked Oues.lions Teehnical Support for Online Services If you need technical support for this online services application, please cmail the Treasurer -Tax Collector. P~e~.? EXHIBIT "M" (Continued) TOLL FREE: ,A>O PA.Y ONUM!: (177) TAlG4S0C 1829-4732) (&19) 531_ W'IfW.sdtrpstax.com VR,OPERTY ADoltI!SS ~ DESCJUpnON~ SUIPMSlON Mailing and Situs Address c.nnot Be Shown In Can'tpltane.. To Government CQM SeGtfon 8254.21 Current Owne' OTAV PROJECT U> DE5CRIP'T1ON LAND IMPROVEMENTS TOTALLIU PERSONALPROPERTV EXEMPTIONS HOMEOWNERS OTHER NET TAXABLE VALUE NAP NO PM18471 DOCUMENT 110 521<e7 DOCUMEHT llA TE 07/30/99 VALUES It &X!MPTIOHS $ 3306 o 3306 o $ 0 o 3306 OWNER 0' tUCORP ON OTAV PROJect' LP JANUARY 1, 200' PARCEL NO TAX RAn ARfA CORTAC NO FIRST INSTALUU!1"lf SECOND INSTALLMENT TOTAL Due 644-030-1t-OO 012115 310.85 + YOUR TAX DIsrlUBunON BASE AGENCY 1% TAX ON NET VALUE VOTER APPROVED BONOS: GEN BOND CHULA VISTA ELEM SCHOOL 1999A GEN BOND CHULA VISTA El.EM SCHOOL 20006 GEN BOND CHULA VISTA ELEM SCHOOL 199ac GEN BONO CHULA VISTA ELEM SCHOOL 19980 GEN BOND CHULA VISTA ELEM SCHOOL ,998E GEN BOND CHULA VISTA ELEM SCHOOL 1998F GEN BOND CHULA VISTA ELEM SCHOOL 1958G GEN BOND CHULA VISTA ELEM SCHOOL 200S REF HI BOND SWEETWATER 2000A HI BOND SWEETWATER 20008 HI SOND SWEETWAiER 2000c SOUTHWESTERN COMMUNITY COLLEGE BOND 2000 SOUTHWESTERN COMMUNITY COLLEGE BON021lOO1200<1 SOUTHWESTERN COMMUNITY COLLEGE BOND REFUND 200SB OTAV WATER IMP D1ST NO 22 -DEBT SERVICE OTAYWATER IMP OlST NO 27 -DEBTSERVlCE MWO OIS REMAINDER OF SDCWA 15019999 TOTAL ON NET VALUE FIXED CHARGE ASSMTS: PHONE r::NA WTR AVAlLASIUTY MWO WTR STANDBY CHRG WATER AVAll.AB1UTY CFO 93-1_0TAY PROJ' 858-522.-&900 800-755-6864 6i9-670-2284 8()0...676-7516 3-96 Page 85 NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET 310.BS . 621.70 RATE TAX AMOUNT 1.0000Q 33.06 0.00316 0.10- O.<lOOOO G.OD 0.00177 0.05 0.00264 0.0& 0.002&9 0.05 0.00343 0.11 0.00408 0.13 o.00S85 0.29 0.0a696 023 0.00537 0.17 0.00783 O~ 0.00511 0,15 o.00ooo 0.00 0.00894 0.29 0.00000 0.00 0.00100 0.23 0.00<170 0.15 1.07253 ~5.00 32.40 37.28 97.20 415.5Z EXHIBIT "M" (Continued) MOSQUITO/DISEASE CTR CO MOSQUITO/RAT CTRL 800-273-5167 800-273-5167 1.58 2.28 621.70 TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 Check one or both boxes to indicate which Installments(s))IOu wlll be paying onUne. Then dick Add Selected InstaUm.ntf.} to Cart to continue. The second Installment can be paid at the same time or after the first inslaWmen!. INSTALLMENT DUE DATE DEUNQUENT AFTER PAYMENT STATUS AMOUNT First Instalfment 12-11.2006 12.11.2006 DUE 310.85 Second Installment 04-10-2007 04.10-2007 DUE 310.85 otal 621.70 P; Pay Firat Installment OR n PayBothln.tall......nts 621.70 ~JL':~~ .~- "J~ FreQu~m.l.Y_ Asked Questions Technical Support Cor Ooline Services If you need technical support for this online services application, please email the Treasurer -Tax Collector. f.ge~~ EXHIBIT "M" (Continued) TOLL FflEe ; !"AX: PA't ONUNE= (877) TAX4SDC (829-4702) (613) 531..soM www.sdtroastu.com P~H:1lTY ADDRESS M OI!SCRlPTION- suaOlVISJON Mailing and Sttus Address: C:mnot Sa Sflown In Compliance To Gowmmonl: Code s.ctfon &254.21 Current OWner OTAY PROJECT LP MAP NO DESCRIPTION VALUU. IXI!MPTIONS PM18789 LAND $ 3973652 DOCUMENT IMPROVEMENTS 0 NO 527467 TOTAL LlU 3973652 OOCUMENT PERSONAL PROPERTY 0 OAT! 07/30/99 EXEMPTIONS HOMEOWNERS $ 0 OTHER 0 NET TAXABLE VALUE 39736S2 OWNER OP RECOaIl ON JAHUARY 1. OTAY PROJECT LP 2DD6 PARCeL NO T.I.X RATE AREA CORTAC NO FIRST tNSTALLMENT SECOND INSTALLMENT TOTAL DUE 56.101.25 + YOUR TAX DISTRIBlITION BASE NET ~-21-OO 01265 AGENCY 1% TAX ON NET VAl~E VOTER APPROVED BONDS: GeN BOND CHULA VISTA ELEM SCHOOL 1999A GEN BOND CHULA. VISTA ELEM SCHOOL 2000B GEN BOND CHULA VISTA ELEM SCHOOL 1998C GEN BOND CHULA VISTA ELEM SCHOOL 19980 GEN BOND CHULA VISTA ELEM SCHOOL ,..8E GEN BONO CHULA VISTA ELEM SCHOOL 1998P GEN BOND CHULA VISTA ELEM SCHOOL 19S8G GeN BOND CHULA VISTA ELEY SCHOOL 200S REF HI BONO SWEETWATER 2000A HI BONO SWEETWATER 2000a HI BOND SWEE1WATER 2000c SOUTHWESTERN COMMUNITY cOllEGE BOND 2000 SOUTHWESTERN COMIIUNITY COLLEGE BOND 200012004 SO~THWESTERN COMIIUNITY COLLEGE BOND REF~ND 20058 or AY WATER IMP DIST NO 22 . DEBT SERVICE OTAYWATER IIIP DIST NO 2T. DEBT SERVICE MWD DlS REIIAINDER OF SOCWA 1501.... TOTAlOHNETVAlUE F'XED CHARGE ASSIITS: PHONE CWA WTR AVAIlABILITY MWD wrR STANDBY CHRG WATER AVAIl.A81UTY CFD 98-1_0TAY pROJ 850-522~ 8OQ.755-6864 619-670.2284 800-67<<).7516 NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET ~ge~~ ".108.25 c 112.2'6.50 RATE T.u: AMOUNT 1.0??oo 39,n8.52 0.00316 125." 0.??oo0 0.00 0.00177 70.33 8.002$4 1001.90 0.00269 106.89 0.00343 138.29 0.00408 162.12 0.00885 351.66 0.00696 276.56 0.00531 213.38 0.00783 311.13 0.00511 203.05 0.??oo0 0.00 0.00894 355.24 0.??oo0 0.00 0.00700 278.15 0.00470 186.76 1.0nSJ ~619.00 3871.30 4455.86 11813.90 49649.42 EXHIBIT "M" (Continued) MOSQUITOIOISEASE CTR co MOSQUITO/RAT CTRL 800.273.5167 800.273.5167 5.14 2.28 TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 112216.50 Check one or both boxes. 10 Indicate which In:;;taUments(s) you will be paying online. Then click AcId Selected Installment{s) to Cart to continue. The second instaUment can be paid at Ihe same time or after the first InstallmenL INSTALLMENT DUE DATE DELINQUENT AFTER PAYMENT STATUS AMOUNT First Inatallment 12-11-2006 12-11-2006 DUE 56.108.25 5eeond Installment 04.10-2007 04.10.2007 DUE 56,108.25 otal 112,216.50 Pi Pay Arst Installment OR r, Pay Both Installments 112,216.50 .IIIL _ ~~I ~ .ikmG~ Freauentlv Asked Ouestions Technical Support for Online Services If you need technical support for this online Service5 application, please cmail the Treasurer .Tax Collector. P1ge~ EXHIBIT "M" (Continued) TOLL '(il.EE : FAX: flAY ONUNE: (871) TAX4S0C (829-4732) (."1531~S6 www.~dtr.asba:Lcom PRopeRTY A.ODItESS . Df.5CR1P110N. suaDtvI5l0N Mailing and Situs Address Cannot Iki ShOWl"lln Compliance To Govemrnent Code Section 62$4-.21 Current Ow..... OTAYPROJECTLP DE5CR1P110N VAWI!Sa. MAP NO EXEMPTIONS PMIS7S. LAND $ 0 DOCUMENT IMPROVEMENTS 0 NO 527467 TOTAL LBd 0 DOCUMENT PEIlSONAL PROPERTY 0 DATE 07/30/.9 EXEMPTIONS HOMEOWNEIlS $ 0 DTliER 0 NET TAXAIlL.E VALUE 0 OWNER 0"- ItICORO ON OTAY PROJECT L P JANUARY 1, 2006 PARCI!L NO "rAX RATE AREA ~R1'AC NO PlRST INSTALLMeNT seCOND INST,.UMEHT TOTAL DUE 644-030.a.GO 01265 0.00 0.00 0.00 + YOUR TAX DISTRI8unON 8~ NET AGENCY 1% TAX ON NET VALUE VOTER APPROVED 80NOS: GEM BOND CHUtA VISTA ELEM. SCHOOl. 1999A GEN BONO CHULA VISTA ELEM SCHOOL 2DooB GEN BOND CHULA VISTA ELEM SCHOOL 19980 GEN BONO CHULA VISTA ELEM SCHOOL 19980 GEN BONO CHULA VlS7A ELEM SCHOOL 1995E GEN BONO CHULA VISTA ELEM SCHOOL 1995F GEN 80ND CHULA VISTA ELEM SCHOOL 1998G GEN BONO CHULA VISTA ELEM SCHOOL 200s REF HI BONO SWEETWATER 2QQQA HI BONO SWEETWATER 20008 HI BONO SWEETWATER 20000 SO~RNCOMMUNITYCO~EGE BONO 2000 SOUTHWESTERN COMMUNITY COLLEGE BOND 2OODI2OO4 SOUTHWESTERN COMMUNITY COLLEGE BOND REFUND 2005B OTAYWATER IMP DIST NO 22. DEBTSERVlCE OTAYWATER IMP DIST NO 27. DEBT SERVICE MWD CIS REMAINDER OF SOCWA 111ll1999t TOTAL ON NET VALUE NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET NET RATE 1.00000 TAX AMOUNT 0.00 0.00316 0.00000 0.00177 0.00264 0.00269 0.00343 0.004<18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 O.QOq5 0.00 0.00 0.00 O.DO 0...... 0.00537 0.00783 0.D0511 0.00 0.??oo0 O.DO 0.00894 0.001I00 0.D07OO 0.00470 1.07253 0.00 0.00 0.00 D.DO 0.00 D.DO TOTAL AMOUNT SAN DIEGO COUNTY 2006-2007 SECURED PROPERTY TAX For Fiscal Year Beginning July 1,2006 and Ending June 30,2007 ~;g1 q~ EXHIBIT "M" (Continued) INSTALLMENT DUE DATE DEUNQUENT AFTER PAYMENT STATUS AMOUNT First Installment 12-11-2006 12-11-2006 PAlO 0.00 SKond Installment 04.10.20Q7 04.10.2007 PAlO 0.00 otal 0.00 -- ~~ ~ Freouentlv Asked Ouestions Technical Support for Online Services If you need technical support for this online services application, please cmail the Treasurer -Tax Collector. ~-1nl 'Page 90 EXHIBIT "N" In July 1995, Baldwin Builders, Inc. a corporation owned by James and Alfred Baldwin, and Baldwin Building Contractors, Ltd. a partnership owned 97% by Baldwin Builders, Inc. (the "Baldwin Company") filed for reorganization under Chapter 11 of the Bankruptcy Code. In February 1996, in order to obtain new financing for the Baldwin Company, James and Alfred Baldwin personally contributed land they owned with an estimated value of over $30 million and agreed to transfer control ofthe Baldwin Company to a trustee selected by the new lenders. Pursuant to an agreement approved by the bankruptcy court, James and Alfred Baldwin and their affiliates exchanged mutual full releases of all claims with the Baldwin Company. Baldwin Building Contractors, Ltd. has since had a plan or reorganization approved and has emerged from bankruptcy under the name "New Millennium Homes". James and Alfred Baldwin are not involved in the management of New Millennium Homes and have a de minimis ownership interest in that company. James and Alfred Baldwin and certain of their affiliated entities, not including any entities involved with the Developer (collectively, the "Baldwins"), were plaintiffs and defendants in various lawsuits with New Millennium relating to alleged purchase options and related matters for two parcels of land owned by the Baldwins. On June 21, 1999, the Baldwins and New Millennium entered into a "Settlement Agreement and Mutual Release" which settled all litigation between the parties and provided for full and complete releases of all claims against each other. New Millennium Homes was delinquent in the payment of special and ad valorem taxes on all of its properties, including special taxes on properties located in Calabasas (Los Angeles, CFD No. 4), Anaheim Hills (City of Anaheim, CFD No. 88-1, and Orange Unified School District CFD No. 89-2), and Portola Hills (Santa Ana Mountains Water District CFD NO.2 and County of Orange CFD No. 87-2). As part of its plan of reorganization, New Millennium Homes has either paid or entered into payment plans with respect to all of its delinquent special and ad valorem taxes. New Millennium Homes currently does not own any property within the District. ~;g1 9t EXHIBIT "0" Altn: Marc Lovato Title Department: Chicago Title Company Attn: Ranny Harper Email: RannV.Harper@CTT.com Phone: (619) 521-3543 Fax: (619) 521-3605 Order No.: 603050068-U54 Otay Ranch Company 610 West Ash #1500 San Diego, Ca 92101 PRELIMINARY REPORT Re: CVT 06-05 Otay Ranch Village 2 "A" Map Dated as of: August 7, 2006 at 7:30 am CHICAGO TITLE INSURANCE COMPANY hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception in Schedule B or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms. 'The printed Exceptions and Exclusion from the coverage of said Policy or Policies are set forth in the attached list. Copies of the Policy forms are available upon request. Please read the exceptions shown or referred to in Schedule B and the exceptions and exclusions set forth in the attached list of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. THIS REPORT (AND ANY SUPPLEMENTS OR AMENDMENTS HERETO) IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND NO LIABILITY IS ASSUMED HEREBY. IF IT IS DESIRED THAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE, A BINDER OR COMMITMENT SHOULD BE REQUESTED. ~;gl 923 SCHEDULE A 1. The estate or interest in the land hereinafter described or referred to covered by this report is: A Fee 2. Title to said estate or interest at the date hereof is vested in: Otay Ranch JC R-4, LLC, a Delaware limited liability company, as to Lot 27; Otay Ranch Fifteen, LLC, a Delaware limited liability company, as to Lot 8; Otay Ranch JC R.5, LLC, a Delaware limited liability company, as to Lots 16 and 19; Otay Ranch Seventeen, LLC, a Delaware limited liability company, as to Lots 17 and 18; Otay Ranch Twenty-One, LLC, a Delaware limited liability company, as to Lot 10; Otay Ranch JC R-6, LLC, a Delaware limited liability company, as to Lot 23; Otay Ranch JC R-7, LLC, a Delaware limited liability company, as to Lot 24; Otay Ranch JC R-9, LLC, a Delaware limited liability company, as to Lots 20 and 21; Otay Ranch Twenty-Two, LLC, a Delaware limited liability company, as to Lot 3; Otay Ranch Twenty, LLC, a Delaware limited liability company, as to Lot 13; Otay Ranch Eighteen, LLC, a Delaware limited liability company, as to Lot 6; Village II of Otay HB SUB, GP, a California general partnership, as to Lots 11, 26 and 31; Otay Ranch Village II.PC-13, LLC, a Delaware limited liability company, as to Lot 2; Otay Ranch II SUN 12, LLC, a Delaware limited liability company, as to Lot 1; Otay Ranch II SUN 6/8, LLC, a Delaware limited liability company, as to Lot 22; Otay Ranch Village 11- PC-15, LLC, a Delaware limited liability company, as to Lot 7; Village II of Otay, LP, a Delaware limited partnership, as to Lots 28 and 33; Rancho Mesa, L.P., a Delaware limited partnership, as to Lots 29 and 32; Otay Ranch Investments, LLC, a Delaware limited liability company, as to Lot 30; and Otay Project L.P., a California limited partnership, as to the remainder 3. The land referred to in this report is situated in the State of California, County of San Diego and is described in the Legal Description, attached hereto: END OF SCHEDULE A CLTA Preliminary Report Form (Rev 111/95) ~;;gJ&f LEGAL DESCRIPTION Lots 1 through 33 and A through D of Chula Vista Tract No. 06-05 Otay Ranch Village 2 and Portions of Village 4 "A" Map, in the City of Chula Vista, County of San Diego, State of California, according to Map thereof No. 15350, filed in the Office of the County Recorder of said County, May 26, 2006. END OF LEGAL DESCRIPTION CLTA Preliminary Report Form (Rev 1/1/95) ~";g19R SCHEDULE B At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in the policy form designated on the face page of this Report would be as follows: A. Property taxes, including any assessments collected with taxes, for the fiscal year 2006 - 2007 that are a lien not yet due. B. The lien of supplemental taxes, if any, assessed pursuant to the prOVlSlons of Chapter 3.5 (commencing with Section 75) of the revenue and taxation code of the State of California C. A Notice of Special Tax Lien pursuant to Sections 3114.5 of the Streets And Highway Code and Section 53328.3 of the Government Code imposing a continuing lien not yet due and payable Executed by: City of Chula Vista Purpose: Community Facilities District No. 97-2 Recorded: August 21,2001 as File No. 2001-0594092 of Official Records D. A Notice of Special Tax Lien pursuant to Sections 3114.5 of the Streets And Highway Code and Section 53328.3 of the Government Code imposing a continuing lien not yet due and payable Executed by: Chula Vista Elementary School District Purpose: Community Facilities District No. 17 Recorded: December 8, 2005 as File No. 2005-1056527 of Official Records E. A Notice Of Special Tax Lien pursuant to Sections 3114.5 of the Streets And Highway Code and Section 53328.3 of the Government Code imposing a continuing lien not yet due and payable Executed by Purpose: Recorded: Sweetwater Union High School District Community Facilities District No. 17 Improvement Area I February 1, 2006 as File No. 2006-0074984 of Official Records F. A pending assessment for the District shown below. When notice of the assessment is recorded with the County Recorder the assessment shall become a lien on said land. District: Disclosed By: Recorded: Community Facilities District No. 17 Annexation No.1 Boundary Map June 28, 2006 as Document No. 2006-0459404 G. Any Special Tax Lien pursuant to Sections 3114.5 of the Streets and Highway Code and/or Section 53328.3 of the Government Code (Mello-Roos Assessment). CLTA Preliminary Report Form (Rev 1/1/95) ~;;g~&f SCHEDULE B (continued) 1. Water rights, claims or title to water, whether or not disclosed by the public records. 2. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: City of San Diego Water pipe lines and trench and excavation slopes and wasting of excess excavated materials July 14, 1923 in Book 937, Page 463 of Deeds Lots 7,10,11 and A as shown on said map Recorded: Affects: 3. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: City of San Diego Water pipe lines, roads and spoil barks, trench and excavation slopes and wasting of excess excavated materials July 14, 1930 in Book 1762, Pages 207 of Deeds Lots C and D as shown on said map Recorded: Affects: 4. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress August 12,1936 in Book 538, Page 374 of Official Records Lots 4, 5, 6, 8, 11, A and D as shown on said map 5. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: City of San Diego Cathodic protection station or stations January II, 1957 in Book 6414, Page 239 of Official Records Lots 11 and A as shown on said map ':l-1n7 P'age 9'6 SCHEDULE B (continued) 6. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress August 16,1957 in Book 6710, Page 545 of Official Records Lots 5 and 6 as shown on said map 7. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress June 3, 1963 as File No. 95990 of Official Records Lots 5 and 6 as shown on said map 8. An easement affecting the portion of said land and for the purposes stated herein, and incidental purposes, condemned by final decree Affects: United States of America Roadway and utility lines Civil No. 79-0907 Final Judgment and Order of Distribution, Case No. 79-0907 was filed May 17, 1982 and entered May 20,1989 in the U. S. District Court, Southern District, disclosed by Condemnation action recorded August 6, 1979 as Document No. 79-328460, April 23, 1980 as Document No. 80-137651 and April 27, 1982 as Document No. 82- 120168, aU of Official Records Lots 5, 6, 8 and D as shown on said map Granted To; Purpose: Case No: Recorded: 9. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: The Pacific Telephone and Telegraph Company Public utilities, ingress and egress June 14, 1982 as File No. 82-181896 of Official Records Lots 5, 6, 8 and D as shown on said map ~;g1 g~ SCHEDULE B (continued) 10. An agreement, and the terms and conditions as contained therein Recorded: October 28, 1993 The City of Chula Vista, a chartered municipal corporation, the County of San Diego, a political subdivision and Otay Vista Associates, a California limited partnership Indemnification, implementation of mitigation measures and payment of certain fees in connection with the approval of the general plan amendment, general and other development plans for the Otay Ranch February 7,1994 as File No. 0994-0084743 of Official Records Dated: By and Between: Regarding: Reference is hereby made to said document for full particulars. 11. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: County of San Diego Landfill nuisance March 17, 1997 as File No. 1997-0118928 of Official Records Lots 26, 27, 28 and 29 as shown on said map 12. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: County of San Diego Landfill nuisance and covenants running with the land March 17, 1997 as File No. 1997-0118929 of Official Records Lots 30 and 31 as shown on said map 13. A document entitled "Restated and Amended Pre-Annexation Development Agreement with Otay Ranch, L.P.", dated, March 4,1997, executed by City ofChula Vista and Otay Ranch, L.P., a California limited partnership, subject to all the terms, provisions and conditions therein contained, recorded May 12, 1997 as File No. 1997-0219970 of Official Records. 14. An easement for the purpose shown below and rights incidental thereto as shown or as offered for dedication on the recorded map shown below. Map No: Easement Purpose: Parcel Map No. 18396 Affects: Assignable and irrevocable general utility and access, landscape buffer, drainage and sewer Lots 26, 27 and 28 as shown on said map 3-109 Page 98 SCHEDULE B (continued) 15. An easement for the purpose shown below and rights incidental thereto as shown or as offered for dedication on the recorded map shown below. Map No: Easement Purpose: Affects: Parcel Map No. 18471 Future 40 foot wide private access Santa Venetia Street 16. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: City of Chula Vista Landscape buffer June 27, 2000 as File No. 2000-0339297 of Official Records Lots 1,23,24 and 26 as shown on said map 17. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: City of Chula Vista Sewer June 27, 2000 as File No. 2000-0339298 of Official Records Heritage Road as shown on said map 18. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: City of Chula Vista Drainage June 27, 2000 as File No. 2000-0339299 of Official Records Lots I, 23, 24 and 26 as shown on said map 19. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: City of Chula Vista Assignable and irrevocable general utility June 27, 2000 as File No. 2000-0339300 of Official Records Lots I, 23, 24 and 26 as shown on said map ~,;gJJJJ SCHEDULE B (continued) 20. A document entitled "Desiltation and Maintenance Agreement with Otay Project L.P., (poggi Canyon Drainage Improvements)", dated, October 19, 1999, executed by Otay Project, L.P., a California partnership, Prowswood-Matsushita Otay Partners LLC, a California limited liability company as owner, Centex Homes, a Nevada general partnership, pm Otay Ranch Associates, LLC, a Delaware limited liability company and the City of Chula Vista, subject to all the terms, provisions and conditions therein contained, recorded June 28, 2000 as File No. 2000-0341829 of Official Records. 21. An easement for the purpose shown below and rights incidental thereto as reserved in a document. Purpose: Recorded: Affects: Water pipelines and/or mains, manholes and lateral pipelines August 18, 2000 as File No. 2000-0440600 of Official Records Lot 24 as shown on said map Said easement contains restrictions on the use, by the owners of said land, of the easement area as set out in said easement document. 22. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress November 15,2000 as File No. 2000-0621780 of Official Records Lots I, 11,23,24,26,27 and 28 The exact location and extent of said easement is not disclosed of record. 23. Intentionally deleted 24. Intentionally deleted 25. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress October 28, 2002 as File No. 2002-0945145 of Official Records Lot I as shown on said map ~ag~ Ib~ SCHEDULE B (continued) 26. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress February 4, 2003 as File No. 2003-0130459 of Official Records Santa Venetia Street as shown on said map 27. An easement for the purpose shown below and rights incidental thereto as set forth in a document. Granted To: Purpose: Recorded: Affects: San Diego Gas & Electric Company Public utilities, ingress and egress October 28, 2004 as Document No. 2004-1019564 Lot I as shown on said map ~;g11~ SCHEDULE B (continued) 28. Covenants, conditions and restrictions (but omitting any covenant or restrictions, if any, based upon on race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, or source of income, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law) as set forth in the document Recorded: October 4,2005 as File No. 2005-0856104 of Official Records Note: Section 12956.1 of the government code provides the following: "If this document contains any restriction based on race, color, religion, sex, sexual orientation, familial status, marital status, disability, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status." Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of a first mortgage or first Deed of Trust made in good faith and for value. Said instrument also provides for the levy of assessments, the lien of which are stated to be subordinate to the lien of a first mortgage or first Deed of Trust made in good faith and for value. Among other things, said document provides: Various easements First Amendment to Declaration of Covenants, Conditions and restrictions of Montecito at Otay Ranch recorded June I, 2006 as Document No. 2006-0389164 and re-recorded July II, 2006 as Document No. 2006-0487654. Second Amendment to Declaration of Covenants, Conditions and Restrictions of Montecito at Otay Ranch recorded August 30,2006 as Document No. 2006-0619008 ~age\bi SCHEDULE B (continued) 29. Covenants, conditions and restrictions (but omitting any covenant or restrictions, if any, based upon on race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, or source of income, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law) as set forth in the document Recorded: January 19, 2006 as File No. 2006-0040797 of Official Records Note: Section 12956.1 of the government code provides the following: "If this document contains any restriction based on race, color, religion, sex, sexual orientation, familial status, marital status, disability, national origin, source of income as defined in subdivision (P) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status." Affects: Lot 30 ~agJ M SCHEDULE B (continued) 30. A Deed of Trust to secure an indebtedness in the original amount shown below. Amount: Dated: Trustor: Trustee: Beneficiary: Loan Number: Recorded: $33,500,000.00 March 28, 2006 Otay Ranch Investments, LLC, a Delaware limited liability company First Bank, a Missouri banking corporation First Bank, a Missouri banking corporation 406063035287 April 5, 2006 as Document No. 2006-0235562 and re-recorded April 17,2006 as Document No. 2006-0266371 Affects: Lot 30 An Agreement to modify the terms and provisions of said Deed of Trust as therein provided. Executed by: Otay Ranch Investments, LLC, a Delaware limited liability company and First Bank, a Missouri banking corporation July 28, 2006 as Document No. 2006-0536346 Recorded: 31. A document entitled "Subdivision Improvement Agreement", dated, May 25, 2006, executed by Otay Project L.P. and City of ChuJa Vista, subject to all the terms, provisions and conditions therein contained, recorded May 26, 2006 as File No 2006-0375302 of Official Records. 32. A document entitled "Supplemental Subdivision Improvement Agreement", dated, May 25, 2006, executed by Otay Project L.P. and City of Chula Vista, subject to all the terms, provisions and conditions therein contained, recorded May 26, 2006 as File No. 2006-0375301 of Official Records. 33. Provisions of the dedication statement on the Map shown below, which offer to dedicate an irrevocable fee interest in the land herein described for open space and other public uses. Map of: Affects: 15350 LotD 34. Provisions of the dedication statement on the Map shown below, which offer to dedicate an irrevocable fee interest in the land herein described for public park purposes. Map of: Affects: 15350 Lots A, Band C ~-115 Page 04 SCHEDULE B (continued) 35. An easement for the purpose shown below and rights incidental thereto as shown or as offered for dedication on the recorded map shown below. Map of: Easement Purpose: Affects: 15350 Public access for park use and other public purposes Lot 15 36. An easement for the purpose shown below and rights incidental thereto as shown or as offered for dedication on the recorded map shown below. Map of: Easement Purpose: Chula Vista Tract No. 06-05, Otay Ranch Village 2 "A" Map Affects: General utility and access, landscape buffer and sidewalk, drainage, private reciprocal access and utility As shown on said map Plge'!b!i SCHEDULE B (continued) 37. Provisions, herein recited, of the dedication statement on the Map of: Provisions: 15350 Lots 4, 5, 9, 14, 28 and 29 are non-buildable lots. A certificate of compliance or subsequent final map must be approved by the City of Chula Vista prior to the issuance of any building permits for said lots. 38. Covenants, conditions and restrictions (but omitting any covenant or restrictions, if any, based upon on race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, or source of income, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law) as set forth in the document Recorded: May 31, 2006 as Document No. 2006-0385428, 2006-0385464, 2006-0385470,2006-0385517,2006-0385721, 2006-0385770, 2006- 0385801, , 2006-0385834, 2006-0385985, 2006-0386006 and 2006- 0386008; June 15, 2006 as Document No. 2006-0426863, 2006- 0426865,2006-0426867 and 2006-0426869 Note: Section 12956.1 of the government code provides the following: "If this document contains any restriction based on race, color, religion, sex, sexual orientation, familial status, marital status, disability, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status." Affects: Lots 1,2,3,6,7,8,10,13,16 through 24 and 27 39. An easement for the purpose shown below and rights incidental thereto as reserved in a document. Affects: Private reciprocal access and utility May 31, 2006 as Document No. 2006-0385471, 2006-0385771, 2006-0385802 and 2006-0386009; June 15, 2006 as Document No. 2006-0426819, 2006-0426868 and 2006-0426870; June 30, 2006 as Document No. 2006-0465915 Lots 6, 7,16,19,22,23,24,31 and 32 Purpose: Recorded: Said easement has been granted and reserved in various deeds of record 3-117 Page 100 SCHEDULE B (continued) 40. A Deed of Trust to secure an indebtedness in the original amount shown below. Amount: Dated: Trustor: Trustee: Beneficiary: Recorded: $24,500,000.00 May 1,2006 Otay Ranch JC R-6, LLC, a Delaware limited liability company First Bank, a Missouri banking corporation First Bank, a Missouri banking corporation May 31, 2006 as Document No. 2006-0385803 Affects: Lot 23 41. A Deed of Trust to secure an indebtedness in the original amount shown below. Amount: Dated: Trustor: Trustee: Beneficiary: Recorded: $23,500,000.00 May 24, 2006 Otay Ranch JC R-9, LLC, a Delaware limited liability company Chicago Title Company Central Pacific Bank, a Hawaii banking corporation June 2, 2006 as Document No. 2006-0393335 Affects: Lots 20 and 21 42. A Deed of Trust to secure an indebtedness in the original amount shown below. Amount: Dated: Trustor: Trustee: Beneficiary: Recorded: $24,170,000.00 May 31, 2006 Otay Ranch JC R-7, LLC, a Delaware limited liability company Chicago Title Company Chinatrust Bank (U.S.A.), a California banking corporation June 5, 2006 as Document No. 2006-0393672 Affects: Lot 24 43. A Deed of Trust to secure an indebtedness in the original amount shown below. Trustee: Beneficiary: Recorded: $30,800,000.00 and $14,000,000.00 May 12, 2006 Otay Ranch Twenty-Two, LLC, a Delaware limited liability company U.F. Service Corporation, a California corporation United Commercial Bank, a California banking corporation June 5, 2006 as Document No. 2006-0393673 3-11R Page 10"'7 Amount: Dated: Trustor: SCHEDULE B (continued) Affects: Lot 3 44. A Deed of Trust to secure an indebtedness in the original amount shown below. Amount: Dated: Trustor: Trustee: Beneficiary: Recorded: $21,000,000.00 June 16, 2006 Otay Ranch Eighteen, LLC, a Delaware limited liability company Chicago Title Company KeyBank National Association, a national banking association June 16,2006 as Document No. 2006-0428745 Affects: Lot6 45. A document entitled "School Facilities Funding and Mitigation Agreement", dated, January 23, 2006, executed by Sweetwater Union High School District, Otay Project L.P., a California limited partnership, Otay Ranch vn JC, LLC, a Delaware limited liability company, Otay Ranch Twelve, LLC, a Delaware limited liability company, Otay Ranch VII-I, LLC, a Delaware limited liability company and Otay Ranch R-2B, LLC, a Delaware limited liability company, subject to all the terms, provisions and conditions therein contained, recorded June 19,2006 as Document No. 2006- 0433349. 46. A covenant and agreement upon and subject to the terms and conditions therein Executed By: In Favor Of: Recorded: Otay Project L.P. and Flatrock Land Company, LLC City of Chula Vista June 28, 2006 as Document No. 2006-0458125 Reference is hereby made to said document for full particulars. ~-11!l Page 108 SCHEDULE B (continued) 47. A covenant and agreement upon and subject to the terms and conditions therein Executed By: In Favor Of: Recorded: Otay Project L.P. and Flatrock Land Company, LLC City ofChula Vista June 28, 2006 as Document No. 2006-0458126 Reference is hereby made to said document for full particulars. 48. A covenant and agreement upon and subject to the terms and conditions therein Executed By: In Favor Of: Recorded: JPB Development and Championship Off-Road Racing (CORR) City ofChula Vista July 7, 2006 as Document No. 2006-0479843 Reference is hereby made to said document for full particulars. 49. A covenant and agreement upon and subject to the terms and conditions therein Executed By: In Favor Of: Recorded: JPB Development and Championship Off-Road Racing (CORR) City of Chula Vista July 19,2006 as Document No. 2006-0507414 Reference is hereby made to said document for full particulars. 50. Any easements not disclosed by those public records which impart constructive notice and which are not visible and apparent from an inspection of the surface of said land. 51. Matters which may be disclosed by an inspection or survey of said land or by inquiry of the parties of possession thereof. 52. Any rights of parties in possession of said land, based on any unrecorded Lease, or Leases. This Company will require a full copy of any unrecorded Lease be submitted to us, together with all supplements, assignments and amendments, before issuing any policy oftitle insurance. END OF SCHEDULE B 3-120 Page 109 INFORMATIONAL NOTES Note No.1: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 1" Installment: 2nd Installment: Code Area: $7,118.78 Paid $7,118.78 Paid 01262 Assessors Parcel Number: 644-030-07 Note No.2: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I" Installment: 2nd Installment: Code Area: $14,526.98 Paid $14,526.98 Paid 01265 Assessors Parcel Number: 644-030-10 Note No.3: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I" Installment: 2nd Installment: Code Area: $17,308.60 Paid $17,308.60 Paid 01265 Assessors Parcel Number: 644-030-14 Note No.4: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 1 it Installment: 2nd Installment: Code Area: $249.87 Paid $249.87 Paid 01265 Assessors Parcel Number: 644-030-16 CLTA Preliminary Report Form (Rev \/1/95) 3-121 Page 11 0 INFORMATIONAL NOTES (continued) Note No.5: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I Sl Installment: 2"d Installment: Code Area: $0.00 Not billable $0.00 Not billable 01265 Assessors Parcel Number: 644-030-17 Note No.6: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I Sl Installment: 2"d Installment: Code Area: $15,809.92 Paid $15,809.92 Paid 01262 Assessors Parcel Number: 644-030-18 Note No.7: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I Sl Installment: 2"d Installment: Code Area: $113.22 Paid $113.92 Paid 01265 Assessors Parcel Number: 644-030-19 Note No.8: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I Sl Installment: 2"d Installment: Code Area: $32,218.19 Paid $32,218.19 Paid 01265 Assessors Parcel Number: 644-030-21 Plge11~f INFORMATIONAL NOTES (continued) Note No.9: Property taxes, including any personal property taxes and any assessments collected with taxes, for the fiscal year 2005 - 2006 I" Installment: 2nd Installment: Code Area: $0.00 Not billable $0.00 Not billable 01265 Assessors Parcel Number: 644-030-23 3-123 Page 112 CHICAGO TITLE INSURANCE COMPANY Fidelity National Financial Group of Companies' Privacy Statement July 1, 2001 We recognize and respect the privacy of today's consumers and the requirements of applicable federal and state privacy laws. We believe that making you aware of how we use your non-public personal information ("Personal Information"), and to whom it is disclosed, will form the basis for a relationship of trust between us and the public that we serve. This Privacy Statement provides that explanation. We reserve the right to change this Privacy Statement from time to time consistent with applicable privacy laws. In the course of our business, we may collect Personal Information about you from the following sources: . From applications or other forms we receive from you or your authorized representative; . From your transactions with or from the services being performed by, us, our affiliates or others; . From our Internet web sites; . From the public records maintained by government entities that we wither obtain directly from those entities, or from our affiliates or others; and . From consumer or other reporting agencies Our Policies Regarding The Protection Of The Confidentiality And Security Of Your Personal Information We maintain physical, electronic and procedural safeguards to protect your Personal Information from unauthorized access or intrusion. We limit access to the Personal Information only to those employees who need such access in connection with providing products or services to you or for other legitimate business purposes. Our Policies and Practices Regarding the Sharing of Your Personal Information We may share your Personal Information with our affiliates, such as insurance companies, agents, and other real estate settlement service providers. We may also disclose your Personal Information: . To agents, brokers or representatives to provide you with services you have requested; . To third-party contractors or service providers who provide services or perform marketing or other functions on our behalf; and . To others with whom we enter into joint marketing agreements for products or services that we believe you may find of interest. In addition, we will disclose your Personal Information when your direct or give us permission, when we are required by law to do so, or when we suspect fraudulent or criminal activities. We also may disclose your Personal Information when otherwise permitted by applicable privacy laws such as, for example, when disclosure is needed to enforce our rights arising out of any agreement, transaction or relationship with you. One of the important responsibilities of some of our affiliated companies is to record documents in the public domain. Such documents may contain your Personal Information. Right To Access Your Personal Information And Ability To Correct Errors Or Request Change Or Deletion Certain states afford you the right to access your Personal Information and, under certain circumstances, to find out to whom your Personal Information has been disclosed. Also, certain states afford you the right to request correction, amendment or deletion of your Personal Information. We reserve the right, where permitted by law, to charge a reasonable fee to cover the costs incurred in responding to such requests. Privacy Statement (10.21-03) 3.gl 24 CHICAGO TITLE INSURANCE COMPANY All requests must be made in writing to the following address: Privacy Compliance Officer Fidelity National Financial, Inc. 601 Riverside Drive Jacksonville, FL 32204 Multiple Products or Services: If we provide you with more than one financial product or service, you may receive more that one privacy notice from us. We apologize for any inconvenience this may cause you. Privacy Statement (10-21-03) Bag~ 215 LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY -1990 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting .or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or resulting in loss or damage which would not have been sustained if the insured claimant had paid value for he insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. Exceptions and Exclusions :hg12B; EXCEPTIONS FROM COVERAGE - SCHEDULE B, PART I This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. Exceptions and Exclusions ~2" AMERICAN LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY (6-1-87) EXCLUSIONS In addition to the Exceptions in Schedule B, you are not insured against loss, costs, attorneys' fees, and . expenses resulting frorn: 1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning ordinances and also laws and regulations concerning: . land use . improvements on the land . land division . environmental protection This exclusion does not apply to violations or the enforcement of these matters which appear in the public records at Policy Date. This exclusion does not limit the zoning coverage described in Items 12 and 13 of Covered Title Risks. 2. The right to take the land by condemning it, unless: . a notice of exercising the right appears in the public records on the Policy Date . the taking happened prior to the Policy Date and is binding on you if you bought the land without knowing of the taking 3. Title Risks: . that are created, allowed, or agreed to by you . that are known to you, but not to us, on the Policy Date -- unless they appeared in the public records . that result in no loss to you . that first affect your title after the Policy Date -- this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks 4. Failure to pay value for your title. 5. Lack of a right: . to any land outside the area specifically described and referred to in Item 3 of Schedule A OR . in streets, alleys, or waterways that touch your land This exclusion does not limit the access coverage in Item 5 of Covered Title Risks. Exceptions and Exclusions ~"In EXCEPTIONS FROM COVERAGE In addition to the Exclusions, you are not insured against loss; cost, attorneys' fees and expenses resulting from: 1. Someone claiming an interest in your land by reason of: A. Easements not shown in the public records B. Boundary disputes not shown in the public records C. Improvements owned by your neighbor placed or you land 2. If, in addition to a single family residence, your existing structure consists of one or more Additional Dwelling Units, Item 12 of Covered Title Risks does not insure you against loss costs attorneys' fees, and expenses resulting from: A. The forced removal of any Additional Dwelling Unit, or, B. The forced conversion of any Additional Dwelling Unit back to its original use. if said Additional Dwelling Unit was either constructed or converted to use as a dwelling unit in violation of any law or government regulation. Exceptions and Exclusions !ag4 219 CALIFORNIA LAND TITLE ASSOCIATION HOMEOWNER'S POLICY OF TITLE INSURANCE (6/2/98) CL T A HOMEOWNER'S POLICY OF TITLE INSURANCE (6/2/98) ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE (10/17/98) EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting frorn: 1. Governmental police power, and the existence or violation of any law or government regulation. This includes ordinances, laws and regulations concerning: a. Building b. Zoning c. Land use d. Improvements on Land e. Land division f. Environmental protection This Exclusion does not apply to violations or the enforcement of these matters if notice of the violation or enforcement appears in the Public Records at the Policy Date. This Exclusion does not limit the coverage described in Covered Risk 14, 15, 16, 17, or 24. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not apply to violations of building codes if notice of the violation appears in the Public Records at the Policy Date. 3. The right to take the Land by condemning it, unless: a. notice of exercising the right appears in the Public Records at the Policy Date; or b. the taking happened before the Policy Date and is binding on You if You bought the Land without Knowing of the taking. 4. Risks: a. that are created, allowed, or agreed to by You, whether or not they appear in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they appear in the Public Records at the Policy Date; c. that result in no loss to You; or d. that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, a.d. 22, 23, 24 or 25. Exceptions and Exclusions !lag~ !l~ 5. Failure to pay value for Your Title. 6. Lack of a right: a. to any Land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 18. Exceptions and Exclusions ~..!l"1~~ AMERICAN LAND TITLE ASSOCIATION LOAN POLICY (10-17-92) WITH AL T A ENDORSEMENT - FORM 1 COVERAGE and AMERICAN LAND TITLE ASSOCIATION LEASEHOLD LOAN POLICY (10-17-92) WITH AL T A ENDORSEMENT - FORM 1 COVERAGE EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyrnent of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material or to the extent insurance is afforded herein as to assessments for street improvements under construction or completed at Date of Policy); or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with applicable doing business laws of the state in which the land is situated. Exceptions and Exclusions gagq ~ 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. Exceptions and Exclusions I3~13:S AMERICAN LAND TITLE ASSOCIATION LOAN POLICY (10-17-92) WITH AL TA ENDORSEMENT - FORM 1 COVERAGE and AMERICAN LAND TITLE ASSOCIATION LEASEHOLD LOAN POLICY (10-17-92) WITH AL TA ENDORSEMENT - FORM 1 COVERAGE (Continued) 7. Any claim, which arises out of the transaction creating the interest of the mortgagee insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the interest of the insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer; or (ii) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine or equitable subordination; or (iii) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. The above policy forms may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following General Exceptions: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, Interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making inquiry of persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. Exceptions and Exclusions 3's'ltJ4 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. Exceptions and Exclusions 8ag4 lP5 AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY (10-17-92) and AMERICAN LAND TITLE ASSOCIATION LEASEHOLD OWNER'S POLICY (10-17-92) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which wouid be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim, which arises out of the transaction vesting in the insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. The above policy forms may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage Policy will also include the following General Instructions: Exceptions and Exclusions ~4~ EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making inquiry of persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereo.f; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. Exceptions and Exclusions !xgl m ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (10/13/01) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (Iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material or to the extent insurance is afforded herein as to assessments for street improvements under construction or completed at Date of Policy); or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. Exceptions and Exclusions 3>:rg1:3B7 6. Real property taxes or assessments of any governmental authority which become a lien on the Land subsequent to Date of Policy. This exclusion does not limit the coverage provided under Covered Risks 7, 8(e) and 26. 7. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to advances or modifications made after the insured has knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This exclusion does not limit the coverage provided in Covered Risk 8. 8. Lack of priority of the lien of the insured Mortgage as to each and every advance made after Date of Policy, and all interest charged thereon, over liens, encumbrances and other matters affecting the title, the existence of which are known to the insured at: (a) The time of the advance; or (b) The time a modification is made to the terms of the Insured Mortgage which changes the rate of interest charged, if the rate of interest is greater as a result of the modification than it would have been before the modification. This exclusion does not limit the coverage provided in Covered Risk 8. 9. The failure of the residential structure, or any portion thereof to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This exclusion does not apply to violations of building codes if notice of the violation appears in the Public Records at Date of Policy. Exceptions and Exclusions :tag'!: 3:$3 NOTICE You may be entitled to receive a $20.00 discount on escrow services if you purchased, sold or refinanced residential property in California between May 19, 1995 and November 1, 2002. If you had more than one qualifying transaction, you may be entitled to multiple discounts. If your previous transaction involved the same property that is the subject of your current transaction, you do not have to do anything; the Company will provide the discount, provided you are paying for escrow or title services in this transaction. If your previous transaction involved property different from the property that is SUbject of your current transaction, you must inform the Company of the earlier transaction, provide the address of the property involved in the previous transaction, and the date or approximate date that the escrow closed to be eligible for the discount. Unless you inform the Company of the prior transaction on property that is not the subject of this transaction, the Company has no obligation to conduct an investigation to determine if you qualify for a discount. If you provide the Company information concerning a prior transaction, the Company Is required to determine if you qualify for a discount. Effective through November 1, 2014 ~we EXHIBIT "P" Village Two Summary Appraisal Report Complete Appraisal Process OTAY PROJECT, L. P. PROPERTY PORTIONS OF THE OTAYRANCH CHULA VISTA, CALIFORNIA APPR,uSED FOR Otay Project, L.P. 270 Newport Center Drive, Suite 200 Newport Beach, California 92660 DATE OF VALUATION December 31, 2005 DATE OF REPORT June 30, 2006 APPRAISED BY Anderson & Brabant, Inc. 353 West Ninth Avenue Escondido, California 92025 A & B File No. 06-067 Page 130 3-141 EXHIBIT "P" (Continued) Village Two SUMMARY APPRAISAL REPORT COMPLETE APPRAISAL PROCESS OTAY PROJECT, L. P. PROPERTY PORTIONS OF THE OTAY RANCH CHULA VISTA, CALIFORNIA APPRAISED FOR Otay Project, L.P. 270 Newport Center Drive, Suite 200 Newport Beach, California 92660 DATE OF VALUATION December 31, 2005 DATE OF REPORT June 30, 2006 APPRAISED BY Anderson & Brabant, Inc. 353 West Ninth Avenlle Escondido, California 92025 A & B File No. 06-067 Page 131 3-142 EXHmIT "P" (Continued) ANDERSON /?, BRABANT,INC. 'I'(.LE!5T....t...P"'....."IlUIS...,.OCO..svu..."'rs 353 W. NINTH AVENUE ESCONDIOO, CAI..IFORNIA 92025.5032 TEI..EPI-tONE f7f30t 741.<1: 46 FAX (71501 741.1049 June 30, 2006 Mr. Ronald P. Therrien Chief Financial Officer JPB DEVELOPMENT, LLC 270 Newport Center Drive, Suite 200 Newport Beach, California 92660 Re: Otay Project, L. P. Property Portions ofthe Olay Ranch Dear Mr. Themen: As requested, we have completed a valuation analysis of the above referenced property. You have requested that we present our findings in a summary format for the purpose of using the final value conclusion in a financial statemenL As agreed, our findings and conclusions are set faIth in a summary format. based upon a complete appraisal process as defined by the Uniform Standards of Professional Appraisal Practice (USP AP). Our report is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b) of USPAP. The data and support for the value conclusion are presented in summary style. Afier a thorough examination and analysis of appropriate data as they relate to the subject, we have formed the following opinion of value for the property, as of me above mentioned date. FOUR HUNDRED FORTY MILLION DOLLARS ($440,000,000) As part of this assignment, we have estimated a reasonable exposure time for the subject property of up to two years. The opinion of value expressed herein is subject to certain assumptions and limiting conditions as set forth in the attached report. A description of the subject property and discussions of the data and analyses that support the value conclusion are also included in the report. We appreciate this opportunity to be of service. Please let u.c;; know if we can be of further assistance in this matter. Respectfully submitted, ANDERSON & BRABANT, INe. t,,A .b,dY William B. Anderson, MAl Certified General Real Estate Appraiser OREA Appraiser No. AG0023l5 Page 132 3-143 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California TABLE OF CONTENTS EXECUTIVE SUMMARY ...........................................................................................................1 ASSUMPTIONS AND LIMITING CONDITIONS ...................................................................2 APPRAISERS' SIGNED CERTIFICATION .............................................................................5 INTRODUCTION Identification of the Property. ......................................... ..... ............................... .................. .....6 Purpose and Date of the Appraisal.............................................................................................6 Estimated Exposure Period ................... ............. .............................. ..... ......................... .., ......... 7 Intended Use and Users ................................ ......... ......................................... ........................... 7 Property Rights Appraised ..........................,......... ........ .......... ............... ............... ............ ......... 7 Valuation Premise. ...................................., ........................... .......................... ............ ........ .......7 USP AP Competency Provision ............ .................... ...................................... ............ ........... ....8 Appraisal Development aod Reporting Process ........................................................................8 Effective Date of Value ... ................... ......... ................... .................................................. .........9 Date of Report................ .. .................................. ........................................................................9 Sales History of the Suhject Property .................................................................,......................9 Location Map ..... .................... ............................................................................. ........ ......... ....1 0 Location Description......... ..........., ....,.................. .......................,......................... ....... ............11 DESCRIPTION OF REAL ESTATE APPRAISED Land Description ................... .......... ...... ............... ..... ............................ ................ ...... ........,... .18 Assessment Infonnation.........n................. ........ .. ..... ...., ......... ............. ........... ......... ... .,....... ..20 Residential .Market Overview......... ................. ......... .......... ..... ................... ........."..... ........... ..20 VALUATION Highest and Best Use .......................................................................... ........................ .............25 Valuation Methodology ........ .................... .................. .............. ........... .......... ............. ............ .25 Conclusion ............. ............ ....................... ....... .................., .......... .............................. .......... ...31 ADDENDA Developmental Analysis Qualifications of the Appraiser Anderson & Brabant. Inc. Page 133 3-144 EXHIBIT ."p" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California Location: Owner of Record: Interest Appraised: Property Description: Highest and Best Use: Propnsed Use: Date of Valuation: Date of Report: Appraisal Reporlffype: Exposure Period: Value ConclusioD: EXECUTIVE SUMMARY Otay Ranch, Chula Vista, California Otay Project LP Fee Simple !.!!!l! The undeveloped land appraised is summarized in the following chart. SFD MF Comm'l CPF INO ...... ""'001 ^'" "'. ^"" Units: ^=' ^=' ^=' ^=' ^=' ..... i1lage2 I,Qj6 214.90 1,416 .,.., 19.40 6.10 Sl.SO 1O~ il\aiCl ..., il111ge6 157 '.m 2.95 AI2{2) 34.40 ViUagc 13 1,842 501.10 m lUG SLlO 12.60 o~' 2,8911 716.00 1,&50 119.60 56.75 10.70 51.SO 5t.20 22. The total acreage, units and dwelling units per acre for eaeh Village are shown in the following chart. Total Total 0.... = Acres Uniu DoIA "iUage2 396.00 2,472 6.24 mage1 4.60 iIlagc6 7.65 157 20.52 Ana) 34.40 i11alltD 586.00 2,119 3.62 ot.al~ J,028.65 4.i48 4.62 ImDrovements No structural improvements are included in this appraisal. Mixed use master planned community. Parcels are designated fnr various uses including residential, commercial, industrial, schools, reson and community facilities. December 31, 2005 June 30, 2006 Complete AppraisaVSummary Report. Varles depending upon use and size; generally one to six months. $440,000,000 Anderson & Brabant, Inc. I Page 134 3-145 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, Califomia ASSUMPTIONS AND LIMITL'l/G CONDITIONS This appraisal is subject to the following special assumptions and limiting conditions: 1. This is a Summary Appraisal Report which is intended to comply with the reporting standards set forth under Standsrd Rule 2-2(b) of the Uniform Standsrds of Professional Appraisal Proctice for a Summary Appraisal Report. As such, it might not include full discussions of the dsta, reasoning, and analyses that were used in the apprsisal process io develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' files. The infonnation contained in this report is specific to the needs of the client for the intended use stated in this report. The appraisers are not responsible for unauthorized use of this report. 2. This is a Complete Appraisal which has heen prepared in conformity "ith the Standsrds of Professional Apprsisal Prsctice of the Appralsallnstitu\e which incorporales the requiremenis of the Uniform Standards of Professional Appralsal Proctice (USPAP) adopted by the Apprsisal Standards Board of the Appralsal Foundation. As such. there are no departures from Standards Rule 1 ofUSP AP. 3. Development cost infonnation including offsite infrastructure, intracts and impact fees were provided by the client and used ill our analyses. No independent third party estimates were obt,ulled. A change in development costs could hsve significant influence on the estimated market value. 4. The various planning areas have been created by a master tentative map with specific final maps for those parcels conveyed to others. We have assumed,. for purposes of valuation, that tlle unsold planning areas can be legally conveyed in accordance with our estimated absorption period. A change in anticipated product delivery dates could alter the projected absorption schedule and the estimated market value. 5. The estimatt.'<i market value of the subject property, including current and future development phases, is based on the assumption that adequate open space has been reserved to facilitate build out in accordance with project summaries as reflected in this report. Further. there is no additional marketable open space land available within the Otay Project, L.P ownership. Any value increment associated with open space land is already incorporated in our value estimate of the developable acreage. This appraisal is subject to the following general assumptions and limiting conditions: 1. It is assumed that information furnished to us by our client including maps. cost estimates, and legal descriptions are substantially correct. 2. No responsibility is assumed for matters legal in character. nor do we render an opinion as to title. which is assumed to be held in fee- simple interest as of the date of valuation unless otherwise specifi,ed. 3. It is assumed that the property is readily marketable, free of all liens and encumbrances except any specifically discussed herein, and under responsible o\\-nersrnp and management. Anderson & Brabant, Inc. 2 Page 135 3-146 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Rmlch, Chula Vista, California 4. Photographs, plat and maps furnished in this appraisal are to assist the reader in visnalizing the property. No survey of the property has been made, and no responsibility has been assumed in this matter. 5. It is assumed that there are no legitimate environmental or ecological reasons that would prevent orderly development of the land to its highest and best use under economically feasible conditions. 6. Soils engineering studies have not been provided to Anderson & Brabant.lnc. It is therefore assumed that there are no hidden or unapparent conditions of the property such as hazardous or toxic wastes and/or other subsoil conditions~ which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering, which might be required to discover such factors, 7. The appraisers are not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraisers that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence ofhazardollS waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos. urea- formaldehyde fOJUIl insulation, or other potentially hazardous materials may affect the value of the properties. The appraisers' value estimates are predicated on the assumption that there is no such material on or in the properties that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions or for any expertise or engineering knowledge required to discover them. The appraisers' descriptions and resulting comments are the result of the routine observations made during the appraisal process. B. Disclosure of the contents of this appraisal report is governed by the by-laws and regulations of the Appraisallnstitute. Neither all nor any part of the contents of this report (especially reference to the Appraisal Institute or the MAl designation) shall be disseminated to the public through advertising media, public relations media, news media, sales media,. or any other public means of communication without prior written consent and approval of Anderson & Brabant, me. 9. The submission of this report constitutes completion of the services authorized. It is submitted on the condition that the client will provide the appraisers customary compensation relating to any subsequent required depositions, conferences, additional preparation or testimony. to. The valuation estimate is of surface rights only and the mineral rights, if any, have been disregarded. 11. No warranty is made as to the seismic stability of the subject property. 12, It is assumed that aU applicable zoning and land use regulations and restrictions have been complied withl unless a nonconformity has been stated, defined, and considered in this appraisal report. Anderson & Brabant, Inc. 3 Page 136 3-147 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California 13. It is assmned that all required licenses, certificates of occupancy, or other legislative or administrative authority from any local, state, or national government Or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. Anderson & Brabant, Inc. 4 Page 137 3-148 EXHIBIT "P" (Continued) Undeveloped Portions ofOtayRanch. Chula Vista, California APPRAISER'S CERTIFICATE I do hereby certify that, to the best of my knowledge and belief, ... 1. The statements of fact contllined in this report are true and correcl 2. The reported analyses. opinions. and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, unbiased professional analyses, opinions and conclusions. 3. 1 have no present or prospective future interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved. 4. My compensation is not contingent upon the reporting of a predetermined value that favors the cause of the client, the amount of the value estimate, the attaimnent of a stipulated result, or the occurrence of a subsequent event. 5. The appDliser did not base, either partially or completely. their analysis and/or the estimate of value on the race, color, religion, familial status, hea1~ or national origin of either the present or prospective owners, occupants. or users of the subject property or the present or prospective O'NIleI'S, occupants, or users of the properties in the vicinity of the subject property. 6. My analyses, opinions, and conclusions were developed., and this report has been prepared, in conformity with the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP), and the Code of Professional Ethics aod the Standards of Professional Practice of the Appraisal lnstitute. 7. [ have made a personal inspection of the property that is the subject of thisreport. 8. No one provided significant professional assistance to the persons signing this report. 9. The appnusal assignment was not based on the requested minimum valuation. a specific valuation, or the approval of a loan. 10. 1be use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. II. M of the date of this report, I have completed the requirements of the continuing education program of the Appraisal Institute. f~Bfi~ Certified General Real Estate Appraiser OREA Appraiser No. AG002315 June 30. 2006 Date 5 Anderson & Brabant, Inc. Page 138 3-149 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ran.ch, Chula Vista, California INTRODUCTION IDENTIFICATION OF THE PROPERTY The appraised property consists of portions of the Olay Ranch located partially within the City of ChuJa Vista and unincozporated San Diego County. These properties are briefly identified in the following chart. Summarv of Pro e A raised - 2005 ProeaTotals SFO MF c._ CFF iNO ..... 50"" 'fota! Touol O~, l~ A~ ""'... CJlilii' Am. D"'" ^"" A_ ...... A=. A= ^= Unics ""'^ ViIl.se2 1,1)56 214.90 Ul 1.416 9UO 15.10 19.40 6.10 sua 10.30 )96.00 vm ., Vi1~1 '.60 ..60 illll~6 1~7 4.10 33.40 ,,, 7.' Il7 20.5 P"A12(2) J4.40 J4.40 Vill~p'J 1.842 SOJ.lO 3.68 271 ::lUG 13.13 51.20 tv,/] ',,"00 1.119 ,." oW, U!l8 716.00 '.M 1.350 119.60 15.47 56.15 10.1G 51.50 SUO 22.' 1028.65 4.743 <6 Nou:. O\'ayTUSIOnl\lParl:openl'p&CllnotincWdcd.m~s Ownersbin As of the date of value, title to the appraised property is vested as follows: Olay Project LP. LeI!al Deseriotion No legal description bas been provided for the appraised properly. It would be voluminous. For purposes of this report, the subject property is legally described by reference to each of the Village parcels identified lUlder the heading Description of the Real Es~ Appraised. PURPOSE AND DATE OFTHE APPRAffiAL The purpose of this appraisal is to estimate the market value of the property as of December 31,2005. As used in this report, Market Value is defined as follow,: MARKET VALUE is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale. the buyer and seller each acting pruden~y and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer-under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well-infonned or wen-advised, and each acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in tenns of cash in United States dollars or in terms of financial arrangements comparable thereto; and Anderson & Brabant. Inc. 6 Page 139 3-150 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, California 5. The price represents the no:nnal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.l ESTIMATED EXPOSURE PERIOD As a requirement of the UnifolDl Standards of Professional Appraisal Practice, we have provided an estimate of the exposure period for the subject property. The exposure period or time is the estimated length of time the property interest being apprnised would have been offered on the market prior to tbe hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based upon an analysis of past events assuming a competitive and open market Exposure time is different for various types of real estate and under various conditions. It is noted that the overall concept of reasonable exposure encompasses not only adequate, sufficient, and reasonable time, but also adequate, sufficient and reasonable effort The reasonable e.1CpOsure period. is a function of price, time, and property use. Considering the scope and magnitude of the subjecr property, we have estimated that exposure time could vary anywhere from six months to two years. INTENDED USE & USERS Our clien~ JPB D.velopmen~ LLC, Otay Project, LLC, Otay Project LP, South Bay Project LLC, and users of the financial statement for which our value estimate has been prepared arc considered to be the only users of this apprnisal report Any other party who may receive this report is not an intended user. Weare not responsible for unauthorized use of this report. PROPERTY RIGHTS APPRAISED The estate appraised is the fee simple interest, subject to covenants, conditions, and restrictions of record, if any. As used in this reportJee simple interest is defined as follows: "Absolute ownership lU1encumberad by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power. and escheat...1 VALUATION PREMISE The valuation premise is based on a sale of the land to a single entity who would then market the individual parcels over time to merchant builders aod others. To accomplish tbis goal, we have prepared a subdivision analysis incorporating discounted cash flow methodology that specifically addresses projected timing for the sale of product to third parties, as well as the cost to create the finished product. (Refer 10 Special Assumptions No.3 and 4). llWJoK.l1[MI of hnl F...ll1fi1, 12. td. (t'hlcago; J\ppt'llisuI1nstl1\lle., 20(1). p. 23 'Th" [)icrirvltuv ofRlIIli F:.Jttlfl!.Aoomiml 3d Ed. (Chicago: AppraisallnstiWle. 1993). p. 140 Anderson & Brabant, Inc. 7 Page 140 3-151 EXHIBIT "P" (Continuecll Undeveloped Portions ofOtay Ranch, ChuJa Vista, California USP AP COMPETENCY PROVISION We, the offices of Anderson & Brabant, Inc., and specifically William B. Anderson, MAl, have the knowledge and experience to complete this appraisal assignment and have appraised this property type before. Please refer to the appraiser's experience data included in the Addenda to this report for additional infonnation. APPRAISAL DEVELOPMENT AND REPORTING PROCESS The appraisal development process reflected in this report is intended to follow the Complete Appraisal guidelines as defined by USPAP. A Complete Appraisal is the act or process of estimating value where the Departure Provision is not invoked. This is also a Summary appraisal report as defined by USPAP. It is a written report prepared in accordance witil Standards Rule 2- 2(b) reiating to a Complete or Limited Appraisal performed under Standard I. A Summary Report presents a concise presentation of all data, reasoning. and analyses used in the appraisal process to develop the opinion of value. In preparing this appraisal, we took the following steps. . The first step in the analysis was to conduct a preliminary SUI'V'ey of the subject property and surrounding area in order ID more accuntlely define the appraisal problem and identify the methods and techniques necessary to accomplish the objective nfthis appraisal report. Legal aspects of the subject property were investigated regarding its potential uses within the context of its surrounding area and entitlem.ent status. . The general area was inapected for the ptnpOse of identifying those specific boundaries within which data that could be considered relevant to this llIllllysis would most likely be located. The intent of this inspection was also to identify physical conditions, neighborhood development trends, and oiher factors that affect real property value in the subject area. We have examined the general economy of the region and community to determine trends in population, housing, employment, financing, and market conditions. . A detailed search of the subjects' primary market area was performed in order to coHect relevant sales. Sources of data included the client, County Recorder's office, various market data services, publishoo reports, and personal contacts. These data were confirmed with principals, iheir representatives, or agents. In order to obtain a thorough understanding of real estate market trends in the subject area. interviews were conducted with numerous local market participants, including real estate agents, developers and investors. . All three traditional approach"- to value, the Cost, Sales Comparison and lncome Approaches were considerod. Of these, only the Sales Comparison Approach and Income Approach (Developmental Analysis) were considered to have applicability in the valuation ofihe subject property. . The Sales Comparison Approach was utilized ID value finished lots in the various planning areas for use in the Discounted Cash Flow Analysis. Upon determination of highest and best use, the market data were analyzed on tile basis of their overall degree of comparability to the appraised property. Anderson & Brabant. Inc. 8 Page 141 3-152 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, ellUla Vista, California . The Developmental Analysis was used to value the subject unsold/undeveloped Parcels in Villages I, 2, 6 and P A 12, as wen as the undeveloped Parcels planned for Village 13. We reviewed the closed sales within Villages I and 5, as well as other market data, and development cost schedules provided for each unsold Parcel. . The .final step entailed the organization and drafting of the summary appraisal report. EFFECTIVE DATE OF VALUE The effective date of value is December 31. 2005. DATE OF' REPORT The date of the report is June 30, 2006. SALES HISTORY OF THE SUBJECr PROPERTY There have been no arms length transactions involving the appraised property during the three year period preceding the date of value stated herein. 9 Anderson & Brabant, inc. Page 142 3-153 EXHIBIT."P".(<:~nt~nued) Undeveloped Portions ofOtay Ranch, Chula Vista, California LOCATION DESCRIPTION San Die1!o Countv San Diego County is 4,261 square miles in sii"', of which around 50 percent is privately owned. As of Jsnuary 1, 2005, the county population was estimated by the Califurnia Department of Finsnce Demographic Research Unit at 3,051,280, up 1.3% from the Jsnuary 1, 2004 total of 3,013,014. The terrain varies greatly, from ocesn beaches to foothills, mountains and deserts. The coastal plain area extends from the ocean to inland areas for 20 to 25 miles. This is the area that has experienced the bulk of development. This coastal plain area also has a very desirable year*round climate which attracts both :resid.ents and tourists to the region. On a regional basis, San Diego County is served by three major freeways. These include Interstate 5, a coastal route cOIDlecting San Diego with Baja California to the south and the states of California, Oregon, and Washington to the north; Interstate 8, a major east-west route connecting San Diego with Arizona and other southwestern states to the east; and Interstate 15, an inland route connecting San Diego with Riverside and San Bernardino Counties and other points to the northeast. There are several important local freeways that provide access within the region. These include Interstate 80S, inland and parallel to Interstate 5; State Route 94, parallel to Interstate 8; State Route 163. connecting Interstate lS with downtown San Diego; and State Route 78, the major east-west freeway in northern San Diego County. San Diego International Airport (Lindbergh Field) is located near downtown San Diego. This airport is serviced by eighteen commercial airlines and four scheduled air-freight services. There are an a<lditional eight small public airports located throughout the county. There is little commercial air activity at these facilities. Rail service is provided by San Diego and Arizona Eastern Railroad, Santa Fe Railroad, and Amtrak. rndu~triallcommercial use of the rail lines for freight carriage has declined in San Diego over the past fiftet'n years. However, the Amtrak line between San Diego and Los A.ngeles is popular with commuters. The San Diego Troney (light rail transit system) has opened several commuter routes in the southern and eastern portions of San Diego County that have proven very popular. Individual transit districts throughout the COl1I1ty provide local bus service. The San Diego region is well located and has a moderate climate which is desirable to most people and which is one of the area's primary attractions. The population and housing growth are increasing at a faster rate than that found in Southern California as a whole, but those rates have declined somewhat over the past several years as the available supply of readily developable land has dwiudled. There bas been a significant amount of new growth occurring over the past few years. This includes an increase in the amount of building in the residential market (single family and high-end multi-family dwellings) as well as commercial, office and industrial uses, and vacancy rates in existing product have decreased significantly. The outlook for the San Diego economy. and the real estate component of the economy, is generally positive. According to the Greater San Diego Chamber ofConunerce. the County's Gross Anderson & Brabant, Inc. 11 Page 143 3-154 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California Regional Product (GRP) in 2005 was estimated al $151,105,000, a 6.6 percent increase above the 2004 level. The Chamber forecast for 2006 GRP is SI61 rnillion, a projected 6.6 percent increase above the 2005 level. To put the area's economy into perspective, in a nmking of nalional economies, lbe economy of lbe state of California would be ranked 6'" among lbe world's nations, and lbe County of San Diego would be 30"'. In relative terms, the San Diego economy has outpertimDed lbe state and the nation since 1996, other !ban the year 2000 when the telccom and technology bubble in nortbem California swelled output. The relalive strength of the local economy, low interest rates, an undersupply of land, and nationwide trends of investing in real estate ralber than the stock: market has led to San Diego County home values appreciating by one of the highest percentages on record. According to Dall1Quick InJormntion Systems, median borne values countywide, as of the end of December 2005, increased 5.1 percent to S516,OOO' compared to December 2004's $491,000. However, seasonal sales activity in December 2005 fel! 11.3 percent to 4,262 transactions, compared to 4,807 in December 2004. The San Diego Association of Realtors, which tracks abnut 60 percent of the tnmsactions covered by DoIl1Quick, raported that there were 8,496 detached and 5,645 attached resale homes listed for sale as of December IS, 2005, making for a ratio of 1.51 single-family detached homes for eacb attached or condo unit. By contrast, in June 2002, the ratio stood at 4.38 to 1. This means resale condos are playing a much bigger role in San Diego's housing market.. and that doesn't take into account the thousands of former apartments that condo-conversion companies have put up for sale as nC\v housing. Housing affordability and household debt remain significant problems for San Diego residents. Home values appreciated much faster than income levels in the past ten years and this rapid appreciation of\oeal home values pri.ced many buyers out of the market. In fact, San Diego has the second worst average home price to average income level in the nation, behind only BostoD. The median household income in San Diego in 2005 was forecast al $53,091, versus tlle median home price reported above. According to Da,aQuick. San Diego County is leading the state in trends that include buyers' use of adjustable..:rate loans, buiiders turning to condominium conversions, and a willingoess among buyers to stretch bodgets to get into a home. In addition, local buyers are using savings and investments to buy rather !ban relying solely on salaries and wages. This puts additional strains on household budgets and places some families deeper into debt. Many San Diego workers will leave the regio~ no matter how low the interest rates are. Also, the ERE- forecasts that as the nalional economy improves, the Federal Reserve could continue to fo",e interest rates higher, which would promPt the last wave of refinances and undoubtedly also slow down the appreciation of home values. The ERB concludes that San Diego and the entire nation face difficult situ..uions, most especially the fallout Jrom the war with Jraq and the stale's budget problems, althnugh California's strong economic recovery over the past two years has helped somewhat in dealing with that matter. Nevertheless, despite an the challenges, San Diego remains a dynamic business community blessed with many valuable assets, diversified industries, an educated work force. R&D facilities and a high quality of life. Coupled with the resilience of the county's workers, companies and industries, economic opportunity and prosperity should continue within the region. Anderson & Brabant, Inc. 12 Page 144 3-155 EXHIBIT "P" (Continued) Undeveloped Portions orOtay Ranch, Chula Vista, Califomia Citv of Chula Vista Chula Vista, which encompasses over 50 square miles, is in south San Diego County between National City to the north, and ihe San Diego communities of Nestor and San Ysidro to the south. Chula Vista is about seven miles south of downtown San Diego and seven miles north of the International Border with Mexico. The eastern boundary is approximately 4.8 miles east of the San Diego Bay shoreline. The north and east bOlmdaries are formed by the community of Boniia, unincorporated county lands, and the area knOv,TI as Olay Lakes. From San Diego Bay, elevations typically increase to a coastal plain 21300 feet ahove mean sea level, with elevations near 600 feet in the eastern portions oflhe city. Highways in the area include Interstate 5, the major north/south freeway connecting the coastal areas; Interstate 805, the major inland north/south frocv,ay; and Highway 54 (South Bay Freeway), which runs east/west aod inters""ts Interstates 5 and 805. Interstate 905 is a southern link between Interstate 5 and Interstate 805 in the San Ysidro area. These freeways provide good access to and from Chula Vista. The SR-125 project, referred to as the South Bay Expressway, is scbeduled for completion in early 2007. The combined SR-125/South Bay Expressway will link SR-905 in Otay Mesa to the SR-54 in Spring Valley where it will connect with the existing 125 providing access north to Saniee. Lindbergh Field, Sao Diego County's international airport, is about lO miles north of Chula Vista and is served by major and commuter airlines. International Airport, which is south of Chula Vista in Tijuana, Mexico, also provides international air travel services. Brown Field, which is southeast of the city, is the local general aviation facility. Commuter rail service is provided by the San Diego Trolley, a light-rail transit system. Greyhound Bus lines is also active in the area, and an Amtrak. National Rail Service depot is to the north in downtown San Diego. According to the Califontia Department of Finaoce, as of January I, 2005, the population ofChula Vista was 217,543, whicb represents a 4.3% increase from the 2004 figore of208,510. According to SANDAG's 2030 Cities/County Forecast, the long~term forecast is for city growth to continue over the next 30 years but at a slower pace. SANDAG projects an average annual wmpoullded growth rate of 2.10% through 2030. Chula Vista's average population per household as of January 2004 was 2.98 persons witl. a median age of 33.0 years (SANDAG). According '0 population household income gathered from SANDAG, the 2004 median household income in Chula Vista was $51,729 per year. The city's median household income was slightly lower than the region's 2004 median household income of $52,192. Cbula Vista experienced the second highest increase in the entire county in median household income from 2000 to 2004, increasing by more than 15%. This compares to. the regional increase of 10.2%. Cbula Vista has adequate police and fire protection, utilities, schools. health care facilities, shopping facilities, cultural facilities, recreational amenities, etc. Police. fire, and sanitation departments are city maintained_ An utilities are available including electricity, gas, water, and sewer. Gas and electricity are provided by San Diego Gas and Electric Co. Water services are provided by Sweetwater Authority and Otay Water Districts. Sewer is provided by the city. Cable and telephone services are also available. Southwestern College, a 2-year commWlity college with an enrollment of more than 17,000 students, is alo.ng Otay Lakes Road near Rancho Del Rey. A University of California campus is proposed in the southeast portion o.f 13 Anderson & Brabant, Inc. Page 145 3-156 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California Otay Ranch. The 400-acre site is adjacent to the 150-aae United States Olympic Training Center off Olympic Parkway. City tecreational amenities include public and private golf courses., public swimming pools. tennis courts, recreational centers, Gtay Lakes, and San Diego Bay which includes an approximate 500 slip bay front marina. Additional plans are for a mixed- use harborside conununity. Major local employment includes trade, manufacturing, education. government, and finance. Approximately 73% of the work force is in service industries. Chula Vista has experienced continued growth in local trade. Taxable sales have consistently increased over the past 10 years. A significant influence in the South County area is the labor force and economic synergism created in Tijuana, Mexico. Bordering Otay Mesa to the south. at the International Border, Tijuana is a major industrial center where 450 Maquiladora plants employ approximately 70,000 people. Companies in Tijuana include Honeywell, Colgate Palmolive, Hughes Aircraft, MatteI, Sanyo, and Sony. The dynamics of utilizing inexpensive labor costs in Mexico and shipping the finished products to Otay Mesa for processing are very advantageous for growth and stability iu the South County area, which includes Chula Vista. Other significant employers in the area include BF Goodrich, Aerospace Aerostructures Group, Southwestern Community College, United States Border Patro~ Raytheon Systems, Sharp Chula Vista Medical Center, Scripps Memorial Hospital, and Kaiser Permanente. The area is increasing in population. a result of a continued influx. of residents seeking housing in one of the new residential developments. New single family detached homes typically range in size between 1,400 and 4,300 square feet. Pricing typically ranges from $490,000 to over $1,000,000 with an average of approximately $650,000. Prices of attached homes typically range from $316,000 to over $623,000 with an average of approximately $400,000. Rental rates for 2-hedroomll-bath and 3-bedroornl2-bath unita typiCally range from about $750 to over $2,000 per month. The weighted average rent for 2-bedtoom and 3-bedtoom apartments are $1,168 and $l,489. respectively. Like most areas of San Diego County, property values have been increasing. Master planned corrtn1unities comprise the majority of new and proposed housing in ChuIa Vista and surrounding South County markets. These communities otTer a variety of products within a defmed neighborhood that includt::s exclusive amenities to homeowners. Amenities range from scenic open space to a complete mix of recreational, educational, retail, and commercial facilities. Cnmmercial development in Chula Vista includes strip and neighborhood retail centers, two regional shopping centers, and office space. The main focus of commercial development and related business activity is in the downtown area in ihe vicinity of 300, 4th, and 5th Avenues betwoon "E" and "1" Streets. The city contains more than 1,800 acres 0 f industrially zoned land. A summary of the larger commercial/industrial complexes is as follows: EastLake Business Part< offers 250 acres of office, R&D, and light manufacturing as part of the EastLake master planned corrununity. Major tenants in this area include United Parcel Service, South Bay Distrihution Center, and the U.S. Posja! Service Regional Distribution Facility. This project is also home to Scobee Park, a 7~acre employee recreational facility with tennis courts, basketball courts, and softball and soccer fields. Rancho Del Rey Business and Retail Center is an 84-acre center which is part of the Rancho Del Rey master planned community. Major tenants include The Home Depot, Costco, South Bay Board of Realtors, Sunrise Jewelry Manufacturing, and Anderson & Brabant, Inc. 14 Page 146 3-157 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, Califurnia Brunswick Premier Lanes. Olay Rio Business Park is a 100-acre park that was planned to contain warehousing. distribution, and light industrial uses. However, the project's land use will change, allowing a recently opened Knott's Soak City waler park, Coon;' Amphitheater, and an auto park. The Otay Valley Road iudustrial area has 400-acres which serves both border areas including South County and Tijuana. Chula Vista does not have a moratorium on new housing units. However, the city did implement a Threshold Ordinance in 1987. The ordinance integrates the necessary approvals for new development with proper infrastructure planning and financing. Implementation of the program will assure that significant, adverse impacts are avoided or reduced through sound planning and that public services and the quality of the environment will be preserved and enhanced. In Dccember 1989, the city adopted a Growth Management Element that specified criteria involving a facilities-driven growth management program.. New master planned developments have adopted special assessment districts as the primary means of assuring proper construction and financing infrastructure. The Growth Management Oversight Commission (GMOC) takes into account past and future growth relative to quality of life facton;. Should the quality of life facton; fall below service level thresholds, the city can issue a building permit moratorium, As of late, the city has entered into separate agreements with various master developers which stipulates permit issues to infrastructure construction. One major nuisance in the community is occasional traffic congestion on me major surface streets and freeways. Nevertheless, this congestion is typical of well-developed communities in San Diego County. Residential properties near industriaVcommercial centers are also subject to some adverse location faCTOrs, The long-term potential for Chula Vista is favorable. It is a weU.established community in south San Diego County. Continued development of new housing and resulting population growth should also bene.tit commercial construction and businesses. Overall, the real estate markets in Chula Vista are expected to follow the generally positive trends of San Diego County and southern California Nei2"hborbood DescriDtion The appraised properties are within Villages 1,2,6 and 13 and also include a commercial zoned parcel within P A 12, all in the master planned Otay Ranch on the cast and of the city and partially within an unincorporated area of the County of San Diego. Otay Ranch was planned to be a balanced community with housing, shops, workplaces, schools, parks, civic facilities and open spaces. The m~ority of development is being clustered in villages, with conveniently located features and well-defined edges such as the C1lula Vista Greenbelt, open spaces, and wildlife corridors, Consisting of 22,899 acres, Otay Ranch is primsrily situated between Telegrsph Canyon Road to the north and Otay Valley Road to the south, north and south of Otay Lakes Road, and south and southeast of Proctor Valley Road. The combined properties of Otay Ranch span a distance of about 12 miIesfrom east to west, and eight and one-half miles from north to south. Approximately 9,100 acres (14.2 square miles) were annexed by the city of Chula Vista on Anderson & Brabant, Inc. 15 Page 147 3-158 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chola Vista, California March 20, 1997. A large portion of the Ranch is presently in the County of San Diego, although it is planned to annex those areas later. In 1993, the City of Chula Vista and the San Diego County Board of Supervisors jointly adopted the Olay Ranch General Develnpment Plan/Sub-regional Plan for the master planned community of Olay Ranch. The plan consists of 11 uroan villages that will ultimately contain approximately 27,000 dwelling units and support commercial and community facilities. The plan governs the Olay Ranch properties, including all of the subject parcels. For planning purposes, Otay Ranch has been grouped geographically to form three distinct parcels: I) Otay Valley Parcel, 2) Proctor Valley Parcel, and 3) San Ysidro Mountains Parcel. The Otay Valley Parcel, in which the subject is located, is the largest and most westerly parcel of the three. The totai land area is approximately 9,449 acres. Telegraph Canyon Road bounds the parcel on the north, the western extension of Heritage Road and the Otay Landfill site on the west, Brown Field on the south, and Lower Otay Lake on the east. The Otay Valley bisects th~ southern portion of this parcel east to west. Approximately 9, I 00 acres of the Olay Valley Parcel were annexed by the city ofChula Vista on March 20, 1997. The Olay Valley Parcel is the most uroan of the three Olay Ranch parcels. At build-out, this parcel is to provide a maximum of 21,686 dwelling units accommodating 62,373 residents. Major components of the land use plan for the Otay Valley Parcel include: 11 urban villages; SR~125; freev.ray commercial; industrial uses; a university site; eastern urban center; and Otay Valley Regional Parle The Olay Ranch Town Center is an 850,000 aquare foot regional shopping mall currently under construction at the intersection of East lake PllIkway and Olympic PllIkway. The mall will be anchored by Macy's, Barnes & Noble, a l2-screen AMC Theatre and will offer 150 retail shops, plus restaurants such as The Cheesecake Factory and P.F. Changs, China Bistro, along with a food pavilion, popper fountains and chalk gardens for children. The grand opening of the Otay Ranch town Center is scheduled for October 2006. The Proctor Valley Parcel comprises 7,895 acres and is the most northerly portion of Otay Ranch, Otay Lakes Road and Lower Otay Lake generally bound this parcel to the south, the Upper Otay Lake and San Miguel MOWltains to the west, the community of Jamu! to the north. and vacant agricultural land to the east Development on this portion of Otay Ranch is not expected for several years. The San Ysidro Mountains Parcel totals approximately 5.555 acres and is situated at the southeastern end of Otay Rancb. The eastern ann of Lower Otay Lake and vacant land along Otay Lakes Road genentlly bound this parcel on the north. Th.e main body of Lower Otay Lake bounds the parcel to the west, land owned by the BLM to the south and vacant land just west of the community of DulzuI"'d. to the east Due to the mountainous terrain and its relative distance from the path of development and lack of direct access, development on this parcel is not expected for several years. As of the valuation date, primary regional access to the Omy Ranch is provided by Interstate 805 (1.805), a north/south freeway located 4 miles inland and approximately two miles west of the most western boundary of Olay Ranch at Telegraph Canyon Road. Secondary access is provided by Interstate 5 (1-5), the coastal north/south freeway located six miles west of Otay 16 Anderson & Brabant, Inc. Page 148 3-159 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California Ranch at Telegraph Canyon Road. State Route 125 (SR-125), an inland toll freeway under constrUction, will extend through Otay Ranch approximately eight miles inland SR-125 is to extend south from IntetState 8 through Otay Ranch and the South Bay area to the international border with Mexico, approximately five miles south of the subject properties. Major east/west routes through the planning area include Telegraph Canyon Road, Otay Lakes Road and Olympic Parkway. The overall development plan for the ranch protects the important na1Ural resources that are evident in the area. An 1 1,0000acre open space preserve unequaled in San Diego County has been created to protect most of the Otay Ranch area. Other large open space areas will preserve and connect many of the natural habitats. Il recognizes the importance of environmental and landform preservation, and the need to design environmentally sensitive conununities. A large regional trail system linked to 'lpaseoS" and public parks provides hikers and bikers with a variety of recreational options. The Gray Ranch is a well conceived master planned corrununity that has received enthusiastic market acceptance. Guest builders have provided a variety of housing for its many residents as well as shopping districts, employment centers, public schools, and recreation elements. Over time, additional serviccooQriented land uses are planned within Otay Ranch, which will add to the establishment of the community. New developments in Otay Ranch are expected to capture a sizeable portion of the real estate market sales activity over the long-Tenn. l7 Anderson & Brabant, Inc. Page 149 3-160 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California DESCRIPTION OF REAL ESTATE APPRAISED LAND DESCRIPTION Land Area/Shane The subject consists of undeveloped land and graded pads. The parcels are typically irregular in shape. Pertinent details of each planning area are shown below. Village 2 ViUa2e 1 and VUlalle 6 Plan Area Minimum No. of Uni" iPlanArea Average No. of Unit Parcel No. Lot Size LotsIUnits Acres Per Acre Parcel No. LotSiz.e LotsIUnils Acres Per Acre R.4 6Oxl05 160 41.50 3.86 VI CPF-2 4.60 R-5 34)(85 130 15.70 8.28 Y6C-1 3.00 R-<I 55x92 63 12.60 5.00 v6 CPF-I 157 4.70 33.40 R-7 60xl00 44 9.40 4.68 PA 12 34.40 R-8 55x92 5J 10.00 5.10 Subtotals 157 46.70 R.9 40];95 101 13.30 7.59 Villa". 13 R-IO MF 90 4.50 20.00 Plan Area. Minimum No. of Units R-Il MF 144 9.90 14.55 Parce:l No. Lot Size: LotsIUnits Ac.... Per Acre R-U MF 295 24.00 12.2 R-I 50<100 llO 25.50 4.31 R-13 MF 149 10.30 14.47 &-2 SSxlOO 95 24.20 3.93 R-14 MF 137 7.80 17.56 R-3 70.105 71 26.30 2.7( R-15 50<85 45 8.10 5.56 R-4 60<105 76 27.10 2.80 R-16 MF 74 3.50 11.14 R-5 55xl00 81 22.20 3.65 R-17 34x85 119 11.50 10.35 R-6 55x92 122 33.40 3.65 R-18A 50<85 66 IUO 5.59 R-7 50<100 III 26.90 4.13 R-18B 60xlOO 46 10.40 4.42 R-8 SSx92 110 23.50 4.68 R-19 40<95 83 10.SO 7.69 R-9 S5xl00 84 19.80 4.2 R-20 60xl05 54 19.30 2.8C R-l0 50xl00 87 20.60 4.22 tR.21 10xl25 31 22.20 lAC R-II 55x92 64 15.80 4.05 R-25 40x95 34 950 358 R.13 6o-xlO5 97 28.50 H( R~26 34x85 29 8.80 3.30 R-14 70xlO5 82 29.70 2.7< R-27 MF 110 8.80 12.50 R-15 SOx toO 81 18.70 4.33 R-28 MF S5 5.90 14.41 R-16 55.92 67 14.80 4.53 R-29 MF 152 8.90 17.08 R-J7 60<105 50 16.80 2.98 R-30 MF ISO 10.20 17.65 R-J8 70xlOS SI 28.60 2.83 5-1 School 10.30 R.19 55.100 83 19.80 4.19 CPF-I 1.20 R-20 50.100 99 30.10 3.29 CPF-Z 0.90 R.21 55xl00 102 25.10 4.06 CPF-3 1.70 l<.-22 S5x92 89 23.70 3.76 CPF-4 LSO R-2J MF 277 21.10 13.13 k;FF-5 O.SO Rcson I 41.70 C-I 12.50 Reson2 9.50 IND-1 Industrial 51.50 5-1 12.60 Subtotals 2,472 389.10 Subtotals 2.119 586.00 The totals per Village are summarized in the following chart. Anderson & Brabant, Inc. 18 Page 150 3-161 EXffiBlT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, California SPD MF Comm'l CPr {NO Resort School Total Total Overall An'" LoIS Acres Units Ao= Acres A= A= A"os Acre< Acres: Uoits OwA Viti age 2 1.056 214.90 1,416 93.80 19.40 6.10 SUO 10.30 396.00 2,472 6.24 !village 1 4.60 4.60 Village 6 157 4.70 2.95 7.65 157 2052 PA 12(2) ]<1.40 34.40 Villill!:e 13 1,842 501.10 271 21.10 51.20 I~ 586.00 2,119 3.6 otals 2,898 716.00 1.850 119.60 56.75 10.70 51.50 51.20 22. 1.028.65 4,748 4.62 ToowraDbvlDraina2:e The bulk of the laud area is level to gently sloping. Drainage appears to be adequate toward storm drain facilities in the abutting streets and it is asswned that adequate drainage will be provided as the individual undeveloped parcels are graded. Soils No soils reports or studies were provided for the property appraised. The value conclusion is predicated on the development or use of the subject property in a manner consistent vlith its highest and best use, as concluded in this report, and does not reflect any value attributable to minerals or material extraction. In this analysis. it was assumed that there are no soil conditions- that would adversely impact the existing or proposed use of the site. Utilities All necessary wet aud dry public utilities are available including electricity, telephone, natural gas, water, and sewer service. Streets. Access and .Emosure Major road infrastructure is currently available to the subject parcels in Villages 1,2,6 and PA 12. The intract road networks will be insialled at the time of site development Otay Lakes Road is currently the only right of way serving Village 13. The conunercial and industrial parcels have good accessibility and exposure. E,asements & Encumbrances We have not reviewed maps showing plotted easement~ and have made the assumption thl;l.t there are no unusual easement encumbrances that would adversely affect the use or value of the appraised property based au its estimated highest and best use. Flood Zone The subject property is located on FEMA Map Community Map Pauel No. 06073C2176F, dated June 19, 1997, within Zone X, an area determined to be outside of the SOO-year floodplain. Earthauake Zone The property is not within an Alquist-Priolo Earthquake Special Studies Zone. However, the site is located in an area prone to seismic events. a condition that it shares with other properties located in the Southern California area Anderson & Brabant, Inc. 19 Page 151 3-162 EXHIBIT "P"(Continued) Undeveloped Portions of Gtay Ranch, Chula Vista, California Torlc Hazard No Phase] Environmenta.! Assessment has been provided. The appraised property is assumed to be free of contamination. Land Use Gtay Ranch is within the city of Chula Vista Otay Ranch General Development Plan and County of San Diego Gtay Subregional Plan (GDP/SRP). M previously noted, these plans set forth land use potential for all of the planning areas within each Village. Modifications to the plans have occurred in the past and it is expected that future changes will also be made; however, no significant changes are anticipated tbat would have an overall negative i.mpact on the properties appraised. ASSESSMENT INFORl\4ATJON Msessment data for each of the individual parcels under appraisal is not currently available. Based on a review of real estate taxes on previously developed parcels within Otay Ranch, it is anticipated that taxes associated with !he existing parcels and future parcels to be developed will conform to !hose of inunediately surrounding neighborhood properties. RESIDENTIAL MARKET OVERVIEW MarketPointe Re-alty Advisors is a San Diego based research firm specializing in all facets of the residential houaing market by providing market analysis, fesa1bility studies, litigation S1.1pport and rese.",h databases for builders, developers, lenders, mortgage bankers, and attorneys nationwide. The film offers a variety of professional consulting services and products to help businesses and organizations understand new real estate markets, empowering them in future business acquisitions and other transactions. One such publication is Residential Trends, which provides a quarterly reporting of residential housing prices and absorption trends for the major market areas of South em California. The competitive market area for the appraised property is generally regarded as Soutb San Diego County. As ShO\'vTI in the fonowing chart, the weighted average of a new attached home dropped to $404,702 in the fourth quarter of 2005, an 8.72 percent decrease over the first quarter. Conversions accounied for a large percentage of the atiached sales in this market area. While prices were decreasing, net sales plunged some 56 percent to 635 net sales from the high of 1,586 during the second quarter. The total inventory also rose to 6,261 units. Offered and unsold inventory increased gradually during the first and second quarters, and then more dramatically during the third and fourth quarters. 20 Anderson & Brabant, .lnc. Page 152 3-163 EXHIBIT "P" (Continued) Undeveloped Portions ofOlay R1mcl1, Chula Vista, California Sonthern San Diego Connty Attached Honsing Summary 4thQ2005 3rd Q 2005 2ndQ 2005 IstQ 2005 DevelOpm'lllS 149 134 119 102 'Total Sold 809 1,539 1,721 1,58 Net Cancelled 174 147 135 15 Not Sold 635 1,392 1,586 1.43 W ciEbted A....el1l.2e Price $404,702 $419,245 $420,993 $443,371 Wei2hted Averaac Sa. Ft 959 1,029 996 1,01 W.icluod $/S,. Fe $422.00 $407.43 $422.68 $437.25 Offered & Unsold Iuventorv 2,650 1,981 1,451 1,221 Remainiog for Develo-pment 3,611 3,283 2,737 1,611 Total [nvcntorv 6,261 5,2~ 4,188 2,832 As shown in Ihe following chart, the detlched segmenl of the housing market fuired somewhat better than the attached market during 2005. There was a gr.wuai increase in the weighted average price of a detached home during 2005, but net sales did dwp neariy 77 percent from the second quarter high of 452. Inventories are up over the previous three quarters, as is the weighted average square feet. Southern San Diego Connty Detached Housing Summary 4th Q 2005 3rd Q 2005 2nd Q 2005 1st Q 2005 Developments 29 28 32 40 "'otal Sold 149 310 454 443 Net Cancellt:d 44 4 2 1 Net Sold 105 306 452 44 Weighted Averaee Price 5884,686 5785,004 5721,636 5656,396 Wei~hted Average Sq, Ft 3,000 2,744 2.656 2,444 Weillhted S/Sq, Ft. $294.90 $286.08 $271.70 $268.57 Offered & Unsold Inventory 210 134 88 10< for Develooment 559 608 617 972 otat Invenklrv 769 742 705 1076 The appraised property is localed within the South County market area of Southern San Diego County. The other communities in this area include Bonita, imperial Beach, National City, Palm City, Paradise Hills, San Ysidw, South Bay and South San Diego City. Attached and detacbed housing market characteristics for this area are shown in the following two charts, Anderson & Brabant, Inc. 21 Page 153 3-164 EXHIBI'f."P" (c:;()utiuued) Undeveloped Portions ofOtayRaneh, Chula Vista, California South County Attached Housing Cbaracteristics No. of Current AvgfDe\l C"'" AvgiDev Tota! Total Cun' Romai Quart\!r Projects SalcsIWeek Cl.lllSPW SPW CummSpw Pri", SF PeT SF Units Sold Q Sales Unsold For Dev 4ih2005 25 21.28 0.85 40.56 1.62 1387.982 1.075 5360.91 3,175 1,599 185 381 1.195 3rd2005 27 31.63 1.39 48.95 1.81 $394,750 1,245 $317.07 3,351 1,927 398 203 ],221 2nd 2005 24 36.11 J,SO 4437 1.85 S399,75O ],280 $312.30 2,986 1,538 363 128 1~20 Is12oo5 J7 25,00 1.00 :n.oo 2.00 S362,871 1..172 $309.62 2,t33 t,J7S 223 102 856 Suuth Cuunty Detacbed Huuslng Char..teristi<s No. of Curmrt Av&"Dev c= ^voJDev Total Total Cll" Remain Quarter Projects Sales'Wuk CurlSPW SPW CummSPW Price SF Per SF Units Sold Q Sales Unsold For Dev 4th 2005 18 6.99 0.39 22.39 1.24 $989,3273,334 $296.74 2,029 1,580 82 112 337 ~rd 2005 19 ]6.91 0.89 29.79 !.S? $8]6,6172,801 $291.54 2,205 1.714 216 62 369 ..002005 22 23.89 1.09 33.70 1.5J $733,323 2.622 $279.68 2,.548 2,215 294 50 283 1st 2005 26 27.00 1.00 40.00 2.00 $645,999 2 383 $271.09 3,049 2,503 340 66 480 Over the last year, the number of projects in this market area has remained fairly constant, but the current sales per week have dropped in the attached market some 43 percent between the third and fourth quarters and about 59 percent in the detached markel during this period. The average unit size has decreased somewhat in the attached category. with a corresponding increase in the priee per square fOOl while the size of a detaehed bome increased gradually during the year as did the per square foot prices. At the end of the fourth quarter there were 1,576 attached units either unsold or remaining for development which would equate to a sellout period of approximately 38 months if all proposed units were to be developed or the sales rate remained the same as achieved during the third quarter. In the detached marlret, the ul1501d and remaining for development inventory would equate to a sellout period of about 20 months. In the attached market, the remaining seHout period is a difficult element of the market to judge going forward because a significant percentage of the available units are conda conversions that could revert back to apartments if necessary, however, this has yet to occur in the San Diego market area during the recent conversion cycle. Characteristics of several housing projects selling product in the Chula Vista sub-market area are shown in the following chart. Anderson & Brabant, Inc. 22 Page 154 3-165 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, California Chula Vista Mousin . Market Ttencb 1211 aiM - 3113106 . faj<<t c.mm.mily """', SIm"'. Uail:S No,Stlle PbD BucPrice 8~ PrKe ....Pric 12110i2004 12/1412005 li231Z I~rl..:tllt ISastb.kc T ownhonzs llmneOJ '" 152 , $371.$00 S394,000 $361, , 5418.5'00 1429,000 S411. l S422.500 S43!l,OOO S4'9, 6/1512005 1211412005 31231200 ""'''' Eutlakr: Tewnhotlll:s sn/200S '" 30 , S495,990 S4~,990 '49' , S54O,990 5565,990 SS., , 5622,990 1634.99Q S611 1211012004 IlJl4f.ZOO$ """ Bd\t;meChlliuult Ota>,~h Triple;l; 10118/2003 10' 180 1 5471,990 S43S,900 .m 2 1428,350 1410.990 '''' l $38.1.900 $3418,990 S3S]. 1211!l12OO4 12114/2005 3/23/2 B~lk;l;/. SiUlMiguclRa.w::h Triplex 1111211-004 'OS "' , 5353,900 5379,900 ..... 1 $369,900 1.433,490 5411.89 l .359_ $398,900 $lIJ!l,90 12l1MOO4 12f14f2<)(1S ]123,1200 amcN OQ)' Ranch Detaehtd 6/2&'2003 " " , .sa:OS.99<l $815,990 .'" , ...,,m NA N. , U96.m S-<J25,990 $.ru,9 6.!1812oo5 1211412005 312312 ..apMS Bastlakc TOIlInhol1lell 41912005 134 ,. :14#,290 :S410,990 S410, 54S4,ti9O $44l,OlS $428. $474.,290 $467,990 $4~;2 61151200.$ 1211412005 )I23,'100ti Castillial1 Ronillg Hilb lbllCh Detached 4iNODS " " $975,900 $1,100,900 Sl,101 Sl.06I,9OO $1,185,900 $1.217 51.0&.900 $1,180.900 51.246, $1,073.900 51.229.900 $1.291 1211012004 121141200$ Comcrwme Thcwouds Dl:'tached 7IIj,'4004 67 .. J $974.990 51,001.990 2 $1,022,990 $J.058,990 , 5I.t05,990 $1,208;990 6/1512005 12114/2005 Corrina ElSllPl.le Tripltx 312512005 126 " I 5416,900 $414.990 2 S442,990 S473,990 , l49OJ90 SSJ7,<J<JO 121tO/1O(l4 l2i14J100S 'cllt;qt:L3\lt W~lldiTlg Walk DetachtoJ J/2012004 150 12S I $475,255 '5529,025 , 5496,500 $553,262 , S:S10,OOO $572,000 121101'2004 1211412005 fil.irha...en RDlling Hnls R(m(h DCUlcl1cd 4!SI200.l 164 '" , 5783,.990 5789.990 2 $78S~90 5822,990 , $813,990 $891,990 , .....m $887,990 31i6l2oo5 12/141200$ Urlbin3' WilldingWalk "'''''''' 211912005 113 ,. , $6)14,200 $741,2SJ 2 S709,67S $7S:l,JJS , 5730,000 5773,734 1211012004 1211412005 erSoleil QulyR:oIch TOWdhoulI;:~ 61412004 '" '" SJll,990 sns.ooo 5354,990 $3.51.4JO $401,990 Sl99,990 , 13'11.990 $373,990 5 $J&O,9~ S.J33,990 121tGnOO4 1211412005 V31eucl.:t Endlkc Dfl3c:blld 7131.'Z004 .. 74 5749.990 $IUJ,990 5763,990 sm,lI9o $&06.990 $904.990 IIfUl Mar}:c(PiJDle ~altyAdVJSon .. .. rtltdt OlIIDle:f1C~.ntyht urterfApril 00. Anderson & Brabant, Inc. 23 Page 155 3-166 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vis"" California The cbart on the preceding page summarizes price trends for selected projects in ChuIa Vista during the period 12/1()l04 through 3123106. Included are both attacbed and detached product types. AJ5 can be seen, prices generally rose duriug 2005, but began declining somewhat during the first quarter of 2006. The general trend corresponds with the greater Southern San Diego County market area and the overall South County market Residential land value conclusions rendered in this report recognize the market trends illustrated in the foregoing discussion. The question becomes whether or not there will be excess supply due to inadequate demand. This appraisal is concerned ",ith vacant land, not a proposed attached residential project so a full blown supply side analysis is not necessary. However. analysts currently suggest an oversupply exists in many markets in the County and there is some evidence of soft prices and incentives. especially in some of the conversion projects. Future projects will need to be well timed and offer an amenity package that provides an edge over the competition. The subject propertY, as part of the overall project discussed above, features strong location attributes and is at the beginning of the development cycle which provides the developers an opportunity to create a project responsive to foreseeable market conditions. Anderson & Brabant, Inc. 24 Page 156 3-167 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, California VALUATION HIGHEST AND BEST USE Highest and Best Use is an important concept in real estate valuatiau as it represents the premise upon which value is based. As US<.--d in this report, Highest and Best Use is defined as follows. "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, sppropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, pbysical possibility, financial feasibility, and maximum profitability.") The couclusion of highest and best use is determined by social, economic, governmental, and physical forces. The concept addresses the question oflegally allowable, physically possible, economically feasible, and maximally productive uses. Potential alternative uses of the property must be considered in the highest and best use analysis. Once the legally allowable and physically possible uses have been identified, the economic viability of the various uses must be detennined. The use is financially feasible if it provides a positive return to the land. The highest and best use is that use that provides the highest overall retUrn. The concept of highest and best use first addresses the land as though unimproved and then as improved.. The appraised property is part of an spproxirnate 23,000 acre master planned community. It is comprised of land in various stages of entitlements and development. The estimated highest and best use is to continue the current program of land use, developing and marketing lots to merchant builders and processing entitlements on the undeveloped land in accordance with the approved General Development Plan, the Otay Subregional Plan, and the Development Agreement. VALUATION METHODOLOGY Develoomental Analvsis A developmental analysis was completed based au development and sell-off of the single- family lots, multi-fiunily sites, commercial properties and other designated Parcels in Villages I, 2, 6 and PA 12, as well as the proposed Parcels in Village 13. The Developmental Analysis provides a projection of cash flows resulting from the development and sell-off of the subject property over an estimated holding period. The analysis is intended to simulate the actual cash flows that will accrue to tbe property as the individual subdivision units are sold and infrastructure and in~tract improvem.ents are completed. These properties comprise the remaining inventor)' proposed for sal e or in-house development in the respective Villages for which entitlements are either in place or will be in place in the near term. The first step in the process is to value the individual parcels in each village. This is based on a review and analysis of land sale transactions thai can be compared to ~rvofRcalEstalC^rnwaiSlll,3dl:d.\Chi~ AmcricanlmtituttofRealE.slateAppn!ism, 1993}p.149 Anderson & Brabant, Inc. 25 Page 157 3-168 EXHIBIT "P" (Continued) Undeveloped Portions ofOmy Ranch, Chula Vista, CaJifurnia each of the various property types. There have been no recent third party arms length transactions of property held by the OIay Project LP ownership, therefore, sales in other locations have been used to estimate marl<et value. We have assumed that all parcels will be=ferred in a minimum blue top or superpad condition. Those sales considered in the analysis are summarized in the following charts. Datum No Location I OtzyVillage7 NBHD R7 -IA OtayViUllge7 NBHDR7-IB OcayViUage7 NBHDR.5. 4 DUly Ranch N"BHDI2 Atrium Easllake. 6 StoncBridgc EmIes NBHO 4, U"112 Esnella SanMigueJ~ Monteciw SallMigllClRanch 9 CharueelairProjcct 4S""""" 10 RivcrwalkSt. SM'" 11 l.mlllilG Hills Village EIC...jol'l l2 Maybockf'rojeet 4S.",.h a,,,, llokMillin Seller McMillin Summa or Dmclle4 L,(If s..l~ Tnr.lhrnOA. Sales NO.Qf Min.Lot Dale Lots Si%e Fcb-06 15l 4,25(; ToW $38.808,510 Prioe Pc:rlcltPerl..otFln 5157.010 5270 McMillin McMillin .,1>-06 100 3"'20 538.721,600 $242.010 $255,00 Eicrow """" I3l '.000 S28.6S3,sQ4 5217,072 ",,",w ""~. ., 8.800 $15,936.520 $]]],053 A".." 68 7JOO 530,600.000 $450,000 WO. Sop-OS 81 t4,OOO S42,930,OOO 5330,000 Nov..(lS " 7.000 $23,672,869 $343,085 S376,688 """"" NOI'-QS 70 7.000 517,812,500 S254,464 ~ """"" F,b.Q6 101 ''''' S3S.5SS.ooo S355,000 $35S, "'=w F,b.Q6 '" USO $4B.35O,000 5221,789 1265;7& "'~ JM'" " 2,650 $16,450,000 $283,621 S349,l21 ."-ttg-05 00 '.000 $16,728,960 S278,816 $402.",1 , IDatum ND_ Locaf!on Mc..\AiIlin McMillin Summary nfSupomad Tn.n.:u:rlollS. Smalt ~tacbed. Art:Kh...'I:I and Aoel"tm!nrProiects Sales Nu.of J::len$ity Dltte Acres Lot.' DuiA( Jan-lM 1:0.23 JI6 l_M2 .., ?T'ke I rotal Perl $40,100,000 SlUi,S McMillin Da\1dsan {M.yVilI;lb>ei NBllDR617 RivmvalkSL SM.. 3u In<! Summit ..."'" Univ..'l'5iIy Commons SMM_ Marilla, SQ. 0( Wood"ide Wt:J;lcm I'.cific CO Ruidential LLC Apr-oS Lakl!$i<le SSMi!l$i{l~OorgeRd. S~'" S:utMisue1l!.anch "I<<"BHDB Villll.ge4A RoIlingHill5Rancl! ~JE.Eastlalc.,L.wlSwllpKDHorno:3 "".k< PL"CC1 D. Eutlakc umd SWll~ Comemtme ea:stl.ke Prn:e shown is ...'i1hfM$:.ndCQS1stQ slloaetgrade, Thepwdlue Fioewu S4R,J$O.OOO !"rico: sbllwn \~wilh f_and COSIliIOW:ctgn>4<:. Tlltpllt'llhaoe price wuSll,672,OOli l' , 10 o.vid~on easltahCc. 218 ]1.41 $Si.942.ooo 5265,78 "9 16J1 S23.3SI,S~ S181,02 '00 20.55 $59,499.900 SJ98.33J '" 19.26 $18,200,000 SIS9,649 97 22.88 SI2.725,000 SUl,18 '95 19.14 $20,000.000 S102,S '66 16.bO $17,150,000 $103<.313 134 17..87 SI3.8oo,000 $102.98 '26 15.75 $14,10U,000 S1l1.905 AU;J)S 19.11 Cornerstone M<::MiHin Iun..QS '" Shea!'roctor Valley Pmcror- Valley WestParmm TriMarilPadiie PrtlctOrVaLl~ WestPumers Buie Ne.....ll1nd Comm. StmdardPacific Rivcrw1lkLP Fieldstor.., E.MainSm:t Lyon Hornell 45 Kelwood Buy~r Sil.lI",r McMmin J~' 14.60 She~ SbndardPllCiflO: Rj...~IkLP 5_92 Apr.()ol. <.24 BllieCom."Tl. EutlIlkeCo. D0>>-03 10.19 La Land A~toI: LP Brookfield lie Pull>: Hjjll:l'.J>~.SenIL NO'o'-Q3 10.00 L)'O<IH0fn!:4 TriMatk PKinC' Oa-03 7.50 SMl1H<Jlnes McMillin Sep.03 '.00 I!a$dak"Co. EutlakeCo. Anderson & Brabant, Inc, 26 Page 158 3-169 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay RJmch, Chula Vista, California SIlInUlll of COlWnerchl Lot Tr:ansaction5 Sales ""'" Price Datum No. Location Buyer Seller n.~ U~ S' Total P<<S I Parcels J and ~ Confidential Eudake Co. .ob-<l6 AP 181,689 53,633,775 S2'.rn Eastlakc: Village W. N,,. Village Walk WWE LLC EastlllkeCo, Nov.OS PCiCN 577,170 $7,673.500 513.30 _ok, 930 3rd Avenue Creekside Vistas CFREILP Nov.OS CCP 246.114 17,toO,ooO $2''&:- Chula Visla 4 4S Rr:nch Towll Cenler .....'" Newland CoI'!ll11. May-05 PC 1,045,440 $17.772,480 SI7.O< 4S Ranch $3\.0< see East H. SIAtt. Miguel McMillan TriMarkPac.jfjc Dec"04 Cmnm. %6,092 S14,450,522 ChuJa Vista 6 .""', I..AFito= EasllakeCo. Sq>04 AP 193,145 S4,.5J8,903 5235 EastlaJa,Vil1iLgeW. 7 SEe Scripp5 Poway Pkwy. &. COIICO Applied Mic:o Nov-O) PC 1.371,704 524,824,000 S18.1 Tech Cellfer Dr., POWll." Based upon an agreement with the client and given the intended use of this report, we have retained addirional documentation regarding these transactio.ns in our work file and will no.t present a detailed discussion of each sale. Our analysis of each as an indicator of value for the various subject planning areas has resulted in the following suggested market values. Anderson & Brabant, Inc. 27 Page 159 3-170 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch, Chula Vista, California Village 2 Ian Area Minirnnm No. of Units Ficishod Total Parcel No, Lot Size LotsIUJlils Acres Perkre Lot Value Per Parcel Per SF R.4 60xlO5 160 41.50 3.86 $394,000 $63,040,000 ,.5 34x85 130 15.70 8.28 5295,000 $38,350,000 ,.6 55x92 63 12.60 5.00 $337,500 $21,262,500 ,.7 6Oxl00 44 9.40 4.68 $394,000 $17,336,000 ,-8 55:<92 51 10.00 5.10 $337,500 $17,212,500 R.9 40x95 101 13.30 1.59 $315,000 $31,815,000 .10 MF 90 4.50 20.00 S162,000 $ 14,580,000 .II MF 144 9.90 14.55 $190,000 $27,360,000 R.12 Mr' 295 24.00 12.29 $228,000 $67,260,000 R.J3 MF 149 10.30 14.47 $220,000 $32,780,000 R.14 MF 137 7.80 17.56 5162,000 $22,194,000 .<.15 SOxE5 45 8.10 5.56 5315,000 514,175,000 -16 MF 74 3.50 21.14 5162,000 $11,988,000 .17 34x8S 1I9 11.50 10.35 5295,000 $35,105,000 -18A SOx85 66 11.80 5.59 5315,000 520,790,000 R.18S 60x 1 00 46 10.40 4.42 $394,000 518,124,000 R.19 40x95 83 10.80 7.69 $315,000 $26,145,000 [R-20 60x 1 05 54 19.30 2.80 5394,000 521,276,000 R.21 7Ox125 31 22.20 1.40 $461,000 $14.291,000 R-25 40x95 34 9.50 3.58 5315,000 510,710,000 R.26 34x85 29 8.80 3.30 $295,000 $8,555,000 iR.27 MF 110 8.80 1250 5228,000 $25,080,000 R-28 MF 85 5.90 14.41 5200,000 $17,000,000 R.29 MF 152 8.90 17.08 $162,000 $24,624,000 R-30 MF 180 10.2Q 17.65 $162,000 $29,160,000 S-l School 10.30 $2,575,000 52,575,000 55.74 CPF-I 1.20 $360,000 5360,000 $6.89 CPF.2 0.90 $270,000 5270,000 $6.8 ~PF.3 l.70 $510,000 S51O,000 56.89 CPP-4 1.50 5450,000 5450,000 56.89 ~PF.5 0.80 5240,000 5240,000 56.8 \:.1 12.50 $6,806,250 56,806,250 $12.5 IND.1 Industrial 5l.50 520,000,000 $20,000,000 58.92 ~.1 10 1.10 9.09 $1l0,393 51,303,930 MU-l 12 1.40 857 5108,900 $ 1 .306,800 MU.] 38 4.40 8.64 570,24-1 $2,669,158 Totals 2,532 396.00 $666,704,138 Anderson & Brabant, Inc. 28 Page 160 3-171 EXHIBIT "P" (Continued) Undeveloped Portions of Otay Ranch. Chula Vista, Califumia Village 1 and Village 6 Plan Area Average No. of' Units Finlsbed Total lParcel No. LorSizc, LotsIUnits A~ PerAcre LotYalue Pet Parcel Per SF ~~ CPF-2 4.60 $2,760.000 $2.760.000 6C.I 3.00 $1.188.000 $1.188.000 V6CPp.I 157 4.70 33.40 5168.100 526.391.700 iFAI2 34.40 532.999.989 529,675.000 519.80 fro..ls 157 $60.014.700 Plan Area arcclNo. -1 -2 .J -4 R-5 .6 R-7 -8 -9 -10 R-ll -13 R-14 -IS R-16 -17 R-18 R.l9 R.20 R~1.1 -22 R-23 Resort 1 eson 2 -1 otals Minimum Lot Size SOx-tOO SSxlOO 7Qxl0:5 6Oxl05 5SxlOO 55>92 SOxloo 55x92 55x100 50x100 55x92 6Ox105 701<105 50xlOO SSx92 601<105 70xl05 55xJOO SOxtOO 55xl00 55x92 MF Village 13 No. of LotsIUnits lID 95 71 76 81 122 III 110 84 87 i\4 97 82 81 67 50 S] 83 99 102 89 271 2.119 Acres 25.50 24.20 26.30 27.10 22.20 33.40 26.90 23.50 19.80 20.60 ]5.80 28.50 29.70 18.70 ]4.80 16.&0 28.60 19.80 30.10 25.10 23.70 21.10 41.70 9.50 12.60 586.00 Units Per Acre 4.31 3.93 2.70 2.80 3.65 3.65 4.13 4.68 4,24 4.22 4.05 3.40 2.76 4.33 4.53 2.98 2.83 4.19 3.29 4.06 3.76 ]3.13 Finished Lot Value $183,500 5]95,000 $224.000 5206.000 $]95.000 $]83.500 $183.500 5183.500 $195,000 $183.500 $]83.500 $206.000 $224.000 $183.500 $183.500 $206,000 $224,000 S195,000 S183,500 .$195,000 5183,500 $125.000 $21.797.424 S4,965,840 S3.150.000 The asswnptions on which the cash flow projections arc based are summarized as follov.-s. A copy of the analysis can be found in the Addenda section of this report. Months Per Period: The developmental analysis is based on periodic cash flows projected over the time required to complete development and sell-off of the subject property. The cash flows are totaled and analyzed on a quarterly basis and that equates to three months per period. Anderson & Brabant; Inc. Page 161 3-172 29 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, California First Unit Sales Period: The first closings are projected to occur in period two, April through July 2006. Those units projected to sell in period two include Planning Areas R-B and R-15 in Village 2, comprising land for 154 multi-fiunily units. The commercial lot in Village 6 is also projected to close during this period. Due to pent up demand, we have projected that a total of804lotslunits will to be sold during the first year of the study. Absorption: Sales are projected to be completed within approximately 24 quarters, or six years. The absorption period is based on our analysis of the subject property sales history, our review of other projects, analysis of current and projected inventories, and a review of published reports documenting absorption characteristics of competing projects. Total Uoits: There are a total of 4,748 units (combined SFR lots, multi-fanlily and tow-nhouse lots) ill. the project. Also included are three commercial sites, one industrial sileo two school sites and several additional future development Parcels. Annoa! Appreciation: The annual appreciation applies to all of the subject parcels. This is applied per period and is compounded on a quarterly basis. Annual appreciation is estimated at fourpercenr and begins in the second period. Marketing and Advertising: Expenses in this category are limited and have been projected at 1.5% oftatal revenues. Sales Costs: Ex.penses in this category include in-house and outside brokerage sales expenses, including commissions, title and closing costs. These costs have been projected at 1.0% of total revenues. General and Administrative: This expense category includes business operating expenses such as office overhead and staff salaries. Expenses have been projected at 2.0% aftatal w/enues, with lump sum estimates in the periods preceding sales. Tax Rate: The tax rate was estimated at 1.110% based on the approximate current tax rate for ad-valorem ta"{es. Special assessments tor the subject properties will not impact the property until after the land sale. Site Development Costs: This is the total cost to bring the subject properties to "blue top" condition, to install all off-tract infrastructure.. and to complete construction of paIks and certain HOA amenities. Cost In1lation: The annual cost inflation applies to all costs associated with the development of the subject properly. This is applied per period and is compounded on a quarterly basis. Annual cost inflation has been estimated at four percent and begins in tile second period. Maximum Loan: The developmental analysis does not in~lude any financing assu.TIlptions. Developer's ProfitJDiscount Rate: The analysis has been completed on the basis of a blended rate combining all project profits aod a discounting of future cash flows. The combined rate is consistent with rates required by merchant builders and developers. Depending on the project term, the blended rates range from approximately 20% for projects Anderson & Brabant, Inc. 30 Page 162 3-173 EXHIBIT "P" (Continued) Undeveloped Portions ofOtay Ranch, Chula Vista, California involving the purchase of finished or near-finished lot., to approximately 30% for long-term land development projects. In this analysis the discount rate is applied to projected cash flows resulting from the sell-off of property for which all or partial entitlements are essentially in place and the infrastructure is partially complete. In addition, the project has a history of successful sale and delivery of similar product in earlier phases. With the exception of the Qtay Ranch Project, the South Bay area has . limited supply ofmercbant builder lots, a condition that will likely continue into the foreseeable future. The selected discount rate of 30"10 is considered to be consistent with marl<et requirements. Developmental Approach: This section includes the cash flow calculations on a periodic (quarterly) basis. Ahsorption schednle: This schedule summarizes the periodic cash flows resulting from the sale of the residential properties. The periodic sales of the non-residential properties are included on the same page as the project assumptions. Construction Cost Schedule: Thi'i schedule summarizes the periodic expendirures for site development. The expenditures are incurred in the period following the sale of the corresponding unit. 'This is consistent with the sale and development history of the subject. CONCLUSION After a thorough investigation and analysis of appropriate data as they relate to the suhject, we have formed the following opinion ofmadeet value, set forth as of the abcve-mentioned dale. ESTIMATED BULK SALE MARKET VALUE $440,000,000 The value estimate is subject to the signed Certification, and Assumptions and Limiting Conditions. Additional supporting documentation pertaining to the analyses performed in reaching this conclusion is maintained in our work file. 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'0; 'w :;;!.o' c2! :ii~!~!~;'~r5i'ilit~lit:i!i1s:Sl;l'f,i\ii.iufif~;$i~ij~j 1st: , Ji' . - 's .~~ :,n:'.._.>..,.,,' ":".:-' m ,~,:~;a~!i:i~i:i:$;a!~:ii i;ai2;~: ~;s: s~a:i:'~(i; ~i :s '~j~: g: ,~ :Ai:;;: i;ii '; r S:a~E:it~a:'i';31a:i:=::;~;~ia;iiiia!Sljlil\'a,Caf:i;aii' .h..... '..'!'!'I"'''.I..i'i.'''':S.!.:.!'i.i'I~lt ,.;.,.;.'..!....,.:..:.i.'.!.'.'0!.f4"'.1.1~~~ - :!=;ai~lii2,_s!lil;li!~I~.g'g(i\a~i:5iliiaj3J2;~~i~ . .;, r " .. : ':'_ ,-, ,',,,, '",<:, i ia1li;:i.llinnt;li:~:li.lNl\iii:i'li:s~a:afiila;i;Sjj(:rr 'S[ it .*:....' ~ ~f~:fni;~[~;2,~fa, [i1:~j:i;i"a~S,;i;g;li!:i: s;!t",:ii:i:s ,. , '~." .' ~- <~~ 8.'''' ~tIHti~fg;flji:~;-i:~!faiaTa,'2!if~;~\gTa;i;aiijijsl;i; fg ~ r ',,_', mi__,,,,,,._!_,_:,, :,. i 'g:a::i;g;ila;a;ji:ii:1a1~~liia:ll:~:::::~i$i1i;i\i(afa )f " ,,; ..',.' '":,, ;,:' i:i\:i:a;~j:lra;3<Sili,i<:i;~~aitiiaiapi:iii~sii~1 . . . , . ~ U~ ~.~; ~,~i~HU.:uiO:U'~ ~,~;~i~U,~ g E) -3'. ~ *';; ~ ~;~i~1:..I~.f~ ~'~;~)~i~!~, ~1~,~~~:~:~;~~5'~'~f'a:~' :l;~ g~i'~;~!;!~~i:~!~'~-~:i:a:a'~J~i~!a:~~:~I~.'!~ :~ ~i~:~;~::';!itj!'i)~l! si;[;'t:~::i.~.lJi;t!i;:;:(jif~J2;~1!:! :5.! ~;::~j~:;;E,='!~:~'~'3 t;;;;::..:t;'*;:o:~!tji!'f:::~1g: -' , ~' fIll - -,.1' 14~:;:': ....:,IlI,~ .,u- , , '''' - '"'.",'" .,.........., '-'~"~' : ; , ,_,M'''','' ">""''''''1'''''- -,- ...-,-.-.-;-,lIil-"'N<'l'.I_'!' ~; . "':. '....':..'..:.....,;,,'..".!t;. .,,;,'....".., : :~:.n Page 173 3-184 EXHIBIT "P" (Continued) '.t,:~r 8, ;:Ij,-,:'" :i:~i~ 'li :: 'if i..i ii-i, ',:i:5l!Sj:a'S]li[..! ie\~,~gj~jg;a ~:~. . ;:;;::t' ~f::: ~ } . 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Anderson, MAl Anderson & Br.J.bant,Inc. 353 West Ninth Avenue EsCll1ldido, CA 92025 (760) 1414146 E,'l 314 1 Resident of San Diego County since 1970 n. Edu~ll.tiotlnl Baoof1)UJId: A Graduated frntn El Segundo High School - 1963 B. Attended El Camino IW'Jor College. Palomar InDicr College, and U.C.L.A C. Professional Education Completed: I. Appraisal Institute a. Real Estare Appraisal 1- Principle TY1ethods and Techniques b. Real Estate Appraisalll- Urban Properties c. Real Estate Appraisal VI - Investment Analysis d. .Real Estate Appraisal VIII 'h Standards oiProfessional Pmctice f. Litigation Valuation 2. Society of Rea1 Estale Appraisers: a.. Course 101 - Rea! Property Valuutlon b. Course 201 -Income Property Vaiuation 3. P--o.rtial ListofSelllinan:: Institutio.nal Real. Estate in the 1990's,: A VaJuationPen:pectiVl:', 6192 Narrative Report Generati01l., 11/92 Impact of Changing Demographics and Economic Influences on Value, 9193 Subdivision Analysis. 9/93 The lmpacr oflia'.Mdous SubSf.an~s on Real Estate, 9/93 UmlcrstllndingLimited Approisal$, 7/')4 Trial PrepllratiOI1 tMock Trial), 9194 CO(ldcm...atior. Valuation, 11/94 Fair Lending and the Appraiser, 12/94 Court Preparation in Litigation Cases, 11/95 The Appraiser In Cyberspace, 12195 California Laws & Regulations, 3f96 Appraisal Guidelines, 3/96 Litigation ValuallOl\- 11/96 Appraising High- Value and Historic Homes, 09/97 Standards ofProfessjonaI Appraisal Practice, 12!9i Damages., Diminution and Jvtitigation, 8198 Useful Internet Web Sites for Appraisers, &/9s. Market Trends in Southern California, 8/98 31'" Annual Litigation Semi.n.ar, 11/98 Laud Development, 3/99 San Diego Ground Leasing, 10/99 Gramm-Leach Privacy Act, 10/0t 34lh Annual Litigalicn Seminar, llfO t ?-..nderson & Brabant, Inc, Page 176 3-187 EXHIBIT "P" (Continued) Qualific:nions uf the Appraiser William B. Anderson, MAl Page 2 m. Pl'oFessiQoa{ Affiliation:!: A. Member, Appraisal In~tiLute, ~1AI B. Member, Inte.'i.lational Right of Way Association C. L98S President,. AIREA, San Diego Chapter No. 42 D. Pane! Member, American Arbitration .Association E. Certified General Real Estate Appraiser (AGO0231 5) Office of Real E$1ate Appraisers, State aI Califomia IV. ADnrais:ll Exncnence: CG-Qwner - Anderson & Brabant, Inc., 1919 to present Co-Owner - Robert M. Dodd & Associates. Inc.. 1977 to 1979 Staff Appraiser, Vice President and Appmisal Nbnager - Finaucia.! Appraisals, Inc.. 1968 to 1977 Staff Appraiser - Fi:nan.cial Savlogs :l!ld Lean Association., Calver City, CaJifonria, 1964 to 1966 V. Emert Wit.ness: Superior Court, San Diego Countj Municipal C.Jurt, San Diego County Federal.Bankruptcy Court, Sllll Diego County, San Bernardino County Assessment Appe.ilii Bc;u-d, San Diego County Various Arbitration Hearings as Witness and Ari1itrator VI. Tynes of Annr'J.jsals~ Residenljnl Property: Single-Family Rtsidellce, Condominiwus, Apartments, Subdivisions, Mobile Home Parks, Existing and Proposed Comm.crcialf'ropeny: Automobile Dealerships. Office Bui.ldings., Shopping Ccmers, Office Condcutiniums, Etc., Existing and proposed Single!Mu1ti~ Tenant. Business Parks, Etc., ExistiIlg and proposed Industrial Property: Vacant Land: Industrial, Commercial, .Residential, and Rural Agricultm;aJ; H..:mches, Avncado and Citnls Groves, Nurseries, Erc. Special Purpose Appraisals: Leasehold Estates, Possessory Intere~;T, Historical. Appraisals, Etc. Special PurpQ.<le Properties: SpeciaJProjects: GoLf Courses, Churches, Yacht Club & Marina. Ete. EIlcinitas Ranch, Pomerado Business Park. Parkway Business Park, $an Marcos County ,Landfill aod K.eHer Ca:Jlyon Landfill Anderson & Brabant, Iuc. Page 177 3-188 EXHIBIT "P" (Continued) QlialilicadO-R:i of ihe APPr.U.u:T William B. AnderSlln, MAl "Page 3 va. Partial List of Aonraisal Client.'!: Lenders Fallb,ook NationalBank Downey Savings Bank of America North County Bank Grossmant Bank Pomona FlJ'St Federal GE Capital Great Western Bank Imperial Bank Pacific Coast Savings & Loan Palomar Savings & Loan Rancho Sarna Fe National Bank Union Bank Weils Fargo Bank Title Comoanies Chicago Title Co. First American Title Co. S3feco Title Co. St Paul Title Co. Title Insurance & Trust Government AO'Cllqies and Mllnicioallties CA Departi!l.flllt ofTrausportmion .Caltrans City ofEllCillitas City of Chula Vista Cit'j ofNat.ioll"i11 City Citv ofEscondido Ci~' of OCem1Side Ch... of San Diego City of San Marcos City o!Yisro CO~tv of San Diego Es(,.'Ondido Union S.;hool District Encina Wastewater Authority NQM County Transit District San Diego Port District U. $. Depanment of Justice Fl.':deral Deposit l.nsurance Corp. Olivenhain Municipal Water District Poway Muni.c:ipaJ Warer District Ramona Unified Sciloot Dis'"..ricr Small Business Administration Vallecitos Water District ValJey Center Municipal Water District Allderson & B;bant, Inc. Page 178 3-189 Law Firms Law Offices of Wesley W. Peltzer Daley & Heft Endema.n, Linccln, Turek & Heater Gray, Cary, Ware &; Freidenrich Jones, Hatfield & Penfield Nugent & Newnham Slaipek & Miller Paul, Hastings, Janofsky & Walke;r Post. Kirby', Noonan & Swear Rutan &. Tucker Jeffrey Scott Sternberg, Eggers, Kidder & Fox Sullivan. Delafi,ld, McGrath & l<loDonald Wingert,. Grcbing, Anello & Chapin White & Bright ~ Stone & Youngberg Trust for Public Land The Willett Company Koll Real Estate Hollandla Dairy Homer HeIle:r Fo.rd The Kissell Company Los Atunitos Race Course Me! Pacific Telephone Pardee Construction Sutro Mortgage Company Wessell ConStl'UC"Jon Company Palomar College Granite Construction EXHIBIT "Q" VILLAGE TWO LAND USE PLAN Average Developable Home Sq. Estimated Sales V2 Single Family Acres No. of Lots Lot Size Ft. Price R-4 41.5 160 60/65 x 105 3,900 1,025,000 R-5 15.7 130 34x85 1,698 528,200 R-6 12.6 63 55x92 2,980 862,900 R-7 9.4 44 60xl00 3,775 998,300 R-8 10.1 50 55x92 2,980 862,900 R-9 13.5 101 40x95 3,083 785,300 R-15 8 37 50x85 3,066 762,500 R-17 13.7 119 34x85 1,698 528,200 R-18A 11.1 65 50x85 3,066 762,500 R-18B 11.1 48 60xl00 3,775 998,300 R-19 10.8 83 40x95 3,083 785,300 R20 19.5 83 60xl05 3,900 1,025,000 R-21 21.8 62 70 and 80xl25 4,200 1,080,000 R-23 13.5 71 55x92 3,113 785,300 R-24 8 41 55x92 3,113 785,300 R-25A 4.5 34 40x95 3,083 785,300 R-25B 4.9 34 40x95 3,083 785,300 R-26 9 75 34x85 1,698 528,200 Total 238.7 1,300 Page 179 3-190 EXHIBIT "Q" (Continued) VILLAGE TWO LAND USE PLAN Developable No. of Target Density Average Estimated V2 Multi-Family Acres Lots (DUlAC) Home Sq. Ft. Sales Price R-IO 3.3 90 20 1,299 410,000 R-Il 9.8 144 14.5 1,498 470,000 R-12 23.6 295 12.3 1,498 470,000 R-l3 10.4 149 14.5 1,498 470,000 R-14 7 146 18 1,299 410,000 R-16 2.5 74 21.1 1,299 410,000 R-27 7.5 110 12.5 1,498 470,000 R-28 5.2 85 14.4 1,498 470,000 R-29 5.9 152 17.1 1,601 465,000 R-30 10.3 180 17.6 1,750 490,000 Total 85.5 1,425 V2 Mixed Use MU-l 1.8 10 1,495 470,000 MU-2 2.4 12 1,275 410,000 MU-3 4.3 38 1,275 410,000 Total 8.5 60 Future Annexable Area 52 Total 52 Total Village Two 364.3 2,837 Based on developable acres as reflected on the approved Tentative Map. Page 180 3-191 EXHIBIT 3 CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT GOAL AND POLICY REpORT APPLICATION OF OTAYPROJECT, L.P. PROPOSED COMMUNITY FACILITIES DISTRICT NO. 14-1 VILLAGE Two GENERAL BACKGROUND The applicant is Otay Project, L.P., the landowner. The General Partner of the landowner is Otay Project, LLC and the Limited Partner is Otay Ranch Development, LLC. The application, dated October 31, 2006, requests the formation of a Community Facilities District ("C.F.D.") over 750.18 gross acres with approximately 622.20 acres of developable land, excluding commercial portions of the project. Otay Project, L.P. is the majority landowner within Otay Ranch Village Two and has consents from the most other of the landowners to act on their behalf. The developer has obtained GDP approval, EIR (04-06), tentative map, recorded final "A" map, adopted SPA plan and grading permit for Village Two. Currently the land is vacant with no physical improvements. The primary proposed use is residential. Grading of the residential property was initiated in late 2006. Prior land use of the site was agricultural. Otay Project, L.P. application indicates property taxes are paid current for fiscal year 2004-05. UNDERLYING PRINCIPALS OF GOALS AND POLICIES I. Protection of the public interest, 2. Fairness in application of special taxes to current and future property owners, 3. Full disclosure of special tax liens, 4. Credit worthiness of special tax bonds, 5. Protecting City's credit rating and financial position, 6. Applicants pay all costs associated with C.F.D. formation. -1- J:\Engineer\LANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy 3~n9t2Application.doc FINDING OF PUBLIC INTEREST OR BENEFIT Policv Summary The City Council may authorize proceedings if the Council determines that the public improvements to be financed provide benefit to the community at large as well as benefit within the C.F.D. ADDlication The list of improvements proposed to be financed through the C.F.D. and owned by the City after completion include: I. Heritage Road - Olympic Parkway to Main Street 2. PFDIF Facilities - Rancho Del Rey Library 3. Pedestrian Bridge Fees 4. Backbone StreetslUtilitieslBus Shelters 5. Traffic Signals Fees 6. Slope Landscaping 7. MTDB Right of Way Landscaping 8. Rock Mountain Road/Main Street (Partial) 9. Environmental Mitigation 10. Waterlines - Non-CIP I I. Open Space Preserve Land 12. Community Park Improvements 13. Town Square 14. Town Center Drive (Otay portion of the cost) Discussion AUTHORIZED PUBLIC FACILITIES Policv Summary Improvements must be public improvements, which will be owned, operated or maintained by the City or other public agency. Improvements must serve a neighborhood area or greater. ADDlication Improvements proposed to be financed will be dedicated to the City for ownership, operation and maintenance. -2- l\EngineerILANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy ~re.aApplication.doc Discussion PRIORITIZATION OF PUBLIC IMPROVEMENTS Policv Summary First priority of a C.F.D. established by the City is the provision of public improvements benefiting the City. Second priority is the provision of public improvements owned, operated or managed by other public agencies. Application All improvements will be owned, operated and maintained by the City. Discussion AUTHORIZED PUBLIC SERVICES Policv Summary Public services proposed to be financed may generally include I) maintenance of parkways, medians and open space; 2) drainage and flood control and 3) other services authorized by the C.F.D. Act and adopted by the City. Application No services are proposed to be funded by this C.F.D. Discussion INCIDENTAL COSTS Policv Summary Certain eligible incidental costs may be financed via special tax bonds. Those incidental costs must be directly related to improvements financed by proceeds of such special tax bonds and are subject to not to exceed percentage limitations. Application A breakdown of incidental costs is not included with the application. -3- J:\Engineer\LANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy ~1 r9at Application.doc Discussion REQUIRED VALUE-TO-DEBT RATIO Policv Summary The required value to lien ratio must be at least 4: I. Application The value to lien ratio is not known and will not be known until completion of the appraisal, final determination offacilities to be financed and final bond issue sizing. Discussiou CRITERIA FOR APPRAISALS Policv Summary The City has specific requirements for appraisal content and objectives. Application The application does not address criteria for appraisals. The City's finance team will direct the appraiser and provide guidance on scope of work and methodology consistent with policy. It is the City's intention to hire the same appraiser that worked for the City on all other recent prior C.F.D.s. Discussion MAXIMUM AGGREGATE TAXES AND ASSESSMENTS Policv Summary The maximum annual special tax installment applicable to any residential parcel shall not exceed one percent of the sales price. Total taxes shall not exceed two percent of initial sales price. The C.F.D. policy provides a mechanism to buy down to 2% at closing to meet the maximum tax policy. Application The application does not address overlapping debt. Determining the maximum aggregate tax is accomplished during development of the Rate and Method of Apportionment ("RMA") and the bond sizing/debt service phase of the process. -4- J:\Engineer\LANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy ~~r96 Application.doc Discussion SPECIAL TAX REQUIREMENTS Policy Summary The Rate and Method of Apportionment shall adhere to specific requirements detailed within the policies. Annlication The City's Special Tax Consultant will be charged with preparing a RMA consistent with City guidelines. It is anticipated the RMA utilized in other recent C.F.O.'s will serve as a model for the proposed C.F.O. Discussion TERMS AND CONDITIONS OF SPECIAL TAX BONDS Policy Summary All terms and conditions of any tax bonds issued by the City shall be established by the City. Anolication Terms and conditions of a bond sale have not yet been discussed and therefore are not yet determined. Terms of a bond sale will be determined during the bond phase by the City's finance team that includes staff, financial advisor, underwriter, bond counsel and other participants. Discussion DISCHARGE OF SPECIAL TAX OBLIGATION Policy Summary Special Tax obligations may be prepaid and discharged in whole or in part at anytime. Aoolication The City's Special Tax Consultant will prepare a RMA that contains prepayment provisions. -5- J:\Engineer\LANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy s.e~ r96 Application.doc Discussion PROPERTY OWNER DISCLOSURE Policy Summary Applicants are required to demonstrate that there will be full disclosure of special tax obligations to prospective purchasers of property. Application A form of disclosure was not provided with the application. Typically, disclosure forms are prepared by the merchant builders at the time of sale to end user. Discussion PREFORMATION COST DEPOSIT AND REIMBURSEMENTS Policy Summary All City and consultant costs incurred in application process and proceedings will be paid by applicant by advance deposit. Application The application states that a deposit will be provided to the City upon notification of the required amount. A deposit request and breakdown will be prepared. Discussion SELECTION OF CONSULTANTS Policy Summary The City shall select and retain all consultants. Application The City intends to keep in place the financing and consulting team used on other recent C.F.D.'s. -6- J:\Engineer\LANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy eperqre1i'1 Application.doc Discussion LAND USE APPROVALS Policy Summary The City may issue bonds secured by special taxes when a) properties have received applicable discretionary land use approvals consistent with financing assumptions and b) applicable environmental review is complete. Annlication The Developer has obtained the following entitlements: . Village Two Tentative Map . Final "A" Map . EIR (04-06) . Adopted SPA plan . GDP approval . Grading permit . First "B" Map approval anticipated April, 2007 Discussion APPLICATION PROCEDURE FOR DEVELOPMENT RELATED C.F.D.s Policy Summary Any application shall contain such information and be submitted in such form required by the City Manager. In addition each application must contain: 1. Proof of authorization if the applicant is not the owner. 2. Evidence that the applicant represents the owners of not less than 67%, by area, of property subject to proposed levy. 3. A business plan for the development of the property that reviews the financial feasibility of the C.F.D. and demonstrates the ability of the owner to pay special tax installments and any other taxes or assessments until full build out. Annlication The information provided is preliminary and general in nature. Extensive due diligence will be required for the preparation of a disclosure document and final City decision to issue bonds. The application was the source for all information contained in this summary. -7- J:\Engineer\LANDDEV\Projects\Otay Ranch Village 2\CFD\Goals & Policy ~~ r98 Application.doc EXHiB~ ~ If COMMUNITY FACILITIES DISTRICT REIMBURSEMENT AGREEMENT (Otay Project, L.P.) TIllS AGREEMENT is made and entered into thi~y of ~~, 2007, by and between the CITY OF CHULA VISTA, a charter city ("City"), and OTAY PROJECT, L.P., a California limited partnership ("Applicant"). RECITALS A. The Applicant has made application with the City to request that the City initiate proceedings under the provisions of the "Mello-Roos Community Facilities Act of 1982," as amended (Government Code Section 53311 and following), to form a community facilities district (the "Community Facilities District") to finance the acquisition and/or construction of certain public improvements. The construction of such public improvements is required as a precondition to the development of properties owned and/or to be developed by the Applicant or affiliates of the Applicant within Village Two of the Otay Ranch. B. Applicant agrees to advance funds to the City for the payment of all initial consulting and administration costs and expenses related to the proceedings to consider the formation of the Community Facilities District and to subsequently authorize, issue and sell bonds forthe Community Facilities District (the "Proceedings"). Such monies shall be subject to reimbursement or credit pursuant to the provisions of this Agreement upon the successful sale of bonds for the Community Facilities District and the receipt by the City of the proceeds of such bonds. C. The parties hereto wish to enter into an Agreement to memorialize the terms and conditions pursuant to which Applicant shall advance monies and the monies so advanced may, subject to certain conditions contained herein, be reimbursed or credited against future special tax obligations. AGREEMENT The parties hereto, for mutual consideration, agree as follows: SECTION 1. Advances. A. Applicant shall advance monies to the City in such amounts and at such times as specified below to pay all costs and expenses incurred by the City in undertaking the Proceedings (except those costs and expenses which are contingent upon the issuance of bonds for the Community Facilities District and payable solely from the proceeds of such bonds), including without limitation, the following: 1. Special Tax Consultant services; 2. Bond counsel services; 3. Financial advisory services; SDPUBIWDIVENl344568.1 1 3-199 4. Appraisal and market absorption services; and 5. City staff and City Attomey time. All such costs and expenses are collectively referred to as the "Formation and Issuance Costs." B. Advances shall be made to the City pursuant to the following schedule: 1. Applicant shall advance the amount of $290,900.00, receipt of which is hereby acknowledged by the City. 2. If monies in addition to the initial advance are necessary to pay for the Formation and Issuance Costs, the City shall as necessary and from time to time make written demand upon Applicant and Applicant shall immediately thereafter, within five (5) working days, deposit said monies with the City to pay for the balance of the Formation and Issuance Costs. If such additional monies are not timely received, all Proceedings shall, at the option of the City, be suspended until such monies are received. SECTION 2. Records. The City agrees to keep records consistent with its regular accounting practices of the amount of monies advanced and the expenditure of such monies. Additionally, the City shall enter into and maintain contracts with all consultants that shall specify the scope of services and compensation to be paid to all such consultants. Such records and contracts shall be available for review by the Applicant during normal business hours upon reasonable notice to the City. SECTION 3. Reimbursement. If the Community Facilities District is formed, Applicant may elect among the following options for the reimbursement of monies advanced pursuant to this Agreement: A. All monies advanced shall be reimbursed in cash solely from bond proceeds; B. All monies advanced shall be applied as a credit upon the special taxes to be levied against properties then owned by the Applicant; or C. A combination of the above. If the Proceedings to form the Community Facilities District are not completed and are abandoned for any reason at any time prior to the successful sale of bonds or the Community Facilities District is unable for any reason to issue or sell the bonds, there will be no obligation on the part of the City or the Community Facilities District to reimburse Applicant for any monies previously advanced pursuant to this Agreement; provided, however, the City does agree to return to Applicant any monies previously advanced which remain on deposit with the City and which the City determines are in excess of the amount necessary to pay for any outstanding Formation and Issuance Costs previously incurred by the City. SECTION 4. Ownership of Documents. All appraisals, market absorption studies, special tax pro formas and other documentation as prepared as a part of the Proceedings shall become the property of the City, regardless as to whether the Community Facilities District is actually formed. SDPUBIWDlVEN\344568.! 2 3-200 SECTION 5. No Obligation to Form Community Facilities District. Applicant acknowledges that the decision of the City Council to form the Co=unity Facilities District is an exercise of the legislative authority of the City Council and that the City may not enter into a contract to obligate the City Council to exercise its legislative discretion in a particular manner. This Agreement does not, therefore, in any way create a contractual, legal or equitable obligation of or commitment by the City to approve the formation of the Co=unity Facilities District. The City expressly reserves the right to abandon the Proceedings for any reason at any time prior to the completion thereof. Should Applicant desire to abandon the Proceedings, Applicant shall provide written notification of such desire to the City and request the City to immediately terminate all consulting agreements and use all efforts to minimize any and all Formation and Issuance Costs. SECTION 6. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 7. Authority to Execute Agreement. The City and the Applicant represent that the individuals signing this Agreement have full right and authority to bind their respective parties to this Agreement. SECTION 8 Best Efforts. The parties promise to use their best efforts to satisfy all conditions to this Agreement and to take all further steps and execute all further documents reasonably necessary to put this Agreement into effect. SECTION 9. Successor and Assigns. This Agreement shall be binding on and inure to the benefit of the respective parties and their respective heirs, legal representatives, successors and assigns. Applicant may not assign its rights or obligations hereunder except upon written notice to City within ten (10) days of the date of such assignment indicating the name and address of the assignee. Upon such notice and the assumption by the assignee in writing delivered to the City of the rights, duties and obligations of the Applicant arising under or from this Agreement, Applicant shall be released for all future duties or obligations arising under or from this Agreement. SECTION 10. Singular and Plural; Gender. Whenever used herein, the singular number shall include the plural, the plural number shall include the singular, and the masculine feminine or neuter gender shall include the others whenever the context of the Agreement so indicates. SECTION 11. Entire Agreement. This Agreement contains the entire Agreement between the parties hereto with respect to the subject matter hereof. This Agreement may not be altered, modified or amended except by an instrument in writing executed by all of the parties. SECTION 12. Governing Law. This Agreement has been executed in and shall be governed by the laws of the State of California SECTION 13. Construction. This Agreement shall be construed as a whole and in accordance with its fair meaning. Captions and organizations are for convenience and shall not be used in construing meaning. SECTION 14. Severability. In the event that anyone or more of the provisions of this Agreement that is or are material to the entering into this Agreement by either Applicant or the City shall for any reason be held to SDPUB\ WDIVEN\344568.\ 3 3-201 be unenforceable in any material respect by a court of competent jurisdiction, Applicant and the City may mutually agree that such unenforceability shall not affect any other provision of this Agreement, and that this Agreement shall be construed as if such unenforceable provision or provisions had never been contained herein. If Applicant and the City fail to so mutually agree, this Agreement shall terminate, without penalty to either party, after the giving by one party of thirty (30) days' prior written notice to the other party. In such event, the City shall use all efforts to minimize any and all Formation and Issuance Costs and shall return to Applicant any monies previously advanced which remain on deposit with the City and which the City determines are in excess of the amount necessary to pay for any outstanding Formation and Issuance Costs previously incurred by the City. SECTION IS. Notices. All notices and demands shall be given in writing by personal delivery or first-class mail, postage prepaid. Notices shall be addressed as appears below for the respective party; provided that, if any party gives notice of a change of name of address, notices to the giver of that notice shall thereafter be given as demanded in that notice. Notices shall be deemed received seventy-two (72) hours after deposit in the United States mail. CITY: CITY OF CHULA VISTA 276 Fourth Avenue Chula Vista, CA 91910 Attention: City Manager APPLICANT: OTA Y PROJECT, L.P. 610 West Ash Street, Suite 1500 San Diego, CA 9210 I Attention: Kim John Kilkenny SECTION 16. Time of the Essence. Time is of the essence in the performance of the parties respective obligations herein contained. SECTION 17. Waiver. The waiver by one party of the performance of any covenant, condition or promise shall not invalidate this Agreement, nor shall it be considered a waiver by him of any other covenant, condition or promise. The waiver by either or both parties of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. The exercise of any remedy provided in this Agreement shall not be a waiver of any consistent remedy provided by law, and any provision of this Agreement for any remedy shall not exclude other consistent remedies unless they are expressly excluded. SECTION 18. Amendment. No provision of this Agreement may be modified, waived, 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 19. Hold Harmless. Applicant shall defend, indemnify, protect and hold harmless the City, its elected officials and appointed officers, employees and consultants retained for purposes other than formation of the Community Facilities District, from and against all claims for damages, liability, cost and SDPUBIWDIVEN\344568.1 4 3-202 expense (including without limitation attorneys' fees) arising directly or indirectly out of the waiver by the City Council of the City's procedures for the selection of any of the consultants identified in Section 1. and retained by the City to assist in undertaking the Proceedings. Applicant's indemnification shall include any and all costs, expenses, attorneys' fees and liability incurred by the City, its officers, employees or consultants retained for purposes other than formation of the Community Facilities District in defending against such claims, whether the same proceed to judgment or not. Further, Applicant at its own expense shall, upon written request by the City, defend any such suit or action brought against the City, its officers, employees or consultants retained for purposes other than formation of the Community Facilities District. Applicant's indemnification of City shall not be limited by any prior or subsequent declaration by the consultant. SDPUB\WDIVEN\344568.1 [Remainder of this page intentionally left blank.] 5 3-203 Signature Page to Co=unity Facilities District Reimbursement Agreement between the City of Chula Vista and Otay Proj ect, L.P. IN WITNESS WHEREOF, City and Applicant have executed this Agreement thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms. CITY OF CHULA VISTA By: City Manager Attest: City Clerk Approved as to Form: City Attorney City of Chula Vista OTA Y PROJECT, L.P., a California Limited Partnership, By: ORIOLE MANAGEMENT, LLC a California limited liability company, General Partner By: . John Kilke , Ice President SDPUB\ WDIVEN\344568.! 6 3-204 CALIFORNIA ALL.PURPOSE ACKNOWLEDGMENT State of California D I County of &-n ~ ss, On N a( ofSigner(s ~sona[[y known to me o proved to me on the basis of satisfactory evidence J@--- - =~~33- J I NoIaIy PublIc - Ca8lcmIa j tan DIego Ccully - _ _ _ ~~_~_~1~~ to be the person~ whose nam#)~ subscribed to the with' instrument and acknowledged to me a el ~~ executed the same in is th~ ~th:,rized capacity(i~, and that by ~/t~ signature~ on the instrument the person~, or the entity upon behalf of which the person~ acted, executed the Instrument. OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Title or Type of Docum Document Date: B Number of Pages: Signer(s) Other Than Named Above: Signerls Name: . Top of thumb here o In9ividual ~orporate Officer - Title(s): o Partner - 0 Limited 0 General o Attorney-in-Fact o Trustee o Guardian or Conservator o Other: Signer Is Representing: G 1999 National Notary Asscct&tIon. 9350 Oe Solo Ave., P.O. Box 2402' Chatllworth, CA 91313-2402' www.nationalnatary.org Prod.. No. 5907 Reorder: Call Toll-Free 1-800-876-6827 3-205 CITY COUNCIL AGENDA STATEMENT ~!'f::. CITY OF :~CHULA VISTA 3/06/2007 Item 4'- SUBMITTED BY: REVIEWED BY: RESOLUTION APPROVING THE AMENDED COOPERATIVE AGREEMENT BETWEEN THE CITY OF CHULA VISTA, THE OTAY WATER DISTRICT, AND THE SWEETWATER AUTHORITY WHICH CREATED THE INTERAGENCY WATER TASK FORCE AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDED COOPERATIVE AGREEMENT. CITY ENGINEER s.? INTERIM CITY MANAGER { ITEM TITLE: 4/5THS VOTE: YES NO X BACKGROUND On February 26, 1991, by Resolution 16081, the City Council approved the Cooperative Agreement for the Interagency Water Task Force. The Interagency Water Task Force was created on March 22, 1991 when the Otay Water Authority and the Sweetwater Authority also approved the Cooperative Agreement. On February 12, 2007, the Interagency Water Task Force adopted the Amended Cooperative Agreement. Staff now recommends that Council approve the Amended Cooperative Agreement allowing the selection of a Vice Chairman, the inclusion of a Drought Management Program, the inclusion of a termination provision and some clarifying language, and the revision of frequency of meetings. ENVIRONMENTAL REVIEW The Environmental Review Coordinator 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; therefore, pursuant to Section 15060( c )(2) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION That the City Council adopt the Resolution approving the Amended Cooperative Agreement between the City of Chula Vista, the Otay Water District, and the Sweetwater 4-1 3/06/2007 , Item ~ Page 2 of3 Authority which created the Interagency Water Task Force and authorizing the mayor to execute the Amended Cooperative Agreement. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION In June 1990, after meeting for a period of one year to analyze issues affecting water supply and service to Chula Vista residents, the Chula Vista Water Task Force presented its final report to the City Council. One of the major recommendations of that Water Task Force was to establish an Interagency Water Task Force, which would include members from the City Council of Chula Vista and representatives from the two water agencies serving Chula Vista, Otay Water District ("Otay") and Sweetwater Authority ("Sweetwater"). It was argued that such a task force would be an effective means of promoting and enhancing the communication between the City and the agencies responsible for providing water service within the service area of Chula Vista. On February 26, 1991, by Resolution 16081, Council approved the Cooperative Agreement of the Interagency Water Task Force and, on March 22, 1991, Otay Water and Sweetwater Authority also approved the Cooperative Agreement. The Cooperative Agreement, known as document number C091-027, created the Interagency Water Task Force between the City of Chula Vista, Otay Water District, and Sweetwater Authority and established the functions and duties thereof. The Task Force currently consists of seven voting members and non-voting ex-officio members. Of the voting members, two shall be members of the City of Chula Vista City Council, two members of Otay Water District Governing Board, two members of the Sweetwater Authority Governing Board and one representative of the general public appointed by the City of Chula Vista City Council. At this time, the Interagency Water Task Force would like to amend the Cooperative Agreement allowing the selection of a Vice Chairman and to include a termination provision and some clarifying language. In addition to the existing conservation program, it is recommended that a Drought Management Program be added as an element of the functions and duties of the Interagency Water Task Force. This would include a preventative plan for drought in the Chula Vista areas served by Otay Water and Sweetwater Authority. In addition, the task force has experienced difficulty in assembling a quorum of representatives for meetings, and thus recommends amending the Cooperative Agreement to revise the meeting frequency of the Interagency Task Force from at least once per quarter to at least twice a year, or quarterly, as determined by agenda requirements. Lastly, the amendment would include provisions for selecting a Vice Chairman from the Interagency Water Task Force membership annually in the month of January. In the event that the Chairman is unable to attend meetings, this would designate an alternate member to lead the meetings in the Chairman's absence. Staff recommends amending the Cooperative Agreement to include a termination provision and some clarifying language, provisions for adding a Drought Management 4-2 3/06/2007 ,Item~ Page 3 of3 Program, selecting a Vice Chairman, and revlsmg the meeting frequency of the Interagency Water Task Force. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(I) is not applicable to this decision. FISCAL IMPACT There is no impact to the General Fund. ATTACHMENTS 1. Cooperative Agreement 2. Cooperative Agreement Strike-Out Version 3. Amended Cooperative Agreement (Draft) Prepared by: Anthony Chukwudolue. Senior Civil Engineer. Engineering Department J:\EngineerIAGENDA\CAS2007\03-06-07IInteragency Water Task Force.lp.doc 4-3 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE AMENDED COOPERATIVE AGREEMENT BETWEEN THE CITY OF CHULA VISTA, THE OTAY WATER DISTRICT, AND THE SWEETWATER AUTHORITY WHICH CREATED THE INTERAGENCY WATER TASK FORCE AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDED COOPERATIVE AGREEMENT. WHEREAS, on Febmary 26, 1991, by Resolution 16081, the Chu1a Vista City Council approved a Cooperative Agreement between the City of Chula Vista, the Otay Water District, and the Sweetwater Authority (collectively "Agencies"); and WHEREAS, on March 22, 1991, the goveming boards of the Otay Water District and the Sweetwater Authority also approved the Cooperative Agreement, creating and establishing the functions and duties of the Interagency Water Task Force; and WHEREAS, staff of the Agencies recommend amending the Cooperative Agreement to incorporate the selection of a Vice Chaim1an, the inclusion of a Drought Management Program and a tennination provision, the revision of meetings times, and to clarify certain language. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula Vista that it approves the Amended Cooperative Agreement between the City of Chula Vista, the Otay Water District, and the Sweetwater Authority, which created the Interagency Water Task Force. BE IT FURTHER RESOLVED by the City Council of the City ofChula Vista that it that authorizes the Mayor to execute the Amended Cooperative Agreement on behalf of the City of Chula Vista. Presented by Approved as to form by Scott Tulloch City Engineer ~~~tV~ Ann Moore City Attomey H:\ENGINEER\RESOS\Resos2007\03-0G-07\lntcragency Water Task Force Amendment REVISED BY EC.doc 4-4 ATTAC4IMENT COOPERATIVE AOREEMENT AN AGREEMENT BETWEEN THE CITY OF CBULA VISTA, THE OTAY WATER DISTRICT, AND THE SWEE'IWATER AUTHORITY CREATING THE CHULA VISTA INTBRAOBNCY WATER. TASK FORCE AND ESTABLISHING THE FUNCTIONS AND DUTIES TIIEREOF WHEREAS, in May 1989, the City Council formed the Chula Vista Ad Hoc Water Task Force for the pw:pose of studying water related issues facing the City of ChuJa Vista and to make recommendations to the City Council regarding water related matters; and WHEREAS, said Task Force has received presentations from leaders and staff members from alll1lajor water related agencies in Southem California since the date of its commission; and WHEREAS, said Task Force has, at the City Council meeting of June 19, 1990 (Item 4b) reported back to the City Council with regard to its recommendations which were conlained in a report from said Task Force dated May 1990, entitled "&commendalt01lS Report to Chu1a Vista City Council", a copy of which is on file in the office of the City Clerk of said City; and WHEREAS, said Task Force has recommended the formation of a Chula Vista Interagcncy Water Task Force to diBcuss local water related issues; and WHEREAS, at the City Council meeting of June 19, 1990, the City Council did direct staff to study and report back on the formation of said Task Force; and, WHEREAS, it is mutually agreed between the City Council of Chula Vista, the board of directors of the Otay Water District, and the board of directors of the Sweetwater Authority that an Interagency Water Task Force to deal with local related water issues would be advisable; and WHEREAS, an agreement should be prepared establishing the formation, responsibilities, and duties of the Task Force; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA, THE BOARD OF DIRECTORS OF OTAY WATER. DISTRICT, AND THE BOARD OF DIRECTORS OF THE SWEETWATER AUTIlORITY AOREE AS FOLLOWS: EattJ Interaiency Water Task Force Creation; Appointment of Members; Term; Quorum; Rules and Regulations. 1. There is bel'eby created a Chula Vista Interagency Water Task Force. The Task Force sbalI consist of seven (l) voting members and non-voting ex-officio members and such other ex-officio members as the agencies may assign. I 4-" 2. Ex-officio members shall be entitled to deliberate, and participate in the deliberations of the Task Force, but shall not be entitled to vote on matters befolll the Task Force. 3. Of the Voting Members. two shall be representatives of. and members of the City Council of the City of Chula Vista and appointed by the City Council ("Council Representativcs"), one shall be a representative of the general public of, and qualified elector of the City of ChuIa Vista and appointed by the City Council ("GeneIal Public Rqnaentative"). two shall be members of the Olay Water District Governing Board and appointed by their board of directors ("Olay Waler District RepleSel'ltatives"), and two sha1l be members of the Sweetwater Authority Governing Board and appointed by their board of dirIlctors ("Sweetwater Authority Representatives"). 4. All vacancies shall be filled by the appointing authority of the representative of the office vacated. S. Each agency sha1l rotate the appoinbnent of a secretary to the Task Force for periods agIllCd to by the Task Foree. 6. The Task Foree shall select a Chairman from iu membership annually in the month of January. 7. Four voting members shal1 constitulc a quorum for the transaction of business. Otherwise. the Task Force shall adopt reasonable rules and regulations for carrying out all the functions and duties of the Task Force and governing iu meetings. All reports and recommendations shall be made in writing. All officers and department heads of all agencies shall cooperate with and render lllaSOIlable assistance to the Task Force. r.m.JI Functions and Duties 1. It shal1 be the function of the Task Force to investigate. study and make =mmendations concerning Water related matters. The primary objective of the Task Force shall be to make =mmcndations with the goal of assuring an adequate and high quality supply of water for the residents of the region. The Task Force shall produce a Illpon which provides objectives including but not limited to: (1) Water Quality (2) Water Reclamation Program (3) Water Conservation Program (4) Emergency Water Storage Supply (5) Water Pressure (6) Water Distribution (7) Implication of Land Use Proposals on Waler Supply 2 4-6 2. In addition to the above, the Task Force shall: A. Make recommendations as to how the City of Chula Vista may become marc proactive in state and regional water related issues. B. Make recommendations as to how the City and the various water purveyors may integrate their long and short term master and general plans for development. Each Agency reserves the right to develop its own Water Master Plan. However, this Task Force may review and comment on these Plans. C. Make recommendations to the City Council and to appropriate Water Boards as to the establishment of ordinanl:elJ, policies and guideline manuals for the implementation of water conservation and other water related measures. D. Recommend the establishment, with implementation plans, of a new water use and conservation ethic and to recommend to the City and the Water Agencies means for implementing same. E. Provide advice to the City in developing any water element or plan as part of its General Plan and/or Growth Management Plan. F. Study and report, as Rquested, the impacts to the water systems of land use decisions. 3. Such other and further malletS as have been or may, from time to time be, assigned to the Task Force by the City Council or Water Agency Boards. Part ill Meetin~s The Interagency Water Task Force shall schedule at least one regular meeting each quarter year on the day and at the time and in the place that it shall designate by resolution and/or by bylaw and such special meetings as the Task Force may require. [Signature page follows] 3 4-7 Presented by John P. Lippitt, Director of Public Works APPROVED MAYOR, CITY OF CHULA VISTA APPROVED OTAY WATER DISTRIcr APPROVED SWEETWATER AUTHORITY [Al13-2\H20AOIUm.TXTl Approved as to form by BnIce M. Boogaard, City Attorney Approved as to form by Attorney, Olay Water District Approved as to fann by Attorney, Sweetwater Authority 4-8 4 AMENDED COOPERATIVE AGREEMENTA TT ACHMEr z AN-AGJ{.,I.\~ll:;';V!' BETWEEN THE CITY OF CHULA VISTA, nl-gqLt\Y WATER DISTRICT, ANDn.4ESWEETWATER AUTHORITY CREATING THECHULA VISTA INTERAGENCY WATER TASK FORCE AND ESTABLISHING THE FUNCTIONS AND DUTIES THEREOF WHEREAS, in May 1989, the City Council formed the Chula Vista Ad Hoc Water Task Force for the purpose of studying water related issues facing the City of Chula Vista and to make recommendations to the City Council and to the affected water agencies regarding water related matters; and WHEREAS, said Task Force has received presentations from leaders and staff members from all major water related agencies in Southern California since the date of its commission; and WHEREAS, said Task Force has, at the City Council meeting of June 19 (Item 4b) reported back to the City Council with regard to its recommendations which were contained in a report from said Task Force dated May 1990, entitled "Recommendations Report to Chula Vista City Council, " a copy of which is on file in the office of the City Clerk of said City; and WHEREAS, said Task Force has recommended the formation of a Chula Water Task Force to discuss local water related issues; and WHEREAS, at the City Council meeting of June 19, 1990, the City Council did direct staff to study and report back on the formation of said Task Force; and, WHEREAS, it is mutually agreed between the City Council of Chula Vista, the board of directors of the Otay Water District, and the board of directors of the Sweetwater Authority that an Interagency Water Task Force to deal with local related water issues would be advisable; and WHEREAS, an agreement should be prepared establishing the formation, responsibilities, and duties of the Task Force; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA, THE BOARD OF DIRECTORS OF OT A Y WATER DISTRICT, AND THE BOARD OF DIRECTORS OF THE SWEETWATER AUTHORITY AGREE AS FOLLOWS: Part I: Interagencv Water Task Force Creation; Appointment of Members; Term; Quorum; Rules and Regulations. 1. There is hereby created a Chula Vista Interagency Water Task Force. The Task Force shall consist of seven (7) voting members and non-voting ex- officio members and such other ex-officio members as the agencies may assIgn. 2. Ex-officio members shall be entitled to deliberate, and participate in the deliberations of the Task Force, but shall not be entitled to vote on matters before the Task Force. 4-9 3. Of the Voting Members, two shall be representatives of, and members of the City Council of the City ofChula Vista and appointed by the City Council ("Council Representatives"), one shall be a representative of the general public of, and qualified elector of the City of Chula Vista and appointed by the City Council ("General Public Representative"), two shall be members of the Otay Water District Governing Board and appointed by their board of directors ("Otay Water District Representatives"), and two shall be members of the Sweetwater Authority Governing Board and appointed by their board of directors ("Sweetwater Authority Representatives"). The three groups of representatives, to wit: Council Representatives, Otay Water District Representatives, and Sweetwater Authority Representatives shall be sometimes herein referred to as "Agency Voting Classifications." 4. All vacancies shall be filled by the appointing authority of the representative of the office vacated. 5. Each agency shall rotate the appointment of a secretary to the Task Force periods agreed to by the Task Force, 6. The Task Force shall select a Chairman and Vice Chail1nan from its membership annually in the month of January. 7, The..I:as*.l:Hf&e-'sflajJ-neh+'Bduet-eHf;t}lt'5+wit*)UHh~,t""S"Hl",.<tfa-tjH&FUm whieh..is..j""1'6bj'.~l-efiHc4-t.,ex-ist.wh*,n..a+.-k="ast..fE>Uf..nl{'lHl-)e{'fi-ar"'presenl,aH<I-at ieast-ead1-A!,'eHey-vBting-f;Jassilk'alciHfI'fs.-fel*'6S€'Hte,J-I"QELyglLI!!LDl"mQ-',!:~, illCJ)!-,jiD.&l)lJ,.<l~L()1J.,(;.Q.l,ln-"jLR"-l-'t:~5.9m!l.ti"~oQn~.Q.I~Y~Y(ltcIPiS.jrict IS~J2!:esC1g!l.ti"-,,,-,-;rnd one ~-"YS;~lwal"Lt'>.l1th9Ji!y l{(;nr".S~Q!ilJiy~:_@~1 c()n~tit!!!, ~.q\lm:l]JnJ()J:..Jh,_!!:<!.J]J;"'(;.ti(mQrJ?l,l"si\1"S'i.. Otherwise, the Task Force shall adopt reasonable rules and regulations for carrying out all the functions and duties of the Task Force and governing its meetings. All reports and recommendations shall be made in writing. All officers and department heads of all agencies shall cooperate with and render reasonable assistance to the Task Force. Part lI: Functions and Duties 1. It shall be the function of the Task Force to investigate, study and make recommendations to the cb.\ll.a.. Yi5.J;r City Council,'flHdlH'~ilc:h.{)f.111<,"go.verning ~-H_-)u-rds*)f.e.th;'-l:1:-{*.fh.~'--tw,t")..--H1:~Ffl-hef':r,..,w,h.j.Hh"HFe'-w-aleF-pr-i:.}'tij(]4.:~rs.-+;'.\\i~1:ter--PRw.i...ier tHt~rH-~; Lb9~1)1f!~L~~L~1J9..r....T.?'j$td.>;L~JQ.Y_t:rniJ..1g.J~.Qwr~L__J~_n_~1.JhQ_..~_~Y~~~1l~:l!19.I A" iI),oXi.ty(iQX"JJXil,gJlq.cJI\1 concerning water related matters, The primary objective of the Task Force shall be to make recommendations with the goal of assuring an adequate and high quality supply of water for the residents of the region. The Task Force shall produce a report which provides objectives including but not limited to: (1) (2) (3) (4) (5) (6) (7) Water Quality Water Reclamation Program Water Conservation Program I hn,,-gD!.h\LJL";:' Emergency Water Storage Supply Water Pressure Water Distribution Implication of Land Use Proposals on Water Supply i;"T:Jllb c._____..___ 4-10 2. In addition to the above, the Task Force shall: A. Make recommendations as to how the City of Chula VistaL and the Water-.}lm.vid,,+-i'vlemoors--the Olav W aterDistrict, and the Sweetwater Authority may become more proactive in state and regional water related issues. B. Make recommendations as to how the City, lllB-,\Vflter-J'rovidcl' MeHll*,-l's,th.~.D.t,IL\:Y_~Jg;J2j~JILc.!,_tl)9.~,,,9,,t.':Y"!"U:'gl!b.,u:i!L and the various water purveyors may integrate their long and short term master and general plans for development. Each Agency reserves the right to develop and implement its own Water Master Plan. However, this Task Force may review and comment on these Plans 'lith the COffifl-\fl'A goal that. eI~ach such Plan should represent a coherent and complimentary water policy (relating to usage, storage, conservation, and enforcement) for the territory \\ hich jc- the suhject marter of covering the combinedjurisdiction~ of the City, and the 'Nator l'rwiider-j\..j..el'HhcrsAhe Otav Water District, aod tile Sweetwater A uthoritvc_ C. Make recommendations to the City Council, alld--ti).-th"-a-ppR'F,,,iale W-ater-Boardsi.,';:.the--Wi%tel'.J>Hwi.i<:)f.-Mt'Rlhe,'s-.,t,h_eQtgy.W <lt~rJ)is_tri,:t ~;SIYSIrri!JKJ)!!1\~iL_<ln<J_JJ)_,,-S~~.~"!';I-" at~Li"lllh()"r!tY_\)S!Y~:miill!_J)()<lr<J__ as to the establishment of ordinances, policies and guideline manuals for the implementation of water conservation and other water related measures. D. Recommend the establishment, with implementation plans, ofa new water use and conservation ethic and to recommend to the City and the W&tef 1'1'0\ idol' Member:; CouneiL the Otav Water District Governing Board. and the Sweetwater Authoritv Governing Board means for implementing same. E. Provide advice to the City in developing any water element or plan as part of its General Plan and/or Growth Management Plan. F. Study and report, as requested, the impacts to the water systems of land use deeisions. 3. Such other and further matters as have been or may, from time to time, be assigned to the Task Force by the City Council,'<+f--\\i{H~"f-lJ'ffW-H.l€>r~mer'i Part 111: Meetings The Interagency Water Task Force shall ",'II,,,IHI~,,l -(':'ih'j.. qH,:i+\,,:'r 1l..\;"1^~1~r ~ L~_q~.~LL~Lon the day and at the time and in the place that it shall designate by resolution and/or by bylaw and such special meetings as the Task Force may require. Part IV: Termination 4-11 'j:hiJ agreeroofH may be termi-naled by any tl-afty-Ut)BfrWFiftefH'iotice authHr~fuf b;uacee by its go, crlling boaJ4Ibj'LCC)')ll~mti\!",{j.JsL~eX!!ellt)JJ!!yJ2eJsmnin"'tg,LvJ)()]1 the written autborization ofthe Citv Council of the Citv of Clm!a Vista. the Otav Water District Cioveming Board. or Ihe Sweetwater Authoritv Governing Board. [End of Page. Next Page is Signature Page] 4-12 Signature Page to the Amended Cooperative Agreement Creating the Chula Vista Interagency Water Task Force Now therefere, the parties hereto, ha'/ing reaa and unaerstooa the terms ana eanditieHG efthis agreen1erH, ae hereay eKpress their eansellt ta the terms hereefa)' setting their hana herote on the aate set ferth aajaeem: therete. Date: JHI)' 31, 20Q/l VISTA CITY OF CHULA Cheryl Cox, Mayor Attest: Susan Bigelow, City Clerk Approved as to form: Anne Moore, City Attorney Date: JHly31,200/l OTAY WATER DISTRICT Mark Watton, General Manager Approved as to form: Yuri Calderon, General Counsel Date: July 31, 20Q/l SWEETWATER AUTHORITY Dennis Bostad, General Manager Approved as to form: C. Michael Cowett, General Counsel 4-13 THE A TT ACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL ~aI~ Ann Moore City Attorney Dated: J-/J.-l!o1 Amended Cooperative Agreement between The City ofChula Vista, Otay Water District, and Sweetwater Authority creating the Chula Vista Interagency Water Task Force And Establishing the Functions and Duties Thereof 4-14 ATTACHMENT 3 AMENDED COOPERATIVE AGREEMENT BETWEEN THE CITY OF CHULA VISTA, OTA Y WATER DISTRlCT, AND SWEETWATER AUTHORlTY CREATING THE CHULA VISTA INTERAGENCY WATER TASK FORCE AND ESTABLISHING THE FUNCTIONS AND DUTIES THEREOF WHEREAS, in May 1989, the City Council formed the Chula Vista Ad Hoc Water Task Force for the purpose of studying water related issues facing the City of Chula Vista and to make recommendations to the City Council and to the affected water agencies regarding water related matters; and WHEREAS, said Task Force has received presentations from leaders and staff members from all major water related agencies in Southern California since the date of its commission; and WHEREAS, said Task Force has, at the City Council meeting of June 19 (Item 4b) reported back to the City Council with regard to its recommendations which were contained in a report from said Task Force dated May 1990, entitled "Recommendations Report to Chu/a Vista City Council, "a copy of which is on file in the office of the City Clerk of said City; and WHEREAS, said Task Force has recommended the formation of a Chula Water Task Force to discuss local water related issues; and WHEREAS, at the City Council meeting of June 19, 1990, the City Council did direct staff to study and report back on the formation of said Task Force; and, WHEREAS, it is mutually agreed between the City Council of Chula Vista, the board of directors of the Otay Water District, and the board of directors of the Sweetwater Authority that an Interagency Water Task Force to deal with local related water issues would be advisable; and WHEREAS, an agreement should be prepared establishing the formation, responsibilities, and duties of the Task Force; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA, THE BOARD OF DIRECTORS OF OTAY WATERDISTRlCT, AND THE BOARD OF DIRECTORS OF THE SWEETWATER AUTHORlTY AGREE AS FOLLOWS: Part I: Interagency Water Task Force Creation; Appointment of Members; Term; Quorum; Rules and Regulations. 1. There is hereby created a Chula Vista Interagency Water Task Force. The Task Force shall consist of seven (7) voting members and non-voting ex- officio members and such other ex -officio members as the agencies may assIgn. 2. Ex-officio members shall be entitled to deliberate, and participate in the deliberatIons of the Task Force, but shall not be entitled to vote on matters before the Task Force. 3. Of the Votittg Members, two shall be representatives of, and members of the City Council of the City of Chula Vista and appointed by the City Council 4-15 ("Council Representatives"), one shall be a representative of the general public of, and qualified elector of the City ofChula Vista and appointed by the City Council ("General Public Representative"), two shall be members of the Otay Water District Governing Board and appointed by their board of directors ("Otay Water District Representatives"), and two shall be members of the Sweetwater Authority Governing Board and appointed by their board of directors ("Sweetwater Authority Representatives"). The three groups of representatives, to wit: Council Representatives, Otay Water District Representatives, and Sweetwater Authority Representatives shall be sometimes herein referred to as "Agency Voting Classifications." 4. All vacancies shall be filled by the appointing authority of the representative of the office vacated. 5. Each agency shall rotate the appointment of a secretary to the Task Force periods agreed to by the Task Force. 6. The Task Force shall select a Chairman and Vice Chairman from its membership annually in the month of January. 7. Four voting members, including at least one Council Representative, one Otay Water District Representative, and one Sweetwater Authority Representative, shall constitute a quorum for the transaction of business. Otherwise, the Task Force shall adopt reasonable rules and regulations for carrying out all the functions and duties of the Task Force and governing its meetings. All reports and recommendations shall be made in writing. All officers and department heads of all agencies shall cooperate with and render reasonable assistance to the Task Force. Part II: Functions and Duties I. It shall be the function of the Task Force to investigate, study and make recommendations to the Chula Vista City Council, the Otay Water District Governing Board, and the Sweetwater Authority Governing Board concerning water related matters. The primary objective of the Task Force shall be to make recommendations with the goal of assuring an adequate and high quality supply of water for the residents of the region. The Task Force shall produce a report which provides objectives including but not limited to: (I ) Water Quality (2) Water Reclamation Program (3) Water Conservation Program/Drought Management Programs (4) Emergency Water Storage Supply (5) Water Pressure (6) Water Distribution (7) Implication of Land Use Proposals on Water Supply 2. In addition to the above, the Task Force shall: A. Make recommendations as to how the City ofChula Vista, the Otay Water District, and the Sweetwater Authority may become more proactive in state and regional water related issues. 4-16 B. Make recommendations as to how the City, the Otay Water District, the Sweetwater Authority, and the various water purveyors may integrate their long and short term master and general plans for development. Each Agency reserves the right to develop and implement its own Water Master Plan. However, this Task Force may review and comment on these Plans. Each such Plan should represent a coherent and complimentary water policy (relating to usage, storage, conservation, and enforcement) for the territory covering the combined jurisdictions of the City, the Otay Water District, and the Sweetwater Authority. C. Make recommendations to the City Council, the Otay Water District Governing Board, and the Sweetwater Authority Governing Board as to the establishment of ordinances, policies and guideline manuals for the implementation of water conservation and other water related measures. D. Recommend the establishment, with implementation plans, of a new water use and conservation ethic and to recommend to the City Council, the Otay Water District Governing Board, and the Sweetwater Authority Governing Board means for implementing same. E. Provide advice to the City in developing any water element or plan as part of its General Plan and/or Growth Management Plan. F. Study and report, as requested, the impacts to the water systems of land use decisions. 3. Such other and further matters as have been or may, from time to time, be assigned to the Task Force by the City Council, the Otay Water District Governing Board, and the Sweetwater Authority Governing Board. Part III: Meetings The Interagency Water Task Force shall meet at least twice a year, or quarterly as agenda matters require on the day and at the time and in the place that it shall designate by resolution and/or by bylaw and such special meetings as the Task Force may require. Part IV: Termination This Cooperative Agreement may be terminated upon the written authorization of the City Council of the City ofChula Vista, the Otay Water District Governing Board, or the Sweetwater Authority Governing Board. [End of Page. Next Page is Signature Page] 4-17 Signature Page to the Amended Cooperative Agreement Creating the Chula Vista Interagency Water Task Force Date: CITY OF CHULA VISTA Cheryl Cox, Mayor Attest Susan Bigelow, City Clerk Approved as to form: Ann Moore, City Attorney Date: OTA Y WATER DISTRICT Mark Watton, General Manager Approved as to form: Yuri Calderon, General Counsel Date: SWEETWATER AUTHORITY Dennis Bostad, General Manager Approved as to form: C. Michael Cowett, General Counsel 4-18 CITY COUNCIL AGENDA STATEMENT ~'Yf:. CITY OF ~~ CHUlA VISTA 03/06/07 Item ~ ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, APPROPRIATING FUNDS FROM THE TRAFFIC SIGNAL FUND FOR COSTS INVOLVED WITH INSTALLATION OF A TRAFFIC SIGNAL AT MAIN STREET AND AUTO PARK PLACE SUBMITTED BY: REVIEWED BY: ~ CITY ENGINEER c:,. I ;({ INTERIM CITY MANAGER 'JI 4/5THS VOTE: YES X NO BACKGROUND In 2003, the City of Chula Vista approved a development including an auto park and other auto related businesses by Mr. Hooper Knowlton on the north side of Main Street at Auto Park Place (Auto Park North). In 2004, the City approved an auto park development by Sunroad Enterprises on the south side of Main Street directly across from Auto Park North (Auto Park East). As a result of these developments, a new traffic signal was needed at the intersection of Main Street and Auto Park Place. Tonight, City Council will consider the appropriation of funds from the City's Traffic Signal Fund for the City's share of signalizing the four-legged intersection. Total project cost was initially paid by Sunroad Enterprises with an understanding that reimbursements would follow from the City and the developer of Auto Park North upon project completion. ENVIRONMENTAL REVIEW: The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity, appropriation of funds, is not a "Project" as defined under Section l5378(b)(5) of the State CEQA Guidelines; therefore, pursuant to Section l5060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION That Council approve the Resolution: 5-1 03/06/07, Item~ Page 2 of3 1. Appropriating funds in the amount of $54,183.32 from the Traffic Signal Fund to reimburse the developer (Sunroad Enterprises) for the cost of installing a traffic signal at Main Street and Auto Park Place. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION In August 2003, the City conditionally approved Tentative Parcel Map 03-03 for Auto Park North located on the north side of Main Street east of Brandywine Avenue. The developer, Mr. Hooper Knowlton, was required to install many public street improvements including traffic signals at the two intersections (Auto Park Place and Auto Park Avenue) along the project frontage at Main Street. Mr. Knowlton entered into a Parcel Map Improvement Agreement to install these public improvements within two years of the date ofthe agreement (by August 26,2005). In August 2004, the City conditionally approved Tentative Parcel Map 01-08 for Auto Park East located on the south side of Main Street opposite Auto Park North. The developer, Mr. Fred Borst, was also required to install traffic signals (along with other improvements to Main Street) at Auto Park Place and Auto Park A venue in the event that these traffic signals were not operational at the time the developer wished to obtain building permits. Mr. Borst did not enter into a Parcel Map Improvement Agreement nor did he apply for a final parcel map, but he sold one of his existing parcels to Sunroad Enterprises who then obtained approval from the City in May 2005 to build the Toyota dealership within Auto Park East. The Tentative Parcel Map approved with Mr. Borst has since expired. However, as part of the Toyota dealership approval, Sunroad Enterprises was required to construct its associated public street improvements along the Main Street frontage together with the traffic signal at Auto Park Place ifMr. Knowlton did not install the signal in time for Toyota dealership building permits. Although Mr. Knowlton's Parcel Map Improvement Agreement and associated bonds guaranteed the construction of public improvements including the traffic signal at Auto Park Place, the work was not completed within the required two-year construction period. On September 21, 2005, the City sent a default letter to Mr. Knowlton stating that all the public improvements must be completed to the satisfaction of the City Engineer or the City would proceed to make demand upon his bonds. By mid-December 2005, there was little activity at the Auto Park North job site and the City sent a second default letter to Mr. Knowlton. This time the City requested that Mr. Knowlton enter into an Amendment to the original Parcel Map Improvement Agreement together with submitting new construction bonds and a cash deposit of $115,000 for half of the traffic signal at Auto Park Place. Mr. Knowlton responded to the second default letter by submitting a cash deposit of $115,000 for half the estimated costs of the traffic signal but did not sign the Amended Parcel Map Improvement Agreement nor post new bonds. Soon construction activity at 5-2 03/06/07, Item2 Page 3 of3 Mr. Knowlton's job site accelerated and therefore staff expected that the required public improvements would be completed. Staff did not pursue the Amendment to the Parcel Map Improvement Agreement. Meanwhile, the Toyota dealership constructed their street improvements on the south side of Main Street and when it became apparent Mr. Knowlton would not install the traffic signal at Auto Park Place in time for the anticipated opening of the Toyota dealership, Sumoad Enterprises proceeded with installing the signal with an estimated total project cost of $230,000. The City agreed to contribute one-quarter of the cost with Sumoad Enterprises also contributing one-quarter of the cost, leaving Mr. Knowlton responsible for one-half of the cost to be covered by the $115,000 cash deposit provided in response to the second default letter. All work was completed and the signal was activated in late December 2006. Sumoad Enterprises has submitted an invoice from their traffic signal contractor in the amount of $216,733.29 and requested reimbursement from the Auto Park North developer and the City per verbal agreement with the City Engineer in November 2005. With Sumoad Enterprises paying $54,183.32 (25%), the remainder would be reimbursed; $108,366.64 (50%) from Mr. Knowlton's cash deposit and $54,183.32 (25%) from the City's Traffic Signal Fund which is consistent with Council Policy 478-01 allowing use of these funds when a significant benefit to the general public is identified. This project meets these criteria. The difference between Mr. Knowlton's cash deposit of $115,000.00 and the 50% reimbursement amount is $6,633.36. This remainder amount will be transferred into Mr. Knowlton's development account, which is in deficit by approximately $25,000.00. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property, which is the subject of this action. FISCAL IMPACT There is no impact to the General Fund. Sumo ad Enterprises is contributing 25% of the total cost, the City's 25% ($54,183.32) reimbursement to Sumo ad Enterprises will be funded with available Traffic Signal funds and the remaining 50% ($108,366.64) reimbursement will be funded by the Auto Park North developer's deposit account with the remainder in that account ($6,633.36) will be transferred into that developer's other account which is in deficit by approximately $25,000. Prepared by: Silvester Evetovich, Principal Civil Engineer, Engineering Department J: IEngineerlAG ENDA ICAS2007103-06-07ISunroadReimbursement.doc 5-3 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING FUNDS FROM THE TRAFFIC SIGNAL FUND FOR COSTS INVOLVED WITH INST ALLA TION OF A TRAFFIC SIGNAL AT MAIN STREET AND AUTO PARK PLACE. WHEREAS, in 2003, the Chula Vista City Council approved a development including an auto park and other auto related businesses by Mr. Hooper Knowlton on the north side of Main Street at Auto Park Place (Auto Park North); and WHEREAS, in 2004, the City approved an auto park development by Sunroad Enterprises on the south side of Main Street directly across from Auto Park North (Auto Park East); and WHEREAS, as a result of these developments, a new traffic signal was needed at the intersection of Main Street and Auto Park Place; and WHEREAS, Sunroad Enterprises installed the traffic signal and paid the total cost for the signal with an understanding that it would be partially reimbursed by the City and the developer of Auto Park North upon project completion. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it approves the appropriation of $54,183.32 to the Other Expenses Category of the Traffic Signal fund from the available balance of the fund for the City's share of the installation of the traffic signal at Main Street and Auto Park Place. Presented by Approved as to form by ~~~J ;U:~ Ann Moore City Attorney Scott Tulloch City Engineer H:\E:N(jINEER\RES()S\Resos20(J7\()3-0()~07\SLlllroadReil11bursel1lent Revised by EC.doc 5-4 COUNCIL AGENDA STATEMENT Item: (p Meeting Date: 3/06/07 ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING DONATIONS IN THE AMOUNT OF $116,000 AND APPROPRIATING SAID DONATED FUNDS SUBMITTED BY: Fire Chiefyll.f / City Manager l (4/5ths Vote: YeslLNo -> REVIEWED BY: The Fire Department has received donations in the amount of $116,000 from various community donors. These donations were made to the Fire Department to support the department's fire suppression and fire prevention functions. The donations will be used to purchase equipment, supplies, and make repairs to Fire Department Facilities. RECOMMENDATION: That Council accept and appropriate donations in the amount of $116,000 and amend the Fire Department's FY07 budget by increasing the services and supplies by $63,500 and the equipment budget by $52,500. BOARDS/COMMISSIONS RECOMMENDATION: N/A DISCUSSION: The Fire Department has received donations in the amount of $116,000. The Mary Birch Foundation donated $115,000 of this amount. $15,000 of the $115,000 Mary Birch donation was designated to restore and make repairs to the "Goose," Fire Department's classic fire engine. The balance of the donation will be used to purchase equipment and supplies, and make repairs and improvements to fire station facilities that are not funded in FY07 departmental budget. Included in these facility improvements are: replacement of the exhaust (Neiderman) system in the engine bay at Fire Station 1, installation of shelving at the Fire Department warehouse facility, and the replacement of cabinets at Fire Station 1. The department will also be replacing exercise equipment that has become outdated and no longer cost effective to repair. The department will also purchase computer equipment for its intranet 6-1 Item: iJJ Meeting Date:3/06/07 project and radio communications equipment to establish a redundant back-up communications system to be better prepared in the event of an emergency. Other Donations The department also received donations in the amount of $1,000 from other community donors. Wal-Mart ($500) and the Local Chapter of the Lions Club ($250) accounted for $750 of this amount. The department will appropriate these donations .to the Fire Prevention Division to purchase learning resources that will allow for a higher level of knowledge and increase fire/life safety and public awareness in the community. The balance of the donated amounts ($250) was made by the Weihe and McCord Families on behalf of Michelle Ann Weihe. Michelle Ann Weihe passed away on September 24, 2006 despite the efforts of Fire Department personnel who came to her aid and attempted to revive her. In appreciation of these efforts, and the support given by Fire Department personnel in their time of need, Michelle's family donated these funds in memory of their daughter. Michelle was a lover of animals. Accordingly, the department will be using these funds to purchase special oxygen masks for animals. These masks are specifically made to fit animals in order to deliver life-saving oxygen and have been shown to be beneficial when treating animals that have been injured in fires. The City of San Diego Fire Department carries and uses these masks. The Fire Department will use the donation to partner with Best Friends San Diego to acquire a sufficient quantity of these masks to have one available on each of its front-line engines. DECISION MAKER CONFLICT: Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California code of Regulations section 18704.2(a)(1) is not applicable to this decision. FISCAL IMPACT: The total amount received is $116,000. There are no matching funds required or General Fund impact. 6-2 RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING DONATIONS IN THE AMOUNT OF $116,000 AND APPROPRIATING SAID DONATED FUNDS WHEREAS, The Fire Department received donations in the amount of $116,000.from the Mary Birch Foundation, Wal-Mart, and other community donors; and, WHEREAS, The Fire Department appreciates the generosity and support shown by these donors; and, WHEREAS, $115,000 of these funds donated by the Mary Birch Foundation will be used to used to purchase equipment, supplies, and make repairs to Fire Department Facilities as funding for such items is not available in current FY07 budget; and, WHEREAS, $750.00 of the funds that were donated by Wal-Mart and the Local Chapter of the Lions Club International will be used by the Fire Prevention division to purchase learning resources that will allow for a higher level of knowledge and increase fire/life safety and public awareness in the community; and, WHEREAS, $250.00 were donated by the McCord and Weihe families in memory of Michelle Ann Weihe passed away on September 24, 2006 despite the efforts of Fire Department personnel who came to her aid and attempted to revive her; and, WHEREAS, This donation was made in appreCIatIOn of the efforts, service, and care given to the family of Michelle Ann Weihe by Fire Department Personnel; and, WHEREAS, This donation in memory of Michelle Ann Weihe who was a lover of animals will be used to purchase special oxygen masks to serve animals rescued in the future from fires. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby accept donations in the amount of $116,000 from the Mary Birch Foundation, Wal-Mart, the Local Chapter of the Lions Club, the McCord and Weihe Families, and appropriates said donated funds to the Fire Department FY 2007 equipment and services and supplies budget. Presented by: Approved as to form by: ---~ . Perry Fire Chief COUNCIL AGENDA STATEMENT Item: "1 Meeting Date: 3/06/07 ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING AND APPROPRIATING $210,083 IN REIMBURSEMENTS FROM VARIOUS STATE AND LOCAL AGENCIES TO OFFSET OVERTIME AND SUPPLIES AND SERVICES COSTS IN THE FIRE . DEPARTMENT SUBMITTED BY: Fire Chief 1) A. f / REVIEWED BY: City Manager I' (4/5ths Vote: YesLNo _l The Fire Department is a participant in Automatic Aid Agreements with all other agencies within San Diego County and an Agreement for Local Government Fire Suppression Assistance to Forest Agencies and the Office of Emergency Services. The Department provides staff and equipment resources to these agencies on a reimbursement basis. The department also receives grant reimbursements for: staff time from the County of San Diego State Homeland Security Office for eligible expenses. Staff is recommending Council to accept the reimbursements from these agencies and appropriate the funds to the Fire Department. RECOMMENDATION: That Council accept and appropriate reimbursements in the amount of $210,083 and amend the Fire Department's FY07 budget by increasing the Fire Suppression personnel services budget by $175,442 and the services and supplies budget by $34,641. BOARDS/COMMISSIONS RECOMMENDATION: N/A DISCUSSION: Reimbursement claims were filed with the City of San Diego for staff time expenses incurred as a result of the Katrina Hurricane disaster. As part of FEMA's California Taskforce 8 (CATF-8) and the (San Diego County) Urban Search & Rescue Program, the City of Chula Vista sent several fire department employees to assist with the search and recovery efforts during Hurricane Katrina. :CATF-8 was deployed into the Hurricane Katrina region for 18 total 7-1 Item: ~ Meeting Date:3/06/07 days and was responsible for the search and victim recovery efforts of several thousand residential homes in and throughout the New Orleans area. The final reimbursements for .this event and the mobilization for Hurricane Ernesto were received in this fiscal year. A reimbursement claim was also filed with State of California Office of Emergency Services (OES) for the major fires that occurred throughout the state that required the deployment of Chula Vista Fire Department resources. The City is eligible for staff time reimbursements in the event of such occurrences per the agreement for Local Government Fire Suppression Assistance to Forest Agencies and the Office of Emergency Services. The Department has received reimbursement for suppression staff time and equipment usage related to the firefighting strike team assignments that included: the Horse fire, the Saw-tooth fire, and the Heart fire. In an effort to manage its overtime costs, the funds received from these reimbursements will be appropriated to the Fire Department's personnel services budget to offset the overtime expenditures for the current fiscal year. County of San Diego Office of Homeland Security Reimbursement The department has received $34,641 from the County of San Diego Office of Homeland Security for the reimbursement of staff time activities related to homeland security planning work that was completed by City staff. This reimbursement was made from FY03 State Homeland Security Grant funds that are administered through the County of San Diego. These funds will be appropriated to the Fire Department's services and supplies expenditure category to offset the annual expenses for the Hazardous Incident Response Team (HIRT), and the Urban Disaster Council (UDC) contracts. The department was not fully funded for these expenses in the current fiscal year, but has incurred the full increased amount for these costs. The appropriation of these funds will enable the department to restore the budgeted amounts that were re- directed in order to pay for these contractual expenses. DECISION MAKER CONFLICT: Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California code of Regulations section 18704.2(a)(1) is not applicable to this decision. FISCAL IMPACT: The reimbursements totaling $210,108 will be used to offset the Fire Department's overtime expenses and expenses incurred for contractual agreements. There is no negative impact to the General Fund. 7-2 RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING AND APPROPRIATING $210,083 IN REIMBURSEMENTS FROM VARIOUS STATE AND LOCAL AGENCIES TO OFFSET OVERTIME AND SUPPLIES AND SERVICES COSTS IN THE FIRE DEPARTMENT WHEREAS, The Fire Department is a partIcIpant in Automatic Aid Agreements with all other agencies within San Diego County and an Agreement for Local Government Fire Suppression Assistance to Forest Agencies and the Office of Emergency Services; and, WHEREAS, The Department provides staff and equipment resources to these agencies on a reimbursement basis; and, WHEREAS, The department also receives grant reimbursements for staff time from the County of San Diego State Homeland Security Office for eligible expenses; and, WHEREAS, The Fire Department has received reimbursements from these agencies totaling $210,083; and WHEREAS, these reimbursements will be used to offset overtime expenses incurred in the FY07 fire personnel budget and contractual obligation expenses incurred for the Hazardous Incident Response Team (HIRT), and the Urban Disaster Council (UDC) contracts. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby accept $210,083 reimbursements and appropriates said funds accordingly: ($175,442) to the Fire Department's personnel services budget and ($34,641) to the supplies and services budget to offset overtime expenses and contractual obligation costs respectively for the fiscal year 2007. Presented by: Approved as to form by: -/-~ ~~;h Ann Moore v .' City Attorney Douglas A. Perry Fire Chief. H:/sharedlattomeylFire - FY07 strike team SHSGP reimbursemen1- 3 CITY COUNCIL AGENDA STATEMENT ~\~ CITY OF :~CHULA VISTA 3/6/07, Item ~ ITEM TITLE: RESOLUTION DIRECTING STAFF TO BEGIN THE PUBLIC PROCESS, AS REQUIRED UNDER PROPOSITION 218, TO INCREASE THE AB 939 FEE TO FULLY FUND THE STATE MANDATED WASTE DIVERSION AND RECYCLING PROGRAMS AS PROVIDED FOR UNDERAB 939, THE WASTE MANAGEMENT ACT DIRECTOR OF GE~L SERVICES ~Y<J. CITY MANAGER (/1 4/5THS VOTE: YES D NO ~ SUBMITTED BY: REVIEWED BY: BACKGROUND AB 939, lmown as the Waste Management Act of 1989, requires cities and counties to divert 50% of the waste going to the landfills. AB 939 was an unfunded mandate, which provided for jurisdictions to charge for the programs and services required to meet this goal. Public Resources Code 4190: "A city, county {,} or city and county may impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing a countywide integrated waste management plan prepared pursuant to this chapter. The fees shall be based on the types or amounts of solid waste, and shall be used to pay the actual costs incurred by the city or county in preparing, adopting, and implementing the plan, as well as in setting and collecting the local fees. In determining the amounts of the fees, a city or county shall include only those costs directly related to the preparation, adoption and implementation of the plan and the setting and collection of the local fees. A city, county, or city and county shall impose the fees pursuant to Section 66016 of the Government Code." Public Resources Code 41902: "A local agency may directly collect the fees authorized by this chapter or may, by agreement, arrange for the fees to be collected by a solid waste hauler providing solid waste collection for the city or county. " Events have occurred which have place substantial strain on the City of Chula Vista's AB 939 funds. First, State grants no longer allow for Household Hazardous Waste (HHW) disposal costs to be paid for with State grant funds. The State grants had been covering up to $100,000 in disposal costs at the City's Household Hazardous Waste Drop-off Facility located at the Public Works Yard, 1800 Maxwell Road, Chula Vista, 91911. Then in February 2006, the temporary disposal exemption for residentially generated waste batteries, fluorescent lamps, and small electronic devices reached its sunset. These items have been identified as toxic and are banned from disposal in municipal solid waste landfills. They must be specially handled 8-1 3/6/07, Item~ Page 2 of 4 through collection events, recycling centers and/or at the Household Hazardous Waste Drop-off Facilities. The disposal/operating costs at the HHW drop-off facility increased 100% as a result of the increased traffic and corresponding HHW disposal volumes from this change in the law. The Household Hazardous Waste Program, which is just one (1) offorty-seven (47) programs the Environmental Services Division of the General Services Department oversees, now requires approximately $200,000 for disposal costs, almost half of the Division's budget. Finally, the landfill diversion goal of 50% was not met for 2005. Chula Vista diverted between 46-48% of the waste from the landfill for this time period. This number has been in steady decline from the high of 54% in 2001. After discussions with California Integrated Waste Management Board (CIWMB), Chula Vista staff identified several waste reduction/diversion and recycling program components, which need to be implemented, including a Construction and Demolition Debris Recycling Ordinance. Diversion Year Percentage 2001 54% 2002 52% 2003 51% 2004 50% 2005 48% Staff is requesting to move forward with the fee increase as described above. If not, then the alternative would be to request an appropriation of $450,000 from the General Fund to the General Services - Environmental Services budget to fund the State Mandated Waste Diversion and Recycling Programs. ENVIRONMENTAL REVIEW Not applicable. RECOMMENDATION That Council adopt the resolution directing staff to begin the public process, as required under Proposition 218, to increase the AB 939 fee to fully fund the State mandated waste diversion and recycling programs as provided for under AB 939, the Waste Management Act. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The City of Chula Vista first implemented the AB 939 fee in fiscal year 1994-95 as 1% of the gross receipts collected by the franchise hauler and forwarded to the City on a monthly basis. The AB 939 fee is equitably distributed across commercial, industrial and residential customers, based on their level of service. This fee was implemented knowing that as recycling program needs developed, adjustments could be made. Additionally, staff anticipated supplementing these funds with State and local grant funds as they were available. In fiscal year 1998-99 the fee was increased from 1 % to 2% to fund Household Hazardous Waste components of the City's AB 939 plan. San Diego County lost the revenue source it used to support Regional HHW Programs for all County residents when they sold the landfills to a private company. This placed more of the funding burden on the local jurisdictions. In 2003 the City increased the AB 939 fee by one-half percent (up to 2.5%) as a response to regulation changes that banned Cathode Ray Tubes (CRTs) such as televisions and computer monitors from landfill disposal, as they had been deemed hazardous. The funding increase also went to cover other AB 939 program enhancements such as commercial and industrial recycling and Space Allocation Ordinance development, implementation and administration, ensuring that adequate recycling and solid waste 8-2 3/6/07, Item~ Page 3 of 4 collection and storage space is designated in new projects and/or remodel projects, both public and private. Once again events have occurred which have placed more program funding burdens on the local jurisdictions requiring an increase in funding either from the General Fund or increased AB 939 fee: loss of grant funding; banning of specific items from landfills; not achieving the State mandated 50% landfill diversion goal for 2005. Chula Vista's AB 939 fee is collected on the gross receipts for waste services by the Contracted Hauler and forwarded to the City monthly. The fee is equitably distributed across commercial, industrial and residential customers, based upon their level of service. It is a pass-through fee, meaning the Contractor only collects the fee on behalf of the City and does not receive any portion or percentage of these fees. The current AB 939 fee is 2.5%, which equates to the following on a monthly invoice. . 32 gal cart = $.30 per month . 64 gal cart = $.39 per month . 96 gal cart = $.45 per month . 3 cubic yd commercial bin, serviced 1 time per week = $2.18 per month For fiscal year 2006-07, the 2.5% AB 939 fee will generate approximately $450,000. These funds are supplemented with various grant funds from the California Integrated Waste Management Board and the California Department of Conservation - Division of Recycling for AB 939 program specific work tasks (Used Motor Oil and Filter Recycling, Bottle and Can Recycling, Anti-litter Program, etc.). An AB 939 fee increase from 2.5% to 5% will generate an additional approximate amount of $450,000, totaling $900,000 annually and would equate to the following on a monthly invoice: . 32 gal cart = an increase from $.30 to $.60 per month . 64 gal cart = an increase from $.39 to $.78 per month . 96 gal cart = an increase from $.45 to $.91 per month · 3 cubic yd commercial bin, serviced 1 time per week = an increase from $2.18 to $4.35 per month The funding received from the proposed increased would be use to: . Offset the current funding short fall in the Household Hazardous Waste Program . Open the HHW facility one additional day during the week (as needed to meet the volume demands); or . Provide several, one-day special events to collect batteries, fluorescent lamps and electronics in different sections of the city · Development, implementation and administration of the Construction and Demolition Debris Recycling Ordinance . Increase various recycling program documentation/reporting requirements and associated administration . Backyard composting program composting bins; . Commercial and industrial "Zero Waste - $top Wa$ting Resources" Program technical assistance and workshops . Assisting in developing commercial food waste and organics recycling infrastructure to divert these materials from the landfill. . Stricter waste reduction and recycling requirements for Special Events including after event reporting 8-3 3/6/07, Item-8-- Page 4 of 4 The City Attorney's office has reviewed this proposed rate increase in light of Proposition 218 and has determined that refuse service rates have been specifically exempted from the voter approval requirements. Instead, these fees are subject to the majority protest requirement that includes a written notice to the recorded property owner of each parcel and a public hearing at least 45 days after the notice is mailed. The public notice will include the amount of the proposed fee, the basis for the calculation, the reason for the fee, and the time, date and location of the public hearing. The fees cannot exceed the funds required to provide the service; shall not be used for any purpose other than that for which the fee is imposed; shall not exceed the proportional cost of the service attributable to the property; and the fee must be for service that is actually used by or immediately available to the property owner. If Council approves ofthe concept of the fee increase, staff will develop the public notice plan and calendar the item for the corresponding public hearing. If approved, the fee adjustment would take place at the annual rate adjustment date for the respective customer service segments: Large Quantity Generators (commercial and industrial services) would go into effect July 1, 2007; Small Quantity Generators (residential cart services) would go into effect September 1, 2007. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section I 8704.2(a)(1) is not applicable to this decision. FISCAL IMPACT The fee increase would potentially generate $450,000 in additional revenue, which would be used to offset increased program costs thus generating a positive impact to the General Fund. ATTACHMENTS None. Prepared by: Lynn France, Conservation Coordinator, General Services Department M:\General Services\GS Administration\Council Agenda\Environmental\AB 939 Fee Increase Al13 rev 2, 2.27-07.doc 8-4 RESOLUTION NO. 2007-_ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DIRECTING STAFF TO BEGIN THE PUBLIC PROCESS, AS REQUIRED UNDER PROPOSITION 218, TO INCREASE THE AB 939 FEE TO FULLY FUND THE STATE MANDATED WASTE DNERSION AND RECYCLING PROGRAMS AS PROVIDED FOR UNDER AB 939, THE WASTE MANAGEMENT ACT. WHEREAS, Assembly Bill 939 (AB939), known as the Waste Management Act of 1989, requires cities and counties to reduce and divert 50% of the waste going to landfills; and, WHEREAS, the City of Chula Vista has not met the 50% waste reduction and diversion goal for 2005; and WHEREAS, the State Grants for Household Hazardous Waste no longer provide funding for the proper handling and disposal of Household Hazardous Waste; and WHEREAS, in February 2006 residentially generated waste batteries, fluorescent lamps, and electronic devices were deemed toxic and were banned from municipal landfills; and WHEREAS, these events have increased AB 939 costs beyond the current funding level, impacting the General Fund; and, WHEREAS, AB 939 authorizes jurisdictions to charge fees for the cost to implement, operate and administer the waste reduction/diversion and recycling programs. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista authorizes City staff to begin the public process, as required under Proposition 218, to increase the AB 939 fee to fully fund State mandated waste diversion and recycling programs as provided for under AB 939 - the Waste Management Act, and bring forward to Council as an agenda item for formal adoption. Presented by Approved as to form by Jack Griffin Director of General Services 8-5 CITY COUNCIL AGENDA STATEMENT ~Iff:.. CllYOF . ~CHUlA VISTA ~~ 3/6V07,IteDl~ SUBMITTED BY: REVIEWED BY: RESOLUTION ACCEPTING THE FINAL REPORT OF EXPENDITURES FOR THE EMERGENCY SEWER LINE REPAIR - OTAY LAKES ROAD AND EASTLAKE PARKWAY AND RATIFYING THE ACTIONS OF THE CITY MANAGER AND DIRECTOR OF GENERAL SERVICES FOR MAKING AND EXECUTING A CONTRACT FOR SAID EMERGENCY REPAIR WITH METROPOLITAN CONSTRUCTION RESOLUTION ESTABLISHING A CAPITAL IMPROVEMENT PROGRAM PROJECT "EMERGENCY SEWER LINE REPAIR - OTAY LAKES ROAD AND EASTLAKE PARKWAY" (SW248) AMENDING THE FISCAL YEAR 07 CIP AND APPROPRIATING SEWER FACILITIES REPLACEMENT FUNDS TO TRANSFER EXPENDITURES MADE FOR SAID PROJECT DIRECTOR OF GE~L SERVICES ~.J)r. CITY MANAGER I' 4/5THS VOTE: YES [8] NO D ITEM TITLE: BACKGROUND On Thursday, October 19,2006, the General Services Department was informed by the Public Works Operations Department that the IS" sewer line at Otay Lakes Road and Eastlake Parkway (Attachment I) was severely damaged and failure to repair could lead to the undermining of the road. City crews were asked to immediately televise the sewer lines and the damage was assessed. In accordance with the emergency provisions of Section 1009 of the City Charter, City staff prepared bid documents to address the repair and obtained three bids. Staff entered into an agreement with the lowest responsible bidder; Metropolitan Construction (General Engineering Contractor License No. 790532). The repair was performed at night to minimize public inconvenience during the holiday shopping season and completed on December 19, 2006. An Informational Item was submitted to Council on November IS, 2006 outlining the proposed work (Attachment 2) with the plan to come back to Council with a final report after the full cost of the project was identified. This report represents the total expenditures for the repaIr. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Statutory Exemption pursuant to Section 15269 (Emergency Projects) of the State CEQA Guidelines. . Thus, no further environmental review is necessary. RECOMMENDATION I. Council adopt the resolution accepting the final report of expenditures for the emergency sewer line repair - Otay Lakes Road and Eastlake Parkway and ratifying the actions of the City 9-1 3/6/07, Item~ Page 2 of3 Manager and Director of General Services for making and executing a contract for said emergency repair with Metropolitan Construction. 2. Council adopt the resolution establishing a Capital Improvement Program project "Emergency Sewer Line Repair - Otay Lakes Road and Eastlake Parkway" (SW248) amending the Fiscal Year 07 CIP and appropriating Sewer Facilities Replacement funds to transfer expenditures made for said project. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION From the video of the damaged line, it was assessed that from the sewer manhole at the center of the intersection, ten feet of sewer pipe would need replacement because it was severely damaged. After the trench was opened, City crews and the Contractor verified that soil loss had occurred. The timely repair of this segment of pipe did not allow for the roadway to be undermined. It is believed the damage initially occurred when SDG&E installed an 8" gas line main over the sewer main. SDG&E has recognized possible liability for the damaged sewer line and the City submitted a claim to SDG&E on January 22, 2007 for the amount of the repair (Attachment 3). Because of the emergency nature of job, the General Services Department proceeded with this job prior to entering into a formal reimbursement agreement with SDG&E. Staff coordinated with SDG&E's staff during the entire repair. As outlined on the Informational Item sent on November 15, 2007, City staff contacted three reputable contracting firms that the City has previously worked with and requested a bid for this work. The low bidder (MJC Construction) had inconsistencies in their bid and was, therefore, rejected.. The City entered into an agreement with the lowest responsible bidder (Metropolitan Construction). A copy of the Agreement and change orders are provided as Attachment 4. The work included advanced warning signs to inform commuters that night work was going to occur, traffic control for the work zone, trenching, shoring, removal and disposal of potentially contaminated soil, removal and replacement of the segment of 15" PVC pipe, backfilling and resurfacing of the road. The sewer manhole in the center of the intersection was also rehabilitated. SDG&E was not charged for the work associated with the rehabilitation of the manhole because the damage was due to normal wear and not a result of SDG&E's gas line construction. Based upon the potential urgent necessity for the preservation of life, health and property, staff entered into an emergency repair contract in accordance with the emergency provision of Section 1009 of the City Charter. The Director of General Services and the City Manager agreed with the recommendation of staff on the necessity to proceed with the emergency repair for the following reasons: o Performing the work at night minimized public inconvenience and safety hazards to the general public. o High flows on the sewer line, due to Eastlake Parkway's pump station traverse this intersection. The bottom piece of pipe that was left in place was overflowing onto the soil around the pipe and undermining the roadway. Immediate repair mitigated a potential total collapse of one of the City's busiest intersection (Otay Lakes Road and Eastlake Parkway). DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet ofthe property which are the subject of this action. 9-2 3/6/07, Iteml Page 3 of3 FISCAL IMPACT The total expenditures for the emergency sewer repair work were funded from the Sewer Facilities Replacement Fund Account and are broken down as follows: Item Base Contract Metropolitan Construction) Amount $ 62,200.00 Chan e Orders $ 11,383.32 $ 5,106.68 $ 50,000.00 Clean Harbors Total Estimated Ci Staff Costs Project To Date Staff Costs thru 1/31/07) General Services - Desi n $13,048 General Services. Surve ($9,324) Engineering. Traffic ($2,560) En ineerin - Wastewater ($2,201 Public Works 0 erations - Ins ections ($10,918 Public Works 0 erations - Maintenance $8,938) Ci Attorne ($251 With respect to the claim the City has filed with SDG&E, the amount of the claim was $113,049.81. Expenditures as listed were paid from existing CIP SW247. At this time staff is recommending appropriating Sewer Facilities Replacement funds to the new CIP SW248 (Emergency Sewer Line Repair - Otay Lakes Road And Eastlake Parkway) and transferring expenditures from SW247. Any funds the City receives from SDG&E in response to this claim will be reimbursed back to the Sewer Facilities Replacement Fund. Staff will work with finance to ensure the transfers. ATTACHMENTS 1 - Location Plat 2 - November Council Informational Item 3 - Ltr reo Claim to SDG&E 4 - Change Order Prepared by: Roberto Yano, Sr. Civil Engineer, General Services M:\General Services\GS Administration\Council Agenda\SW248\2007-SW248-CAS2 jg revisions3.doc 9-3 p.,TT,'\CHMEN, { ~ ~ o ~ ~ ~ ~ '0 o o N - '0 '" 00 '" ::... - ~ U Jll " '" :l.. " ., ~ "- '" '" ui '" '" u 2 ':'1 - c: ci:; .,... " ;;: '" ;; en OSJ B 'u; ..0 '" ;;: '" '" ~ c:: '" '" > u ~ E- E ~If?- ~ V'1\CHMENT z CI1Y Of CHUlA VISTA General Services Department Informational Item November 15,2006 File: SW 248 - 1 TO: The Honorable Mayor and City Council FROM: VIA: Jack Griffin, Director OfGen~ervices ~~. Jim Thomson, City Manager .p SUBJECT: Emergency Sewer Line Repair - Otay Lakes Road and Eastlake Parkway (SW 248) On Thursday, October 19,2006, the General Services Department was informed by the Public Works Operations Department that the 15" sewer line at Otay Lakes Road and Eastlake Parkway (see attachment A). was severely damaged and could lead to the undermining of the road. City crews were asked to immediately televise the sewer lines and the damage was assessed as follows: From the sewer manhole at the center of the intersection, two to four feet of the northerly pipe of the sewer syst= has the top half completely missing. Because the bottom is still functioning as designed the sewer continues to flow. It is unknown at this time if that area has experienced additional soil loss that could actually lead to undermining of the roadway. Staffis acting under that assumption that it has. It is believed that the damage initially occurred in the 1980's when SDG&E installed an 8" gas line main over the sewer main. The damage was undetected, however, the sewer main has continued to deteriorate over time. SDG&E has recognized possible liability for the damaged sewer line, but has taken the position that the City needs to perform the necessary repairs and file a claim with their Claims Department. Because of the =ergency nature of job, the General Service Department believes that it is important to complete this job immediately, prior to entering into a formal reimbursement agreement with SDG&E. Staffwill be coordinating with SDG&E's staff during the entire repair. Therefore, staff intends to enter into an emergency repair contract in accordance with the emergency provision of Section 1009 of the City Charter and based upon the potential urgent necessity for the preservation of life, health and property. The estimated cost for this repair is from $50,000 to $60,000. Included in this estimate are costs related to traffic control requirements, coordination with the many surrounding utilities and the need to perform some, if not all, of the work at night. Staff will solicit three bids from responsible contractors that have worked for the City before. Staff will be using the Sewer Facilties Replacement Fund to undertake the work and then will seek reimbursement from SDG&E. With the beginning of the holiday season approaching, staff will be doing everything possible to expedite this repair and cause minimal inconvenience to our residents. Staff will return to Council with a full report after the repair has been completed. 9-5 iV[:\bgint:er\DFS]GN\.sW24~\info item 11-15-06r.dos ~ ~ o '-0 a c (', -- '-0 0;) ::Jl ::: -- - Cl, on '" on on 0;) u 2 ~I '" E i3 ?: u s: on '20 ~ on ~ 0;) ?: -- 13 Cl, Cl, '" := ;;: u ~ -& ~ ~. Fit .<.., o < f c '~ \ ' \' ,~~~, ~ .-,.1 .._~-- ~"'-"~~ --- ~ ,: TT.'\CHMENT. 2:; ellY OF CHUlA VISTA GENERAL SERVICES DEPARTMENT December 18,2006 SW - 248 Dean LeBrecht SDG&E Sr. Claims Advisor 833S Century Park Ct. CP2SD1386 San Diego, Ca 92123 RE: Reimbursement for the Emergency Sewer Line Repair - Intersection of Otay Lakes Road and Eastlake Parkway. - Dear Mr. LeBrecht As per your instructions, the City will pursue reimbursement for the cost associated with this project as soon as the repair is complete. The estimated costs for the repair, including Contractor's expense and City forces, are in the range of $100,000 to $120,000. Staff obtained three bids from responsible contractors that have worked for the City before. The repair included the removal and replacement of the damaged ten foot segment of 15" PVC sewer pipe. Said segment was on the north leg of the sewer system measuring from the outside of the manhole in the middle of the intersection. The damage initially occurred when SDG&E installed an 8" gas line main over the sewer main. Please provide me with a list of requirements and forms you need filled out in order to expedite this reimbursement. . The City is grateful that the damaged pipe was repaired before it caused any major damage to the intersection. Please call me at 619-397-6217 if you have any questions. Thank you. 1800 Maxwell Road. MS B-300 Chula Vista, CA 91911 Phone I (619) 397-6220 Fax (GI9) 397-6250 ~"tt-. PRIDE AT WORK 9-7 v"'ww .chL1la!vis~;:<(<1i.gov {) I'fo,t_('Jn"""tr R~ry~I,.,1 r"li~' ~~f? - dS-"--=: -.... -~ ~--':;"~ - - - ";- i\CHMENT.---1-- CITY OF CHUlA VISTA DEPARTMENT OF PUBLIC WORKS OPERATIONS Date February 7,2007 File No. 0735-10-SW248 CHANGE ORDER NO. 1/FINAL CONTRACT: EMERGENCY SEWER REPAIRS ON OTAY LAKES AND EAST LAKE PARKWAY CONTRACTOR: METROPOLITAN CONSTRUCTION The following changes shall be made to the referenced contract, dated December 7,2006, between the CITY OF CHULA VISTA and METROPOLITAN CONSTRUCTION A. Additional Items are due to conflicts between design and field conditions. New Unit Unit Additional No. Description OTY Tvpe Cost Total A Polyurethane coating inside sewer manhole at the intersection 1.0 LS $9,700.00 $9,700.00 of Otay Lakes Road and Eastlake Parikway was required due to eroded sewer manhole. B Additional day ofTraffic Control was needed to complete the 1.0 LS $6,383.32 $6,383.32 repair of extensivelv damaned sewer manhole. C Sewer Dioe connection to the existina manhole. 1.0 LS $2,500.00 $2,500.00 SUBTOTAL AMOUNT INCREASE (A): $18,583.32 B Delete Items (Not required due to field conditions or due to design changes) Bid Item Delete Unit Unit Deleted No. Description OTY Tvpe Cost Total 2 Sewer manhole base reconstruction -1 LS $7,200.00 ($7,200.00 SUBTOTAL AMOUNT DECREASE (B): ($7,200.00) CHANGE ORDER NO.1 NET INCREASE: $11,383.32 ORIGINAL CONTRACT AMOUNT: PREVIOUS CHANGE ORDERS: CHANGE ORDER NO. 1 INCREASE TO CONTRACT: TOTAL CONTRACT AMOUNT: $62,200.00 $0.00 $11 ,383.32 $73,583.32 This contract change order will add Three (3) Calendar Days to contract. The agreed upon total days and price included all costs for fumishing all tools, labor, materials, equipment, incidental costs and fees for performing the worik in this contract change and no additional compensation will be due. It is agreed by the undersigned that this worik shall be performed and materials furnished in accordance with the original (base) contract, Green Book specifications and applicable standard drawings. ORDERED BY Richard Hopkins Asst. Director of PW OPS ACCEPTED BY JOSE ORTIZ FILMEX, dba Metropolitan Construction APPROVED BY Dave Byers Director of PW OPS 1800 Maxwell Rd. Chula Vista, CA 91911 Phone (619) 397-6000 9-8 ~"e, PRIDE AT WORK www.chulavista.gov ,*Po.I.COllsumerRe<:y<:ledPaper RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING THE FINAL REPORT OF EXPENDITURES FOR THE EMERGENCY SEWER LINE REPAIR - OT A Y LAKES ROAD AND EASTLAKE PARKWAY AND RATIFYING THE ACTIONS OF THE CITY MANAGER AND DIRECTOR OF GENERAL SERVICES FOR MAKING AND EXECUTING A CONTRACT FOR SAID EMERGENCY REPAIR WITH METROPOLITAN CONSTRUCTION WHEREAS, October 19, 2006, the General Services Department was informed by the Public Works Operations Department that the IS-inch sewer line at Otay Lakes Road and Eastlake Parkway was severely damaged and failure to repair the line could undermine the integrity of the road; and WHEREAS, City crews were asked to immediately televise the sewer lines and the damage was assessed; and WHEREAS, in accordance with the emergency provisions of Section 1009 of the City Charter, City staff prepared bid documents to address the repair and obtained three bids; and WHEREAS, staff entered into an agreement with the lowest responsible bidder; Metropolitan Construction (General Engineering Contractor License No. 790532); and WHEREAS, the repair was performed at night to minimize public inconvenience during the holiday shopping season and completed on December 19,2006; and WHEREAS, the Director of General Services and the City Manager agreed with the recommendation of staff on the necessity to proceed with the emergency repair because it would mitigate a potential total collapse of one of the City's busiest intersection (Otay Lakes Road and Eastlake Parkway); and WHEREAS, the Director of General Services and the City Manager agreed with the recommendation of staff on the necessity to proceed with the emergency repair because it minimized public inconvenience and safety hazards to the general public; and 9-9 Resolution No. 2007- Page 2 WHEREAS, the total expenditures for the emergency sewer repair work were funded from the Sewer Facilities Replacement Fund Account and broken down as follows: Item Amount Base Contract (Metropolitan Construction) $ 62,200.00 Chanoe Orders $ 11,383.32 Clean Harbors $ 5,106.68 Total Estimated City Staff Costs $ 50,000.00 Pro;ect To Date Staff Costs (thru 1/31/07) General Services - Desi.n ($13,048) $ (13,048.00) General Services. Survey ($9,324) $ 19,324.00) EngineerinQ: - Traffic $ (2,560.00) E02ineering - Wastewater $ (2,201.00) Public Works Operations - Insnections $ (10,918.00) Public Wades Ooerations - Maintenance $ 1 8,938.001 Citv Attorney ($251) $ (251.00) ...,{.0'..~:j...::;,.!,..: .:...........,:...:,~I'!i::..i;... ~.: . NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby accepts the final report of expenditures for the "Emergency Sewer Line Repair _ Otay Lakes Road And Eastlake Parkway" and ratifies the actions of the City Manager and Director of General Services for making and executing a contract for said emergency repair with Metropolitan Construction. Presented by Approved as to form by Jack Griffin Director of General Services ~-(~~\.-\~ Ann Moore . City Attorney 9-10 RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING A CAPITAL IMPROVEMENT PROGRAM PROJECT "EMERGENCY SEWER LINE REPAIR - OTAY LAKES ROAD AND EASTLAKE PARKWAY" (SW248) AMENDING THE FISCAL YEAR 07 CIP AND APPROPRIATING SEWER FACILITIES REPLACEMENT FUNDS TO TRANSFER EXPENDITURES MADE FOR SAID PROJECT WHEREAS, in order to perform the "Emergency Sewer Line Repair - Otay Lakes Road And Eastlake Parkway", Sewer Facilities Replacement Funds from an existing Capital Improvement Program (CIP) Project (SW247) were used; and WHEREAS, the total expended from SW247 for the emergency repair was $128,690; and WHEREAS, staff is recommending the establishment of a new capital improvement project "Emergency Sewer Line Repair - Otay Lakes Road And Eastlake Parkway" (SW 248) from the Sewer Facilities Replacement Funds; and WHEREAS, staff recommends the transfer from the Sewer Facilities Replacement Fund in the amount of $128,690 to the new CIP project "Emergency Sewer Line Repair - Otay Lakes Road And Eastlake Parkway" (SW 248); and WHEREAS, staff recommends the transfer of the expenditures made ($128,690) for said project to the new CIP project "Emergency Sewer Line Repair - Otay Lakes Road And Eastlake Parkway" (SW 248). NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby authorize establishing a capital improvement project entitled "Emergency Sewer Line Repair - Otay Lakes Road And Eastlake Parkway" (SW 248) Project, appropriating $128,690 from Sewer Facilities Replacement Funds and the transferring of the expenditures for said purpose. Presented by Approved as to form by ~.C< ~Th (, ~ \\\(\(~, H~ Ann Moore City Attorney Jack Griffin Director of General Services 9-11 CITY COUNCIL AGENDA STATEMENT 3/6/07, ItemL SUBMITTED BY: REVIEWED BY: RESOLUTION APPROPRIATING FUNDS IN THE AMOUNT OF $120,014.00 AS PAID TO THE CITY OF CHULA VISTA BY CRICKET COMMUNICATIONS TO THE GAYLE MCCANDLISS PARK CAPITAL IMPROVEMENT PROJECT (CIP PR-179) FOR FUTURE IMPROVEMENTS TO THE PARK DIRECTOR OF GE~RAL SERVICES G~' CITY MANAGER II ITEM TITLE: 4/5THS VOTE: YES [gI NO 0 BACKGROUND In March 2006, Cricket Communications approached the City with a proposal for a Wireless Telecommunications Facility (WTF) at Gayle McCand1iss Park. After several location and antenna options were discussed, the City and Cricket agreed upon the installation of their WTF antennas inside the top portion of a new light standard to be installed in the park near the entrance. At the City's request, to assist with the funding of future park improvements, the Schedule of Premises (SOP) agreed to by the City of Chu1a Vista and Cricket Communications, for the installation of the wireless facility in this park, states that Cricket will provide full payment for the 5-year lease of the site from the City in one lump sum and an additional $12,000 for two new light fixtures. This amount totals $120,014.00 and was received from Cricket and processed by the City on January 6, 2007. ENVIRONMENTAL REVIEW The Environmental Review Coordinator 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. Pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION That Council adopt the resolution. 10-1 3/6/07, Itern~ Page 2 of 2 BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The monetary contribution being made by Cricket Communications to Gayle McCandliss Park will be joined with additional funding allocated for this park in the form of a grant from the State of California and will be used for specific ADA-related improvements to the park and the provision of an upgraded play area. These enhancements will be managed by the Department of General Services and will include the necessary coordination of the Environmental Review Coordinator. The approval of this agenda item is for the transfer funds into the appropriate account only. The physical installation of the future improvements planned for Gayle McCandliss Park will be the subj ect of a separate action by City Council. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property, which is the subject of this action. FISCAL IMPACT No impact to the General Fund. ATTACHMENTS None. Prepared by: Krista Burroughs, Landscape Planner II, Department of General Services M:\General Servlces\GS Administration\Council Agenda\Gayle McCandliss Park PR179\Council Agenda Statement (3-6.07).doc 10-2 RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING FUNDS IN THE AMOUNT OF $120,014.00 AS PAID TO THE CITY OF CHULA VISTA BY CRICKET COMMUNlCATIONS TO THE GAYLE MCCANDLISS PARK CAPITAL IMPROVEMENT PROJECT (CIP PR-179) FOR FUTURE IMPROVEMENTS TO THE PARK WHEREAS, in March 2006, Cricket Communications approached the City with a proposal for a Wireless Telecommunications Facility (WTF) at Gayle McCandliss Park; and WHEREAS, to assist with the funding of future park improvements, the Schedule of Premises (SOP) states that Cricket Communications will provide full payment for the 5-year lease of the site from the City in one lump sum and an additional $12,000 for two new light fixtures; and WHEREAS, $120,014.00 was received from Cricket Communications and processed by the City on January 6, 2007; and WHEREAS, the monetary contribution made by Cricket Communications will be joined with additional funding allocated for this park in the form of a grant from the State of California and will be used for specific ADA-related improvements to the park and the provision of an upgraded play area. NOW, THEREFORE,. BE IT RESOLVED that the City Council of the City of Chula Vista does hereby appropriate funds in the amount of $120,014.00 as paid to the City of Chula Vista by Cricket Communications to the Gayle McCandliss Park Capital Improvement Project (CIP PR-179) for future improvements to the park. Presented by Approved as to form by ~ity Jack Griffin Director of General Services 10-3 CITY COUNCIL AGENDA STATEMENT ~\~ CITYOF '~CHULA VISTA 03/06/2007 Item ---LL ITEM TITLE: RESOLUTION ACCEPTING $205,670 FROM THE HIGH INTENSITY DRUG TRAFFICKING AREA PROGRAM AND APPROPRIATING FUNDS THEREFOR, WAIVING THE COMPETITIVE BIDDING PROCESS AND AUTHORIZING A ONE-TIME PURCHASE OF MONITORING AND SURVEILLANCE EQUIPMENT FR~b,l ~I. CHIEF OF POLIC~ CITY MANAGER Q I SUBMITTED BY: REVIEWED BY: 4/5THS VOTE: YES X NO BACKGROUND The High mtensity Drug Trafficking Area (HIDTA) Program was created by the Anti-Drug Abuse Act of 1988. This act authorized the Director of the Office of National Drug Control Policy (ONDCP) to designate regions within the United States that face drug trafficking threats affecting other areas of the nation as HIDT As. The HIDTA Program provides resources to assist each HIDTA-designated region in developing and implementing a strategy to address its regional drug threat. Each HIDTA strives to create partnerships between federal, state and local law enforcement agencies and promote a coordinated, intelligence driven response to its drug trafficking problems. San Diego and Imperial Counties have been designated as HIDTA regions, due to the volume of illegal narcotics entering the United States through the international border. Funding through HIDT A grants is aimed to disrupt the market for illegal drugs by dismantling or disrupting Drug Trafficking Organizations (DTOs). Operation Alliance is one of several task force initiatives eligible to receive HITDA funds. Operation Alliance is a collocated and commingled task force comprised of federal, state, and local law enforcement agencies investigating Port of Entry and border smuggling cases, and conduct nationwide and international high-level investigations at all levels of complexity. The Chula Vista Police Department has participated as a local representative on the Operation Alliance task force since 1994. 11-1 03106/2007, Item--.\.L Page 2 00 ENVIRONMENTAL REVIEW Not Applicable RECOMMENDATION That Council adopts the resolution accepting $205,670 from the High Intensity Drug Trafficking Area Program, appropriating $199,680 to the FY 2006/2007 Police Department capital budget, waiving the competitive bidding process and authorizing a one-time purchase of monitoring and surveillance equipment from IS!. BOARDS/COMMISSION RECOMMENDATION Not Applicable DISCUSSION As a participant on the Operation Alliance Task Force and other similar task forces, the Chula Vista Police Department has developed an exceptionally productive working relationship with several allied federal, state and local agencies. These agencies have been the Department's counterparts in a variety of investigations, including money laundering, homicides, kidnapping and major drug investigations. One goal of the Police Department is to help disrupt the illegal drug activities occurring along the southwest United StateslMexican border within the county of San Diego, giving particular attention to cases involving the City of Chula Vista. Our participation has significantly increased arrests, narcotics and money seizures among large-scale drug traffickers, including several who operated in Chula Vista. HlDTA grant funds have been awarded to the Police Department to purchase enhanced monitoring and surveillance equipment for the Operation Alliance task force. These federal grant funds, which are only available to local agencies, will expand an existing monitoring and surveillance system, which is currently in place throughout the United States. This added technology would significantly enhance the capability of criminal investigators to further their investigations while meeting the stated goals ofHIDTA and Operation Alliance. Immigration and Customs Enforcement (ICE), who is the federal agency leading the Operation Alliance task force, uses a very specific surveillance system nationwide that is manufactured by a vendor named IS!. The Counterdrug Technology Assessment Center of ONDCP has certified IS!' s surveillance system. The Drug Enforcement Administration (DEA) has a purchase agreement with ISI, and ISI has agreed to extend the DEA negotiated pricing to the Police Department for this one-time purchase. Because of the technical issues surrounding the expansion of this system, the vendor's unique knowledge of the system already in place, and the confidentiality required for this expansion, the Police Department requests to waive the competitive bidding process and to authorize this one-time purchase from IS!. The Acting Purchasing Agent has reviewed this equipment purchase, and she understands the need for sole sourcing. 11-2 03/06/2007, Item--lL Page 3 of3 The projected cost for the surveillance equipment purchase is $199,680. The funding from the HIDTA program includes the $199,680 expenditure reimbursement, along with a 3% administrative fee of$5,990 to process the purchase. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 1 8704.2(a)(1) is not applicable to this decision. FISCAL IMPACT Approval of this resolution will result in the appropriation of $199,680 to the FY 2006/2007 capital budget of the Police Department for the purchase of monitoring and surveillance equipment. The funding from the HIDTA program includes the $199,680 expenditure reimbursement, along with a 3% administrative fee for processing the purchase. Consequently, there is a positive fiscal impact in the amount of $5,990 to the General Fund. ATTACHMENTS None. Prepared by: Leonard Miranda, Captain, Police Department RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING $205,670 FROM THE HIGH INTENSITY DRUG TRAFFICKING AREA PROGRAM AND APPROPRIATING FUNDS THEREFOR, WAIVING THE COMPETITIVE BIDDING PROCESS AND AUTHORIZING A ONE-TIME PURCHASE OF MONITORING AND SURVEILLANCE EQUIPMENT FROM JSI. WHEREAS, the High Intensity Drug Trafficking Area (hereinafter referred to as "HIDTA") Program strives to create partnerships between federal, state and local law enforcement agencies and promote a coordinated, intelligence driven response to drug trafficking problems; and WHEREAS, Operation Alliance is one of several task force initiatives eligible to receive HITDA funds and the Police Department has participated as a local representative on the Operation Alliance task force since 1994; and WHEREAS, HIDTA grant funds have been awarded to the Police Department to purchase enhanced monitoring and surveillance equipment for the Operation Alliance task force; and WHEREAS, because of the technical issues surrounding the expansion of the surveillance system, the vendor's unique knowledge of the system already in place, and the confidentiality required for this expansion, the Police Department requests to waive the competitive bidding process and to authorize this one-time purchase from JSI; and WHEREAS, the funding from the HIDTA program includes a $199,680 expenditure reimbursement, along with a 3% administrative fee of $5,990 to process the purchase. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby accept $205,670 from the High Intensity Drug Trafficking Area Program, appropriate $199,680 to the FY 2006/2007 Police Department capital budget, waive the competitive bidding process and authorize a one-time purchase of monitoring and surveillance equipment from JSI. Presented by: Approved as to form by: Richard P. Emerson Police Chief fa 11-4 CITY COUNCIL AGENDA STATEMENT :$"!r::.. CIIT OF -<: < ~ CHULA VISTA March 6, 2007 Item I Z. SUBMITTED BY: PUBLIC INPUT REGARDING DESIRED QUALIFICATIONS OF A NEW CITY MANAGER ~ INTERIM CITY MANAGER 'J! CITY ATTORNEY {j 0. ITEM TITLE: 4/5THS VOTE: YES NO x BACKGROUND: At its February 20, 2007 meeting, the City Council directed staff to provide a report with recommendations for a process to obtain public input related to the selection of a new City Manager, and to indicate what would be appropriate and not appropriate to discuss in open session. As discussed in the attached memo from the City Attorney, staff recommends that any public discussion regarding the selection of a new City Manager be limited to general comments regarding the desired qualifications of a new City Manager and avoid discussion of any specific candidates for the position. ENVIRONMENTAL REVIEW: N/A RECOMMENDATION That Council: I. Accept this report. 2. Hear and consider any public input provided at the March 6th Council meeting regarding the characteristics desired in a new City Manager. BOARDS/COMMISSION RECOMMENDATION: N/A PREVIOUS ACTIONS: After a vacancy occurred in the City Manager position in June 2006, the City contracted with Bob Murray and Associates to conduct the executive search for the next City Manager. As part of that process, Mr. Bob Murray met with the then Mayor and Councilmembers individually, and staff as time permitted, at meetings on Tuesday, August 22, 2006. Later on August 22, in open session during the Council meeting, Mr. Murray was scheduled to summarize the input he had received regarding the position and to hear any additional comments from the Council and potentially the public, as well as answer any questions related to the executive search process. However, the August 22, 2006 Council meeting was a lengthy one, and the agenda item related to the executive search process for the City Manager was not reached on the agenda until after Mr. Murray had to leave town. The item was therefore continued to a special Council meeting on August 26, 2006. As indicated in the attached staff report and minutes from that August 26, 12-1 Date, Item~ Page 2 of2 2006 meeting, Mr. Murray in open session summarized for the City Council the input he had received regarding the desired characteristics for the new City Manager. There was no public input on the characteristics for the new City Manager at that meeting, and the then Mayor and Councilmembers concurred with the summary provided by Mr. Murray regarding the desired qualifications for the new City Manager. Mr. Murray then prepared the brochure announcing the position, which was mailed to potential applicants. A copy of that brochure is attached, and it includes a description of the "Opportunities and Challenges" facing the City and a description of the "Ideal Candidate" for the position. It was not anticipated that the hiring process would be conducted in a public session; the candidates were told their application would be kept confidential. Subsequently, when a new Mayor and Councilmember were elected in the November 2006 election, Mr. Murray interviewed the newly elected Mayor and Councilmember to obtain their views on the characteristics desired for a new City Manager. In addition, the Council extended the filing deadline for applicants for the City Manager position from the original filing deadline of October 16, 2006 to an extended deadline of December 5, 2006. DISCUSSION: At the February 20, 2007 meeting, the City Council directed staff to prepare this report regarding what is appropriate to discuss in open session and what is not appropriate. Attached is a memo from the City Attorney that describes that issue in further detail. As indicated in the attached memo, staff recommends that the discussion at the March 6th Council meeting on this item be limited to the desired qualifications of the new City Manager, and that it should avoid any discussion of specific candidates for the position. It is recommended that the Council accept any written or verbal comments at the March 6th Council meeting from members of the public and limit the Council's own discussion in public session to a general discussion of the desired qualifications of the new City Manager because of the expectation of privacy created by the City in the current application process. DECISION MAKER CONFLICT: Staff has reviewed the decision contemplated by this action and determined that it is not site specific and consequently the 500-foot rule found in California Code of Regulations Section 18704.2 (a)(l) is not applicable to this decision. FISCAL IMPACT: N/A ATTACHMENTS: . Memo from City Attorney . Staff report on the executive search process for the City Manager at the August 26, 2006 Council meeting . Minutes of the August 26, 2006 Council meeting . Brochure inviting applications for City Manager position Prepared by: Jim Thomson, Interim City Manager 12-2 0lY OF CHULA V1SfA OFFICE OF THE CITY ATTORNEY MEMORANDUM DATE: February 28, 2007 TO: The Honorable Mayor and City Council FROM: Joan F. Dawson, Deputy City Attorney Ann Moore, City Attorney CA. tf" VIA: RE: Public Input Regarding City Manager Process The City Attorney has been asked to provide guidance to the City Council regarding what can be discussed and what should not be discussed in open session regarding the current recruitment process for a new City Manager. The Ralph M. Brown Act, codified at Government Code sections 54950 through 54963, provides that meetings of a legislative body, such as the Chula Vista City Council, should be open and public (see Government Code S 54953). The Brown Act contains specific exceptions from the open meeting requirements where government has a demonstrated need for confidentiality (see Government Code S 54962). Personnel matters are one such exception. There is specific statutory authority that authorizes closed sessions to consider the appointment, employment, evaluation of performance, or dismissal of a public employee (see Government Code S 54957(b)(I)). The underlying purpose of this personnel exception is to protect the employee from public embarrassment and to permit free and candid discussions of personnel matters by a local governmental body. See San Diego Union v. City Council, 146 Cal. App. 3d 947, 955 (1983). Evaluating a prospective public employee's qualifications is within the ambit of the personnel exception of the Brown Act. Historically, the Chula Vista City Council has discussed employment matters in closed session as allowed by the Brown Act. As noted by the Fourth District Court of Appeal in the San Diego Union case, this confidential process permits free and candid discussions of personnel matters. It further encourages a high caliber of applicants, who may be currently employed elsewhere and have a legitimate reason to request confidentiality when applying for a position with the City of Chula Vista. In determining whether an application process for City positions should be open or closed, the Council must weigh lof2 12-3 the right to privacy of the individual applicants with the public interest in open discussion. In this instance, the candidates for City Manager were told by the City that the process would be confidential to protect their privacy rights. This expectation of privacy created by the City relates to the individual candidates' qualifications for the position, including responses they have given to interview questions or any other personal information the candidates have provided either verbally or in writing. It is the City Attorney's recommendation that a written authorization be obtained from the remaining candidates if the Council wishes to move the discussion regarding the candidates from closed session to open session. Further, anything that has been discussed in closed session regarding the candidates may not be disclosed, except as provided by Government Code section 54957.1. This section requires the legislative body to publicly report any "[a]ction taken in closed session to appoint, employ. . . or otherwise affect the employment status of a public employee." Gov't Code ~ 54957.1(a)(5). See also Gov't Code ~ 54963 ("(a) A person may not disclose confidential information that has been acquired by being present in a closed session. . . to a person not entitled to receive it, unless the legislative body authorizes disclosure of that confidential information. (b). . . "confidential information" means a communication made in closed session that is specifically related to the basis for the legislative body of a local agency to meet lawfully in closed session. . . . "). The document that was published by the City, in conjunction with Bob Murray and Associates, inviting interest in the City Manager position is a public document pursuant to Government Code section 6250 et seq., the California Public Records Act. This four- page document contains information on the ideal candidate for City Manager. It also contains information regarding salary and benefits for the City Manager. This general information is public information, and it would be permissible for the Council to receive public comment on this information, if desired. To summarize, it would be permissible for the Council to seek public input or ideas regarding the kind of City Manager who would be good for the City and the ideal criteria for a new City Manager. It would not be permissible to discuss in public the specific qualifications of individual applicants and how they mayor may not fit within the parameters established for the position. General discussion regarding salaries and other terms of compensation are matters of public interest warranting open discussion. San Diego Union v. City Council, 146 Cal App. 3d at 955. However, any negotiations regarding compensation with a specific candidate should take place in closed session, as a public employee appointment matter pursuant to Government Code section 54954.5(e). In the future, if the Council desires to change its policy of discussing employee appointment matters in closed session, the Council should make the change prior to the start of an appointment process so applicants understand there is no expectation of privacy in their applications for a City position. 20f2 12-4 COUNCIL AGENDA STATEMENT ITEM TITLE: Item ft!:i= / Meeting Date .July 22; 2~88 RI,;1.~ /0(:, REPORT ON THE EXECUTIVE SEARCH PROCESS FOR THE CITY MANAGER BY BOB MURRAY OF BOB MURRAY AND ASSOCIATES. SUBMITTED BY: REVIEWED BY: Director of Human Resources rrF-- ~\ City Manager 0 (415ths Vote: Yes_ No-1U The City has contracted with Bob Murray and Associates to conduct an Executive Search for the next City Manager. Mr Murray will speak to the Council regarding issues and recommendations related to the executive search and seek Council input regarding those issues. Mr. Murray will report back to Council once he is prepared to recommend a group of finalists for the position. RECOMMENDATION: That Council provides direction to Mr Murray BOARDS/COMMISSIONS RECOMMENDATION: N/A DISCUSSION: Bob Murray and Associates has been selectecl to conduct the executive search for the next City Manager. Mr. Bob Murray will be working with Council and staff to discuss qualifications, procedures and other issues related to the executive search. Mr. Murray is scheduled to meet with the Mayor and Council individually, and staff as time permits, at meetings throughout the day on Tuesday, August 22, 2006 The purpose of the individual meetings is to gather input for discussion at the Council meeting. Later that evening, in open session during the Council meeting, Mr Murray will have an opportunity to summarize the input he received regarding the position and to hear any additional comments from the Council and potentially the public, as well as answer questions related to the executive search process. Mr Murray will report back to the Council once he is prepared to recommend a group of finalists for the position. FISCAL IMPACT: N/A I-I 12-5 MINUTES OF A SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA August 26, 2006 1:00 P.M. A Special Meeting of the City Council of the City ofChula Vista was called to order at I:4S p.m. in the Council Chambers located in City Hall, 276 Fourth Avenue, Chula Vista, California ROLL CALL: PRESENT: Councilmembers: Castaneda, Chavez, McCann, Rindone, and Mayor Padilla ABSENT: Councilmembers: None ALSO PRESENT: Interim City Manager Thomson, Senior Assistant City Attorney Marshall, Bob Murray of Bob Murray and Associates PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE ACTION ITEMS I. REPORT ON THE EXECUTNE SEARCH PROCESS FOR THE CITY MANAGER BY BOB MURRAY OF BOB MURRAY AND ASSOCIATES (Continued from August 22,2006) The City has contracted with Bob Murray and Associates to conduct an executive search for the next City Manager. (Human Resources Director) Mr. Murray spoke to the Council regarding issues and recommendations related to the executive search, and sought Council input regarding those issues. Mr. Murray will report back to Council once he is prepared to recommend a group of finalists for the position. The Council took no formal action. PUBLIC COMMENTS Angela Brill commented on concerns of Rolling Hills residents and the addition of a bus route. ADJOURNMENT At 2:03 p.m., Mayor Padilla adjourned the meeting to the Regular Meeting on September 19, 2006 at 6:00 p.m. in the Council Chambers. The meeting of September 5, 2006 was cancelled per Municipal Code Section 2.04.020. The meeting of September 12, 2006 was cancelled due to the Mayor's State of the City Address, to be held on that date at the Montevalle Recreation Center at 6:00 p.m. , ~ ~6.J.. ~~ Susan Bigelow, MMC, City Clerk 12-6 '\ \ ., , ., \ \ , \ \ \ -m \ '\~~ ~~l~~1i' ~~f?- ~ ,.~ "t.. __-__- -- -- - --- ~ -.-........ ~ - -- ellY OF CHUlA VISTA INVITES YOUR INTEREST IN THE POSITION OF CITY MANAGER r----SOB MURRAY r ) & ASSOCIATES ,...... \ S IN EXECUTIVE SEARCH " EXPERT ~~ The City of Chula Vista offers convenient access l'r-l to all the cultural. recreational. educational and business opportunmesthesouthern Californ,,- re;jon provides. THE COMMUNITY Chula Vista, California is a diverse, thriving city with a population of more than 225,000 people who enjoy an international setting and a casual, recreational lifestyle. Located just minutes from both downtown San Diego and the US. Mexico border, the city offers convenient access to all the clJltu.ral, rec. r. ea. tJ.....o...n....a....I, .. .............'."-'-,",...-:".;.'. educational and business opportunities the southem Califomia region prQVides. Chula Vista is one of the fastest growing cities in the nation and hasayibfant, growing economy. Situated a10ngthe scenic San Diego Bay and sunrounde d bypicturesquemountaJ'ns, ,- '. .,.....,...-.. .:-',"': ,.,,', '>-, '..... ..... Chula Vista evokes a sense of community and family spirit reminiscent of small town America, complete with tree-lined streetS, family owned bLisinesSe~. and . the amenities of a growing city. .,.',,",.',:-,'. Chula Vista has an expanding downtown with retail shops!' re~urants a~c:I.' businesses, both old and new. New, modern architecture blends'With historical :', " '.. "" :,:. F.' .:'.'....' "",::-'Y:',.,...:',: -','", ,'"..,.: ";;"',":.~ sites and parks located throughout the city. . {: ,.;., . ,,",,>. ' >i,;:,/- <':'><:..{ ,. The City of Chula Vista has good schools, excellent health 6lrJ~di~les;sp~rq~~\ . parks, community programs for all ages, and top-notch facil~ies for~he Sollth. Bay's seniors. The expanding population can be attributed ~g~oWi~~h;ti~r~g' ' and employment opportunities, a rich community spirit. a consf:kmly ritcro:~rate' climate and a city government that makes quality of life a priority. '. " .. ....,... ',. .,...,.....-...;_ _.c...'>,':.,..,...,..-'......., ... .. . ,,:.--.-,'.:'_...':-,.:.'..-.........,.:..<:..:.-.'.....-'..'::. The near-perfect Mediterranean climate lends itself to an activ~ outdoor lifestyle: '. . . . .. .:...",:;i,'>..:....'::.':';f~;"-;-!:-,;>;-i:::.":": Chula Vista is home to the U.5. Olympic Training Center, Coo~ Amph.itheatre, the Chula Vista Nature Center, Knotts Soak City USA, four golf ~ourSes, a . .. . -'. ..,. ........ '. :":'- -,,:..-..,<,.....,.:;..'.-.'.:;.::....+,.:.....;.'.,'.... beautiful marina, and an abundance of parks and open sp,!~es. . ,.,-.:".:. .'..".'.'.' ',,'.-........-..:':...,. :':.,;:..:::_-...,',-i,'S:::--::t';''::-(1:/-:<';'.'.:':':''..::.::/ In addition, Chula Vista provides a variety of cultural and educati~nalfacilities . ';":'::';"S' ...'. such as the Chula Vista Heritage Museum, . . '. .,.:;. ;-"".-' Onstage Playhouse, the San Diego Junior Theatre, and the award-winning Chula Vista Public Library ~m. THE ORGANIZATION The City of Chula Vista is a full-service city with a full-time staff of 1,263 people and has a stable Council/Manager form of government. The City Manager's Office, also called the Administration Department, is made up of the City Manager, the Assistant City Managers, the Office of Budget and Analysis and the Office of Communications. OPPORTUNITIES AND CHALLENGES Chula Vista is a community in transition. As the population has increased, the city has become more diverse, with its social and ethnic make-up changing dramatically over a relatively short period of time. As award winning master planned communities are built in the east, a new vision aimed at revitalizing older neigh- borhoods on the city's west side is emerging in the fonrn of the Urban Core Master Plan. Chula Vista's financial health is stable. It is important to the City Council and residents of the community that the city's financial position remains strong in the future. As neighborhoods mature and the cost of providing services increases, Chula Vista will face challenges. The city has recently created a non-profit entity to assist the City Council in its efforts to promote redevelopment. The new 50 I (c)3, the Chula Vista Redevelopment Corporation, is governed by a nine member board, four of whom are appointed by the City Council. A major project that will require the attention of the next City Managerwill be the Bayfront project. Planning is underway to transform the Chula Vista bayfront into a magnificent world-class destination. Experts are calling it one of the most significant waterfront planning efforts on the west coast. IDEAL CANDIDATE The city is currently seeking a City Manager with strong interpersonal skills who can effectively communicate with the City Council, staff, residents and customers. As Chula Vista has matured, so has the relationship between the City Council and the City Manager. The City Council is committed to setting policy and looks to the City Managerand hisiherstaffto provide policyaitematives. The present Council is much more engaged in policy development than in the past. The new City Manager should work well in a collabor- ative environment where he/she and the City Council respect one another's roles. The City Council looks to the City Manager to provide leadership and clear direction to staff and hold individuals accountable. Follow through and communication is important to the City Council. tomer service; appreciating what the residents have come to expect. The new City Manager should have an extensive background in municipal management. That experience should provide the new City Manager with an understanding offinancial management, redevelopment and economic develop- ment, growth, and the dynamics of a diverse community. A Bachelor's degree in public administration or a related field is required; a Master's degree is preferred. THE COMPENSATION The salary for the City Manager position is open and is dependant upon qualifi- cations. The city also offers an attractive benefits package including: The new City Manager should have an extensive background in munidpal management. That experience should pro,,1de 1he new City Manager with an under>tanding of inano~ management. redevelopment and economic development, and growth. The City Council is looking for an individual who is progressive; a forward thinker who is creative and innovative. The next City Manager should be a person who is politically astute but apolitical. A manager who treats each Council Member equally and keeps them well informed is being sought. The ideal candidate must understand the basic principles of service delivery in the various municipal functional areas, and must be able to anticipate future needs forthe city. He/she will be a team player and work with others in a collaborative manner. The ideal candidate will be an individual who embraces and encourages quality cus- 12-9 Retirement - The city contributes the employee's full 8% share to the California Public Employees Retire- ment System (CaIPERS), provides the 3% @ 60 for- mula and does not participate in Social Security. Flexible Benefit Plan - This position receives $1 I ,966 annually, from which medical insurance must be purchased for the employee. The remaining money may then be used to purchase a wide variety of non-taxable benefits or receive taxable cash. (The all)ount will be pro-rated based on plan year and start date.) '" Insurance - The city provides life and AD&D insurance coverage of $50,000. Long Term Disability - The city pays the total premium for a short and long-term disability Policy. Vacation & Holiday - This position receives 25 vacation days per year at a rate of7.69 hours per pay-period, with an option to sell back up to 80 hours of accnued vacaTIon once per fiscal year. The city observes I 0 hard holidays and credits 24 hours each fiscal years for three floating holidays. Sick Leave - Sick leave is accrued at the rate of3.69 hours per pay period, with the option of a cash payment of 1/4 of the annual accumulation if 4 days or fewer are used during the year. Beginning sick leave and vacation balances are negotiable. Management Leave - This executive management position receives 80 hours of Management Leave annually which must be used before the end of the fiscal year. Hours are pro-rated based on date ofhire. Deferred Compensation - A non-contributory deferred compensation plan is available. In addition, you may choose to participate in the city's 40 I (a) plan. which matches 5% of salary. Flexible Spending Accounts - Employees may participate in a Heakh and/or Dependent Care FSA that will allow them to pre-designate money into these accounts on a pre-tax basis. TO APPLY If you are interested in this outstanding opportunity please submit your resume to: Bob Murray Bob Murray & Associates 1677 Eureka Road, Suite 202 Roseville. CA 95661 (916) 784-9080 (916) 784-1985 fax e-mail: apply@bobmurrayassoc.com Filing Deadline: O<:tober 16, 2006 Following the dosing date, resumes will be screened according to TIhe qualifications outlined above. The most qualified candidates will be invited to screening interviews with Bob Murray and Asso- ciates. A select group of candidates will be asked to provide references once it is anticipated they may be recommended as finalists; references will be contacted only following candidate approval. Can- didates will be advised of the status of the recruitment following selection of the City Manager. 5hould you have any questions please do not hesitate to contact Mr. Murray at: (916) 784-9080 ....--....... r T) Bos MURRAY .\\ ~PE~.7N ~x~c~.I:'- ~,:.: ~ CITY COUNCIL AGENDA STATEMENT 03/06/2007,ltemll ITEM TITLE: QUARTERLY FINANCIAL STATUS REPORT FOR THE QUARTER ENDED DECEMBER 31, 2006 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $450,000 FROM THE AVAILABLE BALANCE OF THE GENERAL FUND TO THE FIRE DEPARTMENT PERSONNEL SEVICES BUDGET FOR COSTS RELATED TO OVERTIME DIRECTOR OF FINANCEIT?SURER~ INTERIM CITY MANAGER ifl SUBMITTED BY: REVIEWED BY: 415THS VOTE: YES 0 NO D BACKGROUND Section 514 (f) of the City Charter requires quarterly fiscal status reports to be filed by the Director of Finance through the City Manager. ENVIRONMENTAL REVIEW Not Applicable RECOMMENDATION That Council: 1, Accept the report as submitted 2, Approve the Resolution of the City Council of the City Of Chula Vista appropriating $450,000 from the available balance of the General Fund to the Fire Department Personnel Services budget for costs related to overtime, BOARDS/COMMISSION RECOMMENDATION Not Applicable DISCUSSION Attached for your consideration is the financial status report for the second quarter of fiscal year 2006-07, The detailed Fiscal Status Report for the quarter ending December 31, 2006, assumes that the City will continue to maintain a reserve level above the 8,0% Council general fund reserve policy, 13-1 DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by accepting this report and has determined that it is not site specific and consequently the 500 foot rule found in the California Code of Regulations section 18704.2(a)(1) is not applicable. FISCAL IMPACT The City General Fund ended the fiscal year 2005-06 with an available balance of $14.9 million or 8.8% of the operating budget. Based on updated revenue projections and the implementation of the citywide contingency plan, the general fund reserves are projected at 8.5% or $14.4 million, a slight decrease of 0.3%, or $498,702, from the prior fiscal year. The reserves were predicted to drop in the first quarter financial status report primarily because of a shortfall in development revenues. Subsequent to that report a development fee study was completed and approved on January 23, 2007. The new fee schedule becomes effective March 26, 2007. The development services departments have incorporated the new fee structure in to their projections. Since the first quarter report, the projected impact to reserves of $602,749 has been reduced to $498,702. The slight reduction in reserves is due to a number of factors the most significant being the quantification of Fire Department overtime usage. The attached report on Fire Department overtime projects that overtime usage will exceed the budgeted amount by $450,000 and therefore a general fund appropriation is requested at this time. Staff has concluded that the Fire overtime budget has been underfunded and that this increase is appropriate, as described further in the attached report. Projected General Fund Available Fund Balance General Fund Reserves July 1, 2006 14,929,410 Projected Revenues & Transfers In 166,607,702 Projected Expenditures & Transfers Out** 167,106,404 Revenues over (under) Expenditures (498,702 *Projected Available Fund Balance as of June 30, 2007 $ 14,430,708 Reserves as Percentage of General Fund Operating Budget 8.5% -Net of $1.8 million in budnet car"'overs for encumbrances and CIP ATTACHMENTS Attachment 1 - Financial Status Report Attachment 2 - Report on Fire Department Overtime Prepared by: Maria Kachadoorian, Director of Finance/Treasurer, Finance Department 13-2 Attachment 1 ~l~ ~ O1YOF (HUlA VISfA FINANCIAL STATUS REPORT Second Q.uar1Er Fiscal Year 2006-07 Prepared by the Finance Department INTRODUCTION The purpose of this report is to provide the City Council, management and the citizens of Chula Vista an update on the City's fiscal status based on the most recent financial information available. The projections presented in this report were prepared through the hard work and efforts of the various Department Heads, departmental analysts, Finance Department staff and the Office of Budget and Analysis. The City began the fiscal year with a balanced general fund budget, which included appropriations for expenditures and transfers out of $170.1 million, supported by estimated revenues and transfers in of $170.1 million. Through the end of the second quarter, Council approved a total of $1,234,823 in additional appropriations supported by additional revenues of $1,062,611 resulting in a net impact to reserves of approximately $172,212 as described in Schedule D. Overall, general fund discretionary revenues such as property taxes and sales taxes continue to be strong as projected. However, the utility users tax (UUT), franchise fees and real property transfer taxes are projected to be $1.7 million less than initially projected. This amount represents about 1.6% of general fund discretionary revenues. In addition, the development services departments are projecting a shortfall in development revenues of approximately $2.4 million in the current fiscal year. Other departmental revenues are also projected lower by $506,156 primarily within the Recreation Department due to lower than anticipated recreation class registration fees. These shortfalls in the Recreation Department will be fully offset by identified expenditure savings. SUMMARY OF PROJECTED REVENUE SHORTFALLS Net Tax Revenue Shortfalls Development Revenue Shortfalls Other Departmental Revenue Shortfalls Total $ (1,651,608) $ (2,371,875) $ (506,156) $ (4,529,639) -2.7% % of Budgeted Revenues To address the anticipated shortfalls in revenues, a citywide contingency plan has been implemented. The City went through an extensive contingency planning process, working with departments to identify expenditure savings within existing budgets to assist in mitigating impacts to the general fund reserves. The remaining impacts will be mitigated by actively managing vacant positions. It is anticipated that these changes can be implemented in the short-term with little to no impact on existing service levels. A summary of the revenue shortfalls and the anticipated savings are summarized as follows. 13-3 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 2 SUMMARY OF FISCAL ISSUES AmQunt Projected Revenue Shortfall: Tax Revenues (net) Development Revenues Other Departmental Revenues 'Mid-Year Appropriations $1,651,608 $2,371,875 $ 506,156 $ 172,212 $4,701,851 Dept Projected Exp Savings Manage Vacant Positions $ 3,558,701 $ 644,448 $ 4,203,149 Projected Impact to Reserves $ (498,702) 'Represents net impact of Mid- Year Council Approved Appropriations. GENERAL FUND RESERVES The City General Fund ended the fiscal year 2006 with an available balance of $14.9 million or 8.8% of the operating budget. Based on updated revenue projections and the implementation of the citywide contingency plan, available reserves are projected at 8.5% or $14.4 million at the end of the current fiscal year. General Fund Reserves July 1, 2006 Projected Revenues & Transfers In Projected Expenditures & Transfers Out" Revenues over (under) Expenditures 'Projected Available Fund Balance as of June 30, 2007 Reserves as Percentage of General Fund Operating Budget 14,929,410 166,607,702 167,106,404 $ (498,702) 14,430,708 8.5% "Net of $1.8 million in bud et car overs for encumbrances and CIP GENERAL FUND EXPENDITURES Total General Fund expenditures and encumbrances through December 31, 2006 were $86.0 million. Actual expenditures year to date are comparable on a quarter-by-quarter basis as reflected under the attached Schedule A. Overall, through identified departmental savings and management of vacant positions, expenditure savings of $4.2 million are projected to largely mitigate the impacts of the projected revenue shortfalls of $4.5 million. The expenditure savings have been identified as salary savings based on managing vacancies citywide, supplies and services savings and savings in other expenses. The continoencv plan has been 13-4 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 3 implemented by manaqement and is beinq monitored departmentally. Schedule A also lists the expenditures to date and projected savings by department. The Fire Department and the Office of Budget & Analysis has conducted a review of Fire overtime usage (Attachment 2). Based on year to date overtime usage, the Fire Department is anticipating budgetary overages of approximately $450,000 related to overtime. Staff has concluded that the Fire overtime budget has been underfunded and that a $450,000 increase in that budget is appropriate, as described further in the attached report. In addition, health insurance costs are anticipated to increase citywide by approximately $470,000 for the remainder of the fiscal year. At this time, any general fund impacts from the health insurance cost increases will be mitigated by reallocating existing budgets between departments as part of the year-end budget clean up, MAJOR DISCRETIONARY REVENUES Overall, the major discretionary revenues, such as sales taxes and property taxes continue to be strong, However, franchise fees, utility users tax and real property transfer tax are projected to be under budget by approximately $1.7 million or -1,6%, At this time, due to a citywide contingency plan, which has been implemented by management, no general fund impacts are anticipated due to these shortfalls. GENERAL FUND MAJOR DISCRETIONARY REVENUES Fiscal Year 2005-06 Fiscal Year 2006-07 Maior Discretionarv Revenues Actual Budaet Projected Variance % Variance 'Property Taxes $ 22,192,789 $ 26,999,041 $ 27,649,041 650,000 2.4% Sales Taxes $ 26,715,515 $ 30,997,040 $ 30,997,040 0 0.0% Franchise Fees $ 9,492,759 $ 11,368,337 $ 10,528,835 (839,502) ~7.4% ransient Occupancy $ 2,336,204 $ 2,581,975 $ 2,581,975 0 0.0% Utility Users $ 6,363,446 $ 8,030,681 $ 6,617,984 (1,412,697) -17.6% Business License $ 1,234,912 $ 1,238,340 $ 1,238,340 0 0.0% Real Property Transfer $ 2,122,860 $ 2,648,554 $ 2,035,145 (613,409) -23.2% *"State Motor Vehicle License Fees $ 18,354,839 $ 17,864,139 $ 17,864,139 0 0.0% Miscellaneous Revenues $ 1 ,602,222 $ 1 ,082,930 $ 1 ,646,930 564,000 52.1% otal $ 90,415,546 $102,811,037 $101,159,429 (1,651,6081 -1.6% "'Property Taxes in Fiscal Year 2005-06 are net of the $1.8 million state takeaway related to ERAF Ill. **In Fiscal Year 2005-06, VLF total reflects reimbursement from State due to previous takeaways. 13-5 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 4 ~ALES TAXES (BUDGET $31.0 MILLION, PROJECTED $31.0 MILLION) Sales and use tax revenue is the City's single largest discretionary revenue source, accounting for 30.6% of the total projected discretionary revenue for the General Fund in fiscal year 2006- 07. During fiscal years 2004-05 and 2005-06 sales tax revenues increased by 10.2% and 13.2% respectively primarily due to increased population and the opening of several new commercial centers in the eastern section of the City. During fiscal year 2006-07, sales tax revenues are projected to increase by 16.0% from the prior year due to the expansion of the auto park and the highly anticipated and publicized opening of the Otay Ranch Town Center Mall. Growth in sales tax revenue has averaged 7% per year over the past five years. Sales Tax Revenue $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 1997 1999 2001 2003 2005 2007 !'ROPERTY TAXES (BUDGET - $27.0 MILLION, PROJECTED $27.6 MILLION) Property taxes continue to grow Countywide, although at a slower rate than in previous years. The pace of new and existing home sales slowed dramatically and is anticipated to continue the trend of slow growth into fiscal years 2007- 08 and 2008-09 and will be reflected in the next proposed budget. Property Taxes $28,000,000 $24,000,000 $20,000,000 $16,000,000 $12.000,000 $8,000,000 $4,000,000 $0 19971998199920002001 200220032004 20052006 2007 "For comparison purposes, the property tax revenue does not reflect $1.8 million in State takeaways in fiscal year 2004-05 and 2005-06. 13-6 FINANCIAL STATUS REPORT Second Quarter RscaJ Year 2006-07 Page 5 According to the most recent County of San Diego Assessor's Office Report, assessed values in Chula Vista have increased by 15.43% for fiscal year 2006-07 compared to 20% in the 2005-06 fiscal year. Based on the updated report from the County Assessor, property tax revenues are projected to come in higher than budgeted by approximately $650,000. Growth in Assessed Value 25.00% 5.00% 20.00% 15.00% 10.00% 0.00% 1995 1997 1999 2001 2003 2005 2007 -Chula Vista -County Overall "As represented in the chart, this is the 8th straight year that the City has seen double-digit growth in assessed values. I3.EAL PROPERTY TRANSFER TAX (BUDGET $2.6 MILLION, PROJECTED $2.0 MILLION) When real property is sold, the County assesses a transfer tax. The tax rate is $1.10 per thousand multiplied by the selling price of the property. The City receives 50% of the transfer tax for sales within Chula Vista. Property transfer taxes are reflective of the housing market. Due to the significant slow down in real estate construction and the cooling of resale homes during the current fiscal year, the revenue projections are being adjusted downward by $600,000. STATE MOTOR VEHICLE LICENSE FEES (BUDGET $17.9 MILLION, PROJECTED $17.9 MILLION) The VLF revenue has gone through many changes in the past two years. The fee was initially established back in 1948 and directed to local government. The State had previously assessed a 2% of value Motor Vehicle License Fee on car registrants on behalf of local governments. During fiscal year 2003-04, the State dropped the fee from 2% to 0.67%. Except for the first three months of that year, the State back-filled this fee reduction with other State funds, keeping local government revenue whole. Beginning in fiscal year 2004-05, the local government share of VLF has narrowed. Cities continue to receive the 0.67% portion of the fee directly from the State, but this amount is now net of County realignment and administrative reductions. The State backfills the gap created by the fee reduction from 2% to 0.67% with an additional allocation of local property tax from County ERAF funds, referred to as the VLF swap. After 2006, the VLF swap will be valued at the original 2005 amount, and increased by the jurisdiction's annual growth in assessed valuation. These changes in valuation are reflected in the fiscal year 2006-07 budget and are projected to come in at budgeted levels. 13-7 FINANCIAL STATUS REPORT Second Quarter FISCal Year 2006-07 Page 6 f~ANCI!.!SE FEES (BUDGETED $11.4 MILLION, PROJECTED $10.5 MILLION) Franchise fee revenues are generated from public utility sources such as San Diego Gas & Electric (2% on gas and 1.25% on electricity), trash collection franchises (9.05% fee), and cable franchises (5% fee) conducting business within City limits. SDG&E is the single' largest generator of Franchise Fees and accounts for approximately 50% of the total franchise revenues, which are received semi-annually, in March and August. SDG&E collects the franchise fee from Chula Vista customers and through a municipal surcharge imposed on the South Bay Power Plant based on their usage of natural gas. Due to the volatility of the price of natural gas and fluctuation in usage this component is difficult to project. Trash franchise fees and cable fees are more predictable due to the fixed rates charged and the monthly and quarterly receipt of the revenues respectively. Total franchise fees received in fiscal year 2005-06 were $9.5 million, which was $457,000 less than projected in the prior year third quarter fiscal status report. At this time, we are projecting franchise fee revenues to come in at approximately $10.5 million. This is $840,000 less than budgeted in the current year due to the prior year shortfall. Staff will continue to monitor this revenue source and provide updated projections in the third quarter report. Franchise Fees .. $9.0 ~ $8.0 $7.0 :IE $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $- / \ \ .' \ 2001 2002 2003 2004 2005 2006 2007 -+- Energy ___ Trash/Cable Y!~~~~'!!{~I!~.!..A~ (BIJDGET $8.0 MILLION, PROJECTED $6.6 MILLION) The City adopted its Utility Users Tax (UUT) in 1978. The City of Chula Vista imposes a UUT on the use of telecom at the rate of 5% of gross receipts, which represents 66% of the total UUT revenues received. The UUT on natural gas services is $0.00919 per therm and $0.00250 per kilowatt on electricity services, which equates to approximately a 1% tax. UUT revenues are projected to grow using population factors and are adjusted downward to account for market saturation in the wireless telecom sector due to the shift in usage of land line telephones to cellular telephones and to internet and other private-network communications. SDG&E is the predominant energy provider with dozens of telecommunications providers. UUT is received on a monthly basis from the various providers. Total UUT revenues received in fiscal year 2005-06 were $6.4 million, of which $2.2 million was from energy and $4.2 million was from telecommunications. The total was 13-8 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 7 $872,000 less than projected in the fiscal year 2005-06 third quarter fiscal status report. The shortfall in UUT was due to one-time credits for billing errors by SDG&E of approximately $84,000 and the relatively mild winter and summers which resulted in lower energy usage. Some large telecommunications providers and taxpayers have taken the position that the UUT does not apply to long distance, VolP (voice over internet), and cellular phone charges. Although pending litigation and potential legislation could adversely affect the telecommunications revenues, they are unlikely to do so during the next twelve months. We are therefore projecting revenues to come in I __Energy __Telecom __Totel relatively flat at $6.6 million resulting in an overall budgetary shortfall of $1.4 million. Utility Users Tax " $7.0 c ~ $6.0 i $5.0 $40 $30 $2.0 $1.0 $0.0 .- --- 2001 2002 2003 2004 2005 2006 2007 DEVELOPMENT RELATED REVENUES Current projections of development related revenues citywide indicate unanticipated revenue shortfalls of approximately $2.3 million in the development services departments, including the Planning & Building, and Engineering Departments, and the Construction Inspection section of Public Works Operations. These shortfalls are projected in both the fee based and deposit based revenue budgets, at $360,000 and $2.0 million respectively. These revenue shortfalls are discussed in detail in the following sections. Projected expenditure savings to mitigate this impact totaling $1.9 million have been identified in the Planning & Building and Engineering Departments and are also discussed below DEVELOPMENT SERVICES GENERAL FUND IMPACT SUMMARY Budgeted Revenues $ 9,790,564 $ 6,922,290 $ 16,712,854 Projected Revenues $ 8,329,712 $ 6,011,267 $ 14,340,979 Revenue Shortfall $ (1,460,852) $ (911,023) $ (2,371,875) Expenditure Savings $ 588,641 $ 1,301,802 $ 1,890,443 General Fund Impact $ (872,211 ) $ 390,779 $ (481,432) 13-9 FINANCIAL STATUS REPORT Semnd Quarter Fiscal Year 2006-07 Page 8 DEVELOPMENT PROCESSING FEES (BUDGET $6. 7 MILLION, PROJECTED $6.3 MILLION) Development related revenues consist of two categories: development processing fee revenues and deposit based revenues. In all, a $2.3 million shortfall is projected in development related revenues. Of that amount, $360,000 is attributable to development processing fee revenues and is discussed in this section. The remaining $2.0 million shortfall is attributable to deposit based revenues, and is discussed in the following section of this report. Development processing fee revenues, which include building permits, planning fees, other building department fees, and engineering fees, reflect a significant decrease year-to-date. One of the major sources of development revenues are building permits, which are down 17% compared to last fiscal year. The decrease in building permit revenue is derived from the combination of a decrease in the valuation of new construction and a decrease in the number of residential building permits issued. Residential Building Permits Units Issued by Fiscal Year 4,000 3.500 3.000 2.500 2.000 1,500 1,000 500 o 1998 I 1999 2000 2001 2002 2003 2004 2005 2006 2007 I E1Single Family . Multi-Family New residential building permits pulled year to date (as of January 31) totaled 565. This represents a 21 % decrease from the 716 residential units pulled as of January 31, 2005. This same measure was as high as 1,403 units in January 2005. In total, 2,216 units were permitted in fiscal year 2004-05 and 1,406 residential units were permitted in fiscal year 2005-06. The highest fiscal year residential construction activity occurred in fiscal year 2003-04, with the permitting of 3,694 units. These historic trends are illustrated in the 'Residential Building Permits' chart above. Current projections for fiscal year 2006-07 reflect the permitting of 1,200 residential units, a reduction of 68% since fiscal year 2003-04 and the lowest level since 1998. The decline in building permits issued will translate into a significant shortfall in development related fee revenues of approximately $360,000 in the current fiscal year. An additional shortfall of $2.0 million in deposit-based revenues is projected as well, bringing the total development revenue shortfall to $2.3 million. This deposit based revenue shortfall is discussed in the next section of this report. Incorporating the fee study and development phasing information, development related revenues for the current fiscal year are projected to total $6.3 million. This projection assumes the issuance of approximately 1,200 new residential construction permits this 13-10 FINANCIAL STATUS REPORT Second Quarter RscaI Year 2006-07 Page 9 fiscal year. This projection represents a revenue shortfall of $360,000 (or 5%), as compared with the approved revenue budget of $6.7 million. STAFF TIME REIMBURSEMENT REVENUES Of the projected $2.3 million revenue shortfall in the development services departments, $360,000 is attributable to the development related fee revenues detailed above. The remaining $2.0 million revenue shortfall projected is associated with staff time reimbursement revenues. These reimbursement revenues are primarily generated by deposit-based accounts. The deposit accounts are funded by developers and reimburse the City for costs associated with development project processing. These reimbursements are based upon actual staff hours expended on projects, which are then billed to the developers' deposit accounts at full cost recovery. The remaining staff time reimbursement revenues are generated by work in redevelopment areas; special tax districts; Development Impact Fee (DIF) program administration; and Capital Improvement Program (CIP) project design, administration, and construction. As described in the previous 'Development Processing Fee' section, the City is experiencing a significant decline in development activity. This decline in development activity directly impacts staff workload, which in turn directly impacts deposit-based revenues. In fiscal year 2005-06, a total of $10.2 million in deposit-based revenues were included in the approved budget. Of this amount, the City's General Fund realized only $8.0 million, or 78%. In response to this revenue shortfall in fiscal year 2005-06, the revenue budget for fiscal year 2006-07 was reduced by 15%, from $10.2 million to $8.7 million. As of the end of the second quarter of fiscal year 2006-07, deposit-based reimbursement revenues are down 6% compared with the same time last year, and are projected to generate a revenue shortfall in the current fiscal year of $1.7 million. The remaining reimbursement based revenue shortfall of $300,000 is associated with the other reimbursement revenue areas described above. DEVELOPMENT SERVICES BUDGETARY ADJUSTMENTS In response to projected shortfalls of $2.3 million in the Planning & Building and Engineering Departments, expenditure budget adjustments have been identified to generate budgetary savings, thereby mitigating impacts to the General Fund. In the Planning & Building Department, projected expenditure savings of $588,641 have been identified for the current fiscal year. These savings reduce their projected General Fund impact as estimated in the first quarter report from $1.25 million to $872,211. In the Engineering Department, projected expenditure savings of $1.3 million have been identified for the current fiscal year. These savings completely offset the department's contingency amount ($896,489) and further reduces the department's General Fund impact by $390,779. 13-11 FINANCIAL STATUS REPORT Second Quarter Fiscal Year 2006-07 Page 1 0 The final group impacted by the slowdown in development activity is the Construction Inspection section of Public Works. The impacts of a development slowdown are delayed for this group, as compared with the Planning & Building and Engineering Departments. This delay is a result of this group's role in the development process, which is primarily limited to project construction. For the current fiscal year, a minor revenue shortfall is projected, which will be completely offset by personnel vacancies. BUDGET ADJUSTMENTS Per Council direction, a list of budget adjustments between summary accounts approved by the City Manager during the quarter are to be provided. There were no budgetary transfer requests during the second quarter of fiscal year 2006-07. ATTACHMENTS Schedule A - Expenditure Status by Department Schedule B - Revenue Status by Department Schedule C - Revenue Status at Fund Level Schedule D - Mid-Year Appropriations 13-12 Financial Status Report Schedule A GENERAL FUND Expenditure Status by Department as of December 31, 2006 "Amended Available Projected Projected Department Budget Balance Expenditures Exp. Savings Legislative and Administrative City Council 1,638,747 847,485 1,575,147 63,600 Boards and Commissions 14,252 2,957 14,252 0 City Clerk 1,155,549 543,990 1,147,949 7,600 City Attorney 2,723,608 1,245,131 2,713,608 10,000 Administration 3,986,459 2,203,044 3,709,836 276,623 Information Technology Services 4,461,887 2,020,006 4,381,521 80,366 Human Resources 5,382,264 2,267,330 5,275,503 106,761 Finance 3,205,939 1,677,964 3,145,939 60,000 Total Legislative and Administrative $22,568,705 $10,807,907 $21,963,755 $604,950 Non-Departmental $3,605,844 ($180,656) $2,961,396 $644,448 Development and Maintenance Services General Services 11,012,673 5,644,741 10,763,865 248,808 Community Development 3,954,618 1,854,305 3,774,838 179,780 Planning and Building Services 10,616,759 5,077,593 10,028,118 588,641 Engineering 7,908,040 4,692,726 6,606,238 1,301,802 Public Works 21,372,349 10,707,860 21,124,016 248,333 Total Development and Maintenance Services $54,864,439 $27,977,224 $52,297,075 $2,567,364 Public Safety Police 50,898,826 27,212,201 60,826,604 72,222 Fire 22,659,407 11,309,237 23,440,678 (781,271) Total Public Safety $73,558,233 $38,521,438 $74,267,282 ($709,049) Culture and Leisure Recreation 7,008,706 3,887,084 6,341,683 667,023 Library 10,334,689 5,580,887 9,961,528 373,161 Nature Center 1,194,857 584,391 1,139,605 55,252 Total Culture and Leisure $18,538,252 $10,052,362 $17 ,442,816 $1,095,436 Total General Fund $173,135,473 $87,178,275 $168,932,324 $4,203,149 "Includes $1.8 million in budget carrryovers for encumbrances and CIP projects. 13-13 Financial Status Report Schedule B GENERAL FUND Revenues Status By Department as of December 31,2006 Amended Actual Projected Var. Proj. Percent Department Budget To Date Revenue To Budget Variance Legislative and Administrative City Council 0 0 0 0 0.0% Boards and Commissions 0 0 0 0 0.0% City Cierk 88,499 3,220 88,499 0 0.0% City Attorney 860,050 212,460 860,050 0 0.0% Administration 442,292 181,138 442,292 0 0.0% Information Technology Services 797,682 76,942 797,682 0 0.0% Human Resources 454,794 124,087 454,794 0 0.0% Finance 1,299,705 459,156 1,299,705 0 0.0% Total Legislative and Administrative $3,943,022 $1,057,003 $3,943,022 $0 0.0% Non-Departmental $109,730,236 $27,992,217 $108,078,628 ($1,651,608) -1.5% Development and Maintenance Services General Services 5,725,631 2,417,537 5,547,838 (177,793) -3.1% Community Development 3,432,743 1,434,024 3,431,429 (1,314) 0.0% Planning and Building Services 9,790,564 3,242,075 8,329,712 (1,460,852) -14.9% Engineering 6,922,290 2,511,372 6,011,267 (911,023) -13.2% Public Works 15,627,901 7,183,064 15,544,422 . (83,479) -0.5% Total Development and Maintenance Services $41,499,129 $16,788,092 $38,864,668 ($2,634,461 ) -6.3% Public Safety Police 9,231,284 2,119,437 9,440,062 208,778 2.3% Fire 990,018 528,539 1,172,782 182,764 18.5% Total Public Safety $10,221,302 $2,647,976 $10,612,844 $391,542 3.8% Culture and Leisure Recreation 3,023,890 959,526 2,447,960 (575,930) -19.0% Library 2,442,856 278,207 2,377,394 (65,462) -2.7% Nature Center 276,892 151,141 283,172 6,280 2.3% Total Culture and Leisure $5,743,638 $1,388,874 5,108,526 ($635,112) -11.1% Total General Fund $171,137,327 $49,874,162 $166,607,688 1$4,529,6391 -2.7% 13-14 Financial Status Report Schedule C General Fund Revenues Summary by Revenue Category Fiscal Year 2006-2007 as of December 31,2006 Amended Actual Projected Var. Proj. Percent Budget To Date Revenue To Budget Variance Property Taxes $26,999,041 $11,247,951 $27,649,041 $650,000 2.4% Other Local Taxes Sales 30,997,040 2,870,914 30,997,040 0 0.0% Franchise 11,368,337 2,750,580 10,528,835 (839,502) -7.4% Transient Occupancy 2,581,975 1,122,060 2,581,975 0 0.0% Utility Users 8,030,681 2,788,918 6,617,984 (1,412,697) -17.6% Business License 1,175,429 530,747 1,175,429 0 0.0% Other 2,711,465 568,139 2,098,056 (613,409) -22.6% Total Other Local Taxes $56,864,927 $10,631,358 $53,999,319 ($2,865,608) -5.0% Licenses & Permits Building, Plumbing, Electrical 3,678,859 1,120,102 3,380,735 (298,124) -8.1% Other 602,876 255,971 598,732 (4,144) -0.7% Total Licenses & Permits $4,281,735 $1,376,073 $3,979,467 ($302,268) -7.1% Fines, Forfeitures & Penalties $1,462,125 $662,658 $1,534,819 $72,694 5.0% Revenue from Use of Money & Property $2,430,673 $754,141 $2,211,603 ($219,070) -9.0% Revenue from Other Agencies State Motor Vehicle License Fees 17,864,139 570,379 17,864,139 0 0.0% Police Grants 3,614,201 594,932 3,619,857 5,656 0.2% Other 3,731,205 544,937 3,664,942 (66,263) -1.8% Total Revenue from Other Agencies $25,209,545 $1,710,248 $25,148,938 ($60,607) -0.2% Charges for Current Services Development-related Services 11,446,550 4,502,903 9,408,759 (2,037,791) -17.8% Other Charges 6,168,396 1,765,705 6,152,395 (16,001) -0.3% Total Charges for Current Services $17,614,946 $6,268,608 $15,561.154 ($2,053,792) -11.7% Other Revenues Reimbursements from Other Funds 15,542,100 4,992,962 15,077,755 (464,345) -3.0% Other 1,881,486 1,172,419 2,594,843 713,357 37.9% Total Other Revenues $17,423,586 $6,165,381 $17,672,598 $249,012 1.4% Transfers-In $18,850,749 $11,057,744 $18,850,749 $0 0.0% TOTAL REVENUES & TRANSFERS-IN $171,137,327 $49,874,162 $166,607,688 ($4,529,639) -2.7% 13-15 Schedule 0 Fiscal Year 2006-07 as of December 31,2006 General Fund Budget Amendments Per Council Resolutions Est Add'l Add'l General Fund Description Revenues Approp Net Impact One-time grant from the Dept. of Alcoholic Beverage Control (ABC Grant) $88,048 $88,048 $0 Park ranger station and facilities for the Otay Valley Regional Park $0 $100,000 ($100,000) Costs for inclusion on the ballot of two proposed charter amendments $0 $50,000 ($50,000) Reimbursement for special event selVices for the seventh Annual Otay Ranch Day $1,381 $1,381 $0 Contribution towards the cost of defibrillators for Chula Vista schools $0 $27,000 ($27,000) Grand funding (UASI 03 Part II) for first responder decontamination Equip. & Truck $46,303 $46,303 $0 Community donations in support of Fire Dept. ceremony and recognition event $6,540 $6,540 $0 Office of Traffic Safety Grant to fund staff, eq.uip. & materials for STEP prog. $199,303 $199,303 $0 TOlal"f 1st Quarter Budget'Aiiiendl1ienls '". . . $341,575 $518,575 ($171,000) State contract with Police Dept. for In Custody Drug Treatment Program (ICDTP) $400,046 $400,046 $0 Reimbursement from Allied Waste for a public education booklet $30,304 $30,304 $0 Dept. of Education Even Start Family Literacy Program grant $5,833 $5,833 $0 Gates Foundation Public Access Computer Hardware Upgrade grant (PAC HUG) $39,000 $39,000 $0 One-time augmentation to the Public Library Fund (PLF) grant $57,807 $57,807 $0 Addition of two California Border Alliance Group (CBAG) funded positions $164,379 $159,591 $4,788 Agreement with Southwestern Community College for in-saNies training program $15,000 $15,000 $0 Donations to the Animal Care Facility $4,767 $4,767 $0 Grant from the San Diego County Law Enforcement Foundation (SDCLEF) $3,900 $3,900 $0 T"lal of 2nd QlIartei Budget Aiiien'dments $721 ;035 . $715,248 $4,788 Year to Datel $1,062,611 $1,234,823 ($172,212)1 13-16 Attachment 2 To: Honorable Mayor and City Council Via: ;( Jim Thomson, Interim City Manager Q From: Doug Perry, Fire Chief~ Edward Van Eenoo, Director Budget and Analysis W Fire Department Overtime Subject: Date: March 1, 2007 On December 19, 2006 the City Council was presented the 1st Quarter Fiscal Status Report for the City of Chula Vista, agenda item 14. As part of the presentation of city departmental fiscal operations for FY 2006-07, the Fire Department's projected deficit for FY 2006-07 was discussed. During the course of this discussion, the Council requested a more in depth analysis of the Fire Department's overtime expenditures and that a report be brought back for review. In an effort to provide the Council with the information requested, the Fire Department and Office of Budget and Analysis jointly conducted a review of the Fire Department's overtime expenditures for the past seven years. The period reviewed included FY 1999-00 through the current budget year FY 2006-07. The result of this review is as follows: Distribution of Overtime Hours An analysis of the Fire Department hours worked for the previous two years ending in the second pay period in November indicated that overtime hours that were worked in the department were distributed as follows: . 88.6% of the hours were worked by the Fire Suppression division. . 6.7% of the hours were worked by the Fire Communications division. . 4.7% of the hours were worked by the other Fire Department divisions including Fire Prevention, Training and Administration. This distribution of the overtime hours worked is depicted in the following graph: 13-17 CHULA VISTA FIRE DEPARTMENT DISTRIBUTION OF OVERTIME HOURS WORKED ortt;R 4.7% SlJ'PRESSlCN 88.6% CCMlt.NCAllCNS 67% As the graph indicates, the Fire Suppression Division works the majority (88.6%) of the overtime in the department due to the need to staff 8 engine companies, 2 truck companies and a Heavy Rescue Vehicle on a 24-hour basis. The Fire Communications Center (6.7%) is also a 24-hour facility that warrants the use of overtime in order to sustain its operations. Additional analysis of the overtime hours worked in just the Fire Suppression Division revealed that the majority of the overtime worked (80%) was required due to coverage for leave hours taken by fire suppression staff. Included in the coverage hours were the following categories of leave: sick leave, injury leave, vacation, holidays, comp time off, management leave, and leave without pay. Under the Fire Department's constant minimum staffing model, overtime is used to backfill for vacancies created when leave is taken. Under constant minimum staffing, the Fire Department does not have extra positions allocated to fill in for vacancies and must therefore rely on overtime to sustain the required staffing levels in order to deploy its engine and truck companies. The deployment of these engines and trucks requires that a specific configuration of 38 fire suppression personnel per shift be available for the Fire Department to staff its vehicles in order to answer calls for service. The next highest category of overtime hours used was for training (12.0%). These hours account for the training that was done as part of the Homeland Security Grants. The City has been receiving Homeland Security funds for the past 4 fiscal years. The overtime expenses incurred as part of this category has resulted from the completion of specialized Homeland Security training by the Fire and Police departments. The amount of overtime paid for these training hours has been reimbursed from grant funds thus resulting in no cost to the City. The City has additionally benefited from these grant funds as staff has been able to obtain specialized training that it would have not otherwise received. 2 13-18 The next category of hours for which the use of overtime is used is to address unforeseen additional workload situations (7%) that may result from staff having to work extended shifts due to calls for service that may extend beyond a regular shift. Extra workload may also result from strike teams that the department may send out of the City to assist in major fire emergencies as part of mutual aid agreements. The department also has staff that is trained for urban search and rescue situations that may be called into service in the case of major events such as 9/11 and Hurricane Katrina. Similar to Homeland Security training, state and federal reimbursement revenues generally offset this type of overtime. The department also relies on the use of overtime in order to backfill for vacant positions until such positions are filled through the hiring process. The overtime expense incurred as a result of staffing for vacant positions is largely offset by salary savings. Special Project work accounts for 1.0% of the overtime hours worked in the Fire Suppression Division. These hours are incurred as a result of projects that cannot be undertaken during the course of regular shift work. These projects may include mapping projects, data systems updates and special studies. These hours also include the time required to assemble the staff that work on different shifts to serve on various committees. These committees are responsible for providing input for the delivery of services and the assessment of department equipment in order to sustain operations. The distribution of these hours is depicted in the following graph: CHULA VISTA FIRE DEPARTMENT SUPPRESSION DIVISION TYPES OF OVERTIME WORKED ~NN3 12.17% LEAI,ECt:MRPG: lIla% EXIRA~ UPt.. s::BlbLPInEClS 1.0'1. 3 13-19 Constant Minimum Staffing The Fire Department employs a constant minimum staffing model to deliver calls for service to the community. Under this model overtime is used to backfill for vacancies created when leave is taken or a situation arises that precludes the department from assembling the required staffing level necessary for service delivery. The Fire Department requires a staffing level of 38 positions to be available each 24-hour shift in order to staff its engine and truck companies at the nine stations operated by the department. This staffing level is mandatory and is comprised of the following configuration of positions: . 2 Battalion Chiefs . 11 Fire Captains . 11 Fire Engineers . 14 Firefighters It is important to note that when examined as a whole, the constant minimum staffing model actually generates a cost savings in the form of cost avoidance to the City. In order to fully understand the benefit of constant minimum staffing it is necessary to evaluate the alternative expenditure outlay that would be necessary in its absence. In other words, the additional cost of hiring extra full-time benefited positions to achieve the required staffing levels needs to be compared to the level of overtime expenditures that are being incurred. When such a comparison is made, it is evident that it is more cost effective to pay overtime, than to hire extra personnel. This is primarily due to hourly over-time rates being less than the hourly rate of a full-time benefited position. This comparison is shown on the following table: Fire Suppression Hourly Rate Comparison Overtime vs. Fully-Benefited Rates Fire average average average Suppression salaries & benefits salary hourly overtime Position hourlv rate rate hourlv rate FIREFIGHTER (112 HR) $ 35.04 $ 21.24 $ 31.86 FIRE ENGINEER (112 HR) $ 42.93 $ 26.20 $ 39.30 FIRE CAPTAIN 1112 HR) $ 49.30 $ 30.63 $ 45.94 From an operational viewpoint, the constant minimum-staffing model funded by overtime is preferred for the following reasons: 4 13-20 . It allows the department to call upon the exact personnel resources to fill vacancies as needed. This is more efficient than having extra positions that would possibly be idle. . Adding extra positions would not guarantee the elimination of overtime entirely as overtime would still be paid in the event of special circumstances such as deployments due to mutual aid and natural disasters like Hurricane Katrina. . The department would have to pay overtime in order to cover for periods of time when vacant positions are in the process of being filled. . The hiring of additional positions also involves incurring additional training and equipment costs. Fire Suppression Overtime Analysis As discussed above, the vast majority of Fire overtime usage is in the Suppression Division, primarily due to constant minimum staffing and the reliance on overtime to cover for vacant positions and employee leave. As shown in the following graph, actual non-reimbursed suppression overtime expenditures increased by $1.27 million, or 193%, between FY 1999-00 and FY 2005-06. CHULA VISTA FIRE DEPARTMENT SUPPRESSION NON-REIMBURSED ACTUAL OVERTIME Thousands $2,000 $600 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $400 $200 $0 FY FY FY FY FY FY FY 2000 2001 2002 2003 2004 2005 2006 5 13-21 This increase in Suppression overtime expenditures since FY 1999-00 can be directly attributed to the following three factors: 1) A 45% increase in suppression staffing levels (i.e. fire fighters, engineers, captains, and battalion chiefs). CHULA VISTA FIRE DEPARTMENT SUPPRESSION STAFFING 120 80 100 60 40 20 o ",<> '),<S ~ "," '),<S ,<-4. ",<>'), ~'V ","> ~ ~ ~ '),<S ~ "," '),<S ~ "," ~ ~ 2) A 39% increase in the average salary of suppression personnel. CHULA VISTA FIRE DEPARTMENT SUPPRESSION SALARY INCREASES $80,000 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 6 13-22 3) A 44.5% increase in the average overtime hours worked per suppression employee - a direct result of the change to constant minimum staffing in FY 2000-01. With the exception of the switch to constant minimum staffing in FY 2000-01 and the spike in FY 2002-03 that resulted from the historic fire storms that year, average suppression overtime hours worked annually per budgeted employee have remained relatively constant. CHULA VISTA FIRE DEPARTMENT SUPPRESSION AVERAGE ANNUAL OT HOURS PER EMPLOYEE 700 100 600 500 400 300 200 ,,'" ~ ..'" "... ",'" ~ ,,'" ~ ~ ,," ~ ~ ,,'" ~ ~ "Co ~ ~ ,,'" ~ ~ Combined, the above factors project a 191% increase in suppression overtime expenditures from FY 1999-00 to FY 2005-06. This result is consistent with the aforementioned actual increase of 193%. Budget to Actual Comparison A comparison of budget to actual overtime expenditures for the Fire Department indicates that actual overtime expenditures grew by $1.46 million from FY 99-00 to FY 05-06, while budgeted overtime increased by $1.2 million. The analysis also revealed that the Fire Department has experienced deficits in overtime ranging from $127k in FY 99-00 to a high of $512k in FY 04-05, averaging $369k per year. 7 13-23 CHULA VISTA FIRE DEPARTMENT OVERTIME EXPENDITURES BY FISCAL YEAR BUDGET VS ACTUAL (Thousands) $500 I_BUDGET I!IlACTUAL I $2,500 $2,000 $1,500 $1,000 $0 ,,'" 0,0, ~ ,," ~<P ,," "," ~ (';) a:'" ~'" ~~ ~'" ,y''' ~ "'.?' ~ As mentioned previously, some overtime usage is created by the need to backfill vacant positions. When this occurs, the salary savings resulting from the vacant position offset the increased overtime cost. Factoring in salary savings realized from vacant positions reduces the overtime deficits to between $113k in FY 1999-00 to $389k in FY 2001-02, averaging $239k per year. The Fire Department's overall overtime needs have been impacted by the following service enhancements: . FY 2002-03 the opening of Fire Station 7 that added an engine and a ladder truck company for a total of 21 new staff. . FY 2003-04 the opening of the Fire Communications Center. . FY 2004-05 the opening of interim Station 8 added 9 staff. . FY 2005-06 the staffing of the Heavy Rescue Vehicle (USAR 53) with 9 additional staff. . FY 2005-06 the addition of the 2nd Battalion Chief equaling three Battalion Chiefs. Despite the staffing increases due to the implemented service enhancements, the overtime budget remained relatively flat from FY 2000-01 through FY 2003- 04. The overtime budget has increased significantly since FY 2004-05 (from $959k to $1.6 million) but this increase has not been sufficient to make up for past deficits. The year-to-year deficit situation has been further compounded by 8 13-24 the increases in wages due to negotiated labor agreements. The impact of these deficits has resulted in fiscal year-end transfers from available balances in order to fund the Fire Department's fiscal year-end operations. Overtime as a Percentage Total Personnel Services Overtime expenditures have grown as a result of staffing increases due to service enhancements implemented by the Fire Department to address the impacts of growth. However, when compared as a percentage of the total personnel services budget, actual overtime expenditures as a percentage of the total actual personnel expenditures have been trending downward since peaking in FY 2002-03 at 15.6% (depicted in the following graph). As also depicted in the graph, budgeted overtime as a percentage of the total personnel budget peaked in FY 2001-02 at 10.7% and has also been trending downward since. This indicates that overtime expenditures do not exhibit an increasing trend when they are examined as percentage of both the total budgeted and the actual personnel expenditures respectively. Although total overtime expenditures have increased over time, these increases can be attributed to the service enhancements that have increased the scale of Fire Department operations. These increases have been necessary to keep pace with service demands. CHULA VISTA FIRE DEPARTMENT OVERTIME EXPENDITURES AS % OF TOTAL PERSONNEL COSTS BUDGET VS ACTUAL 25.0% I_BUDGET _ACTUAL I 20.0% 15.6% 5.0% 15.0% 10.0% 0.0% ~ pf<:J i" ))" ~rS' (\. >.:"" ,J,,"" << ))"0 ",,'1.' ~ ('1<1' ,J,,"" << ))':l ~~ ,,'0 ",,<if ~ 9 13-25 Overtime Expenditures per Budgeted Full-Time Equivalent As the following graph indicates, actual overtime expenditures per budgeted full- time equivalent have not increased despite the increases in staffing that have occurred. This is partially attributed to some of the staffing increases taking place in divisions where the compensated overtime earned is not as high or is not eligible to be earned. CHULA VISTA FIRE DEPARTMENT OVERTIME EXPENDITURES PER FULL.TIME EQUIVALENT $20,000 $16,875 $5,000 $15,000 $10,000 $0 pf<S> ~q; .;>' ~ 5>'1- ,,' ~ 5>" "" ~ ".I' ~ b ~p ~ ",?' ~ ci ~ ~ Projected* Fiscal Year 2006-07 and 2007-08 Fire Overtime Projections A detailed analysis was conducted to project Fire overtime needs for Fiscal Years 2006-07 and 2007-08. For this analysis, overtime was grouped into three categories: . Regular Overtime - Approximately 75% of overall overtime usage. Regular overtime is primarily used to backfill for vacant positions and employee leave. As these uses can vary significantly from year to year, regular overtime is the most difficult of the three categories of overtime to project and is therefore the primary focus of the remainder of this analysis. . Reimbursed Overtime - Used in instances such as strike teams that the department may send out of the City to assist in major fire emergencies as part of mutual aid agreements. Funds for reimbursed revenues are 10 13-26 generally appropriated mid-year as revenues are received as opposed to during the annual budget process making budget projections unnecessary. . Other Overtime - Primarily related to hard holidays and FLSA premiums. Projecting funding for this type of overtime is fairly straightforward as it is based upon known MOU agreements. These amounts are calculated within the City's position budgeting system and have historically been budgeted at or slightly above actual levels. Regular Overtime Projection Since suppression accounts for approximately 90% of the Fire Department's total regular overtime dollars, the analysis included a breakdown of average overtime hours worked over the past three years and current overtime rates for all 106 authorized suppression positions by job classification. These numbers were used to calculate the projected regular overtime requirements for the Suppression Division for FY 2006-07 as shown in the following table. CHULA VISTA FIRE DEPARTMENT SUPRESSION ESTIMATED REGULAR OVERTIME FY 2006-07 Avg OT #of hours FY 06 - 07 Emplovees worked OT Rate Est OT Batt Chief 6 376 $ 58.49 $ 132,044 Fire Captain 31 587 44.25 $ 805,217 Fire Engineer 33 533 37.73 $ 663,592 Fire Fighter 36 350 32.06 $ 403,988 Total Estimated Suppression Regular OT $ 2,004,841 It should be noted that current departmental overtime is tracking about $200k higher than these historical trends due to a higher than usual number of vacant positions this year. The vacancies that are creating the higher overtime usage will result in additional salary savings that will more than offset the additional overtime expense. The following charts show the entire Fire Department's regular overtime budget by division along with the projected overtime and any surplus or deficit. For suppression, the number used was based on the current 11 13-27 year trend taking into account the higher than usual vacancy rate. For all other divisions, projections were based upon historical usage. CHULA VISTA FIRE DEPARTMENT REGULAR OVERTIME ESTIMATES FOR FY 2006-07 Current FY Estimated 06 - 07 FY 06 - 07 Surplus I Division Budget Expenditure (Deficit) Training $ 54,671 $ 53,600 $ 1,071 Suppression $ 1,681,594 $ 2,204,841 $ (523,247) Communications $ 88,103 $ 132,500 $ (44,397) Prevention $ 18,513 $ 21,900 $ (3,387) Admin $ 7,884 $ 7,718 $ 166 Regular OT $ 1,850,765 $ 2,420,559 $ (569,794) Reimbursed and Other Overtime Projection As mentioned, reimbursed overtime is appropriated midyear as the funds are received. Typically, the budget will match the actual expenditures; therefore, the FY 2006-07 projections are based on current year to date expenditures. Since reimbursed revenue is appropriated only when the revenue is received, the estimate for FY 2007-08 is $0. Other overtime for FY 2006-07 was budgeted using known MOU amounts. Current projections show that the actual expenditures will be within the budgeted amounts. Summary of FY 06 - 07 and FY 07 - 08 Projections The chart below summarizes all of the Fire Department's budgeted and projected overtime by category for FY 2006-07, along with an estimate for FY 2007-08. Although the FY 06-07 overtime deficit is projected to be approximately $570k, there will be some salary and benefit savings to partially offset this deficit. 12 13-28 CHULA VISTA FIRE DEPARTMENT FY 06-07 and FY 07-08 OVERTIME ESTIMATES Current Estimated Projected FY 06 - 07 FY 06 - 07 Surplus I FY 07 - 08 BudQet Expenditure (Deficit) Expenditure Regular $ 1,850,765 $ 2,420,559 $ (569,794) $ 2,517,416 Reimbursed' $ 159,216 $ 159,216 $ $ Other $ 522,716 $ 522,716 $ $ 533,170 $ 2,532,697 $ 3,102,491 $ (569,794) $ 3,050,586 * Current budget is $15k. A budget amendment will be brought forward to appropriate revenue already received. FY 08 estimate is $0. Budget will be appropriated once any revenue is received. Summary The Fire Department has increased its scale of operations significantly over the past seven years in order to continue delivering services to the community and meet the demands of growth. The increased scale of operations has also resulted in increased base budget costs necessary to sustain these new service levels. However, the Fire Department has not received the necessary level of funding for personnel services including overtime expenditures to sustain these increased service levels. While the Fire regular overtime budget has increased by 233% from FY 1999-00 to FY 2005-06, there was a structural imbalance in FY 1999-00 of approximately $127k that had compounded to $384k in FY 2005-06. In order to correct this imbalance, staff will be recommending an additional appropriation that addresses this need to properly fund personnel expenditures for the remainder of FY 2006-07. It is important to note that constant minimum staffing necessitates that overtime be used to backfill for employee leave time (vacation, sick, etc) as well as vacancies within the department. Although vacancies add to the total overtime cost, salary and benefit savings offset this additional cost, therefore, these salary savings must be considered when analyzing total personnel needs. It is anticipated that the additional appropriation request for overtime net of salary and benefit savings for FY 06-07 will be approximately $450,000. 13 13-29 RESOLUTION NO. 2007- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROPRIATING $450,000 FROM THE AVAILABLE BALANCE OF THE GENERAL FUND TO THE FIRE DEPARTMENT PERSONNEL SERVICES BUDGET FOR COSTS RELATED TO OVERTIME WHEREAS, the City General Fund ended the fiscal year 2006 with an available balance of$14.9 million or 8.8% of the operating budget; and WHEREAS, based on updated revenue projections and the implementation of the citywide contingency plan, the general fund reserves are projected at 8.5% or $14.4 million, a slight decrease of 0.3%, or $498,702, from the prior fiscal year; and WHEREAS, the reserves were predicted to drop in the first quarter financial status report primarily because of a shortfall in development revenues; and WHEREAS subsequent to that report a development fee study was completed and approved on January 23,2007; and WHEREAS, the new fee schedule becomes effective March 26, 2007; and WHEREAS, the development services departments have incorporated the new fee structure in to their projections; and WHEREAS, since the first quarter report, the projected impact to reserves of $602,749 has been reduced to $498,702; and WHEREAS, the slight reduction in reserves is due to a number of factors the most significant being the quantification of Fire Department overtime usage; and WHEREAS, the Fire Department and the Office of Budget & Analysis has conducted a review of Fire overtime usage; and WHEREAS, based on year to date overtime usage, the Fire Department is anticipating budgetary overages of approximately $450,000 related to overtime. 13-30 NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista appropriates $450,000 from the available balance of the General Fund to the Fire Department personnel services budget for costs related to overtime. Presented by Approved as to form by Maria Kachadoorian Director of Finance/Treasurer 13-31 ~V?- :::...- ~ ~55_= Mayor and City Council City Of Chula Vista 276 Fourth Avenue Chula Vista, Ca 91910 619.691.5044 - 619.476.5379 Fax MEMO OlY OF CHUlA VISTA February 21, 2007 TO: Lorraine Bennett, Deputy City clerk FROM: Jennifer Quijano, Constituent Services Manager RE: Aging Commission Mayor Cox would like to recommend Mary Helvie for appointment to the Aging Commission. Please place on the March 6, 2007 council agenda for ratification. Thank you. cc: Mayor Cox "'_ L CUffe'lI-I..., :s:erve- 0,.., ..l.. / 1'1/1$'" / L-/ui e.. ~es- u-r / .9/.,:1/ 107 - ;.:; y r;;;,;.vot 11s-1o ~/c/c~. ;;2 J B C). J 07- aIL L:2Uf:l- \5-A- \ ~V~ ~ '~~~~ Mayor and City Council City Of Chula Vista 276 Fourth Avenue Chula Vista, Ca 91910 619.691.5044 - 619.476.5379 Fax MEMO CllY OF CHULA VISTA February 21, 2007 TO: Lorraine Bennett, Deputy City Clerk FROM: Jennifer Quijano, Constituent Services Manager RE: Growth Management Oversight Commission Mayor Cox would like to recommend Russ Hall for appointment to the Growth Management Oversight Commission and will be the Central City Representative. Please place on the March 6, 2007 council agenda for ratification. Thank you. cc: Mayor Cox 8>e- ,... L; /07 _ Rl/.s~ /-IIt-.?/ ,;&ev/ot./.s-ly ~ ~ 6>/1 -~ / fj,- _ ~rHJ'A.-I'r.sto'" ~ tJt.e ~'~..s r/a'/JI>< '::J L.(;:) "I/;-~-98 -/Ita.. tt - :30-0/ 7-/"-a>/ " 8-"1'_05 ~",,.,;c. ~(;>;4""e"AI- ~/'V.-I'S~".()/'") C ~"'''''J__hoJ1 t,A)QS:"\ S'*":I'~.{-e..t e>n /-.j7-e>..f! .61 ~""'/ ,4o/Ii:J/7 } /,1-.;1..:>- 77 /;(,u 6'-3e>-00 7- / /- 00 " /, 31o-?:>4 ;)/,)6/07 - I!J&:)) oJL czuJ-\- ~S-13-\ , ~I~ ~ '~~~~ ~- - Mayor and City Council City Of Chula Vista 276 Fourth Avenue Chula Vista, Ca 91910 619.691.5044 - 619.476.5379 Fax MEMO ellY OF CHUlA VISTA February 26, 2007 TO: FROM: Lorraine Bennett, Deputy City Clerk Jennifer Quijano, Constituent Services Manager RE: International Friendship Commission Mayor Cox would like to recommend Nancy Mulcahy for appointment to the International Friendship Commission. Please place on the March 6, 2007 council agenda for ratification. Thank you. CC: Mayor Cox .9-P"/07 _ pJr, ;nt-.dealt'! d~ I'ltf:>f .:::~~.J..'r e>" CUI 7 o'<lcf' His: ler ,b/ c/c.'.r , ~JIID7 - o~ ~Id- .:st:: I"l'"'- \5-(- \