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HomeMy WebLinkAboutAgenda Packet 2001/12/04 CITY COUNCIL AGENDA December 4, 2001 4:00 p.m. Council Chambers Public Services Building 276 Fourth Avenue, Chula Vista CI'IY OF CHULA VISTA City Council City Manager Patty Davis David D. Rowlands, Jr. Stephen C. Padilla City Attorney Jerry R. Rindone John M. Kaheny Mary Salas City Clerk Shirley A. Horton, Mayor Susan Bigelow The City Council meets regularly on the first calendar Tuesday at 4:00 p.m. and on the second, third and fourth calendar Tuesdays at 6:00 p.m. Regular meetings may be viewed at 7:00 p.m. on Wednesdays on Cox Cable Channel 17 or Chula Vista Cable Channel 47 December 4, 2001 I declare under penalty of perjury that I am employed by the City of Chula Vista in the Office of the City Clerk and that I posted this document on the bulletin board according to Brown Act requirements. " AGENDA /&,£. ~~ Dated" í? Signed -. ~ I (4:0 . . L-/ CALL TO ORDER ROLL CALL: Councilmembers Davis, Padilla, Rindone, Salas, and Mayor Horton. PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE SPECIAL ORDERS OF THE DAY . INTRODUCTION BY CHRIS SALOMONE, DIRECTOR OF COMMUNITY DEVELOPMENT, OF THE EMPLOYEE OF THE MONTH, JUDI BELL, SENIOR SECRETARY . RECOGNITION OF CHULA VISTA FIREFIGHTER JEFF PETER, WHO PROVIDED ASSISTANCE IN NEW YORK CITY RECOGNITION OF RECENTLY PROMOTED CHULA VISTA FIREFIGHTERS: JEFF PETER, BATTALION CHIEF AND DAN GILES, CAPTAIN CONSENT CALENDAR (Items I through 16) . The Council will enact the staff recommendations regarding the following items listed under the Consent Calendar 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 after Action Items. Items pulled by the public will be the first items of business. I. APPROVAL OF MINUTES of Adjourned Regular Meetings of November 15 and November 19, 2001; and Regular Meeting of November 20,2001 Staff recommendation: Council approve the minutes. 2. WRITTEN COMMUNICATIONS A. REQUEST FROM COUNCILMEMBER DAVIS FOR AN EXCUSED ABSENCE AT THIS MEETING. Staff recommendation: Council approve the request. B. LETTER OF RESIGNATION FROM JOHN SOOV AJIAN FROM THE HOUSING ADVISORY COMMISSION Staff recommendation: The resignation be accepted with regret and the City Clerk be directed to post the vacancy in accordance with Maddy Act requirements. 3. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AMENDMENT TO THE OTAY RANCH SECTIONAL PLANNING AREA (SPA) ONE PLANNED COMMUNITY DISTRICT REGULATIONS, ALLOWING "FOR-PROFIT" DAY CARE FACILITIES IN COMMUNITY PURPOSE FACILITY ZONING DISTRICTS, AS AUTHORIZED IN THE PLANNED COMMUNITY ZONE (SECOND READING AND ADOPTION) The Otay Ranch Company has applied to amend the Otay Ranch Sectional Planning Area (SPA) One Plan to reallocate 97 unused dwelling units authorized by the Otay Ranch General Development Plan for the Village One core mixed-use project and modify the SPA One Planned Community District Regulations to allow "for-profit" day care centers. (Director of Planning and Building) Staffrecommendation: Council place the ordinance on second reading for adoption. 4. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REPEALING SECTION 2.52.165 OF THE CHULA VISTA MUNICIPAL CODE RELATING TO CAMPAIGN CONTRIBUTIONS (SECOND READING AND ADOPTION) At the October 23, 2001 Council meeting, the City Council referred several issues relating to the City's campaign ordinance to the City Attorney with direction to return at a later date. The City Attorney was requested to develop language to resolve certain difficulties with the provisions of Section 2.52.165 and to return with a recommendation conceming the formation of a committee to review the entire campaign ordinance. (City Attorney) Staff recommendation: Council place the ordinance on second reading for adoption. 5. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA RATIFYING CITY STAFF'S ACTION ON APPROVING CHANGE ORDERS ASSOCIATED WITH THE CONSTRUCTION OF THE PUBLIC WORKS OPERATIONS FACILITY AND CORPORATION YARD, LISTED ON ATTACHMENT A, AND AUTHORIZING STAFF TO PROCESS LIP TO AN ADDITIONAL $250,000 IN CHANGE ORDERS On September 26, 2000, Council amended Policy #574-01, authorizing the City Manager to approve change orders pertaining to the Corporation Yard project with a single change order value not exceeding $50,000 and a cumulative value of up to $250,000. The policy permits the City Manager to exceed the limits if delay of the approval would cause a delay in the "critical path" schedule of the project. Adoption of the resolution ratifies staff's recent actions in approving change orders valued at $368,953 and will also authorize staff to process up to an additional $250,000 in change orders in accordance with the policy. (Director of Public Works) Staff recommendation: Council adopt the resolution. Page 2 - Council Agenda 12/04/01 6. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING B1DS AND AWARDING CONTRACT FOR "SIDEWALK REPLACEMENT AT VARIOUS LOCATIONS IN THE CITY OF CHULA VISTA (PROJECT JY 065H) AND APPROPRIATING ADDITIONAL FUNDS FROM THE UNAPPROPRIATED BALANCE OF THE GAS TAX FUND (4/STHS VOTE REQUIRED) On October 3, 2001, the Director of Public Works received sealed bids for sidewalk replacement at various locations in the City (Project JY-065H). The low bid was submitted by J. M. Scibilia, Inc. of Escondido. The work consists of the removal and replacement of displaced curbs, gutters, sidewalks, and driveways. The work includes excavation and grading, PCC sidewalks, driveways, curbs and gutters, asphalt concrete pavement, removal and disposal of existing improvements, traffic control, protection and restoration of existing improvements, other miscellaneous work, and all labor, material, equipment, and transportation necessary for the project. (Director of Public Works) Staff recommendation: Council adopt the resolution. 7. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING REQUEST FROM THE CHULA VISTA RV RESORT & MARINA TO CONDUCT WINTERFEST 2001 AND AUTHORIZING TEMPORARY STREET CLOSURES AND WAIVING CITY FEES FOR POLICE SERVICES The Chula Vista RV Resort & Marina, in conjunction with South Bay Community Services, The Salvation Army, Chula Vista PAL, Head Start, Episcopal Community Services, Lutheran Social Services, Chula Vista Cares, Chula Vista Welfare Council, and Catholic Charities, is requesting permission to conduct an organized Winterfest 2001 on Saturday, December 8, 2001. (Chief of Police) Staffrecommendation: Council adopt the resolution. 8. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING RECLASSIFICATIONS, SALARY ADJUSTMENTS, AND/OR CHANGES IN BENEFIT GROUP FOR SEVEN CLASSIFIED POSITIONS, AND APPROPRIATING FUNDS THEREFOR (4/STHS VOTE REQUIRED) The requests for reclassification, salary adjustments, and/or changes in benefit group are a result of a change in the scope of duties and realm of responsibility assigned to these six positions. These classifications now have five incumbents and one vacancy. (Director of Human Resources) Staff recommendation: Council adopt the resolution. 9. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING THE CITY OF CHULA VISTA CAFETERIA BENEFITS PLAN FOR 2002 The Internal Revenue Code requires that employers offering cafeteria plans under Section 125 have a written plan document and that the employer adopt the plan document annually. The proposed resolution fulfills this requirement. (Director of Human Resources) Staff recommendation: Council adopt the resolution. Page 3 - Council Agenda 12/04/01 10. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING A RESTATED AND AMENDED 457 DEFERRED COMPENSATION PLAN The City has offered a deferred compensation plan to employees since 1975. Since the plan was adopted, it has been modified several times in order to conform to changing Internal Revenue Service regulations. This amendment is necessary to implement the considerable enhancements made available by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). (Assistant City Manager Powell) Staff recommendation: Council adopt the resolution. 11. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING A 401(a) DEFERRED COMPENSATION PLAN AND APPROVING A PLAN ADMINISTRATION AGREEMENT WITH NATIONAL DEFERRED COMPENSATION INC. In addition to the 457 deferred compensation plan currently offered, the Council recently approved the provision of a new deferred compensation plan for Executive and Senior Management employees to be effective in January 2002. Staffrecommends the adoption of the plan established pursuant to Internal Revenue Service Code Section 401(a) and that the new plan be administered through an administrative agreement with one of the City's existing plan administrators, National Deferred Compensation, Inc. Staff recommendation: Council adopt the resolution. 12. A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN APPLICATION FOR GRANT FUNDS TO THE STATE OF CALIFORNIA DEPARTMENT OF PARKS AND RECREATION FOR OTAY PARK B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING A GRANT IN THE AMOUNT OF $83,725 FROM THE STATE OF CALIFORNIA FOR OTAY PARK; AND AMENDING THE CIP NO. PR214 BUDGET TO INCLUDE THESE FUNDS; AND AUTHORIZING THE DIRECTOR OF PARKS & RECREATION, OR HIS DESIGNEE, TO SIGN THE APPROPRIATE DOCUMENTATION WITH THE STATE OF CALIFORNIA TO ACCEPT THE GRANT FUNDS (4/5THS VOTE REQUIRED) The City has received notice of the award of grant funds from the state in the amount of $83,725 for improvements to Otay Park. In order to receive the funds, the City must submit an application to the state Department of Parks and Recreation. The state allows the City to apply for and accept the grant simultaneously. Staff recommendation: Council adopt the resolutions. Page 4 - Counci! Agenda 12/04/01 13A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN APPLICATION FOR PER CAPITA GRANT FUNDS TO THE STATE OF CALIFORNIA DEPARTMENT OF PARKS AND RECREATION FOR THE SKATE PARK AT GREG ROGERS PARK ADJACENT TO THE BOYS AND GIRLS CLUB ON OLEANDER B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING A PER CAPITA GRANT IN THE AMOUNT OF $1,581,000 FROM THE STATE OF CALIFORNIA FOR THE SKATE PARK AT GREG ROGERS PARK ADJACENT TO THE BOYS AND GIRLS CLUB ON OLEANDER; AND ESTABLISHiNG A NEW CIP FOR THE SKATE PARK; AND APPROPRIATING THESE GRANT REVENUES IN THE NEW CIP; AND AUTHORIZING THE DIRECTOR OF PARKS & RECREATION, OR HIS DESIGNEE, TO SIGN THE APPROPRIATE DOCUMENTATION WITH THE STATE OF CALIFORNIA TO ACCEPT THE GRANT FUNDS (4/STHS VOTE REQUIRED) The City has received notice of the award of per capita grant funds from the state in the amount of $1,581,000. It is suggested that these funds be used to fund the construction of the skate park at Greg Rogers Park, adjacent to the Boys and Girls Club on Oleander. In order to receive the funds, the City must now submit an application to the state Department of Parks and Recreation. The state allows the City to apply for and accept the grant simultaneously. Staffrecommendation: Council adopt the resolutions. 14. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE CITY'S FORMAL BIDDING PROCESS AS IMPRACTICAL AND AWARDING THE CONTRACT FOR $102,760 TO PURKISS ROSE-RSI FOR ARCHITECTURAL DESIGN SERVICES FOR THE SKATE PARK AT GREG ROGERS PARK ADJACENT TO THE BOYS AND GIRLS CLUB AT OLEANDER AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE AN AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND PURKISS ROSE-RSI (4/5THS VOTE REQUIRED) The Parks & Recreation Department has long realized that a need for a safe and secure skate park venue exists in Chula Vista. On October 9, 2001, Council approved the design for the skate park at Greg Rogers Park, adjacent to the Boys and Girls Club on Oleander. The approved design and feasibility study were conducted and produced by Purkiss Rose, the successful bidder in the RFP process. Whereas Purkiss Rose performed admirably and successfully completed the design and feasibility study, it is recommended that Purkiss Rose provide consulting services for the creation of the construction documents and assist City staff dur/ng the construction project. Staff recommends that the bidding process be waived and the City Manager be author/zed to negotiate and execute an agreement with Purkiss Rose in a form to be approved by the City Attorney. (Director of Parks and Recreation) Staff recommendation: Council adopt the resolution. Page 5 - Council Agenda 12/04/01 15. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIV1NG THE CITY'S FORMAL BIDD1NG PROCESS AND AWARDiNG THE ARCHITECTURAL SERVICES CONSULTiNG CONTRACT FOR $49,000 TO ARCH PAC, iNC. FOR ARCHITECTURAL DESIGN SERVICES FOR THE LOMA VERDE POOL RENOVATION The Parks & Recreation Department's approved Capital Improvement Project No. PR- 226 identifies the Loma Verde Pool renovation project, which includes removing the existing island to increase the programmable area of the pool, removing and disposing of the current decking, installing rim-flow gutters, resurfacing the pool, providing depth markers in the tile and coping, and replacing and repairing deck equipment. This project requires the services of an architect to design and furnish plans and specifications to allow a pool contractor to perform the tasks associated with the pool renovation. Due to the status of the project, timing issues, and since Arch Pac, Inc. has successfully performed the design renovation project at Parkway Pool, staff recommends that the bidding process be waived and the City Manager be authorized to negotiate and execute an agreement with Arch Pac, Inc. in a form to be approved by the City Attorney. (Director of Parks and Recreation) Staff recommendation: Council adopt the resolution. 16. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROViNG AN INDIVIDUAL PARK MASTER PLAN AND NEIGHBORHOOD PARK NAME FOR PARK P-2 OF OTAY RANCH SPA ONE, VILLAGE ONE The Otay Ranch Company has prepared an individual Park Master Plan for the neighborhood park site (P-2) located in the Otay Ranch SPA One, Village One project area. The Parks and Recreation Commission has recommended approval of the Park Master Plan and park name, Harvest Park. (Director of Parks and Recreation) Staff recommendation: Council adopt the resolution. ORAL COMMUNICATIONS Persons speaking during Oral Communications may address the Council on any subject matter within the Council's jurisdiction that is not listed as an item on the agenda. State law generally prohibits the Council from taking action on any issue not included on the agenda, but, if appropriate, the Council may schedule the topic for future discussion or refer the matter to staff. Comments are limited to three minutes. PUBLIC HEARINGS The following items have been advertised and/or posted as public hearings as required by law. 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. Page 6 - Council Agenda 12/04/01 17. CONSIDERATION OF PUBLIC TESTiMONY ON THE FORMATION OF COMMUNITY FACILITiES DISTRICT NO. 2001-1 (SAN MIGUEL RANCH) AND CONSIDERATION OF AUTHORIZATION TO LEVY SPECIAL TAXES AND iNCUR A BONDED INDEBTEDNESS SECURED BY SUCH SPECIAL TAXES (CONTINUED FROM NOVEMBER 6, 2001) On June 19, 2001, Council accepted NNP-Trimark San Miguel Ranch, LLC's application and approved the initiation of proceedings to consider the formation of Community Facilities District No. 2001-1 (CFD No. 2001-1). On September 25, 2001, Council adopted a resolution of intention to form the district and a resolution of intention to incur a bonded indebtedness for each improvement area therein; and set the public hearing for November 6, 2001. The public heating was continued to this date at the request of the applicant. CFD No. 2001-1 will fund the construction of public facilities, such as roadways, for the San Miguel project. In addition, a portion of the proceeds may be authorized to be used for certain transportation projects, as directed by the City. Adoption of the resolutions will continue the formal proceedings leading to the establishment of CFD No. 2001-1: designate Improvement Areas A and B therein; authorize the levy of special taxes, subject to the approval of the qualified electors in each improvement area; and authorize bonds to be issued for each improvement area, to be secured by the levy of the special taxes. (Director of Public Works) Staff recommendation: Council conduct the public heating and adopt the following resolutions. A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA FORMiNG AND ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2001-1 (SAN MIGUEL RANCH), DESIGNATiNG IMPROVEMENT AREAS THEREIN AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES WITHiN EACH SUCH IMPROVEMENT AREA TO THE QUALIFIED ELECTORS THEREOF B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARiNG NECESSITY TO INCUR BONDED iNDEBTEDNESS FOR EACH IMPROVEMENT AREA OF COMMUNITY FACILITIES DISTRICT NO. 2001-1 (SAN MIGUEL RANCH), SUBMITTING TO THE QUALIFIED ELECTORS OF EACH SUCH IMPROVEMENT AREA A PROPOSITION TO iNCUR A BONDED INDEBTEDNESS SECURED BY THE LEVY OF A SPECIAL TAX WITHiN SUCH IMPROVEMENT AREA TO FINANCE CERTAIN TYPES OF PUBLIC FACILITIES AND G1VING NOTICE THEREOF 18. CONSIDERATION OF THE PROPOSED ASSESSMENT OF CERTAIN DELINQUENT SOLID WASTE SERVICE CHARGES AS LIENS UPON THE RESPECTIVE PARCELS OF LAND AND PLACEMENT OF DELiNQUENT CHARGES ON THE NEXT REGULAR TAX BILL FOR COLLECTION Page 7 - Council Agenda 12/04/01 In order to adequately protect the City's interest in delinquent solid waste service charges and ensure that collection efforts are directed towards the responsible property owner in the event of a change of ownership, staff is recommending approval for liens against affected properties as a preliminary action to placing the delinquencies on the property tax rolls if they remain unpaid. Adoption of the resolution will enhance the collection process for delinquent solid waste service charges by reducing the amount of uncollectable losses and ensure that payment will be received on a timelier basis. (Assistant City Manager Powell) Staff recommendation: Council conduct the public heating and adopt the following resolution: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ASSESSING DELiNQUENT SOLID WASTE CHARGES AS LIENS UPON THE RESPECTIVE PARCELS OF LAND AND APPROVING PLACEMENT OF DELiNQUENT CHARGES ON THE NEXT REGULAR TAX BILL ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussion and deliberation by the Council, staff or members of the public. The items will be considered individually by the Council, and staff recommendations may, in certain cases, be presented in the alternative. 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. 19. REPORT REGARDiNG THE RECONSIDERATION OF THE DESIGNATION OF 769 BROADWAY, THE HENRY FISCHER HOUSE AS A HISTORIC SITE On August 21, 2001, Council considered the designation of the Henry Fischer House at 769 Broadway as a historic site, based upon the recommendation of the Resource Conservation Commission. The Council also considered other potential actions that could be taken to preserve the house. At that time, Council requested that staff return with information on a number of issues, including the feasibility of City preservation of the house as a museum. (Director of Planning and Building) Staff recommendation: Council accept the report and take no action regarding the designation or preservation of the Henry Fischer house, as requested by the property owner. 20. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DESIGNATING THE GEORGE STEESE HOUSE AS A HISTORIC SITE AND PLACING THE GEORGE STEESE HOUSE ON THE CITY OF CHULA VISTA LIST OF HISTORIC SITES IN ACCORDANCE WITH MUNICIPAL CODE SECTION 2.32.070(A) The property owner, Veronica Lugo, has requested that her property at 224 Fig, known as the George Steese house, be considered for inclusion on Chula Vista's List of Historic Sites. The Resource Conservation Commission (RCC) considered the designation of the property at its October 15, 2001 meeting and recommends that the house be placed on the list. (Director of Plarming and Building) Staff recommendation: Council adopt the resolution. Page 8 - Council Agenda 12/04/01 ITEMS PULLED FROM THE CONSENT CALENDAR OTHER BUSINESS 21. CITY MANAGER'S REPORTS 22. MAYOR'S REPORTS Appointment of Deputy Mayor. B. Ratification of appointment to the International Friendship Commission: Sara Alviz. C. Ratification of appointment to the Safety Commission: Mark Perrett. D. Ratification of appointment to the Town Centre Project Area Committee: David McClurg. E. Ratification of appointment to the Town Centre Project Area Committee: Lisa Moctezuma. F. Ratification of appointment to the Board of Appeals and Advisors: Ben West. G. Consideration of endorsement of a Hate-Free Zone program in Chula Vista. 23. COUNCIL COMMENTS CLOSED SESSION Announcements of actions taken in Closed Session shall be made available by noon on Wednesday following the Council Meeting at the City Clerk's office in accordance with the Ralph M. Brown Act (Government Code 54957. 7). 24. CONFERENCE WITH LEGAL COUNSEL REGARDING INITIATION OF LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(C) Two Cases 25. PUBLIC EMPLOYEE PERFORMANCE EVALUATION PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 54954.5 (e) City Manager ADJOURNMENT to the Regular Meeting of December 11, 2001, at 6:00 p.m. in the Council Chambers, and thence to an adjourned regular meeting to be held December 13, 2001 at 4:00 p.m. in the Council Conference Room. Page 9 - Council Agenda 12/04/01 November 21st, 2001 MEMO TO: City Clerk FROM: Patty Wesp 5UB,TECT: REQUEST FOR EXCUSED ABSENCE beputy Mayor bavis has advised that she will be out of town for the becembcr 4th Council meeting. To that end, she has asked for an excused absence. Thank You] Cc: Deputy Mayor Davis Armando Buelna '~ohn ~vajian OamNANCE NO. .. xqo ,oova ox4 CHULA VISTA APPROVING AN A1VIEe~'- NT TO THE oTAOyF RANCH SECTIONAL PLANNING AREA (SPA) ONE PLANNED COMMUNITY DISTRICT REGULATIONS ALLOVCING "FOR- PROFIT" DAY CARE FACILITIES IN COMMUNITY PURPOSE FACILITY ZONING DISTRICTS AS AUTHORIZED IN THE PLANNED COMMUNITY ZONE. WHEREAS, the properties which is the subject matter of this resolution is identified as Exhibit "A" attached hereto and described on Chula Vista Tract 96-04A, and is commonly known as Village One Core ("Property"); and, WHEREAS, an application (PCM 01-14) to amend the Otay Ranch Sectional Planning Area (SPA) One Planned Community District Regulations was filed with the City of Chula Vista Planning and Building Department on February 9. 200I by Otay Project, LLC, The Otay Ranch Company ("Applicant"); and, WHEREAS, the Otay Ranch Sectional Planning Area (SPA) One Plan, Planned Community District Regulations ("Project") are intended to ensure that the Otay Ranch SPA One Plan is prepared in accordance with the Otay Ranch General Development Plan (GDP), to implement the City of Chula Vista General Plan for eastern Chula Vista, to promote the orderly planning and long term phased development of the Otay Ranch GDP and to establish conditions which will enable the amended Otay Ranch SPA One Plan area to exist in harmony within the community; and, WHEREAS, the Otay Ranch SPA One Plmmed Community District Regulations are established pursuant to Title 19 of the Chula Vista Municipal Code, specifically Chapter 19.48 (PC) Planned Community Zone, and are applicable to the Otay Ranch SPA One Land Use Plan o£ the Otay Ranch SPA One Plan; and, WHEREAS, the Otay Ranch SPA One Planned Co~mnanity District Regulations establishes zoning regulations for Commumty Purpose Facility Zoning Dmtncts located in the Otay Ranch SPA One; and, WHEREAS, the application(s) request to amend the Otay Ranch SPA One Planned Community District Regulations, to permit "for-profit" day care facilities in Community Purpose Facilities Zoning Districts in SPA One; and, WHEREAS, On March 27, 2001, the City Council adopted Ordinance No. 2830 amending Chapters 19.04, Definitions, and 19.48, Planned Community Zone of the Chula Vista Municipal Code permitting "For-Profit" day care facilities as a primary use in Community Purpose Facilities zoning districts subject tn findings outlined in Chapter 19.48.025, Section "F"; and, WHEREAS, the development of the Property bas been the subject matter of a Sectional Planning Area One Plan ("SPA One Plan") previously approved by the City Council on June 4, 1996 by Resolution No. 18286, wherein the City Council, in the environmental evaluation of said SPA One Plan, relied in pan on the original Otay Ranch SPA One Plan Final Environmental Impact Report No. 95-01, SCH #94101046 ("EIR 95-01") and the amended Otay Ranch SPA One Plan Final Environmental Impact Repot/No. 97-03, SCH #97091079 ("EIR 97-03"); and, WHEREAS, the City's Environmental Review Coordinator has reviewed the Project mad has determined that the amendment to the Otay Ranch SPA One to permit for profit day care centers do not result in a physical change to the environmental and are therefore covered by "the general role that CEQA applies only to projects, which have the potential for causing a significant effect on the environment." (CEQA Guidelines Section 15061 (b)(3)), and are therefore exempt from CEQA; and, WHEREAS, the Plmming Commission set the time and place for a hearing on said Otay Ranch Sectional Planning Area (SPA) One Plan (PC M-01-14) and notice of said hearing, together with its purpose, was given by its publication in a newspaper of general circulation in the city and its mailing to property owners within 500 feet of the exterior boundaries of the Project site at least ten days prior to the hearing; and, WHEREAS, a duly noticed hearing was held at the time and place as advertised, namely 6:00 p.m. November 7, 2001, in the Council Chambers, 276 Fourth Avenue, before the Planning Commission and said hearing was thereafter closed; and WHEREAS, a duly noticed public hearing was scheduled befbre the City Council of the City of Chula Vista on the Otay Ranch SPA One Plan amendment and adopting the ordinance to approve the modification to the SPA One Planned Community District Regulations; and, NOW, THEREFORE, BE tT RESOLVED THAT THE CITY COUNCIL of the City of Chula Vista does hereby find, determine, resolve and order as tbllows: PLANNING COMMISSION RECORD The proceedings and all evidence introduced befbre the Planning Cormnission at their public hearing held on November 7, 2001, and the minutes and resolutions resulting therefrom, are hereby incorporated into the record of this proceeding. These documents, along with 'any documents submitted to the decision makers, shall comprise the entire record of the proceedings for any California Envh'onmental Quality Act (CEQA) claims. C©MPLIANCE WITH CEQA The City Council hereby finds that the Project, as described and analyzed in the Second-Tier Final EIR 95-01 and FEIR 97-03, would have no new effects that were not examined in said Final EIR (Guideline 15168 (c)(2)). III. ACTION The City Council hereby adopts an Ordinance to the Otay Ranch SPA One Planned Community District Regulations, to permit "for-profit" day care facilities in Community Purpose Facilities Zoning Districts in SPA One finding that they are consistent with the City of Chula Vista General Plan, the Otay Ranch General Development Plan, Otay Ranch SPA One Plan, and all other applicable Plans, and that the public necessity, convenience, general welfare and good planning and zoning practice support their approval and implememation. tV. EFFECTIVE DATE This Ordinance shall take effect and be in full force on the thirtieth day from and after its adoption Presented by Approved as to form by Robert Leiter John M. Kaheny Planning and Building Director City Attorney HERITAGE PARK CHULA VISTA PLANNING AND BUILDING DEPARTMENT LOCATOR PROJECT OTAY PROJECT, L.P. PROJECT DESCRIPTION:  APPLICANT: SPA AMENDMENT Request: Olay Ranch SPA One Village (~ne Core; Allocate 97 MF ! PROJECT S. OF E. PALOMAR S¥. beiween affordable units, ameud the PC Distdct Regulations to allow for proffi ADDRESS: Santa Rita St. & Santa Andrea St. ch d care facilities, proposal to reduce parking requirement from 640 SCALE: FILE NUMBER: to 501 to serve mixed use, senior & affordable multi-family & CPF uses. NORTH No Scale DRC-01-23 Related Case: PCM-97-11, PCM-01-14 h:\home\planning\carlos\locators\drc0123.cdr 10.'18.01 ~.~ ~LTL REPEALING SECTION 2. b2. 165 OI~-THE CHULA VISTA MUNICIPAL CODE RELATING TO CAMPAIGN CONTRIBUTIONS SECTION I: That Section 2.52.165 of the Chula Vista Municipal Code is hereby repealed: A. Disclosure of Contribution - Limit. involving = ~ ~ ..... it ~ 'entitlement ......... , perm or ......... usc B. Disqualification Limit. position to influence the decision in a proceeding ~=~ ~= ~= ~'~ ~ ~ ....... ~=~=~ ~=~ willfully ................... = ............ = ........... par or = ...... = .... , provided, b_owever, that ~ ....... ~ ~ .................. t5 ~,.,~ ~ h== reaso~ to know that ~h= par r, = ...... ~ .... or ~ .... ~h=~ ~ ~= ~ .... ~=~ ~.,~h respect to public C. When a ccunci!mem~er runs for reelection, the her current term of office for contributions received towards his or her reelection. n o=~=o =~ ~=~=~= ~ = ...... ~ e=~= the city for use shall disclose on the record of the ...... ~ contribution in an amount of more than $1,000 in the =~=~ ~ =~ ~=~=~ ~=~ ..... ~=~ ~ any City Council Member. ~ ~ ~ ........... ~ ~ ........ ~ disqualification ~=]] ~,,~ ..... ~=~ ~ ,.,~ ~h~ contrib~tio~ activity maintained or controlled or at the behest, consent or F. The provisions of Government Code Section ~4308, its =~,,~ ~h~ isions ~ this section. SECTION II: This ordinance shall take effect and be in full force on the thirtieth day from and after its second reading and adoption. Presented by and Approved as to form by ity Kaheny Attorney J: \At t orney\0rdinance\Campaign Contrib. doc COUNCIL AGENDA STATEMENT Item: ~- Meeting Date: 12/4/01 ITEM TITLE: Resolution Ratifying City staff's action on approving change orders associated with the construction of the Public Works Operations Facility and Corporation Yard, listed on Attacl-nnent A, and authorizing staff to process up to an additional $250,000 in change orders SUBMITTED BY: Director of Public Works~ City M~~x (4/Sths Vote: Yes No X) REVIEWED BY: On September 26, 2000, the City Cound01 amended Policy #574-01 attthorizing the City Manager to approve change orders pertaining to the Corporation Yard project with a single change order value not exceeding $50,000 and a cumulative value of up to $250,000. The policy permits the City Manager to exceed the limits if delay of the approval would cause a delay in the "Critical Path" schedule of the project. Approval of tonight's resolution will ratify staff's recent actions in approving change orders valued at $368,953 listed on Attachment A. Tonight's action will also authorize staff to process up to an additional $250,000 in change orders in accordance with the policy. RECOMMENDATION: That Council ratify City staff's action on approving change orders valued at $368,953 associated with the construction of thc Public Works Operations Facility and Corporation Yard listed on Attachment A, and authorize staff to process up to an additional $250,000 in change orders. BOARDS/COMMISSIONS APPROVAL: Not Applicable DISCUSSION: City Staff and Highland Partnership continue to scrutinize every change order requested by the Specialty Contractors. Due to integration of the work of the numerous trades, plan clarifications and Value Engineering efforts, numerous change orders are required in order to complete the project. City Staff has approved the change orders totaling $368,953 listed on Attachment A and now presents them for Council's ratification. City staffs analysis included a determination that the failure to process these change orders would have resulted in a delay in the critical path schedule of the project. The following is a general description of the major Change Orders sho~vn on Attachment A: AGRA ($21,550) This change order is for soils testing and inspection professional services associated with completion of ~ite underground ntilities, completion of retaining wall backfill compaction testing, asphalt place~nent and compaction testing. Barring any unforeseen conditions, based on a detailed analysis of work remaining and evaluation by the specialty contractor, this change order will be sufficient to complete the work with all monies not spent being directed back to the City. Page 2, Item: ,~ Meeting Date: 12/4/01 Stanford Sign, inc. ($19,700) The original contract documents detailed code compliant signage, which was publicly bid and subsequently awarded. This change order is for interior and site directional signage. Based on staff's requirements the design for this signage ~vas completed in early September and informally bid. After reviewing the bids received, staff and Highland determined it to be more cost effective to award this additional ~vork to the existing signage specialty contractor via change order. Daryl Griffis Acoustics~ Inc. ($41,604) Due to an oversight by City staff and Highland, an insufficient number of lockers to meet the total needs were ordered and delivered. This change order is necessary to purchase the additional wall lockers needed. Helix Electric, inc. ($43,000) After extensive review of plans by staff and Highland focusing on end user requirements, various improvements were added to building and site security. Improvements include installation of additional security cameras, added access points and security hardware upgrades. A portion of this change is the inclusion of the household hazardous waste disposal facility into the main security system and extensive improvements to the administration building security and access system. This change order is for the electrical (security conduit, wiring and appliances) portion of this revision. PSI, Inc. ($50,000) This change order is for an estimated amount to cover professional inspection services through the end of the project. Based on the progress of the structural steel specialty contractor, staff & HPI have detemfined that additional professional services ~vill be required to complete testing & continuous inspection both for on site erection and at the contractor's fabrication plant. Additionally, due to concerns regarding the quality of metal fabrications from the structural steel specialty contractor early in the project, staff & HPI decided to require continuous rather than periodic inspection of this contractor's work. Also included in this change order are allowances for testing and inspections related to the revised paving plan. F.J. Willert, Inc. ($79,584) After an extensive review of anticipated traffic patterns and operations at specific areas of the corporation yard, staff, HPI and appropriate consultants revised the paving plan to maximize paving utility, maintainability and service life at various areas to be paved. Based on this approach, specific areas were changed from asphalt paving to concrete paving and new paving cross-sections were specified for both asphalt and reinforced concrete paving. This chm~ge order is predominately associated with the changes required in demolition of existing asphalt paving, over excavation of areas to be paved, importation of the newly specified base in areas designated to receive concrete paving, placing and compaction of base and export of associated spoils. Because Staff and Highland Partnership are aware of the need for further change orders (some are in the process of being evaluated), staff is also requesting authorization to process up to an additional $250,000 in change orders. The same complete and thorough review and documentation of the need for these additional change orders will continue to be followed. Staff Page 3, Item: -~ Meeting Date: 12/4/01 may also return to Council for ratification and/or requesting approval of these potential future change orders. On July 24, 2001, City staff forwarded an informational memorandum, to the City Council providing a detailed overview of the change orders process for the Corporation Yard project. As indicated in said memorandum, the construction of the Corporation Yard is a very complex project involving many building trades and contracts for that work. The project also involves the renovation and expansion of existing buildings and facilities which, by its very nature, is nmch more prone to uncovering unanticipated items needing to be handled through change orders. City and Highland staffs have aggressively managed the change order process for this complex project. The very nature of a multi-phase, multi-building project that includes new construction as well as substantial renovation, demands conscientious and continuous oversight of the change order manage~nent process. Change order avoidance and reduction for this project commenced with a thorough review of the plans and specifications. Following this initial strategic effort to mitigate the potential for change orders is the actual change order management process once a contractor presents a request for a change order. Regardless of the reason for the specialty contractor's submission of a request for a change order, City and Highland staffs closely scrutinize each and every line item on the request. This step is taken to determine if the items requested are covered within plans, specifications, contract documents of the respective specialty contract. I f so, the request for a change order is rejected outright. Should the request be found to have merit, itemized costs are compared to bid line item unit costs, industry standard "means and methods" cost analysis, and comparative bid proposals from like contractors. Particular attention is focused on capturing any credits that may be covered by the original contract scope. City and Highland staffs automatically default to using the lowest cost calculation as a basis for further negotiation. Staff and Highland then enter into negotiations with the specialty contractor, more often than not resulting in a lower than requested change order amount. In those few instances where negotiations have failed to result in a price that staff and Highland feel is reasonable, then Highland negotiates the work with other project specialty contractors. This proven system has been successful in achieving the lowest possible cost associated with change orders. As previously indicated many of the change orders were initiated by the City in order to improve the facility and also to save on future maintenance and operations costs. FISCAL IMPACT: Per Attachment A, the total value of the change orders to be ratified by the City Council is $368,953. As of September 25, 2001, the cumulative value of all change orders approved by the City Council was $2,355,918. Following tonight's action, the cumulative total value of all change orders approved to date will be $2,724,871. With tonight's authorization of $250,000, the new contingencies budget will be $2,974,871. The cost of these change orders is within the budget appropriation for the project. Attachments: A Summary of change orders proposed for ratification File: 0735-10-GG131 J:\EN GiNEER\AGENDA\CORPYARDDEC4COA 113SMNREV.DOC Change Orders For Ratification by City Councll in December 2001 Highland Attachment A Chula Vista Corp Yard Project # 092 Highland Partnership, Inc 1800 Maxwell Rd Tel: 619-397-0367 Chula Vista, CA 91910 Fax: 619-397-0389 CNG Curb Restake & Sewer Points @ ACCULINE 0 520 OO7 09201050-02 10/1/01 Maint Bldg 008 09201050-02 10/19/01 Resteke Lights & Curb Line ACCULINE 0 1,170 005 9201050-02 9/28/01 Additional Soils/Asphalt Compaction & AGRA 0 21,550 Testing 006 09202211.01 10/1/01 Grading, Demo & Export @ Vadous FJWILLERT 0 79.584 Locations Modification of Mechanical Curbs @ 008 09206100.01 9/28101 Shops A HELIX CON 0 2.344 Remove Existing - Replace New Louver CSM 0 3.450 010 09207600-01 9/28/01 @ Admin 011 09207600-01 10/2/01 Added Coping @ Old Shops CSM 0 3,522 001 09207600-02 9/17/01 Modification of Pits #1 & #2 @ Maintenance CSM 0 14.200 005 09208110-01 9/28101 CREDIT - Retrofit (5) Openings BRADY CO 0 -1.334 006 09208110-01 10/8/01 Rehang Doors in Admin BRADY CO 0 205 007 09208110-01 10/19/01 Site Finish Wood Doors/Rehang Existing BRADY CO 0 1.155 001 09210400-01 9/28/01 Interior Signage - Newly Designed STANFORD 0 19.700 021 9202660-01 9/28/01 Correction of Sterm Drain Pipe IV Elev SHERWOOD 0 2,988 022 9202660-01 9128/01 Plumber Tie-ins ~ Maintenance Bldg SHERWOOD 0 -3.475 004 9202900-01 9/28/01 Landscape Changes - Plan Revisions BENCHMARK 0 11.340 005 9202900-01 37166 Correct Storm Drair~rme Drain Conflict BENCHMARK 0 874 003 9209610-01 1011101 Caq~et Changes HOWARDS 0 5.690 001 9213120-01 9/28/01 HAZMAT Storage Con/ainer Contract Adds SAFETY 0 2,827 009 9215000-01 9/17/01 Mechanical Changes @ Pits 1 & 2 LGSMTL 0 3,569 010 9215000-01 10/5/01 Refurbish Existing Boiler LGSMTL 10/5/01 0 1.629 011 9215000-01 10/5/01 Mechanical Labeling of Exis6ng LGSMTL 9/28/01 10/1/01 0 1.847 012 9215000-01 11/2/01 RepairandReplaceACUnitsinCentr81 LGSMTL tt/5/0t 0 8,128 Receiving 002 9209255-01 1018/0t Add Rolling Gate @ Shops Rm S141 WRCHAVEZ 0 2.509 003 09216700-01 10/8/01 Voice/Data Patch Panel EXPANETS 0 4.790 004 09216700-01 37186 Additional Digital Cards and Phones EXPANETS 0 3910 008 09205120-01 11/8/01 Framed Openings @ Shops A C&S DOC 11/8/01 0 -10,328 017 9203200-01 10/1/01 AddedRetainingWall@Admin-Rebar PCS 0 1.177 0/1/ Masonry Wall Inflll @ RHWDF & Added FABER 0 5,067 018 9204150-01 01 Wall@Main Sdg Waterproofing @ Added Admin Retaining 002 9207100-01 10/29101 Wall SADDLEBACK 0 1.569 003 9210000-01 9117/01 Modification/Additional Wall Lockers DCA 0 41.604 004 9210000-01 10/16/01 Orop Ceiling Additions DCA 0 8.345 022 9215400-01 9/28/01 Added Roof Drain Tts-ins ~ Maintenance MHP 0 3,475 023 9215400-01 10/8/01 HHWDF - C~nnec~ Fire Sprinklor Supply MHP 0 3,285 024 9215400-01 10/8/01 Area Drain Acid ~ Bus Wash MHP 0 1.981 027 9216000-01 10/1/01 HHWDF Elecblcal Adds HELIX ELEC 0 7,474 028 9216000-0t 1011101 Revise Security To Add Exterior Door @ HELIX ELEC 0 650 Admin 029 9216000-0t 1011/01 Move Subpanel in Admin HELIX ELEC 0 1.992 030 9216000-0t 1011101 Revised Security Plan - Power to E~ectric HELIX ELEC 0 1.350 Locks 031 9216000-01 t0/2/01 Split 400NG Feeder Conductors ~ Main HEUX ELEC 0 988 Added Floor Outlets - Lunchroom 8, 033 9216000-01 1018101 FItoess HELIX ELEC 0 1,856 034 9216000-01 1018/01 Insra[I SIngte Pole Dimmers ~ Admin HELIX ELEC 0 327 035 921600001 1018/01 Added Circuits {~ Central Receiving HELIX ELEC 0 2,582 036 9216000-01 10/11/01 Electrica~ Changes in the SecurEy System HELIX ELEC 0 43,000 Provide & Install New Transformer ~ HELIX ELEC 0 4,097 037 9216000-01 10/19/01 Admln 038 9216000-01 10/19/0t Revised Dimmers ~ Admin HELIX ELEC 0 t ,061 Electrical Power to Control Panel for 039 0216000-0t t0/29/01 VFDs HELIX ELEC 0 2,347 040 9216000-0t 10/29/01 Add Mag Locks Per Security Revision HELIX ELEC 0 2,374 041 9201050-03 11/27/01 ~,,dded Scope for Testing Inspections PSI 0 50.000 RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA RATIFYING CITY STAFF'S ACTION ON APPROVING CHANGE ORDERS ASSOCIATED WITH THE CONSTRUCTION OF THE PUBLIC WORKS OPERATIONS FACILITY AND CORPORATION YARD, LISTED ON ATTACHMENT A, AND AUTHORIZING STAFF TO PROCESS UP TO AN ADDITIONAL $250,000 IN CHANGE ORDERS WHEREAS, on September 26, October 20, October 17, October 24 and November 14, 2000 the City Council approved the award of multiple contracts for the construction of the Corporation Yard Project; and WHEREAS, Highland Partnership, Inc., the City's Construction Manager, along with City staff have been overseeing the construction work; and WHEREAS, on September 26, 2000, the City Council amended Policy ~574-01 authorizing the City Manager to approve all change orders pertaining to this project with a single change order value not exceeding $50,000 and a cumulative value of up to $250,000; and WHEREAS, the policy permits the City Manager to exceed the limits if delay of the approval, would cause a delay in the "Critical Path" schedule of the project; and WHEREAS, this resolution will ratify staff's recent actions in approving change orders valued at $318,953 listed on Attachment A; and WHEREAS, staff is seeking authorization to process up to an additional $250,000 for change orders in accordance with policy outlined above. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby ratify City staff's action on approving change orders valued at $318,953 associated with the construction of the Public Works Operations Facility and Corporation Yard listed on Attachment A, attached hereto and incorporated herein as if set forth in full. BE IT FURTHER RESOLVED that staff is hereby authorized to process up to an additional $250,000 for change order approval in accordance with the policy outlined above. Presented by Approved as to form by John P. Lippitt C~AM Director of Public Works ~toK~nh~y ~ [J:kATTORNEYIRESO\ CorpYardl3 (Noven%ber 26, 2001 (2:23PM)] COUNCIL AGENDA STATEMENT Item ~a, Meeting Date: 12/04/01 ITEM TITLE: Resolution Accepting bids and awarding contract for "Sidewalk Replacement at Various Locations in the City of Chula Vista, California (JY-065H)" Project and appropriating additional funds from the unappropriated balance of the Gas Tax Fund. SUBMITTED BY: Director of Public Works REVIEWED BY: City Manage O i~ (4/5ths Vote: Yes X~NoJ On October 3,2001, the Director of Public Works received sealed bids for the "Sidewalk Replacement at Various Locations in the City of Chula Vista, California (JY-065H)" Project. The work consists of the removal and replacement of displaced curbs, gutters, sidewalks, and driveways. The work includes excavation and grading, PCC sidewalks, driveways, curbs & gutters, asphalt concrete pavement, removal and disposal of existing improvements, traffic control, protection and restoration of existing improvements, other miscellaneous work, and all labor, material, equipment, and transportation necessary for the project. RECOMMENDATION: That Council accept bids and award the contract for the "Sidewalk Replacement at Various Locations in the City of Chula Vista, California (JY-065H)" Project to J.M. Scibilia, Inc. of Escondido, California, for $130,864.45. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Public Works Operations Street Maintenance budget includes funds for this project. The project was included in the budget to remove and replace curbs, gutters, sidewalks, and driveways displaced on various City streets. This contract covers FY2001-2002 maintenance budget. Engineering staff prepared plats, specifications, and advertised the project. Staff received and opened bids on October 3, 2001. The City received bids from four contractors as follows: CONTRACTOR BID AMOUNT 1. J.M. Scibilia, Inc. Escondido, California. $130,864.45 2. Tri-Group Construction - Poway, California $133,830.00 3. Portillo Concrete - Chula Vista, California $141,041.00 4. Heffier Company, Inc. ~- National City, California $146,263.00 The low bid by J.M. Scibilia, Inc. is above the Engineer's estimate of $110,584.00 by $20,280.45 or approximately 18%. Engineering staff has verified the references provided by the contractor and their work has been satisfactory. Staff has reviewed the low bid and recommends awarding the contract to J.M. Scibilia, Inc. of Escondido, California, for $130,864.45. The Engineer's estimate was prepared conservatively using unit prices comparable to previous similar projects. Because the bids received are above the $100,000 staff is recommending appropriating Page 2, Item ~ Meeting Date: 12/04/01 $30,864.45 from the unappropriated balance of the Gas Tax fund. These funds are available due to the closing of CIP project STM 320, Palomar StreetYI5 Interchange Mapping Project (1995). The closing of this project results in the return of $50,621 to the Gas Tax Fund. Attachment "A" shows the specific work to be done at each location, approximate quantities of sidewalk, curb, gutter, and driveway to be installed. Disclosure Statement Attachment "B" is a copy of the contractor's Disclosure Statement. Environmental Status The Environmental Review Coordinator has reviewed the work involved in this project and has determined that the project is exempt under Section 15301, Class 1 (c) of the California Environmental Quality Act (Minor Alterations of Existing Public Improvements or Public Structures). Wage Statement ~he source of funding for this project is Gas Tax Funds. Contractors bidding this project were not required to pay prevailing wages to persons employed by them for the work under this project. Disadvantaged businesses were encouraged to bid through the sending of the Notice to Contractors to various trade publications. Financial Statement FUNDS REQUIRED FOR CONSTRUCTION A. Contract Amount (J.M. Scibilia, Inc.) $130,864.45 TOTAL FUNDS REQUIRED FOR CONSTRUCTION $130,864.45 FUNDS AVAILABLE FOR CONSTRUCTION A. Gas Tax (16731-6401) $100,000.00 B. * Unappropriated balance of the Gas Tax Fund $30,864.45 TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $130,864.45 Staff has closed CIP project STM 320 which resulted in the return of $50,621 to the unappropriated balance of the Gas Tax fund, thereby making available sufficient funds to award the entire work program. Upon completion of the project, the improvements will require only routine City street maintenance. Attachments: A - Table (location of work) B - Contractor's Disclosure Statement J:\Engineer~AGENDA\JY065h A113.doc APPENDIX "A" Sidewalk Replacement FY2001-02 JY-065H 1 ! 6 668 A~ur Ave 104 ) 2 ) 15 4180 Boni~ RC 100 25 26~ 3 5 471 Broadway on Otis St side of prop 420 4 ~ 5 471j Broadway on Otis St side of prop 420 Elevado 5 14 535 Camino 25 513 ~ ~ ?~)~_assemman st 64 7 8 812~Coun~ Club Dr 60 8 8 812 Count~ Club Dr 100 ~ 1 9 ~ 8 812 Coun~Club Dr ~0~ 10 ~ 8 812)Count~ Club Dr 105l 1113 1161 c smm Downs Dr 60 12 2 1031E, Prospe~ St. on 3udson Way 180 13 : 3 36 East Eme~on St. 176 108 ~4 ~ ~3 ~[~ st 200 88 15 3 203 Ea~ Olympic St 284 72 16 3 212 E~ oJympic st 60 17 3 227 East Onieda St 264 18 3 226 East O~ord St. 75 19 2 103 East Prospe~ St 148 20 i 1397 Eckman Ave 14~ 21 13 12~ Fallbrook Ct 165 22) 1 23622 13 12~4218 Fou~h AveFalmbr°°k Ct across from 25 8~l ...... ~ 11 2~' ~ 218 -~ Ave 60 Z5 t 712 Hi'J'i~ '6F ~' 26 2 375~I St 245 [ ~ [ 1l 28 2 ~6 I St. 250 29 29 1884)Ithmca St ~ m 18o~ 30 8 55JK St ~ ~ m 180) ~ 1) 31 5 915jKm~ake Ln. 205 ) ~ 1 32 9 74 Leanna St 120 ~ 30~ 1 ~ 7 922 Maria Way 7 g60 Mari wey 144 ~0~ ...... 10/16/01 1 APPENDIX "A" Sidewalk Replacement FY2001-02 JY-065H ~6 5 530-536 ~ntosh St ~00 12 1 37 9 1087 ~elrose ~ve 240 38 12 383 Mont~lm 801 20~ 39 12 382 Montclair St 60~ ~ 1 40 11 1234 Neptune Dr 60~ 16~ 41 11 938 Nita Ct 84 63 42 7 315 Nova Way 1~ 45 43 7 321 Nova Way 228 77; 44 7 335 Nova Way 164 45~ 1 45 16 1142 Oasis Ave 192 1 46 16 970 Paseo De Paso 100 47 1 160 QuinGrd St 100 '1~ 48 11 545 ~cond ~ve 150 49 10 90~ She~ood 125 360 50 1 390 Sierra Way 192 31 51 13 836 SGnford Ave 272 52 2 1378 ~eresa Way 120 31] 53 2 1384~eresa Way 140 1 54 15 985 ~Valencia ~ 390 55 14 920 Wayne Ave 1~ 36~ 56 b 840 Woodlawn Ave 140 37~ 1 57 9 8~6 Cedaar Ave on Sierra Way side 120 31 2 58 5 527 D St 245 5 6St 60 5 529 D St 70 61 15 1370 Don Carlos Ct 25 60 4~ 0Z 2 168i East Paisley St 308 96 63) 2~ 63 7 654 FiSh Ave 40 64 7 654 FiEh Ave 250 65 7 654 FiEh Ave on Halsey St side of prop 160 668 803 Frimt Ave 380 ~ ~ 67 6 209 Ga~re~ Ave 120 68 6 209 Garre~ Ave 50 69 4 781 Gresen Rd 8~ 2i~ 70 4 181~I St 160 71 3 78~Kin~ St 85 APPENDIX "A" Sidewalk Replacement FY2001-02 JY-065H 7Z 3 84 King St 105 73 3 88) King St 150 361 2i 74 3 891 King St 55 75 3 951 King St 50 76 3 141 King St 84 11 2 77 ! 291 IVlinot Ave 80 120 21 78 4 135i Mitcher St 48 79 12 325 Montclair St 104 80 16 1138 Oasis Ave 4.0 8! l~ 320 Topaz Ct 75 80 2~ 82 15 997 Valencia Ct 180 . 2i 9080 1100 3184 829~ 10/16/01 3 APPENDIX "B" THE CITY OF CHULA VISTA DISCLOSURE STATEMENT Pursuant to Council Policy 101-01, prior to any action upon matters which will require discretionary action by the Council, Planning Commission and all other official bodies of the City, a statement of disclosure of certain ownership or financial interests, payments, or campaign contributions for a City of Chula Vista election must be filed. The following information must be disclosed: 1. List the names of all persons having a financial interest in the property that is the subject of the application or the contract, e.g., owner, applicant, contractor, subcontractor, material supplier. 2. If any person* identified pursuant to (1) above is a corporation or partnership, list the names of all individuals with a $1000 investment in the business (corporation/partnership) entity. If any person* identified pursuant to (1) above is a non-profit organization or trust, list the names serving as director of the non-profit organization or as trustee or beneficiary or of any person trustor of the trust. z 4. Please identify every person, including any agents, employees, consultants, or independent contractors you have assigned to represent you before the City in this matter. 14 C:\FILE CABINETXWORDLIY0651tkJY06511-Contract. doc APPENDIX "B" 5. Has any person* associated with this contract had any financial dealings with an official** of the City of Chula Vista as it relates to this contract within the past 12 months? Yes No ~ If Yes, briefly describe the nature of the financial interest the official** may have in this contract. 6. Have you made a contribution of more than $250 within the past twelve (12) months to a current member of the Chula Vista City Council? Yes No ~ If Yes, which Council member? 7. Have you or any member of your governing board (i.e. Corporate Board of Directors/Executives, non-profit Board of Directors made contributions totaling more than $1,000 over the past four (4) years to a current member of the Chula Vista City Council? Yes No fya~ If Yes, which Council member? 8. Have you provided more than $300 (or an item of equivalent value) to an official** of the City of Chula Vista in the past twelve (12) months? (This includes being a soume of income, money to retire a legal debt, gift, loan, etc.) Yes No ~ If Yes, which official** and wbat was the nature of item provided? , t Sig~)~t~r; 0fCc/t~tr~ctor/Xp~iicant Print or type name of Contractor/Applicant * Person is defined as: any individual, finn, co-partnership, joint venture, association, social club, fraternal organization, corporation, estate, trust, receiver, syndicate, any other county, city, municipality, district, or other political subdivision, -or any other group or combination acting as a unit. ** Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member of a board, commission, or committee of the City, employee, or staffmembers. 15 C:\FILE CABIN E'BWORDklY065HUY065 H-Contract.doc RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND AWARDING CONTRACT FOR "SIDEWALK REPLACEMENT AT VA~RIOUS LOCATIONS IN THE CITY OF CHULA VISTA, CA. (JY- 065H)" PROJECT, AND APPROPRIATING ADDITIONAL FUNDS FROM THE UNAPPROPRIATED BALANCE OF THE GAS TAX FUND WHEREAS, at 2:00 p.m. on October 3, 2001, the Director of Public Works received the following four sealed bids for ~Sidewalk Replacement at Various Locations in the City of Chula Vista, Ca. (JY-065H)". CONTRACTOR BID AMOUNT 1. J.M. Scibilia, Inc. Escondido, California. $130,864.45 2. Tri-Group Construction, Poway, California $133,830.00 3. Portillo Concrete, Inc. - Chula Vista, $141,041.00 California 4. Heffler Company, Inc. - National City, $146,263.00 California WHEREAS, the low bid by J. M. $cibilia, Inc. is above the Engineer's estimate of $110,584.00 by $20,280.45 or approximately 18% and staff's bid estimate was prepared conservatively using prices from similar projects; and WHEREAS, Engineering staff checked the references provided by the contractor and all references were verified and their work has been satisfactory; and WHEREAS, staff has reviewed the low bid and is recommending awarding the contract to J. M. Scibilia, Inc. of Escondido, California; and WHEREAS, the Environmental Review Coordinator has reviewed the work involved in this project and has determined that the project is exempt under Section 15301, Class l(c) of the California Environmental Quality Act (Minor Alterations of Existing Public Improvements or Public Structures); and WHEREAS, the source of funding for this project is Gas Tax Funds and contractors bidding this project were not required to pay prevailing wages to persons employed by them for the work under this project; and WHEREAS, no special minority or women owned business requirements were necessary as part of the bid documents, however, disadvantaged businesses were encouraged to bid through the sending of the Notice to Contractors to various trade publications. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby accept bids and award contract for the "Sidewalk Replacement at Various Locations in the City of Chula Vista, California (JY-065H)" project to J. M~ Scibilia, Inc. of Escondido, California in the amount of $130,864.45. BE IT FURTHER RESOLVED that the amount of $30,864.45 is hereby appropriated from the unappropriated balance of the Gas Tax Fund. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby authorized and directed to execute said contract on behalf of the City of Chula Vista. Presented by Approved as to form by ohn Director of Public Works [J:~TTORNEY\RESO\ sidewalk replacement (November 26, 2001 (1218PM)] COUNCIL AGENDA STATEMENT Item No '~ Meeting Date 12/4/01 ITEM TITLE: RESOLUTION APPROVING REQUEST FROM THE CHULA VISTA RV RESORT & MARINA TO CONDUCT THE WINTERFEST 2001 AND AUTHORIZING TEMPORARY STREET CLOSURES AND WAIVING CiTY FEES FOR POLICE SERVICES. SUBMITTED BY: Chief of Polic~-j~ Risk Manager-~ REVIEWED BY: City Manager ~.~ ~¢' (4/5ths Vote: Yes No X~ ) The Chula Vista RV Resort & Marina, in conjunction with South Bay Community Services, The Salvation Army, Chula Vista PAL, Head Start, Episcopal community Services, Lutheran Social Services, Chula Vista Cares, Chula Vista Welfare Council, and Catholic Charities, is requesting permission to conduct an organized Winterfest 2001 on Saturday, December 8, 2001. RECOMMENDATION: That Council adopt the resolution approving the waiver of City fees for police services and authorizing temporary street closures for the organized Winterfest 2001 subject to staff conditions. BOARDS/COMMISSIONS RECOMMENDATIONS: Not Applicable DISCUSSION: The Chula Vista RV Resort and Marina is requesting permission to conduct Winterfest 2001 on Saturday, December 8, 2001 (Attachment A). Winterfest 2001 will consist of approximately nine other organizations including South Bay Community Services, The Salvation Army, Chula Vista PAL, Head Start, Episcopal Community Services, Lutheran Social Services, Chula Vista Cares, Chula Vista Welfare Council, and Catholic Charities. Forty (40) tons of snow will be brought in and placed on the northwest side of Bayside Park, 460 Sandpiper Way. The proposed street closure will be a section of Sandpiper Way, from the entrance of the marina parking lot to the entrance of the RV Resort (Attachment B). 7-/ Page 2, Item ~ Meeting Date 12/04/01 Winterfest 2001 is scheduled to take place between 10:00 AM and 6:00 PM. The street closures would be in effect from approximately 6:00 AM to 7:00 PM to allow for the dispersion and clean up of forty (40) tons of snow. The Police Department will monitor the progress of the Winterfest 2001, and will close and subsequently reopen streets and intersections as quickly as possible. A diagram of where Winterfest 2001 will take place is attached (Attachment A). The street closures will have an impact on City bus service in the area. Transit has agreed to cancel and re-route bus service in the area during the Winterfest 2001, and post signs of the interruption of service. Staff approval is recommended subject to the following conditions: 1. Prior to the event, Chula Vista RV Resort & Marina shall provide evidence, acceptable to the City, of commercial general liability insurance in the amount of $1 million in the form of a Certificate of Insurance and Policy Endorsement naming the City of Chula Vista as additional insured. 2. Chula Vista RV Resort & Marina will provide adequate police coverage at the event as determined by the Police Department through coordination with the Department's Special Events Coordinator. Winterfest 2001 will be marshaled by police and police department volunteers. 3. Adequate traffic control equipment and devices as determined by the Police Department. The Chula Vista RV Resort & Marina will be responsible for renting or purchasing the equipment and delivering and removing it from designated locations. 4. Chula Vista RV Resort & Marina will provide posting and removal of "No-Parking" signs along the Winterfest 2001 event. 5. Chula Vista RV Resort & Marina will provide and remove adequate portable toilets and trash receptacles at the Winterfest 2001 staging area. 6. Chula Vista RV Resort & Marina will be responsible for the removal of any snow left over at the end of Winterfest 2001. 7. Winterfest 2001 sponsors will provide a letter agreeing not to sue the City, its agents, and employees for any act arising from the Winterfest 2001 to hold the Page 3, Item Meeting Date 12/04/01 City harmless, fully indemnify and release the City, its agents and employees from any and all liability arising from the Winterfest 2001, excluding only that liability which may arise from the negligence or sole willful conduct of the City. The Chula Vista RV Resort & Marina has also made a formal request to the City Manager asking that fees associated with police services for this year's Winterfest 2001 be waived. In calculating fees for police service, staff estimates it will cost approximately $3,000 dollars. The use of volunteers is based on availability; however, staff is confident up to ten volunteers (Explorer Scouts and Senior Volunteers) will be available for this year's event. Winterfest 2001 is expected to draw hundreds of children from Chula Vista and will include craft and food booths, a stage with entertainment, and a drop off area for unwrapped toys for children. Winterfest 2001 hopes to provide a positive image and venue for the youth in our community. FISCAL IMPACT: Staff estimates it will cost $3,000 to provide Police coverage at the event. Costs are calculated on an overtime rate plus a 10% administrative fee, standard for nonprofit events. Costs for Police related services will be absorbed by the Police Department. Oct 26-01 01:48P Chula Vista RV Resort 619 422 8872 P.01 ATTACHMENT A C HULA VISTA RV RESORT& MARINA FACSIMILE TRANSMITTAL SHEET O~c~] ~ Chula %/[sta Police Special Events 10/26/01 691-528~ 2 476-530] 422-0111 ~nted( N/A Per oux tel( )hone conversation I am faxi,g you rh;~ request for the closure of a section of Sa~dpip( ' Way on December 8, 2001 from 6:00 A.M. to 7:00 P.M. The actual event time is fro~ 10:00 A.M. to 6:00 P.M. The area requested is outlined in heavy black on the street ntp and park area. We are ~4dng that the street be closed from the entrance of the marl ia parking lot to the entrance of the RV Resort. 40 tons of s xow will be brought in for the kids to play On; there will be craft and food booths, a st ge with entertainment and a drop off area for tmwmpped toys for children along with !ood items. This of course is only a small preview of what the day will consist of. This is Co- )p of the organizations mentioned below: Chula Vist RV Resort and Marina, South Bay Community Services, The Salvation Army, CV >al, Head Start, Episcopal Com-~unlty Services, Lutheran Social Services, Chula Vist Cares, Chula Vista Welfare Council and Catholic Charities. We are all I atting our efforts together to make it a successful year for all underprivi] ~ged children in the South Bay Area. Please let n know what we will need in order to use the property mentioned. Thank you ~ advance for you timely consideration and help in this matter. Andrea La~ ralley Manager of the Chula Vista RV Resort 460 SANDPIPER WAY CHULA VISTA, CA. 91910 RESTROOMS [ PET I ~, [ STOF PICNIC AREA '~ :~ASSION VINE HORSESHOE PITS I..U RESOLUTION RESOLUTION APPROVING REQUEST FROM THE CHULA VISTA RV RESORT & MARINA TO CONDUCT WlNTERFEST 2001 AND AUTHORIZING TEMPORARY STREET CLOSURES AND WAIVING CITY FEES FOR POLICE SERVICES WHEREAS, the Chula Vista RV Resort & Marina, in conjunction with South Bay Community Services, The Salvation Army, Chula Vista PAL, Head Start, Episcopal Community Services, Lutheran Social Services, Chula Vista Cares, Chula Vista Welfare Council, and Catholic Charities, will be conducting Winterfest 2001 on Saturday, December 8, 2001; and WHEREAS, the Chula Vista RV Resort & Marina has requested City fees for police services be waived; and WHEREAS, Law Enforcement related fees estimated at $3,000 dollars shall be waived; and WHEREAS, the Chula Vista RV Resort & Marina will provide evidence of insurance in the form of a Certificate of Insurance and Policy Endorsement, acceptable to the City, in the amount of $1 million dollars naming the City of Chula Vista as additional insured, and their insurance company as primary; and WHEREAS, the Chula Vista RV Resort & Marina will provide adequate traffic control equipment and "No-Parking" signs as specified by the Chula Vista Police Department; and WHEREAS, the Chula Vista RV Resort & Marina will provide adequate police coverage at the event as determined by the Chula Vista Police Department; and WHEREAS, the Chula Vista RV Resort & Marina will be responsible for the removal of any snow left over at the end of Winterfest 2001; and WHEREAS, Winterfest 2001 sponsors will provide a letter agreeing not to sue the City, its agents and employees for any act arising from the Winterfest 2001 to hold the City harmless, fully indemnify and release the City, its agents and employees from any and all liability arising from the Winterfest 2001, excluding only that liability which may arise from the negligence or sole willful conduct of the City, NOW, THEREFORE, BE IT RESOLVED the City of Chula Vista does hereby approve the waiver of police service fees and authorizes temporary street closures on Saturday, December 8, 2001 for the Winter[est 2001 sponsored by the Chula Vista RV Resort & Marina. Presented By Approved as to form by Rich~l P.~n~erson ~L~¥~ John M. Kahen~ Chief of Pc~ic~ City Attorney COUNCIL AGENDA STATEMENT Item ~9 Meeting Date 12/4/01 ITEM TITLE: Resolution Approving reclassifications, salary adjustments and/or changes in benefit group for seven classified positions and appropriating funds therefore. SUBMITTED BY: Director of Human ResourcesQg,.) REVIEWED BY: City Manager ~ ~Df~ (4/Sth Vote: Yes X No__) The following requests for reclassification, salary adjustments and/or changes in benefit group are a result of a change in the scope of duties and realm of responsibility assigned to these seven positions. These classifications now have six incumbents and one vacancy. RECOMMENDATION: Council adopt the resolution approving the reclassifications and the salary/benefit adjustments, to be effective pay period beginning December 14, 2001, and appmpriate $11,722 based on unanticipated revenues in FY02 and amend the proposed FY03 spending plan to increase the personnel services budget in Administration by $12,784, in the City Clerk's Office by $14,903 and the City Attorney's Office by $5,189 to be funded through unanticipated revenues. BOARD/COMMISSION RECOMMENDATION: N/A DISCUSSION: Position: Principal Management Analyst (Middle Management) Department: Office of Budget and Analysis Recommendation: Create a new classification of Fiscal Management Analyst. The new classification will address the specialized nature of the duties performed by the incumbents and will better reflect the scope and level of responsibilities assigned. Salary placement will increase to $79,190 (E) annually or 10% above the current salary. Discussion: The duties and responsibilities assigned to the Principal Management Analysts (assigned to the Office of Budget and Analysis) have increased significantly in scope and complexity over the past year along with the demands required by the position. The growing need for complex financial and cost-benefit analyses as well as the impacts of the two-year budget has increased the level, skill and knowledge required to perform these duties. The incumbents duties and responsibilities include complex statistical and financial analysis, project management coordination, along with analysis of complex citywide and fiscally relevant interdepartmental and departmental financial and operations projects. The fiscal analyses include cash flow models, fiscal impact of new development, and indirect cost allocation along with the development of computer models in database and spreadsheet formats. Under minimal supervision the incumbents work on highly complex projects that have multimillion-dollar impact (such as DIF, GMOC, fee studies, staffing fommlas) developing models and programs. Along with analyzing data, the incumbents are Page 2, Item ~ Meeting Date 12/4/01 responsible for the development of the data collection instruments and the database structure as well as training staff in the utilization of in-house programs. The incumbents also take a lead role in the budget process by developing budget instructions, working with departments, reviewing department requests, and making recommendations as to funding and justification. As the analytical arm of the City Manager' Office the OBA analysts are typically assigned some of the most complex and sensitive projects in the City in which they are expected to take lead with minimal supervision. Agencies locally and regionally were surveyed for comparable positions to assess external salary comparison and were used to determine the scope and level of responsibility of the incumbents' positions and appropriate salary placement. Fiscal Impact: In FY02 the $13,240 cost of the reclassifications can be absorbed though anticipated salary savings. In FY03 the $24,588 cost of these positions can be partially offset by $11,804 in anticipated salary savings with the remaining $12,784 to be appropriated based on unanticipated revenue from developer deposit reimbursements. Position: Intergovernmental Affairs Coordinator (Middle Management) Department: City Manager's Office Recommendation: Increase salary by 10% to an annual E-Step of $79,190. Discussion: As the City has grown in size and complexity, the City's role in monitoring and impacting legislation has grown and as such the Intergovernmental Affairs Coordinator's responsibilities and job duties have grown accordingly. The incumbent reports directly to the City Manager with minimum day-to-day supervision, working in direct contact with the Mayor and members of the City Council, and providing direction and guidance to Department Heads throughout the organization. The Intergovernmental Affairs Coordinator is also responsible for developing chtical relationships and alliances with other agencies that can assist the City's efforts to protect its fiscal health as well as the quality of life of those who live and do business in the City of Chula Vista. During the past two years the duties and responsibilities of the incumbent have grown in scope and complexity. This position requires an in-depth knowledge of the state and federal legislative process, a high degree of sophistication in day-to-day working relationships with key legislators and their staff, and an ability to influence those individuals with respect to their actions on legislative proposals. Therefore, the salary upgrade will better reflect the incumbent's current duties and responsibilities. Fiscal Impact: In FY02 the cost of $4,413 and FY03 cost of $8,196 for the salary adjustment can be absorbed through anticipated salary savings. Position: Records Manager (Confidential to Middle Management) Department: City Clerk's Office Recommendation: Based on both the labor market survey data and internal relationships within the City Clerk's office, salary placement for this classification is recommended at $54,380 (E) or 27.29% above the current salary. The salary recommendation will increase the Records Manager position to the salary level of the Deputy City Clerk, which is similar in scope of duties and level of responsibility. Page 3, Item ~ Meeting Date 12/4/01 Discussion: In municipal organizations, the City Clerk, Assistant City Clerk or Deputy City Clerk most commonly performs the duties of Records Manager. In Chula Vista, the City Clerk (executive manager) performed the duties until 1998, when a Deputy City Clerk/Records Manager (mid-manager) was hired to focus on the citywide records management and document imaging programs. It is appropriate that the Records Manager position be placed in the mid- management group because of the complex duties involved in planning, organizing and managing the citywide programs. The incumbent also performs varied, complex and confidential administrative assistance to the City Clerk and Assistant City Clerk. Salary data and job specifications from local and regional cities were collected, reviewed and compared to the Records Manager position. Several local comparisons were identified, and salary data was used for comparisons purposes. Job specifications were reviewed and compared to the level of dnties and responsibility assigned to the Records Manager. An internal comparison of duties and responsibilities was also made with the Deputy City Clerk's position. It was determined that both positions have duties that are similar in scope and level of responsibility. Based on salary and job specification surveys, and on the internal organization of the City Clerk's department, it is recommended that the Records Management position be aligned with the Deputy City Clerk position. Fiscal Impact: The cost of the increase for the Records Manager position in FY02 of $8,969 and the FY03 and ongoing cost of $14,903 will be funded by unanticipated revenue. Position: Legal Assistant (Confidential) Department: City Attorney Recommendation: Create a new classification of Senior Legal Assistant. The new classification will be a lead position in the litigation division of the City Attorney's Office and be responsible for supervising and training the Legal Assistant in that division along with performing the administrative duties of the division. Salary placement will increase to $49,688 (E-step) armually or 10% above the current salary. Discussion: Over the past several years the City Attorney's Office has expanded to meet the increasing legal demands of the City. Several years ago the Office was divided into two divisions, administration and litigation. The litigation division now encompasses additional areas of legal support and consists of one assistant city attorney, two deputy city attorneys, one contract attorney and two legal assistants. One legal assistant position is currently vacant as the previous incumbent resigned to accept a position in the private sector. As the division has expanded so has the amount of administrative responsibilities associated with the division such as billing, time keeping and training. Previously, when the office was smaller, the confidential secretary to the City Attorney was able to perform all the necessary administrative functions of the office. However, now that the administrative division has also expanded it is necessary to transfer many of the administrative tasks to the litigation division. In addition, the division is located apart from the main City Attorney office due to space constraints and this factor has mandated that an experienced legal assistant be assigned to the division in order to maintain its efficiency and productivity and to act as the lead legal assistant in the division. Page 4, Item ~5~ Meeting Date 12/4/01 Fiscal Impact: The $2,753 FY02 cost of this reclassification and the FY03 cost of $5,189 will be funded by unanticipated revenue. FISCAL IMPACT: There will be no fiscal impact on the General Fund fund balance. In FY02 the cumulative cost of all the reclassifications and salary adjustments is $29,375; $17,653 can be absorbed in the budget based on anticipated salary savings with the remaining $11,722 to be funded through unanticipated miscellaneous revenues. The FY03 and ongoing fiscal impact of these changes is $52,876; $20,000 can be absorbed in the budget based on anticipated salary savings, $12,784 can be offset by unanticipated developer deposit reimbursements and the remaining $20,092 will be funded through unanticipated miscellaneous revenues. RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING RECLASSIFICATIONS, SALARY ADJUSTMENTS AND/OR CHANGES IN BENEFIT GROUP FOR SEVEN CLASSIFIED POSITIONS AND APPROPRIATING FUNDS THEREFOR WHEREAS, the addition of higher level duties and changes in level of authority and responsibility necessitates reclassification and/or change in benefit group for the following seven classified positions: Position: Principal Management Analyst (Middle Management) Department: OFFICE OF BUDGET AND ANALYSIS Recommendation: It is recommended to reclassify three incumbents and one vacant Principal Management Analyst position by the creation of a new classification of Fiscal Management Analyst. The new classification will address the specialized nature of the duties performed by the incumbents and will better reflect the scope and level of responsibilities assigned. Salary placement will increase to an annual E-Step salary of $79,190 or 10% above the current salary. Position: Intergovernmental Affairs Coordinator (Middle Management) Department: CITY bk%-NAGER'S OFFICE Recommendation: During the past two years, the duties and responsibilities of the Intergovernmental Affairs Coordinator have grown in scope and complexity. This position requires an in-dept knowledge of the state and federal legislative process, a high degree of sophistication in day-to-day working relationships with key legislators and their staff, and an ability to influence those individuals with respect to their actions on legislative proposals. It is recommended that the salary be increased by 10% to an annual E-Step of $79,190. Position: Records Manager (Confidential to Middle Management) Department: CITY CLERK'S OFFICE Recommendation: Based on both the labor market survey data and internal relationships within the city Clerk's office, it is recommended that the Records Manager position be moved from Confidential to Middle Management. The annual salary range will increase to an annual E-Step salary of $54,380. The salary recommendation will increase the Records Manager position to the salary level of the Deputy City Clerk, which is similar in scope of duties and level of responsibility. Position= Legal Assistant (Confidential) Department= CITY ATTORNEY Reco~unendation= It is recommended that a new classification of Senior Legal Assistant be created. This new classification will be a lead position in the litigation division of the City Attorney's office and be responsible for supervising and training the Legal Assistant in that division along with performing the administrative duties of the division. Salary placement will increase to an E- step salary of $49,668, or 10% above the current salary. WHEREAS, there will be no fiscal impact on the General Fund balance; and WHEREAS, in FY02 the cumulative costs of the reclassifications and salary adjustments is $29,375; $17,653 can be absorbed in the budget based on anticipated salary savings, $12,784 can be offset by unanticipated developer deposit reimbursements and the remaining $29,092 will be funded through unanticipated miscellaneous revenues. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby approve certain reclassifications, salary adjustments and changes in benefit groups for the seven positions set forth hereinabove effective December 14, 2001. BE IT FURTHER RESOLVED that $11,722 ($8,969 to the City Clerk's budget and $2,753 to the City Attorney's budget) is hereby appropriated based on unanticipated discretionary revenues in FY02. BE IT FURTHER RESOLVED that the proposed FY03 spending plan is hereby amended to increase the personnel services budget in Administration by $12,784, in the City Clerk's office by $14,903 and the City Attorney's office by $5,189 to be funded through unanticipated revenues. Presented by Approved as to form by · Kaheny ~ Candy Emerson ~yAttorney Director of Human Resources J/ATTORNEY/RESO\ reclass[f'catJons 12-04 (NoverTiber 29, 2001 (2:41 PM)] -2- COUNCIL AGENDA STATEMENT ITEM MEETING DATE 12/04/01 ITEM TITLE: RESOLUTION Adopting the City of Chula Vista Cafeteria Benefits Plan for 2002 SUBMITTED BY: DIRECTOR OF HUMAN RESOURCES(t..~/ REVIEWED BY: CITY MANAGER.~i~,~9~' (4/§th Vote: Yes No X) The Internal Revenue Code requires that employers offering cafeteria plans under Section 125 have a written plan document, and that the employer adopt the plan document annually. This resolution will fulfill this requirement. RECOMMENDATION: That Council adopt the resolution. BOARD/COMMISSION RECOMMENDATION: N/A DISCUSSION: In June 1998, Council authorized updates to the City's flexible benefit plan in compliance with Internal Revenue Service (IRS) guidelines. Each of the City's bargaining groupswere invited to send representatives to participate in "designing" the City's Plan Document in compliance with IRS guidelines. The document presented here is the result of that meet and confer process and has been updated to reflect the 2002 beginning Flex Plan amounts, current health and dental plan options, and other changes to comply with current IRS regulations related to Section 125 Plans (i.e., definition of qualified change in family status and access to Plan while on FMLA). FISCAL IMPACT: None with this action. Attachment: A - City of Chula Vista Cafeteria Benefits Plan 2002 H:\Home\Personnel\Ma rgarita~2001 cafetriaplanA113.doc City of Chula Vista CAFETERIA BENEFITS PLAN YEAR 2002 C:\My Documents~AGENDA STATEMENT~.002 Plan Document Final.doc Page 1 of 7 City of Chula Vista Cafeteria Benefits Plan ' This is a "Cafeteria Plan" of benefits for City of Chula Vista employees and is intended to qualify under Section 125 of the Internal Revenue Code. ELIGIBILITY FOR PARTICIPATION This Plan is for the exclusive benefit of employees of the City of Chula Vista. Eligible employees are defined as individuals who are: 1. Directly employed by the City of Chula Vista, and 2. Working in a half time, three quarter time or full time benefit status. Hourly employees are not eligible for this plan except for School Site Coordinators under the STRETCH Program. Employees who are on approved leave, with or without pay, under the provisions of the Family Medical Leave Act (FMLA), are entitled to full access to their flexible benefit plan during their absence. If an employee fails to return to work after such leave for any reason other than the serious illness of the employee or the family member for whom the leave was granted or through no fault of the employee, they will be required to pay all flexible benefit plan monies paid to them, or on their behalf during the absence. Employees who are on an approved unpaid leave of absence for their own disability or illness, beyond the 12 weeks allowed under the FMLA will continue to have their health insurance and their basic life insurance premiums paid by their Flexible Benefit Plan. Employees who are authorized to take leave with benefits (e.g., Military Leave Policy) as approved by the City Council, will continue to be covered under the flexible benefit plan until expiration of leave pursuant to the provisions of such leave policy. The City of Chula Vista does not pay for an employee's benefits if the employee is ~n an unpaid status for any reason than those indicated above. The employee may choose to continue their health, and certain optional benefits coverage at their own cost until they return to work or for the designated length of time as determined by the City of Chula Vista. If the premiums are not paid, the coverage will be short-term canceled. The coverage will be reinstated immediately upon the employee's return to work, or the first of the month after their return if premiums were not paid during the employee's absence. C:\My Documents~AGENDA STATEMENT, S002 Plan Document Final.doc Page 2 of 7 PLAN YEAR The Plan Year is from January 1 to December 31 of each year. ELECTIONS Election of benefits must occur during the open enrollment period prior to the start of each Plan Year or, in the case of a newly hired employee, within 30 days from eligibility date. Enrollment Forms Elections must be made in writing on forms/worksheets provided by the Risk Management Division: An authorization form must be signed by employees to allow for necessary deductions from their paychecks to provide the benefit coverage selected. In addition to the benefit election form (if applicable), the employee must also complete and sign all appropriate applications and enrollment forms for the specific benefits selected. Default Enrollment If an employee fails to complete the election of benefits prior to the start of the Plan Year, that employee will automatically be enrolled in their previous year's Health Insurance Plan (including any dependent health offset). If not available, Risk Management will enroll the employee in a comparable plan. The remainder of the annual allotment will be placed in the Cash Payment. In the case of a new hire or newly eligible employee, failure to turn in the completed forms within 30 days from eligibility date will result in automatic enrollment in the least costly health plan made available by the City and the remaining funds will be placed in the taxable Cash Payment option. Effective Date of Coveraqe The elections are effective for the period of January 1 to December 31 of each year or, for employees hired after January 1 of a Plan Year, for the remainder of the Plan Year following eligibility date. Benefits are prorated for employees hired after January 1 of each Plan Year. Termination of Coverage Upon Separation Benefits terminate at the time an employee terminates employment except for health and dental, which terminate on the last day of the month in which the employee terminates his/her employment. An eligible employee who terminates and is rehired within 30 days will be reinstated to his or her prior benefit elections at termination unless another qualifying event has occurred that allows a change. An employee who is reinstated after 30 days may make new elections. C:\My Documents~AGENDA STATEMENT~2002 Plan Document Final.doc Page 3 of 7 Qualified Chanqe in Family Status Elections are irrevocable except to accommodate changes in family status as defined in the Income Tax Regulations, 26 CFR Part 1, or to accommodate any significant curtailment or reduction of coverage under any given benefit plan, or in the case of any significant premium increase or decrease imposed by a third-party insurer. Participants who experience a change in family status may be allowed to change or revoke elections. Several examples, although not all inclusive, of the types of events that constitute a change in family status are as follows: · The marriage or divorce of the employee. · The birth or adoption of a child. · The death of the employee's spouse or dependent. · Significant cost change or coverage change. · Termination or commencement of employment by employee's spouse. · Unpaid leave of absence by the employee or the employee's spouse. Changes are also permitted in the event of significant changes in health coverage of the employee or the employee's spouse that are related to the spouse's employment or are subject to the Special Enrollment Period as described in the Health Insurance and Portability and Accountability Act (HIPAA). Changes to benefit elections will be permitted only to the extent that they are consistent with and appropriate to the reason the change is requested. CONTRIBUTIONS Employer contributions are a fixed amount provided by the City to each eligible employee on a non-elective basis. Salary reduction agreements are provided for in this Plan for Health Insurance premiums in excess of the employer's contributions. In the event payroll deductions for reimbursement accounts are selected and subsequently stopped due to an eligible family status change, the reactivation of the account will not be permitted until the next plan year if elected during open enrollment. C:\My Documents~AGENDA STATEMENT~2002 Plan Document Final,doc Page 4 of 7 MAXIMUM CONTRIBUTIONS Eligible employees are allotted funds based on their bargaining groups. These amounts prorated for non-full-time unclassified or unrepresented employees. The allotments are as follows: UNIT AMOUNT Confidential $7,490 CVEA $6,490 Executive $10,390 Level 1 $2,425 IAFF Level 2 $4,494 Level 3 $6,078 Middle Managers $7,990 Level 1 $2,384 POA Level 2 $4,387 Level 3 $6,037 Senior Managers $8,990 WCE $7,990 Mayor $10,390 Councilmembers $6,926 Eligible employees may elect the cost of their health insurance premium in excess of this allotment to be paid on a pro-tax (salary reduction) basis. In addition, an eligible employee may elect up to $2,500 for a Dental/Medical/Vision Reimbursement Supplement account. Single or married (filing a joint return), eligible employees may also set aside up to $5,000, from all sources, per plan year for a Dependent Care Reimbursement Supplement Account. A married employee filing returns separately may set aside up to $2,500 per plan year. BENEFITS All eligible employees participate in the Flexible Benefits Plan. Each employee must select one health insurance coverage, unless married to another City employee and are covered under the spouse's policy. The Mayor and Councilmembers have the option to waive medical insurance coverage. All employees except those represented by IAFF, POA and WCE, and the Mayor and Councilmembers must elect the premium for $3,000 in life insurance coverage currently $8.00 per year. C:\My Documents~AGENDA STATEMENT~002 Plan Document FinaLdoc Page 5 of 7 The options in this plan are as follows: 1. Health Insurance a. Kaiser (01) b. PacifiCare PPO Plan c. PacifiCare (HMO) Low Option d. PacifiCare (HMO) High Option e. Spouse of City employee coverage 2. Life Insurance a. $3,000 * · Note: Does not apply to POA, IAFF, WCE, Mayor or Councilmembers. 3. Remaining money may be used for: 1. Dependent Health Insurance 2. Cash Payment (taxable) 3. Dental/MedicalNision reimbursement 4. Dependent/Child Care (daycare) reimbursement 5. Employee group dental Each of these benefits is described in more detail in the Summary Highlights of Employee Benefits and in the respective plan documents or insurance contracts, which are incorporated here by reference. CONSTRUCTION If the plan contains contradictory provisions or if there appears to be a conflict between its provisions, the following rules apply: a. The interpretation that favors the Plan as a tax-free plan over any interpretation that might render the Plan taxable. b. Subject to paragraph (a), the rules established by the Supreme Court of California for the construction of like instruments will apply. C:\My Documents~AGENDA STATEMENT'S_002 Plan Document Final.doc Page 6 of 7 PLAN PARTICIPATION RIGHTS As a participant in the plan, you are entitled to examine, without charge, at the Plan Administrator's office all plan documents including insurance contracts; obtain copies of all Plan Documents (at a reasonable cost) and other Plan information upon request to the Administrator. PLAN IS NOT AN EMPLOYMENT CONTRACT This plan document is not a contract of employment. Neither the creation of the Plan nor any amendment to it gives any legal or equitable right to any person against the employer. Participation in the Plan does not give any member any right to continued employment. PLAN ADMINISTRATOR The Plan Administrator is the Risk Manager of the Human Resources Department or his/her designees. The address of the Plan Administrator is: 276 Fourth Avenue Chula Vista, CA 91910 Telephone: (619) 691-5096 PLAN AMENDMENT OR TERMINATION The City of Chula Vista reserves the right to amend the Plan from time to time if deemed necessary or appropriate to meet the requirements of the internal Revenue Code and any similar provision of subsequent revenue or other laws or pursuant to negotiations with the Employee groups; provided that no such modification or amendment shall make it possible for any benefit contributions or payment to be used for, or directed to purposes other than for the exclusive benefit of participating employees and their beneficiaries under the Plan. The City reserves the right to discontinue or terminate the Plan at the end of any Plan Year or in accordance with negotiations with the Employee Groups. Any such amendment, discontinuance or termination shall be effective on January 1 of any given year or such date that is agreed upon by the City and Employee Groups. No amendment, discontinuance or termination shall allow the return of funds to the City or the use of any funds for any purpose other than for the exclusive benefit or participating employees and their beneficiaries. C:\My Documents~AGENDA STATEMENT~002 Plan Document FinaLdoc Page 7 of 7 RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING THE CITY OF CHULA VISTA CAFETERIA BENEFITS PLAN FOR 2002 WHEREAS, the Internal Revenue Code requires that employers offering cafeteria plans under Section 125 have a written plan document and that the employer adopt the plan document annually; and WHEREAS, in June of 1998, Council authorized updates to the City's flexible benefit plan in compliance with Internal Revenue Service guidelines; and WHEREAS, the document attached for formal adoption is the result of the meet and confer process and the 2002 Plan Document has been updated to reflect the 2002 beginning Flex Plan amounts, current health and dental plan options, and other changes to comply with current IRS regulations related to Section 125 Plans (i.e., definition of qualified change in family status and access to Plan while on FMLA). NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby adopt the City of Chula Vista Cafeteria Benefits Plan for 2002 as set forth in Attachment A. Presented by Approved as to form by Candy Emerson J?hn/~. Kaheny ~ Director of Human Resources C~Attorney J~ ~attorney~reso~cafeteria plan 2002 COUNCIL AGENDA STATEMENT Meeting Date 12/4/01 ITEM TITLE: Resolution adopting an a~ended 457 Deferred Compensation Plan SUBMITTED BY: Assistant City Manager Powell{j REVIEWED BY: City Manager z~.,!~3~(4/Sths Vote: Yes No X ) SUMMARY: The City has offered a Deferred Compensation Plan to employees since 1975. Since the Plan was adopted, it has been modified several times in order to conform to changing Internal Revenue Service regulations. This amendment is necessary to implement the considerable enhancements made available by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) . RECOMMENDATION: Approve Resolution adopting an amended 457 Deferred Compensation Plan. DISCUSSION: On February 18, 1975, the City Council approved a 457 Deferred Compensation Plan. The Plan has undergone several modifications since that time, some minor, some major, primarily to maintain conformance with Federal regulations. The City currently contracts with two Plan administrators, National Deferred Compensation, Inc. and the International City Manager' s Association. Both administrators have notified staff of enhancements available to the City Plan due to the passage of EGTRRA. The proposed improvements can be categorized into three main areas: increased contribution limits, improved portability between Plans, and enhanced flexibility of distribution options. Contribution Limits Under the current Plan, contributions are limited to the lesser of (1) 25 percent of taxable compensation before deferrals or (2) $8,500. Effective January 1, 2002, the new limit will be the lesser of (1) 100 percent of taxable compensation after reduction for 457 Plan deferrals or (2) $11,000. The new dollar limit is then increased by $1,000 each year through calendar year 2006 after which it increases in $500 increments based on inflation. /O -/ Page 2, Item /O Meeting Date 12/4/01 The existing catch-up contribution limit of $15,000 per year for three years is also increased to twice the basic annual limit, or $22,000 in calendar year 2002. In addition, there is also a new "catch-up" provision available for participants age 50 and older, allowing an additional contribution of $1,000 over and above the basic contribution limit and increasing by $1,000 each year through calendar year 2006. Plan Portability Under current regulations, when a 457 Plan participant changes employers or leaves the workforce, they have very limited choices; leave all or a portion of their Plan assets in the Plan, transfer the funds to another 457 plan, or take a distribution resulting in taxation. EGTRRA includes provisions allowing participants the additional option of ~rolling" their funds into traditional IRA's or any other type of qualified retirement plan. These new provisions also allow participants to roll assets from other plans into the City's 457 Plan. Plan Distributions Although information on all of the enhancements to the regulations covering Plan distributions is still to come, it is clear that EGTRRA eliminated two major restrictions. As of January 1, 2002, there is no definitive timeframe within which participants must elect a beginning payment date for distributions and once a participant begins receiving payments, the payment schedule is modifiable. Approval of the amended Plan will maintain compliance with Federal Government tax laws governing the deferral of compensation for income tax purposes and continue to afford City employees maximum benefits under the law. FISCAL IMPACT: This action will have no fiscal impact on the City as the Plan is self-supporting through charges to the participants. CITY OF CHULA VISTA RESTATED AND AMENDED DEFERRED COMPENSATION PLAN (457) RESTATED AND AMENDED DEFERRED COMPENSATION PLAN AND TRUST/CUSTODIAL DOCUMENT FOR PUBLIC EMPLOYEES The Plan consists of the provisions set forth in this document, and is applicable to each Participant who elects to participate in the Plan. The Plan is effective as to each such Participant upon the date he becomes a Participant by executing a Participation Agreement with the Administrator. Section 1. Name: The name of this Restated and Amended Deferred Compensation Plan and Trust/Custodial Document is theCi ty of Chul a Vista_ State ofCal i fornia , Deferred Compensation Plan, hereinafter referred to as the "Plan". This Plan is the continuation in restated form of the City of Chul a Vi sta Deferred Compensation Plan previously established by the Employer on February 18, .1975 Section 2. Purpose: The primary purpose o£the Plan is to attract and retain personnel by permitting them to enter into agreements with the Employer that will provide for deferral of payment of a portion of current Compensation until death, disability, retirement, termination of employment, or other events as provided herein, in accordance with applicable provisions of State law, and applicable Sections of the Internal Revenue Code. Section 3. Definitions: For the purposes of this Plan when used and capitalized herein the following words and phrases shall have the meanings set forth below. 3. l "Account" means the Participant account maintained for the purpose of recording deferred compensation, exchanges, withdrawals, and other account activity as well as any investment gains or losses allocated thereto. 3.2 "Administrator" means the organization selected by the Employer to administer the Plan. 3.3 "Beneficiary" means the person or persons, a Participant designates to receive his interest under the Plan after the Participant's death. The designation may be made, revoked and/or changed only by a written instrument signed by the Participant and filed with the Administrator prior to the Participant's death. If the Participant fails to designate a Beneficiary or if no designated Beneficiary survives the Participant, his Beneficiary shall be his spouse if he is married, or, if not, his estate. 3.4 "Code" or "IRC" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. Page I of 14 3.5 "Compensation" means all payments made by the Employer as remuneration for services rendered, including salaries, fees, etc. 3.6 "Deferred Compensation" means the amount of Compensation that a Participant elects to defer into the Plan under the Participation Agreement. 3.7 "Disability" means the inability of a Participant to engage in his usual occupation by reason of a medically determinable physical or mental impairment as determined by the Employer on the basis of advice from a physician or physicians. 3.8 "Eligible Rollover Account" means the separate Account maintained by the Administrator within the Plan for a Participant for amounts of Eligible Rollover Distributions. 3.9 "Eligible Rollover Distribution" means an eligible rollover distribution as defined in IRC Section 402(c)(4), including Eligible Rollover Distributions to a surviving spouse under IRC Section 402(c)(9). 3.10 "Eligible Retirement Plan" means an Eligible Retirement Plan as defined in IRC Section 402(c)(8)(B). 3.1 t "Employee" means any officer, employee or elected official of the Employer; including all extra-help or temporary employees, who has been designated by the Employer as an Employee for participation in the Plan. 3.12 "Employer" means the City of Chula ¥ista 3.13 "Employer Contribution" means the contribution made by the Employer to the Plan. 3.14 "Employment Period" means a period from January I through December 31 of the same year, except that the first Employment Period of an Employee hired on any date other than January 1 shall be the period beginning with the date of employment and ending on December 31 of the same year. 3.15 "Includible Compensation" means, for the purposes of the limitations on deferrals, Compensation for services pertbrmed for the Employer which is currently includible in gross income after giving effect to all provisions of the IRC. The amount of Includible Compensation shall be determined without regard to any community property laws. 3.16 "Independent Contractor" means any person receiving any type of compensation from the Plan Sponsor or any of its agencies, departments, subdivisions or instrumentalities for which services are rendered pursuant to one or more written or oral contracts, if such person is not an Employee. Page 2 of 14 3.17 "Investment and Trust/Custodial Fund" means a fund established by the Employer as a convenient method of setting aside a portion of its assets to meet its obligations under the Plan. 3.18 "Normal Retirement Age" means the age specified in writing by the Participant. If the Employer has a Employer's Retirement System, the Normal Retirement Age specified by the Participant must be an age at which the Participant is eligible to retire pursuant to the Employer's basic pension plan, by virtue of age, length of service, or both, without the consent of the Employer and with the right to receive immediate retirement benefits without actuarial or similar reduction because of retirement before some later specified age. If the Employer has no Employer's basic pension plan, the Normal Retirement Age specified by the Participant must be at lease age 60. In no event shall Normal Retirement Age be later than age 70 V2. 3.19 "Participant" means any Employee or Independent Contractor who is or has been eligible to defer Compensation to, and retains rights to benefits under, this Plan and who participates in this Plan by signing a Participation Agreement. 3.20 "Participation Agreement" means the agreement executed and filed by an Employee with the Administrator under which the Employee elects to become a Participant in the Plan. 3.21 "Plan" means the Employer's Deferred Compensation Plan as set forth in this document and as it may be amended from time to time. 3.22 "Plan Year" means the calendar year in which the Plan becomes effective, and each succeeding calendar year during the existence of this Plan. 3.23 "Severance From Employment" means the severance of a Participant's employment with the Employer, as defined by IRC 457(d)(l)(A), or on account of the Participant's death or retirement. An Independent Contractor shall not be considered Severed From E~nployment from the Employer and shall not receive any benefits under the Plan unless (i) at least 12 months have expired since the date on which the last contract, pursuant to which the Independent Contractor provided any services to the Employer, was terminated, and (ii) the Independent Contractor has performed no services for the employer during the 12 month period referred to herein either as an Independent Contractor or Employee. 3.24 "Trustee/Custodian" means a bank, trust company, financial institution, or other legally authorized entity appointed by the Employer to have custody of Plan assets in the Investment and Trust/Custodial Fund. 3.25 "Unforeseeable Emergency" means severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or a Participant's dependent (as defined in IRC Section 152(a)), loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Page 3 of 14 /o Section 4. Participation in the Plan: 4.1 Participation. Each Employee and Independent Contractor may elect to become a Participant in the Plan and defer payment of Compensation not yet earned by executing a Participation Agreement and filing it with the Administrator at any time during active employment with the Employer. Compensation shall be deferred for any calendar month only if a Participation Agreement providing for such deferral has been entered into and is effective before the beginning of such month. 4.2 Designation of Beneficiary. The Participant shall have the right to file a Beneficiary election with the Employer designating the person or persons who shall receive the benefits payable under the Plan in the event of the Participant's death. The form for this purpose shall be provided by the Administrator and will have no effect until it is signed by the Participant and accepted by the Administrator prior to the Participant's death. If the Participant dies without electing a Beneficiary under the Plan, benefits will be paid to the Participant's estate. The Participant maintains the sole responsibility for filing a proper beneficiary election with the Administrator. 4.3 Modification of Deferral. A Participation Agreement shall remain in effect until it is terminated or modified. A Participant may modify an existing Participation Agreement to effect subsequent deferrals in accordance with rules established by the Employer. Such modification must be filed by the Participant with the Employer prior to the beginning of the month for which the modification is to be effective. 4.4 Termination of Deferral. A Participant may terminate further deferrals of Compensation under the Plan by filing with the Administrator an executed notice of termination of his Participation Agreement. Any revocations or terminations of deferrals shall be effective prospectively only. Participant Account balances shall not be payable to an Employee upon terminating deferrals under the Plan unless such Account balances would be otherwise payable to the Participant under the Plan. 4.5 Selection of Investment Options by the Participant. The Participant shall select one or more investment options in the Investment and Trust/Custodial Fund into which the Participant's Deferred Compensation shall be allocated; provided that any amounts so allocated equal or exceed a minimum of $20.00 per pay period. The Employer shall invest, or cause to be invested, the Participant's deferrals in accordance with such selection. 4.6 Selection of Investment Options bv the Beneficiary. After the death of the Participant, his Beneficiary shall have the right to amend the Participant's, or the Beneficiary's own, investment specification in the procedural manner approved by the Employer. Section 5. Amount of Deferrals; Deferral of Compensation: Page 4 of 14 5.1 Deferral of Compensation. During each Employment Period in which a Participant participates in the Plan, the Employer shall defer payment of such part of the Participant's Compensation as the Participant has specified in the Participation Agreement. 5.2 Employer Contribution. The Employer may contribute to the Plan for Participants. Employer contributions shall vest at the time the contributions are made and shall apply towards the maximum annual deferral limits of the Plan. 5.3 Limitation. The amount of Compensation which may be deferred by a Participant and the amount of Employer contributions, if any, made to a Participant's Account are subject to the following limitations: a. Annual Limitation. Except as provided in Paragraph (b) below, the maximum amount that a Participant may defer during an Employment Period, when added to the amount of any Employer Contribution for such Participant during the Employment Period, shall not exceed the lesser of (i) the maximum dollar amount under IRC Section 457(b)(2)(A) as adjusted for cost of living adjustments described in IRC Section 457(e)(15) or (ii) 100% of the Participant's Includible Compensation as provided in IRC Section 457(b)(2)(B). b. "+50 Catch-Up" Deferrals. The maximum deferral amount described in Paragraph (a) above and contributed under the Plan is increased for a Participant who has attained age 50 (or older) by the end of each Employment Period. The additional amount permitted to be contributed under this Paragraph is the lesser of (i) the applicable dollar amount set forth in IRC Section 414(v)(2)(B) or (ii) the Participant's Compensation for the taxable year reduced by any other elective deferrals of the Participant for the taxable year. This Paragraph shall NOT be applicable for any taxable year in which Paragraph (c) below applies. c. "Traditional Catch-Up" Deferrals. For one or more ora Participant's last three Employment Periods ending before the Participant attains Normal Retirement Age, the maximum amount a Participant may defer shall be the lesser of (i) twice the maximum deferral amount in effect under IRC Section 457(b)(2)(A) or (ii) the limitation established for the taxable year under Paragraph (a) above, plus the limitation established for purposes of Paragraph (a) for each of the prior taxable years beginning after December 31, 1978, during which the Participant was eligible to participate less the amount of Compensation deferred by or on behalf of the Participant under the Plan for each of such prior taxable years. 5.4 USERRA. Notwithstanding the preceding provisions of this Section, a Participant who is entitled to reemployment pursuant to th terms of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) may defer an additional amount under the Plan as provided for in that Act for the years of his or her service in the uniformed se~'vices (as defined by USERRA). Any such deferral will not be subject to Page 5 of 14 the limits set forth above in the year in which deferred, but will be subject to the limits for the Employment Period to which such deferrals relate. Section 6. Investment and Trust/Custodial Fund Provisions: 6.1 Investment and Trust/Custodial Fund. The Employer shall establish an Investment and Trust/Custodial Fund for the purpose of holding Plan assets for the exclusive benefit of the Plan's Participants or Beneficiaries. 6.2 Trust/Custodial Provisions: a. Trustees/Custodian. The Trustees/Custodian shall be, at any time the individual or individuals duly appointed and authorized by the Employer. b. Adoption of Investment Options. The Trustee/Custodian or the Employer shall work with the Plan Administrator to adopt various investment options for the investment of Plan assets. Additionally, the Trustee/Custodian or the Employer shall monitor and evaluate the appropriateness of those offerings by the Plan. The Trustees/Custodian or the Employer may de-select options that are determined to be no longer appropriate for offering. In the event options are de-selected, the Trustees/Custodian or Employer may move, or require Participants to move, account balances to an alternative investment option offered by the Plan. By exercising such right to select investment options or by failing to respond to notice to transfer from a de-selected option, Participants and their Beneficiaries agree that no Plan fiduciaries will be liable for any investment losses or lost investment opportunity under the Plan. c. Designation of Fiduciaries. The Employer, Trustees/Custodians, and their designees are fiduciaries under the Plan. Each fiduciary has only those duties or responsibilities specifically assigned to him under the Plan or delegated to him in writing by another fiduciary. Each fiduciary may assume that any direction, information, or action of another fiduciary is proper and need not inquire into the propriety of any such action, direction or information. Except as provided by law, no fiduciary will be responsible for the malfeasance, misfeasance or nonfeasance of any other fiduciary. d. Fiducia~ Standards. 1. The Trustees/Custodian and all other fiduciaries shall discharge their duties with respect to this Plan solely in the interest of the Participants and Beneficiaries of the Plan. Such duties shall be discharged for the exclusive purpose of providing benefits to the Participants and Beneficiaries and defraying expenses of the Plan. 2. All fiduciaries shall discharge their duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an Page 6 of 14 enterprise of a like character and with like aims, and as defined by applicable State law. e. Trustees/Custodian's Powers and Duties. The Trustees/Custodian'S powers and duties shall be those defined under applicable State law. f. Exempt Status. This Plan and Investment and Trust/Custodial Fund is intended to be exempt from taxation under Section 501(a) of the IRC and is intended to comply with Section 457(g) of the Code. The Trustees/Custodian shall be empowered to submit or designate appropriate agents to submit this Plan and Investment and Trust/Custodial Fund to the Internal Revenue Service for a determination of the eligibility of the Plan under Section 457, and the exempt status of the Investment and Trust/Custodial Fund under Section 501 (a). 6.3 Investment Options. Each Participant may allocate the balances of his Account under the Plan among the investment options provided under the Plan. A Participant may change his investment options in accordance with rules established by the Employer and/or the investment providers. 6.4 Account. The Employer shall maintain an Account for each Participant to hold any Deferred Compensation or Employer Contributions, as well as any gains or losses of such funds. Each Participant's Account shall be revalued at least quarterly to reflect the earnings, gains and losses creditable thereto or debitable therefrom in accordance with the performance of the investment options selected by the Participant. The earnings, gains and losses creditable to or debitable from an Account shall mean the actual earnings, gains and losses of each investment option, on a pro-rata basis among the Accounts of those Participants who selected that investment option. Section 7. Plan Administration: 7.1 Administration. The Plan shall be maintained by the Employer, which may implement rules and regulations for the administration of the Plan consistent with its Plan. 7.2 Powers. The Employer, or its designee, shall have all powers to perform all duties necessary to exercise its functions including, but not limited to, the: a. Determination of Employees' eligibility, participation, and benefits under the Plan; b. Establishment and maintenance of written records showing at any time the interest of a Participant in his Account; c. Interpretation and construction of the provisions of the Plan; d. Direction to make disbursement of benefits under the Plan; Page 7 of 14 /o e. Appointment of, and delegation to, such agents, advisors, counselors and delegates including an Administrator as may be necessary and appropriate for the administration and operation of this Plan. 7.3 Revocability of Administrative Action. Any action taken by the Employer with respect to the rights or benefits under the Plan of any person shall be revocable by the Employer as to payments or distributions not theretofore made pursuant to such actions and appropriate adjustments may be made in future payments or distributions to a Participant or Beneficiary to offset any excess payment or underpayment theretofore made to such Participant or Beneficiary. Section 8. Distribution of Benefits: 8.1 General Provisions. Except for Unforeseeable Emergency withdrawals under Section 8.5, and Voluntary In-Service Distribution withdrawals under Section 8.7 or otherwise specifically allowed by the Plan, distributions from the Plan may not be made to a Participant earlier than (i) the calendar year in which the Participant attains age 70 ½; or (ii) the calendar year in which there is a Severance From Employment by the Participant. All irrevocable elections of a Benefit Commencement Date by Participants or Beneficiaries made prior to January 1, 2002 and defaulted distributions (other than a defaulted distribution to an annuity option) may be voided at the election of the Participant or Beneficiary. 8.2 Mode of Payment. Benefits shall be paid in accordance with the payment option elected by a Participant. Payment amount, method of payment, and settlement options are available as provided by each of the available investment options. The Participant shall elect the mode of payment based upon the options then available. A Participant who has chosen a payment option, other than a purchased annuity payment option, shall have the ability to change his payment option, an administrative charge or restrictions may be applicable as determined by the Employer and Administrator. 8.3 Provisions Required Pursuant to Code Section 401(a)(9). Distribution ora Participant's entire Account shall commence not later than April 1 following the calendar year iii which he attains age 701/2 or separates from service, which ever is later. Unless the form of distribution is a single lump sum payment, distributions shall be made over a period not exceeding the life expectancy of the Participant, or the joint life expectancy of the Participant and his Beneficiary. 8.4 Payments to a Beneficiary. If the Participant dies before the benefits to which he is entitled under this Plan have been paid or exhausted, then the remaining benefits payable under the Plan shall be paid to his designated Beneficiary. The Beneficiary shall have the right to elect the time and mode of payment of such benefits, subject to the limitations set forth in this Plan. Such election as to the time of payment (distribution commencement date) shall be filed by the Beneficiary not later than ninety (90) days following the Page 8 of 14 Participant's death. Failure to file an election as to the form of payment may result in the Administrator making a lump sum payment to the Beneficiary. a. Death After Benefit Commencement. If the Participant dies after having begun to receive payments, the remainder of such scheduled payments shall be suspended for a period of sixty days after the Participant's death. During such suspension period, the Beneficiary may elect to receive the balance of the Participant's Account in a single lump sum or in another method of distribution, provided that any elected method will distribute the remaining balance at least as rapidly as under the method of distribution used prior to the Participant's death. If no such election is made by the Beneficiary by the end of the sixty-day suspension period, the remaining Account balance shall be paid to the Beneficiary by the same payment method originally selected by the Participant. b. Death Prior to Benefit Commencement. If the Participant dies before payments have begun, payments to a Beneficiary must comply with one of the following requirements: 1. If the Participant has no Beneficiary, or the Beneficiary is not a person, such as an estate or a trust, the entire account value will be distributed within five (5) years of the Participant's death; or 2. If the Beneficiary is not the Participant's spouse, then distribution of the Account must begin on or before December 31 of the calendar year following the Participant's death, and the entire account must be paid over a period not extending beyond the life expectancy of the Beneficiary; or 3. If the Beneficiary is the Participant's surviving spouse, distribution of the Account may be delayed until December 31 of the calendar year in which the Participant would have attained age 70 '/2 at which time the entire account must then be paid over a period not extending beyond the life expectancy of the spousal Beneficiary. c. Interpretation: This section has been drafted in accordance with Treasury Regulations issued under Section 401 (a)(9) of the Code. To the extent there is a conflict between this Section and the IRC, the provisions of the IRC and applicable Treasury Regulations shall prevail. 8.5 Unforeseeable Emergency Withdrawals. Notwithstanding any other provisions of this Plan, in the event of an Unforeseeable Emergency a Participant may request that benefits be paid to him at any time. Such request shall be subject to any limitations specified by the investment carrier. Benefits to be paid shall be limited strictly to the amount necessary to meet the Unforeseeable Emergency constituting financial hardship to the extent such Unforeseeable Emergency may be relieved: a. through reimbursement or compensation by insurance or otherwise, Page 9 of 14 b. by liquidation of the Participant's assets (to the extent such liquidation would not itself cause severe financial hardship), or c. by cessation or temporary suspension of deferrals under the Plan. Note: Foreseeable personal expenditures normally budgetable, such as a down payment on a home, the purchase of an automobile, college or other educational expenses, etc., will not constitute an Unforeseeable Emergency. The decision of the Employer or its designee concerning the payments of benefits under this Section shall be final. 8.6 Effect of Reemployment. Ifa Participant who has a Severance From Employment again becomes an Employee, no distributions shall be made or continued to the Participant while he is so employed. Any amounts which the Participant was entitled to receive on his prior Severance from Employment shall be held until the Participant is again entitled to a distribution under the terms of the Plan. 8.7 Voluntary In-Service Distributions. A Participant who is an active Employee of an eligible Employer shall receive a distribution of the total amount payable to the Participant under the Plan if the following requirements are met: a. the total amount payable to a Participant under the Plan does not exceed $5,000 (or the dollar limit under IRC Section 41 l(a)(l 1), if greater); and b. the Participant has not previously received an in-service distribution of the total amount payable to the Participant under the PLAN; and c. no amount has been deferred under the Plan with respect to the Participant during the two-year period ending on the date of the in-service distribution; and d. the Participant elects to receive the distribution. Section 9: Plan Transfers and Eligible Distribution Rollovers. 9.1 Outgoing Section 457 Plan to Plan transfers through Severance of Employment. Ifa Participant terminates employment with the Plan Sponsor and accepts employment with another employer which maintains an eligible deferred compensation plan (as defined in IRC Section 457) and the new employer's plan accepts transfers, the Participant may transfer his account balance from the Plan to the plan maintained by the new employer. 9.2 Outgoing Section 457 Plan to Plan transfers while Employed. If the Employer offers an eligible deferred compensation plan (as defined in IRC Section 457) other than the Plan, and such other plan accepts transfers, the Participant may transfer the account balance from the Plan to the other plan. Page 10 of 14 /o --,"3 9.3 Incoming Section 457 Plan to Plan Transfers. Transfers from other eligible deferred compensation plans (as defined in IRC Section 457) to the Plan will be accepted at the Participant's request if such transfers are in cash or non-annuity products currently offered under the Plan. Any such transferred amount shall not be subject to the contribution limitations of Section 5.3, provided however, that the actual amount deferred during the Employment Period under both Plans shall be taken into account in calculating the deferral limitation for that year. For purposes of determining the limitation set forth in Section 5.3, years of eligibility to participate in the prior plan and deferrals under that plan shall be taken into account. 9.4 Incoming Eligible Rollover Distributions. The Plan may receive an Eligible Rollover Distribution on behalf of a Participant from an Eligible Retirement Plan provided (a) the Eligible Rollover Distribution is made entirely in the form of U.S. dollars, and (b) the Participant demonstrates to the Administrator's satisfaction that the amount is a qualifying eligible rollover distribution under IRC Sections 402(c)(4), 403(a)(4) or 408(d)(3). 9.5 Outgoing Eligible Rollover Distributions. Subject to Section 8.1, a Participant may elect at the time and in the manner prescribed by the Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Participant, provided the Participant presents to the satisfaction of the Administrator a letter of acceptance or other written acknowledgment from the accepting plan that it is an Eligible Retirement Plan qualified to accept the Eligible Rollover Distributions. 9.6 Purchase of Service Credits. At any time, a Participant may use all or a portion of an account balance as a direct trustee-to-trustee transfer to a Retirement System to purchase permissive service credit or for the repayment of service credits, provided that (a) the Retirement System permits such a transfer, and (b) the Participant demonstrates to the Administrator's satisthction that the transfer is to a defined benefit governmental plan (as defined in IRC Section 414(d)) and the transfer is permissible for the purchase of service credit (as defined in Code Section 415(n)(3)(A)) or for the repayment of service credits permissible by IRC Section 415(k)(3). Section 10. Domestic Relations Orders. 10.1 Receipt of Orders. When the Employer, Administrator, Plan or Investment and Trust/Custodial Fund receives a judgment, decree or order entered or enforceable pursuant to local domestic relations or marital property law ("Domestic Relations Order" or "DRO"), and relating to the property rights of a Participant's present or former spouse ("Alternate Payee"), then: a. The Administrator shall promptly notify the Participant and Alternate Payee of the receipt of the DRO, and Page 11 of 14 /o b. Within a reasonable time, the Administrator will follow the procedures adopted by the Employer to determine the validity of the DRO. In the event the Administrator believes that the DRO is acceptable, it will forward the DRO to the Employer for approval. If the DRO does not appear to be acceptable, the Administrator will forward the DRO tO the Employer for a final determination and instruction to reject. 10.2 Validity ora DRO. A valid DRO is a judgment, decree, order, or approval of a marital property settlement made pursuant to state domestic relations law (including community property law), relating to the property rights ora Participant and Alternate Payee. In addition, the DRO must: a. Create or recognize the existence of the right of an Alternate Payee to all or a portion of the benefits payable with respect to a Participant under the Plan; b. Clearly specify the following information: 1. The name and last known mailing address of the Participant and Alternate Payee covered by the DRO; and 2. The amount or percentage, or the manner in which the amount or percentage is to be determined, of the Participant's benefits to be paid to the Alternate Payee; and 3. The number of payments or period to which the DRO applies; and 4. The plan to which such DRO applies. c. Provide a form of payment to the Alternate Payee that is permitted under the Plan; and d. Not require the payment of benefits to an Alternate Payee which are required by a prior DRO to be paid to another Alternate Payee. 10.3 Processing of a DRO. If it has been determined that a DRO applies to a Participant's account, upon specific instruction from the Employer, the Administrator shall comply with the DRO. The Administrator may place a restrictive hold on a Participant's account while it determines the validity of and/or processes a DRO. The Administrator shall establish a separate Account for the Alternate Payee and transfer the assigned value or benefit from the Participant's Account into the Alternate Payee's Account. 10.4 Rights of an Alternate Payee. The Alternate Payee is entitled to receive distributions immediately upon the establishment of his account under Section 10.3, and commencement of distributions must begin no later than April 1 st following the year in which the Alternate Payee attains age 70 1/2, in accordance with the terms of Section 8.3. Distributions made to an Alternate Payee are reported as taxable income to the Alternate Payee. State taxes, if applicable, and Federal taxes will be withheld from any distribution Page 12 of 14 on the Alternate Payee's account based upon the tax withholding elections of the Alternate Payee. The Alternate Payee may not make any contributions to his Account but is permitted to designate beneficiaries for the Account and to exemise exchanges among the investment options as permitted by the Plan. 10.5 No Liability for Previously Distributed Amounts. If it is determined that a DRO is valid and the Participant has begun receiving distributions from the Plan, the Alternate Payee must commence distributions within sixty (60) days following the date the DRO is determined to be valid. The Administrator shall only process a DRO to the extent possible based upon the then current value or benefit in the Participant's Account. Section 11. Nonassignability: The interest of a Participant established under the Plan, shall not be assignable in whole or in part, directly or by operation of law or otherwise, in any manner unless specifically allowed through this document. Section 12. Miscellaneous: 12.1 No Effect on Employment. Neither the establishment of the Plan nor any modification thereof, nor the establishment of an Account, nor any agreement between the Employer, Administrator and the Trustee/Custodian, nor the payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the Employer except as herein provided, and in no event shall the terms of employment of the Employee, Independent Contractor, or Participant be modified or in any way affected. 12.2 Construction. This Plan shall be construed, administered and enforced according to the Constitution, laws of the state in which the Employer resides, and the IRC. Section 13. Amendment and Termination: 13.1 Amendment and Termination. The Employer may at any time modify, amend, suspend, or terminate the Plan in whole or in part (including retroactive amendments) or cease deferring Compensation pursuant to the Plan for some or all Participants. In the event of such an action, the Employer shall deliver to each affected Participant a notice of such modification, amendment or termination or a notice that it shall cease deferring Compensation; provided, however, that the Employer shall not have the right to reduce or affect the value of any Participant's Account or any rights accrued under the Plan prior to such modification, amendment, termination or cessation. 13.2 Interpretation. This Plan is intended to be an eligible deferred compensation plan under Section 457 of the Code, and shall be interpreted and administered in a manner consistent with the IRC. The Employer reserves the right to amend the Plan to the extent that it may be necessary to conform the Plan to the requirements of Section 457 of the Code and any other applicable law, regulation or ruling, including amendments that are retroactive to Page 13 of 14 the effective date of the Plan. In the event that the Plan is deemed by the Internal Revenue Service to be administered in a manner inconsistent with the Code, the Employer shall correct such administration. Section 14. Gender and Plurals. Whenever used herein, the masculine gender shall include the feminine and the singular shall include the plural unless the provisions of the Plan specifically require a different construction. Section 15: Effective Date. This Deferred Compensation Plan and Trust Custodial Document shall be effective January 1, 2002. Page 14 o f 14 /o RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING A RESTATED AND AMENDED 457 DEFERRED COMPENSATION PLAN WHEREAS, the City has offered a Deferred Compensation Plan to employees since 1975; and WHEREAS, since the Plan was adopted it has been modified several times in order to conform to changing Internal Revenue Service regulations; and WHEREAS, this amendment in thc form of a complete restatement is necessary to implement the considerable enhancements made available by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby adopt a restated and amended 457 Deferred Compensation Plan, a copy of xvhich shall be kept on file on the office of the City Clerk. Presented by Approved as to form by Robert Powell .Lo.h/~vl.. Kaheny ~ Assistant City Manager &~y Attorney J:\Attorney\Reso\Deferrcd Comp 457 plan COUNCIL AGENDA STATEMENT Meeting Date 12/4/01 ITEM TITLE: Resolution adopting a 401(a) Deferred Compensation Plan and approving a Plan Administration Agreement with National Deferred Compensation Inc. SUBMITTED BY: Assistant City Manager Powell'~ REVIEWED BY: City iv~anager~04 (4/Sths Vote: Yes No X ) SUMMARY: The Council recently approved the provision of a new deferred compensation plan for Executive and Senior Management employees to be effective in January, 2002 in addition to the 457 Deferred Compensation Plan currently offered. Staff is recommending adoption of a plan established pursuant to Internal Revenue Service Code section 401(a}. Staff is also recommending that the new Plan be administered through an administration agreement with one of the City's existing plan administrators, National Deferred Compensation Inc. RECOMMENDATION: Approve Resolution adopting a 401(a) Deferred Compensation Plan and approving a Plan Administration Agreement with National Deferred Compensation Inc. DISCUSSION: On February 18, 1975, the City Council approved a 457 Deferred Compensation Plan. The Plan has undergone several modifications since that time, some minor, some major, primarily to maintain conformance with Federal regulations. The City currently contracts with two Plan administrators, National Deferred Compensation, Inc. and the International City Manager's Association. The Council recently approved the provision of a new deferred compensation plan for Executive and Senior Management employees to be effective in January, 2002 in addition to the 457 Deferred Compensation Plan currently offered. It has been determined that the most advantageous type of plan would be one established pursuant to Internal Revenue Service Code Page 2, Item ~' Meeting Date 12/4/01 section 401(a). Establishing the new Plan under this section of the IRS code rather than expanding the current Plan will allow participants to maximize their retirement savings to a greater degree while presenting no disadvantages to the City. The primary benefit to having two different plans is the ability to view contribution limitations separately rather than on a combined basis. The one significant disadvantage to the 401(a) Plan is that distributions from the Plan prior to the participant reaching the age of 59 ~ will be penalized in addition to the normal income tax. Since the City already contracts with National Deferred Compensation Inc. and the International City Manager's Association for administration of the existing deferred compensation plan, and the majority of the employees involved in the proposed plan have their accounts with National Deferred Compensation Inc., it is being recommended that administration of the new plan be contracted with National Deferred Compensation Inc. They have offered to perform the necessary services for the new Plan at the same very low rates charged to participants for the existing Plan services (0.0223% of the value of their accounts monthly). As with the existing Plan, there will be no administrative cost to the City for the new Plan. FISCAL IMPACT: This action will have no fiscal impact to the City as the Plan is self-supporting through charges to the participants. The City's contributions to the new Plan as approved previously are estimated at $90,000 for the remainder of this fiscal year and $184,000 for the next fiscal year. RESOLUTION NO. 2001-~ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING A 401(a) DEFERRED COMPENSATION PLAN AND APPROVING A PLAN ADMINISTRATION AGREEMENT WITH NATIONAL DEFERRED COMPENSATION INc. WHEREAS, the City Council recently approved the provision of a new deferred compensation plan for Executive and Senior Management employees to be effective in January, 2002 in addition to the 457 Deferred Compensation Plan currently offered; and WHEREAS, staff is recommending adoption of a plan established pursuant to Internal Revenue Service Code Section 401 (a); and WHEREAS, staff is also recommending that the new Plan be administered through an administration agreement with one of the City's existing plan administrator, National Deferred Compensation Inc. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby adopt a 401(a) Deferred Compensation Plan and approve a Plan Administration Agreement, a copy of which shall be kept on file on the office of the City Clerk. BE IT FURTHER RESOLVED that Assistant City Manager Powell of the City of Chula Vista is hereby authorized and directed to execute said agreement on behalf of the City. Presented by Approved as to form by Robert Powell Assistant City Manager jc\Attorncy\Reso\Deferred Camp 40 I plan /",-3 NATIONWIDE RETIREMENT SOLUTIONS, INC. MODEL GOVERNMENTAL DEFINED CONTRIBUTION PLAN AND TRUST Copyright 1999 NATIONWIDE RETIREMENT SOLUTIONS, INC. TABLE OF CONTENTS ARTICLE I DEFINITIONS ARTICLE II ADMINISTRATION 2.) POWERS AND RESPONS)BILlTlES OF THE EMPWYER.........................................................9 2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY..............................................................9 2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITlES......................................................9 2.4 POWERS AND DUTIES OF THE ADMINISTRATOR...............................................................IO 2.5 RECORDS AND REPORTS.................................................................................................11 2.6 APPOINTMENT OF ADVISORS...........................................................................................11 2.7 INFORMATION FROM EMPLOYER....................................................................................11 2.8 PAYMENT OF EXPENSES..................................................................................................1) 2.9 MAJORITY ACTIONS.......................................................................................................11 2.IOCLAIMS PROCEDURES.....................................................................................................11 ARTICLE ill ELIGIBILITY 3.1 CONDITIONS OF ELIGIBILITY..........................................................................................12 3.2 EFFECTIVE DATE OF PARTICIPATION.............................................................................. 12 3.3 DETERMINATION OF ELIGIBILITY...................................................................................)2 3.4 TERMINATION OF ELIGIBILITY.......................................................................................12 3.5 OMISSION OF ELIGIBLE EMPLOYEE................................................................................. I 2 3.6 INCLUSION OF INELIGIBLE EMPLOYEE............................................................................ 12 3.7 ELECTION NOT TO PARTICIPATE.....................................................................................13 ARTICLE IV . CONTRIBUTION AND ALLOCATION 4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTlON..........................................)3 4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTlON......................................................13 4.3 ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS....................................13 4.4 MAXIMUM ANNUAL ADDITIONS.......................................................................................15 4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDlTlONS..........................................................20 4.6 TRANSFERS FROM QUALIFIED PLANS..............................................................................20 4.7 VOLUNTARY CONTRIBUTIONS.........................................................................................21 4.8 DIRECTED INVESTMENT ACCOUNT.................................................................................22 4.9 MANDATORY EMPWYEE CONTRIBUTIONS......................................................................22 4.10 INTEGRATION IN MORE THAN ONE PLAN........................................................................23 ARTICLE V VALUATIONS 5.1 VALUATION OF THE TRUST FUND....................................................................................23 5.2 METHOD OF VALUATION.................................................................... .............................23 ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS 6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.........................................................23 6.2 DETERMINATION OF BENEFITS UPON DEATH...................................................................24 6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY.................................................25 6.4 DETERMINATION OF BENEFITS UPON TERMINATlON........................................................25 6.5 DISTRIBUTION OF BENEFITS............................................................................................27 6.6 DISTRIBUTION OF BENEFITS UPON DEATH........................................................................31 6.7 TIME OF SEGREGATION DISTRIBUTION.......................................................................34 OR 6.8 DISTRIBUTION FOR MINOR BENEFICIARY.........................................................................34 6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN................................................35 6.10 PRE-RETIREMENT DISTRIBUTIONS..................................................................................35 6.11 ADVANCE DISTRIBUTION FORHARDSHIP........................................................................35 6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS.............................................................36 6.13 SPECIAL RULE FOR NON-ANNUITY PLANS........................................................................36 ARTICLE VII. TRUSTEE 7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.......................................................................37 7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE........................................................37 7.3 OTHER POWERS OF THE TRUSTEE...................................................................................38 7.4 LOANS TO PARTICIPANTS................................................................................................40 7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS............................................................42 7.6 TRUSTEES COMPENSATION AND EXPENSES AND TAXES....................................................42 7.7 ANNUAL REPORT OF THE TRUSTEE..................................................................................42 7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE..................................................43 7.9 TRANSFER OF INTEREST..................................................................................................43 7.IOTRUSTEE INDEMNIFICATION............................................................................................44 ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS 8.1 AMENDMENT.......................................................".........................................................44 8.2 TERMINATION...................................................................................,.............................4 5 8.3 MERGER OR CONSOLIDATION.........................................................................................45 ARTICLE IX MISCELLANEOUS 9.1 EMPLOYER ADOPTIONS...................................................................................................45 9.2 PARTICIPANT'S RIGHTS...................................................................................................45 9.3 ALIENATION...................................................................................................................45 9.4 CONSTRUCTION OF PLAN................................................................................................46 9.5 GENDER AND NUMBER....................................................................................................46 9.6 LEGAL ACTION...............................................................................................................46 9.7 PROHIBITION AGAINST DIVERSION OF FUNDS...................................................................46 9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.........................................................47 9.9 INSURER'S PROTECTIVE CLAUSE.....................................................................................47 9.IORECEIPT AND RELEASE FOR PAYMENTS...........................................................................47 9.11 ACTION BY EMPLOYER................................................................................................47 9.12 HEADINGS....................................................................................................................47 9.13 APPROVAL BY INTERNAL REVENUE SERVICE.................................................................47 9.14 UNIFORMITY.................................................................................................................48 9.15 PAYMENT OF BENEFITS..................................................................................................48 ARTICLE X PARTICIPATING EMPLOYERS 10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER..................................................48 10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.........................................................48 10.3 DESIGNATION OF AGENT..............................................................................................48 10.4 EMPLOYEE TRANSFERS................................................................................................49 10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES..................................49 10.6 AMENDMENT.................................................................................................................49 10.7 DISCONTINUANCE OF PARTICIPATION...........................................................................49 10.8 ADMINISTRATOR'S AUTHORITY.....................................................................................49 ARTICLE XI CASH OR DEFERRED PROVISIONS 11.1 FORMULA FOR DETERMINING EMPWYER'S CONTRIBUTlON..........................................................50 11.2 PARTICIPANT'S SALARY REDUCTION ELECTlON............................................................................50 11.3 ALLOCATIONS OF CONTRIBUTION, FORFEITURES AND EARNINGS..................................................53 11.4 ADVANCE DISTRIBUTION FOR HARDSHIP.......................................................................................54 ARTICLE I DEFINITIONS As used in this Plan, the following words and phrases shall have the meanings set forth herein unless a different meaning is clearly required by the context: l.l "Administrator" means the person(s) or entity designated by the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer. 1.2 "Adoption Agreement" means the separate agreement, which is executed by the Employer and accepted by the Trustee which sets forth the elective provisions of this Plan and Trust as specified by the Employer. 1.3 "Aggregate Account" means with respect to each Participant, the value of all accounts maintained on behalf of a Participant, whether attributable to Employer or Employee contributions, subject to the provisions of Section 4.3 1.4 "Anniversary Date" means the anniversary date specified in C3 of the Adoption Agreement. 1.5 "Beneficiary" means the person to whom a share of a deceased Participant's interest in the Plan is payable, subject to the restrictions of Sections 6.2 and 6.6. 1.6 "Code" means the Internal Revenue Code of 1986, as amended ITom time to time. 1.7 "Compensation" with respect to any Participant means one of the following as elected in the Adoption Agreement. (a) Infonnation required to be reported under Code Sections 6041, 6051 and 6052 (wages, tips and Other Compensation Box on Fonn W-2). Compensation is defined as wages, as defined in Code Section 3401(a), and all other payments of Compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code Sections 6041(d) and 6051(a)(3). Compensation must be detennined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services perfonned (such as the exception for agricultural labor in Code Section 3401 (a)(2». (b) Code Section 3401(a) wages. Compensation is defined as wages within the meaning of Code Section 3401(a) for the purposes of income tax withholding at the source but detennined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services perfonned (such as the exception for agricultural labor in Code Section 3401(a)(2». (c) Code Section 415 safe-harbor compensation. Compensation is defined as wages, salaries, and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, commissions paid salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fiinge benefits, and reimbursements, or other expense allowances under a nonaccountable plan (as described in Regulation Section 1.62-2(c», and excluding the following: (I) Employer contributions to a plan providing for salary deferrals which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; and (2) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403(b) of the Internal Revenue Code (whether or not the contributions are actually excludable from the gross income of the Employee). If, in connection with the adoption of any amendment, the defmition of Compensation has been modified, then, for Plan Years prior to the Plan Year which includes the adoption date of such amendment, Compensation means compensation determined pursuant to the Plan then in effect. In addition, if specified in the Adoption Agreement, Compensation for all Plan purposes shall also include compensation which is not currently includible in the Participanfs gross income by reason of the application of Code Sections 125, 402(e)(3), 402(b)(1)(B), 403(b), 414(h)(2) or 457(b). Compensation in excess 01'$200,000 shall be disregarded. Such amount shall be adjusted at the same time and in such manner as permitted under Code Section 415(d). For Plan Years beginning prior to January I, 1989, the $200,000 limit shall not apply. In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, for Plan Years beginning on or after January I, 1996, the annual Compensation for each Employee taken irito account under the Plan shall not exceed the OBRA '93 annual Compensation limit. The OBRA '93 annual Compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost of living in accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which Compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual Compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. For Plan Years beginning on or after January I, 1996, any reference in this Plan to the limitation under Code Section 401(aXI7) of the Code shall mean the OBRA '93 annual Compensation limit set forth in this provision. If Compensation for any prior determination period is taken into account in determining an Employee's benefits accruing in the current Plan Year, the Compensation for that prior determination period is subject to the OBRA '93 Compensation limit in effect for that prior determination period. For this purpose, 2 for determination periods beginning before the fITSt day of the Plan Year beginning on or after January 1,1994, the OBRA '93 annual Compensation limit is $150,000. 1.8 "Contract" or "Policy" means any life insurance policy, retirement income policy, or annuity contract (group or individual) issued by the Insurer. In the event of any conflict between the terms of this Plan and the terms of any Contract or Policy purchased hereunder, the Plan provisions shall control. 1.9 "Early Retirement Date" means the date specified in the Adoption Agreement on which a Participant or Former Participant has satisfied the age and service requirements specified in the Adoption Agreement (Early Retirement Age). A Former Participant who terminates employment after satisiYing the service requirement for Early Retirement and who thereafter reaches the age requirement contained herein shall be entitled to receive his benefits under this Plan. 1.1 0 "Elective Contribution" means the Employer's contributions to the Plan that are made pursuant to the Participant's deferral election pursuant to Section 11.2, excluding any such amounts distributed as "excess annual additions" pursuant to Section 4.5. In addition, if selected in E3 of the Adoption Agreement, the Employer's matching contribution made pursuant to Section I 1.1 (a) shall or shall not be considered an Elective Contribution for purposes of the Plan, as provided in Section 11.1 (a). Elective Contributions shall be subject to the requirements of Sections I 1.2(b) and 11.2(c). l.ll "Eligible Employee" means any Employee specified in Dl of the Adoption Agreement. 1.12 "Employee" means any person who is employed by the Employer, but excludes any person who is employed as an independent contractor. The term Employee shall also include Leased Employees as provided in Section 1.26. 1.13 "Employer" means the entity specified in the Adoption Agreement, any Participating Employer (as dermed in Section 10.1) which shall adopt this Plan, any successor which shall maintain this Plan and any predecessor which has maintained this Plan. 1.14 "Excess Compensation" means, with respect to a Plan that is integrated with Social Security, a Participant's Compensation which is in excess of the amount set forth in the Adoption Agreement. 1.15 "Excess Deferrals" means, with respect to any taxable year of a Participant, the excess of the aggregate amount of such Participanf s deferrals and the elective deferrals pursuant to Section 11.2(f) actually made on behalf of such Participant for such taxable year, over the dollar limitation provided for in Code Section 402(g), which is incorporated herein by reference. Excess Deferrals shall be treated as an "annual addition" pursuant to Section 4.4 when contributed to the Plan unless distributed to the affected Participant not later than the first April 15th following the close of the Participanf s taxable year. 1.16 "Fiscal Year" means the Employer's accounting year as specified in the Adoption Agreement. 1.17 "Forfeiture" means that portion of a Participant's Account that is not Vested, and occurs on the earlier of: 3 (a) the distribution of the entire Vested portion ora Participant's Account, or (b) the last day of the Plan Year in which the Participant incurs five (5) consecutive I-Year Breaks in Service. Furthermore, for purposes of paragraph (a) above, in the case of a Terminated Participant whose Vested benefit is zero, such Terminated Participant shall be deemed to have received a distribution of his Vested benefit upon his termination of employment. In addition, the term Forfeiture shall also include amounts deemed to be Forfeitures pursuant to any other provision of this Plan. 1.18 "Former Participant" means a person who has been a Participant, but who has ceased to be a Participant for any reason. 1.19 "415 Compensation" means compensation as defined in Section 4.4(1)(2). If, in connection with the adoption of any amendment, the defmition 01"'415 Compensation" has been modified, then, for Plan Years prior to the Plan Year which includes the adoption date of such amendment, "415 Compensation" means compensation determined pursuant to the Plan then in effect. 1.20 "Highly Compensated Employee" means an individual who has compensation in excess 01'$80,000 (as indexed) from the Employer in the immediate prior year and, if the Employer elects the application of this clause for the preceding year, was in the top paid group of employees for such preceding year. For this purpose, an employee is in the top paid group of employees for any year if such employee is in the group consisting of the top 20 percent of the employees when ranked on the basis of compensation paid during such year. 1.21 "Hour of Service" means (I) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer for the performance of duties during the applicable computation period; (2) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence) during the applicable computation period; or (3) each hour for which back pay is awarded or agreed to by the Employer without regard to mitigation of damages. The same Hours of Service shall not be credited both under (I) or (2), as the case may be, and under (3). Notwithstanding the above, (i) no more than 501 Hours of Service are required to be credited to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period); (H) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker's compensation, or unemployment compensation or disability insurance laws; and (Hi) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee. For purposes of this Section, a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly, or indirectly through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate. An Hour of Service must be counted for the purpose of determining a Year of Service, a year of participation for purposes of accrued benefits, a One-Year Break in Service, and employment commencement date (or reemployment commencement date). Hours of Service will be credited for employment for any individual considered to be a Leased Employee pursuant to Code Sections 414(n) and the Regulations thereunder, 4 Hours of Service will be determined on the basis of the method selected in the Adoption Agreement. 1.22 "Insurer" means Nationwide Life Insurance Company or any of its affiliates or subsidiaries, or any legal reserve insurance company which has issued one or more policies under the Plan prior to the adoption of this Plan. 1.23 "Investment Manager" means an entity that (a) has the power to manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility to the Plan in writing. Such entity must be a person, finn, or corporation registered as an investment adviser under the Investment Advisers Act of 1940, a bank, or an insurance company. 1.24 "Joint and Survivor Annuity" means an annuity for the life of a Participant with a survivor annuity for the life of the Participanrs spouse which is not less than 112, nor greater than the amount of the annuity payable during the joint lives of the Participant and the Participant's spouse. The Joint and Survivor Annuity will be the amount of benefit which can be purchased with the Participant's Vested interest in the Plan. 1.25 "Late Retirement Date" means the date of, or the first day of the month or the Anniversary Date coinciding with or next following, whichever corresponds to the election made for the Normal Retirement Date, a Participant's actual retirement after having reached his Normal Retirement Date. 1.26 "Leased Employee" means any person (other than an Employee of the recipient) who pursuant to an agreement between the recipient and any other person ("leasing organization") has performed services for the recipient (or for the recipient and related persons determined in accordance with Code Section 414(n)(6» on a substantially full time basis for a period of at least one year, and such services are of a type historically performed by employees in the business field of the recipient employer (or, effective with respect to Plan Years beginning on or after January I, 1997, are services performed under primary direction or control of the recipient). Contributions or benefits provided a leased employee by the leasing organization which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer. A leased employee shall not be considered an Employee of the recipient if: (i) such employee is covered by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined in Code Section 415(cX3), but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee's gross income under Code Sections 125, 402(eX3), 402(b), 403(b) or 457(b), (2) immediate participation, and (3) full and immediate vesting; and (ii) leased employees do not constitute more than 20 percent of the recipient's nonhighly compensated workforce. 1.27 "Mandatory Employee Contribution" means Participant contributions which are to be made as a condition of employment with the Employer. Pursuant to Code Section 414(b), such contributions shall be picked up by the Employer and are deemed to be employer contributions and are not taxable income to the employee. 1.28 "Non-Elective Contribution" means the Employer's contributions to the Plan other than those made pursuant to the Participant's deferral election made pursuant to Section 11.2. In addition, if selected in E3 of the Adoption Agreement, the Employer's Matching Contribution made pursuant to Section 4.3(b) shall be considered a Non-Elective Contribution for purposes of the Plan. 1.29 "Normal Retirement Age" means the age specified in the Adoption Agreement at which time a Participant shall become fully Vested in his or her participant's account. 1.30 "Normal Retirement Date" means the date specified in the Adoption Agreement on which a Participant shall become eligible to have his or her benefits distributed to him or her. 1.31 "One-Year Break in Service" means (a) if the Hours method is selected in the Adoption Agreement, the applicable computation period during which an Employee has not completed more than 500 Hours of Service with the Employer; or (b) if the elapsed time method is selected in the Adoption Agreement, a Period of Severance ofat least 12 consecutive months. Period of Severance means the period commencing with the earlier of: (i) the date an Employee separates from service by reason of quitting, retirement, death or discharge; or (H) the fITSt anniversary of the first day of the period in which an employee remains absent from service (with or without pay) for any reason other than quitting, retirement, death or discharge; or (Hi) the second anniversary of the first day of the period in which an Employee remains absent from service (with or without pay) because of a "maternity or paternity leave of absence", and ending with the date such Employee resumes service. A Break in Service shall not include (i) any period during which the Employee is absent in the service of the armed forces of the United States, including any period during which his reemployment rights as a veteran are protected by law; (ii) any period during which the Employee is on a leave of absence authorized by the Employer not to exceed two years (which leaves shall be granted on a nondiscriminatory basis to all Employees similarly situated), provided, however, that if the Employee fails to return to service prior to the expiration of such authorized leave, his Period of Severance shall be ~eemed to commence on the date such authorized leave commenced. Further, solely for the purpose of determining whether a Participant has incurred a One-Year Break in Service, Hours of Service shall be recognized for "authorized leaves of absence" and "maternity and paternity leaves of absence". "Authorized leave of absence" means an unpaid, temporary cessation from active employment with the Employer pursuant to an established nondiscriminatory policy, whether occasioned by illness, uniformed service, or any other reason. A "maternity or paternity leave of absence" means, for Plan Years beginning after December 31, 1984, an absence from work for any period by reason of the Employee's pregnancy, birth of the Employee's child, placement of a child with the Employee in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement. For this purpose, Hours of Service shall be credited for the computation period in which the absence from work begins, only if credit therefore is necessary to prevent the Employee from incurring a One-Year Break in Service, or, in any other case, in the immediately following computation period. The Hours of Service credited for a "maternity or paternity leave of absence" shall be those which would normally have been credited but for such absence, or, in any case in which the Administrator is unable to determine such hours normally credited, eight (8) Hours of Service per day. The total Hours of Service required to be credited for a "maternity or paternity leave of absence" shall not exceed 50 I. 1.32 "Participant" means any Eligible Employee who participates in the Plan as provided in Section 3.2 and has not for any reason become ineligible to participate further in the Plan. 1.33 "Participanrs Account" means the account established and maintained by the Administrator for each Participant with respect to his or her total interest under the Plan resulting from (a) the Employer's contributions 6 in the case of a Profit Sharing Plan or Money Purchase Plan; (b) the Employer's Non-Elective Contributions in the case of a 401(1<) Profit Sharing Plan; and (c) elective deferrals treated as employer contributions under Code Section 414(h), if any. 1.34 "Participant's Combined Account" means the account established and maintained by the Administrator for each Participant with respect to his or her total interest under the Plan resulting from the Employer's contributions. 1.35 "Participant's Elective Account" means the account established and maintained by the Administrator for each Participant with respect to his or her total interest in the Plan and Trust resulting from Elective Contributions. A separate accounting shall be maintained with respect to that portion of the Participant's Elective Account attributable to Elective Contributions made pursuant to Section 11.2, and Employer matching contributions if they are deemed to be Elective Contributions. 1.36 "Participant's Rollover Account" means the account established and maintained by the Administrator for each Participant with respect to his or her total interest in the Plan resulting from amounts transferred from another qualified plan or "conduit" Individual Retirement Account or Individual retirement Annuity in accordance with Section 4.6. 1.37 "Plan" means this instrument (hereinafter referred to as Nationwide Retirement Solutions Governmental Defined Contribution Plan and Trust Basic Plan Document) including all amendments thereto, and the Adoption Agreement as adopted by the Employer. 1.38 "Plan Year" means the Plan's accounting year as specified in C2 of the Adoption Agreement. 1.39 "Pre-Retirement Survivor Annuity" means an immediate annuity for the life of the Participant's spouse, the payments under which must be equal to the actuarial equivalent of 50% of the Participant's Vested interest in the Plan as of the date of death. 1.40 "Regulation" means the Income Tax Regulations as promulgated by the Secretary of the Treasury or his or her delegate, and as amended from time to time. 1.41 "Retired Participant" means a person who has been a Participant, but who has become entitled to retirement benefits under the Plan. 1.42 "Retirement Date" means the date as of which a Participant retires for reasons other than Total and Permanent Disability, whether such retirement occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date (see Section 6.1). 1.43 "Salary Deferrals" means, with respect to any Participant, that portion of the Participanes total Compensation which has been contributed to the Plan in accordance with the Participant's deferral election pursuant to Section 11.2. 1.44 "Short Plan Year" means, if specified in the Adoption Agreement, that the Plan Year shall be less than a 12 month period. If chosen, the following rules shall apply in the administration of this Plan. In determining whether an Employee has completed a Year of Service for benefit accrual purposes in the Short Plan Year, the number of the Hours of Service required shall be proportionately reduced based on the number of months in the Short Plan Year. The determination of whether an Employee has completed a Year of Service for vesting and eligibility purposes shall be made in accordance with Department of Labor Regulation 2530.203-2(c). In addition, if this Plan is integrated with Social Security, the integration level shall also be proportionately reduced based on the number of days in the Short Plan Year. 1.45 "Taxable Wage Base" means, with respect to any Plan Year, the contribution and benefit base under Section 230 of the Social Security Act at the beginning of such Plan Year. 1.46 "Terminated Participant" means a person who has been a Participant, but whose employment has been terminated other than by death, Total and Permanent Disability or retirement. 1.47 "Total and Permanent Disability" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The disability of a Participant shall be determined by a licensed physician chosen by the Administrator. However, if the condition constitutes total disability under the federal Social Security Acts, the Administrator may rely upon such determination that the Participant is Totally and Permanently Disabled for the purposes of this Plan. The determination shall be applied uniformly to all Participants. 1.48 "Trustee" means the person or entity named in B4 the Adoption Agreement and any successors. 1.49 "Trust Fund" means the assets of the Plan and Trust as the same shall exist from time to time. 1.50 "Vested Contributions" means the nonforfeitable portion of any account maintained on behalf of a Participant. 1.51 "Voluntary Contribution Account" means the account established and maintained by the Administrator for each Participant with respect to his total interest in the Plan resulting from the Participant's nondeductible voluntary contributions made pursuant to Section 4.7. 1.52 "Year of Service" means (a) if the hours method is selected in the Adoption Agreement, the computation period of twelve (12) consecutive months, herein set forth, and during which an Employee has completed at least the number of Hours of Service specified in the Adoption Agreement or (b) if the elapsed time method is selected, twelve (12) Months of Service. If the hours method is selected in the Adoption Agreement, then for purposes of eligibility for participation, the initial computation period shall begin with the date on which the Employee first performs an Hour of Service (employment commencement date). The computation period beginning after a One-Year Break in Service shall be measured from the date on which an Employee again performs an Hour of Service. The succeeding computation periods shall begin with the first anniversary of the Employee's employment commencement date. However, if one (I) Year of Service or less is required as a condition of eligibility, then after the initial eligibility computation period, the eligibility computation period shall shift to the current Plan Year which includes the anniversary of the date on which the Employee fITSt performed an Hour of Service. An Employee who is credited with the specified number of Hours of Service in both the initial eligibility computation period and the first Plan Year which commences prior to the first anniversary of the Employee's initial eligibility computation period will be credited with two Years of Service for purposes of eligibility to participate. For vesting purposes, the computation period shall be the Plan Year, including the period prior to the Effective Date of the Plan unless specifically excluded pursuant to the Adoption Agreement. If the Elapsed time method is selected in the Adoption Agreement, then for purposes of determining an Employee's vesting and initial or continued eligibility to participate, an Employee will receive credit for the aggregate of all time periods commencing with the Employee's fITSt day of employment or reemployment and ending on the date a Break in Service begins. The first day of employment is the first day the Employee performs an Hour of Service. An Employee will also receive credit for any period of severance of less than 12 consecutive months. Fractional periods of a year will be expressed in terms of days. For vesting purposes, and all other purposes not specifically addressed in this Section, the computation period shall be the Plan Year, including periods prior to the Effective Date of the Plan unless specifically excluded pursuant to the Adoption Agreement. Years of Service and breaks in service will be measured on the same computation period. Years of Service with any predecessor Employer which maintained this Plan shall be recognized. Years of Service with any other predecessor Employer shall be recognized as specified in the Adoption Agreement. ARTICLE II ADMINISTRATION 2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER (a) The Employer shall be empowered to appoint and remove the Trustee and the Administrator from time to time as it deems necessary for the proper administration of the Plan to assure that the Plan is being operated for the exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of the Plan and the Code. (b) The Employer may, in its discretion, appoint an Investment Manager to manage all or a designated portion of the assets of the Plan. In such event, the Trustee shall follow the directive of the Investment Manager in investing the assets of the Plan managed by the Investment Manager. (c) The Employer shall periodically review the perfonnance of any fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or .pursuant to procedures established hereunder. 2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY The Employer shall appoint one or more Administrators. Any person, including, but not limited to, the Employees of the Employer, shall be eligible to serve as an Administrator. Any person so appointed shall signify his or her acceptance by filing written acceptance with the Employer. An Administrator may resign by delivering his or her written resignation to the Employer or be removed by the Employer by delivery of written notice of removal, to take effect at a date specified therein, or upon delivery to the Administrator ifno date is specified. The Employer, upon the resignation or removal of an Administrator, shall promptly designate in writing a successor to this position. If the Employer does not appoint an Administrator, the Employer will function as the Administrator. 2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES If more than one person is appointed as Administrator, the responsibilities of each Administrator may be specified by the Employer and accepted in writing by each Administrator. In the event that no such delegation is made by the Employer, the Administrators may allocate the responsibilities among themselves, in which event the Administrators shall notify the Employer and the Trustee in writing of such action and specify the responsibilities of each Administrator. The Trustee thereafter shall accept and rely upon any documents executed by the appropriate Administrator until such time as the Employer or the Administrators file with the Trustee a written revocation of such designation. 9 2.4 POWERS AND DUTIES OF THE ADMINISTRATOR The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and determine all questions arising in connection with the administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to cany out the purpose of the Plan; provided, however, that any procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to be deemed a qualified plan under the terms of Code Section 401(a), and shall comply with its terms and all regulations issued pursuant thereto. The Administrator shall have all powers necessary or appropriate to accomplish his or her duties under this Plan. The Administrator shall be charged with the. duties of the general administration of the Plan, including, but not limited to, the following: (a) the discretion to determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder and to receive benefits under the Plan; (b) to compute, certifY, and direct the Trustee with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder; (c) to authorize and direct the Trustee with respect to all nondiscretionary or otherwise directed disbursements ftom the Trust Fund; (d) to maintain all necessary records for the administration of the Plan; (e) to interpret the provisions of the Plan and to make and publish such rules for regulation of the Plan as are consistent with the terms hereof; (f) to determine the amount and type of any Contract or policy to be purchased ftom the Insurer; (g) to compute and certifY to the Employer and to the Trustee ftom time to time the sums of money necessary or desirable to be contributed to the Trust Fund; (b) to consult with the Employer and the Trustee regarding the short and long-term liquidity needs of the Plan in order that the Trustee can exercise any investment discretion in a manner designed to accomplish specific objectives; (i) to prepare and distribute to Employees a procedure for notifYing Participants and Beneficiaries of their rights to elect Joint and Survivor Annuities and Pre-Retirement Survivor Annuities; Plan. OJ to assist any Participant regarding his or her rights, benefits, or elections available under the 10 2.5 RECORDS AND REPORTS The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to the Internal Revenue Service, Department of Labor, Participants, Beneficiaries and others as required by law. 2.6 APPOINTMENT OF ADVISERS The Administrator, or the Trustee with the consent of the Administrator, may appoint counsel, specialists, advisers, and other persons as the Administrator or the Trustee deems necessary or desirable in connection with the administration of this Plan. 2.7 INFORMATION FROM EMPLOYER To enable the Administrator to perform his functions, the Employer shall supply full and timely information to the Administrator on all matters relating to the Compensation of all Participants, their Hours of Service, their Years of Service, their retirement, death, disability, or termination of employment, and such other pertinent facts as the Administrator may require; and the Administrator shall advise the Trustee of such of the foregoing facts as may be pertinent to the Trustee's duties under the Plan. The Administrator may rely upon such information as is supplied by the Employer and shall have no duty or responsibility to verify such information. 2.8 PAYMENT OF EXPENSES All expenses of administration may be paid out of the Trust Fund unless paid by the Employer. Such expenses shall include any expenses incident to the functioning of the Administrator, including, but not limited to, fees of accountants, counsel, and other specialists and their agents, and other costs of administering the Plan. Until paid, the expenses shall constitute a liability of the Trust Fund. However, the Employer may reimburse the Trust Fund for any administration expense incurred. Any administration expense paid to the Trust Fund as a reimbursement shall not be considered an Employer contribution. 2.9 MAJORITY ACTIONS Except where there has been an allocation and delegation of administrative authority pursuant to Section 2.3, if there shall be more than one Administrator, they shall act by a majority of their number, but may authorize one or more of them to sign all papers on their behalf. 2.10 CLAIMS PROCEDURE Any person who believes that he or she is entitled to a benefit under the Plan shall have the right to file with the Plan Administrator a written notice of claim for such benefit. Within 120 days after its receipt of such written notice of claim, the Plan Administrator shall either grant or deny such claim provided, however, any delay on the part of the Plan Administrator in arriving at a decision shall not adversely affect benefits payable under a granted claim. II ARTICLE III ELIGIBILITY 3.1 CONDITIONS OF ELIGIBILITY Any Eligible Employee shall be eligible to participate hereunder on the date he or she has satisfied the requirements specified in the Adoption Agreement. 3.2 EFFECTIVE DATE OF PARTICIPATION An Eligible Employee who has become eligible to be a Participant shall become a Participant effective as of the day specified in the Adoption Agreement. In the event an Employee who has satisfied the Plan's eligibility requirements and would otherwise have become a Participant shall go from a classification of a noneligible Employee to an Eligible Employee, such Employee shall become a Participant as of the date he or she becomes an Eligible Employee. In the event an Employee who has satisfied the Plan's eligibility requirements and would otherwise become a Participant shall go from a classification of an Eligible Employee to a noneligible Employee and becomes ineligible to participate and has not incurred a One Y ear Break in Service, such Employee shall participate in the Plan as of the date he returns to an eligible class of Employees. If such Employee does incur a OneYear Break in Service, eligibility will be determined under the break in service rules of the Plan. 3.3 DETERMINATION OF ELIGIBILITY The Administrator shall determine the eligibility of each Employee for participation in the Plan based upon information furnished by the Employer. Such determination shall be conclusive and binding upon all persons, as long as the same is made pursuant to the Plan. Such determination shall be subject to review per Section 2.10. 3.4 TERMINATION OF ELIGIBILITY In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee, such Former Participant shall continue to vest in his or her interest in the Plan for each Year of Service completed while a noneligible Employee, until such time as his or her Participant's Account shall be forfeited or distributed pursuant to the terms of the Plan. Additionally, his or her interest in the Plan shall continue to share in the earnings of the Trust Fund. 3.5 OMISSION OF ELIGIBLE EMPLOYEE If, in any Plan Year, any Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by his or her Employer for the year has been made, the Employer shall make a subsequent contribution, if necessary after the application of Section 4.3(e), so that the omitted Employee receives a total amount which the said Employee would have received had he or she not been omitted. 3.6 INCLUSION OF INELIGIBLE EMPLOYEE If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the Employer shall not be entitled to recover the contribution made with respect to the 12 ineligible person. In such event, the amount contributed with respect to the ineligible person shall constitute a Forfeiture for the Plan Year in which the discovery is made. 3.7 ELECTION NOT TO PARTICIPATE An Employee of any Participating Employer who adopts a Plan in which Mandatory Contributions are picked-up by such Participating Employer pursuant to Code Section 414(h) (a "Pick-up Plan") shall not be permitted to waive participation in the Plan. However, notwithstanding any other Plan provision to the contrary, where the Plan is not a Pick-up Plan, an Employee may elect to waive participation in the Plan. If an Employee makes the election referred to in the preceding sentence, he or she shall not receive any waived contribution in cash, and such election shall be (I) in writing; (2) a one-time irrevocable election; (3) made when the Employee commences employment or, if later, when such Employee flTSt becomes eligible to participate in any plan of the Participating Employer; and (4) applicable with respect to all plans of the Participating Employer, including plans that have not then been established by the Participating Employer. ARTICLE IV CONTRIBUTION AND ALLOCATION 4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION (a) For a Money Purchase Plan- (I) The Employer shall make contributions over such period of years as the Employer may . determine on the following basis. On behalf of each Participant eligible to share in allocations, for each year of his or her participation in this Plan, the Employer shall contribute the amount specified in the Adoption Agreement. All contributions by the Employer shall be made in cash or in such unencumbered property as is acceptable to the Trustee. (h) For a Profit Sharing Plan- (I) For each Plan Year, the Employer shall contribute to the Plan such amount as specified by the Employer in the Adoption Agreement. All contributions by the Employer shall be made in cash or in such unencumbered property as is acceptable to the Trustee. 4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION The Employer shall generally pay to the Trustee its contribution to the Plan for each Plan Year within the time prescribed by law. 4.3 ALWCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS (a) The Administrator shall establish and maintain an account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other valuation date, all amounts allocated to each such Participant as set forth herein. (h) The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contributions for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution as follows: (I) For a Money Purchase Plan: 13 (i) The Employer's Contribution shall be allocated to each Participant's Combined Account in the manner set forth in Section 4.1 herein and as specified in Section E2 of the Adoption Agreement. (2) For an Integrated Profit Sharing Plan: (i) The Employer's contribution shall be allocated to each Participant's Account, in a dollar amount equal to 5.7% of the sum of each Participant's total Compensation plus Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that his total Compensation plus his total Excess Compensation for the Plan Year bears to the total Compensation plus the total Excess Compensation of all Participants for that year. Regardless of the preceding, 4.3% shall be substituted for 5.7% above if Excess Compensation is based on more than 20% and less than or equal to 80% of the Taxable Wage Base. If Excess Compensation is based on less than 100% and more than 80% of the Taxable Wage Base, then 5.4% shall be substituted for 5.7% above. (ii) The balance of the Employer's contribution over the amount allocated above, ifany, shall be allocated to each Participant's Combined Account in the same proportion that his total Compensation for the Year bears to the total Compensation of all Participants tor such year. (iii) Except, however, for any Plan Year beginning prior to January I, 1990, and if elected in the Adoption Agreement, for any Plan Year beginning on or after January I, 1990, a Participant who performs less than a Year of Service during any Plan Year shall not share in the Employer's contribution for that year, unless there is a Short Plan Year or a contribution is required pursuant to Section 4.3(G). (3) For a Non-Integrated Profit Sharing Plan: (i) The Employer's contribution shall be allocated to each Participant's Account in the same proportion that each such Participant's Compensation for the year bears to the total Compensation of all Participants for such year. (ii) except, however, for any Plan Year beginning prior to January I, 1990, and if elected in the Adoption Agreement for any Plan Year beginning on or after January I, 1990, a Participant who performs less than a Year of Service during any Plan Year shall not share in the Employer's contribution for that year, unless there is a Short Plan Year. (c) As of each Anniversary Date or other valuation date, before allocation of Employer contributions and Forfeitures, any earnings or losses (net appreciation or net depreciation) of the Trust Fund shall be allocated in the same proportion that each Participant's and Former Participant's nonsegregated accounts bear to the total of all Participants' and Former Participants' nonsegregated accounts as of such date. If any nonsegregated account of a Participant has been distributed prior to the Anniversary Date or other valuation date subsequent to a Participant's termination of employment, no earnings or losses shall be credited to such account. If contributions are allocated directly to a Participant's Account, the Participant's Account shall be credited with the actual earnings or losses attributable to such contributions, Notwithstanding the above, with respect to contributions made to a plan after the previous Anniversary Date or allocation date, the method specified in the Adoption Agreement shall be used. 14 (d) Participants' Accounts shall be debited for any insurance or annuity premiums paid, if any, and credited with any dividends or interest received on insurance contracts. (e) As of each Anniversary Date any amounts which became Forfeitures since the last Anniversary Date shall flTSt be made available to reinstate previously forfeited account balances of Former Participants, if any, in accordance with Section 6.4(e)(2) or be used to satisfY any contribution that may be required pursuant to Section 3.5 and/or 6.9. The remaining Forfeitures, if any, shall be treated in accordance with the Adoption Agreement. Provided, however, that in the event the allocation of Forfeitures provided herein shall cause the "Annual Addition" (as deemed in Section 4.4) to any Participant's Account to exceed the amount allowable by the Code, the excess shall be reallocated in accordance with Section 4.5. (I) Notwithstanding anything herein to the contrary, any Participant who terminated employment during the Plan Year for reasons other than death, Total and Permanent Disability, or retirement shall or shall not share in the allocations of the Employer's Contributions and Forfeitures, as provided in the Adoption Agreement. (g) Notwithstanding anything herein to the contrary, Participants terminating for reasons of death, Total and Permanent Disability, or retirement shall or shall not share in the allocations as provided in this Section as elected in the Adoption Agreement. (h) If a Former Participant is reemployed after five (5) consecutive One-Year Breaks in Service, then the Participant's accounts shall be maintained as follows: (I) one account for nonforfeitable benefits attributable to pre-break service; and (2) one account representing his employer derived account balance in the Plan attributable to post-break service. (i) Notwithstanding anything herein to the contrary, Participants will accrue the right to share in allocations of Employer contributions with respect to periods of qualified military service as provided in Code Section 414(u). 4.4 MAXIMUM ANNUAL ADDITIONS (a)(1) If the Participant does not participate in, and has never participated in another qualified plan maintained by the Employer, or a welfare benefit fund (as defined in Code Section 419(e», maintained by the Employer, or an individual medical account (as defined in Code Section 415(1)(2» maintained by the Employer, which provides Annual Additions, or a simplified employee pension (as defined in Code Section 408(\<» the amount of Annual Additions which may be credited to the Participant's accounts for any Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer contribution that would otherwise be contributed or allocated to the Participant's accounts would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (2) Prior to determining the Participant's actual compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimation of the Participant's compensation for the Limitation Year, uniformly determined for all Participants similarly situated. (3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for such Limitation Year shall be determined on the basis of the Participant's actual compensation for such Limitation Year. 15 (4) if there is an excess amount pursuant to Section 4.4(a)(2) or Section 4.5, the excess will be disposed of in the following manner: (i) Any nondeductible voluntary employee contributions (plus attributable earnings), to the extent they would reduce the Excess Amount, will be distributed to the Participant; . (ii) If, after the application of paragraph 4(i), an excess amount still remains, any Deferrals (plus attributable earnings), to the extent they would reduce the Excess Amount, will be distributed to the Participant; (iii) If, after the application of subparagraphs (i) and (ii), an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Participant's account will be used to reduce Employer contributions (including any allocation of Forfeitures) for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; (iv) If, after the application of subparagraphs (i) and (ii), an Excess Amount still exists, and the Participant is not covered by the Plan at the end of a Limitation Year, the Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer contributions (including allocation of any Forfeitures) for all remaining Participants in the next Limitation Year, and each succeeding Limitation Year if necessary; (v) If a suspense account is in existence at any time during a Limitation Year pursuant to this Section, it will not participate in the allocation of investment gains and losses. If a suspense account is in existence at any time during a particular limitation year, all amounts in the suspense account must be allocated and reallocated to participants' accounts before any employer contributions or any employee contributions may be made to the plan for that limitation year. Excess amounts in the suspense account may not be distributed to Participants or Former Participants. (b)( I) This subsection applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan maintained by the Employer, or a welfare benefit fund (as defined in Code Section 419(e» maintained by the Employer, or a simplified employee pension maintained by the Employer, or an individual medical account (as defined in Code Section 415(1)(2» maintained by the Employer, which provides Annual Additions, during any Limitation Year. The Annual Additions which may be credited to a Participant's accounts under this Plan for any such Limitation Year shall not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's accounts under the other plans and welfare benefit funds for the same limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's accounts under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and welfare benefit funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed or allocated to the Participant's account under this Plan for the Limitation Year. (2) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section 4.4(a)(2). 16 (3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year. (4) If, pursuant to Section 4.4(b)(2) or Section 4.5, a Participant's Annual Additions under this Plan and such other plans would result in an Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a simplified employee pension, will be deemed to have been allocated fITSt, followed by Annual Additions to a welfare benefit fund or individual medical account, regardless of the actual allocation date. (5) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of: (i) the total Excess Amount allocated as of such date, times (ii) the ratio of (I) the Annual Additions allocated to the Participant for the Limitation Year as of such date under this Plan to (2) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other qualified defined contribution plans. (6) Any Excess Amount attributed to this Plan will be disposed in the manner described in Section 4.4(a)(4). (c) If the Participant is covered under another qualified defined contribution plan maintained by the Employer, Annual Additions which may be credited to the Participant's Account under this Plan for any Limitation Year will be limited in accordance with Section 4.4(b)' unless the Employer provides other limitations in the Adoption Agreement. (d) If the Employer maintains, or at any time maintained, a qualified defined benefit plan covering any Participant in this Plan, the sum of the Participant's Defined Benefit Plan Fraction and Defmed Contribution Plan Fraction will not exceed 1.0 in any Limitation Year commencing before January I, 2000. The Annual Additions which may be credited to the Participant's Account under this Plan for any Limitation Year will be limited in accordance with the Limitation on Allocations Section of the Adoption Agreement. (e) For purposes of applying the limitations of Code Section 415, the transfer of funds from one qualified plan to another is not an "annual addition." In addition, the following are not Employee contributions for the purposes of Section 4.4(1)(1)(2): (I) rollover contributions (as defined in Code Sections 402(c)(4), 403(a)(4), 403(b)(8) and 408(d)(3»; (2) repayments of loans made to a Participant from the Plan; (3) repayments of distributions received by an Employee pursuant to Code Section 41 I (a)(7)(B) (cash-outs); (4) repayments of distributions received by an Employee pursuant to Code Section 41 I (a)(3)(D) (mandatory contributions); and (5)Employee contributions to a simplified employee pension. (I) For purposes of this Section, the following terms shall be defined as follows: (I) "Annual Additions" means the sum credited to a Participant's accounts for any Limitation Year of (I) Employer contributions, (2) effective with respect to "limitation years" beginning after December 31, 1986, Employee contributions, (3) forfeitures and (4) amounts allocated, after March 31, 1984, to an individual medical account, as deemed in Code Section 415(1)(2), which is part of a pension or annuity plan maintained by the Employer. Except, however, the "415 Compensation" percentage limitation referred to in paragraph (a)(2) above shall not 17 apply to: (I) any contribution for medical benefits (within the meaning of Code Section 419A(f)(2» after separation from service which is otherwise treated as an "annuaJ addition," or (2) any amount otherwise treated as an "annual addition" under Code Section 415(1)(1). Notwithstanding the foregoing, for "limitation years" beginning prior to January I, 1987, only that portion of Employee contributions equal to the lesser of Employee contributions in excess of six percent (6%) of "415 Compensation" or one-half of Employee contributions shall be considered an "annual addition." For this purpose, any Excess Amount applied under Sections 4.4(a)(4) and 4.4(b)(6) in the Limitation Year to reduce Employer contributions shall be considered Annual Additions for such Limitation Year. (2) "Compensation" means a Participant's Compensation as elected in the Adoption Agreement. However, regardless of any selection made in the Adoption Agreement, for Limitation Years beginning prior to January I, 1998, "415 Compensation" shall exclude compensation which is not currently includible in the Participant's gross income by reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(h), 414(h) or 457(h). For Limitation Years beginning after December 31, 1997, such amounts, except for 414(h), shall be included. For Limitation Years beginning after December 31, 1991, for purposes of applying the limitations of this article, compensation for a limitation year is the compensation actually paid or made available during such limitation year. Notwithstanding the preceding sentence, compensation for a participant in a defined contribution plan who is Permanently and Totally Disabled (as defined in Code section 22(e)(3» is the compensation such participant would have received for the limitation year if the participant had been paid at the rate of compensation paid immediately before becoming Permanently and Totally Disabled; such imputed compensation for the disabled participant may be taken into account only if the participant is not a Highly Compensated Employee and contributions made on behalf of such participant are nonforfeitable when made. (3) "Defined Benefit Fraction" means a fraction, the numerator of which is the sum of the Participant's Projected Annual Benefits under all the defined benefit plans (whether or not terminated) maintained by the Employer, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the Limitation Year under Code Sections 415(b) and (d) or 140 percent of his or her Highest Average Compensation including any adjustments under Code Section 415(b). Notwithstanding the above, if the Participant was a Participant as of the first day of the first Limitation Year beginning after December 31, 1986, in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125 percent of the sum of the annual benefits under such plans which the Participant had accrued as of the end of the close of the last Limitation Year beginning before January I, 1987, disregarding any changes in the terms and conditions of the plan after May 5,1986. The preceding sentence applies only if the deemed benefit plans individually and in the aggregate satisfied the requirements of Code Section 415 for all Limitation Years beginning before January I, 1987. (4)"Defined Contribution Dollar Limitation" means $30,000, as adjusted under Code Section 415(d). 18 (5)" Defined Contribution Fraction" means a fraction, the numerator of which is the sum of the Annual Additions to the Participant's Account under all the defined contribution plans (whether or not terminated) maintained by the Employer for the current and all prior Limitation Years, (including the Annual Additions attributable to the Participant's nondeductible voluntary employee contributions to any defined benefit plans, whether or not terminated, maintained by the Employer for the current and all prior Limitation Years, to any simplified employee pensions, and the annual additions attributable to all welfare benefit funds, as defined in Code Section 419(e), and individual medical accounts, as deemed in Code Section 415(1)(2), maintained by the Employer), and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior Limitation Years of Service with the Employer (regardless of whether a defined contribution plan was maintained by the Employer). The maximum aggregate amount in any Limitation Year is the lesser of 125 percent of the Defined Contribution Dollar Limitation or 35 percent of the Participant's Compensation for such year. For Limitation Years beginning prior to January I, 1987, the "Annual Addition" shall not be recomputed to treat all Employee contributions as an Annual Addition. If the Employee was a Participant as of the end of the first day of the first Limitation Year beginning after December 31, 1986, in one or more defined contribution plans maintained by the Employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this ftaction and the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal to the product of (I) the excess of the sum of the ftactions over 1.0 times (2) the denominator of this fraction, will be permanently subtracted ftom the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January I, 1987, and disregarding any changes in the terms and conditions of the plan made after May 5, 1986, but using the Code Section 415 limitation applicable to the first Limitation Year beginning on or after January I, 1987. (6) "Employer" means the Employer that adopts this Plan and all Affiliated Employers, except that for purposes of this Section, affiliated employers shall be determined pursuant to the modification made by Code Section 415(h). (7) "Excess Amount" means the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (8) "Highest Average Compensation" means the average Compensation for the three consecutive Years of Service with the Employer that produces the highest average. A Year of Service with the Employer is the 12 consecutive month period defined in Section El of the Adoption Agreement which is used to determine Compensation under the Plan. (9) "Limitation Year" means the Compensation Year (a 12 consecutive month period) as elected by the Employer in the Adoption Agreement. All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different 12 consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made. (10) "Maximum Permissible Amount" means the maximum Annual Addition that may be contributed or allocated to a Participant's account under the plan for any Limitation Year, which shall not exceed the lesser of: (i) the Defined Contribution Dollar Limitation, or 19 (ii) 25 percent of the Participant's Compensation for the Limitation Year. The Compensation Limitation referred to in (ii) shall not apply to any contribution for medical benefits (within the meaning of Code Sections 401(h) or 419A(f)(2» which is otherwise treated as an annual addition under Code Sections 415(1)(1) or 419A(d)(2). If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12 consecutive month period, the Maximum Permissible Amount will not exceed the Defined Contribution Dollar Contribution multiplied by the following fiaction: number of months in the short Limitation Year 12 (11) "Projected Annual Benefit" means the annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified Joint and Survivor Annuity) to which the Participant would be entitled under the terms of the Plan assuming: (i) the Participant will continue employment until Normal Retirement Age (or current age, iflater), and (ii) the Participant's Compensation for the current Limitation Year and all other relevant factors used to determine benefits under the Plan will remain constant for all future Limitation Years. (g) Notwithstanding anything contained in this Section to the contrary, the limitations, adjustments and other requirements prescribed in this Section shall at all times comply with the provisions of Code Section 415 and the Regulations thereunder, the terms of which are specifically incorporated herein by reference. 4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS (a) If as a result of the allocation of Forfeitures, a reasonable error in estimating a Participant's annual Compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3» that may be made with respect to any Participant under the limits of Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the "Annual Additions" under this Plan would cause the maximum provided in Section 4.4 to bc exceeded, the Administrator shall treat the excess in accordance with Section 4.4(a)(4). 4.6 TRANSFERS FROM QUALIFIED PLANS (a) If specified in the Adoption Agreement, and with the consent of the Administrator, amounts may be transferred ITom other qualified plans, provided that the trust ITom which such funds are transferred permits the transfer to be made and the transfer will not jeopardize the tax exempt status of the Plan or create adverse tax consequences for the Employer. The amounts transferred shall be set up in a separate account herein referred to as a "Participant's Rollover Account." Such account shall be fully vested at all times and shall not be subject to forfeiture for any reason. (b) Amounts in a Participant's Rollover Account shall be held by the Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as provided in Paragraphs (c) and (d) of this Section. 20 (c) Amounts attributable to elective contributions (as dermed in Regulation Section 1.401 (k)-1(g)(3), including amounts treated as elective contributions, which are transferred ftom another qualified plan in a plan-to-plan transfer shall be subject to the distribution limitations provided for in Regulation 1.401(k)-1(d). (d) At Normal Retirement Date, or such other date when the Participant or his Beneficiary shall be entitled to receive benefits, the fàir market value of the Participant's Rollover Account shall be used to provide additional benefits to the Participant or his Beneficiary. Any distributions of amounts held in a Participant's Rollover Account shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections 411(aXII) and 417 and the Regulations thereunder. Furthermore, such amounts shall be considered as part of a Participant's benefit in determining whether an involuntary cash-out of benefits without Participant consent may be made. (e) The Administrator may direct that employee transfers made after a valuation date be segregated into a separate account for each Participant until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated or be invested as part of the general Trust Fund, to be determined by the Administrator. (t) For purposes of this Section, the term "qualified plan" shall mean any tax qualified plan under Code Section 401(a). The term "amounts transferred ftom other qualified plans" shall mean: (i) amounts transferred to this Plan directly ftom another qualified plan; (ii) lump-sum distributions received by an Employee ftom another qualified plan which are eligible for tax ftee rollover to a qualified plan and which are transferred by the Employee to this Plan within sixty (60) days following his receipt thereof; (iii)amounts transferred to this Plan ftom a conduit individual retirement account or individual retirement annuity provided that the conduit individual retirement account or annuity has no assets other than assets which (A)were previously distributed to the Employee by another qualified plan as a lump-sum distribution (B)were eligible for tax- ftee rollover to a qualified plan and (C)were deposited in such conduit individual retirement account within sixty (60) days of receipt thereof; and (iv) amounts distributed to the Employee ftom a conduit individual retirement account or annuity meeting the requirements of clause (iii) above, and transferred by the Employee to this Plan within sixty (60) days of his or her receipt thereof ftom such conduit individual retirement account or annuity. (g) Prior to accepting any transfers to which this Section applies, the Administrator may require the Employee to establish that the amounts to be transferred to this Plan meet the requirements of this Section and may also require the Employee to provide an opinion of counsel satisfactory to the Employer that the amounts to be transferred meet the requirements of this Section. This subsection 4.6(g) shall be implemented via uniformly applied written procedures. 4.7 VOLUNTARY CONTRIBUTIONS (a) If elected in the Adoption Agreement, each Participant may, at the discretion of the Administrator in a nondiscriminatory manner, elect to voluntarily contribute a ponion of his or her compensation earned while a Participant under such plan. Such contributions shall be paid to the Trustee within a reasonable period of time but in no event later than 90 days after the receipt of the contribution. 21 (c) The balance in each Participant's Voluntary Contribution Account shall be Vested Contributions at all times and shall not be subject to Forfeiture for any reason. (d) A Participant may elect to withdraw his voluntary contributions from his or her Voluntary Contribution Account and the actual earnings thereon in a manner which is consistent with and satisfies the provisions of Section 6.5. If the Administrator maintains sub-accounts with respect to voluntary contributions (and earnings thereon) which were made on or before a specified date, a Participant shall be permitted to designate which sub-account shall be the source for his or her withdrawal. No Forfeitures shall occur solely as a result of an Employee's withdrawal of Elective Contributions. In the event such a withdrawal is made, or in the event a Participant has received a hardship distribution pursuant to Regulation 1.401(k)-I(d)(2)(iii)(B) ftom any plan maintained by the Employer, then such Participant shall be barred from making any voluntary contributions for a period of twelve (12) months after receipt of the withdrawal or distribution. (e) At Normal Retirement Date, or such other date when the Participant or his or her Beneficiary shall be entitled to receive benefits, the fair market value of the Voluntary Contribution Account shall be used to provide additional benefits to the Participant or his or her Beneficiary. (f) The Administrator may direct that Elective Contributions made after a valuation date be segregated into a separate account until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated or be invested as part of the general Trust Fund, to be determined by the Administrator. 4.8 DIRECTED INVESTMENT ACCOUNT (a) If elected in the Adoption Agreement, all Participants may direct the Trustee as to the investment of their individual account balances. Participants may direct the Trustee in writing to invest their account in specific assets as permitted by the Administrator provided such investments are permitted by the Plan. The account of any Participant so directing will thereupon be considered a Directed Investment Account. (b) A separate Directed Investment Account shall be established for each Participant who has directed an investment. Transfers between the Participanfs regular account and their Directed Investment Account shall be charged and credited as the case may be to each account. The Directed Investment Account shall not share in Trust Fund Earnings, but it shall be charged or credited as appropriate with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in market value during each Plan Year attributable to such account. (c) The Administrator shall establish a procedure, to be applied in a uniform and nondiscriminatory manner, setting forth the permissible investment options under this Section, how often changes between investments may be made, and any other limitations that the Administrator shall impose on a Participant's right to direct investments. 4.9 MANDATORY EMPLOYEE CONTRIBUTIONS (a) The Employer may elect in the Adoption Agreement that all Eligible Employees must contribute Mandatory Employee Contributions to the Plan as a condition of employment with the Employer. The Employer shall collect such contributions and remit them to the Trustee. The Employer may "pick up" such contributions as provided in Internal Revenue Code Section 414(b). 22 (b) Mandatory Employee Contributions shall be 100% Vested when made and shall be distributed as provided by Article VI. 4.10 INTEGRATION IN MORE THAN ONE PLAN If the Employer and/or an Affiliated Employer maintain qualified retirement plans integrated with Social Security such that any Participant in this Plan is covered under more than one of such plans, then such plans will be considered to be one plan and will be considered to be integrated if the extent of the integration of all such plans does not exceed 100%. For purposes of the preceding sentence, the extent of integration of a plan is the ratio, expressed as a percentage, which the actual benefits, benefit rate, offset rate, or employer contribution rate, whatever is applicable under the Plan, bears to the limitation applicable to such Plan. ARTICLE V VALUATIONS 5.1 V ALUA TION OF THE TRUST FUND The Administrator shall direct the Trustee, as of each Anniversary Date, and at such other date or dates deemed necessary, by the Administrator, herein called the "Valuation Date," to determine the net worth of the assets comprising the Trust Fund as it exists on the "Valuation Date." In determining such net worth, the Trustee shall value the assets comprising the Trust Fund at their fair market value as of the "Valuation Date" and shall deduct all expenses for which the Trustee has not yet obtained reimbursement &om the Employer or the Trust Fund. 5.2 METHOD OF VALUATION In determining the fair market value of securities held in the Trust Fund which are listed on a registered stock exchange, the Administrator shall direct the Trustee to value the same at the prices they were last traded on such exchange preceding the close of business on the "Valuation Date." If such securities were not traded on the "Valuation Date," or if the exchange on which they are traded was not open for business on the "Valuation Date," then the securities shall be valued at the prices at which they were last traded prior to the "Valuation Date." Any unlisted security held in the Trust Fund shall be valued at its bid price next preceding the close of business on the "Valuation Date," which bid price shall be obtained from a registered broker or an investment banker. In determining the fair market value of assets other than securities for which trading or bid prices can be obtained, the Trustee may appraise such assets itself, or in its discretion, employ one or more appraisers for that purpose and rely on the values established by such appraiser or appraisers. Where the Trust Fund assets include an annuity contract, it shall be valued at the annuity contract value. ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS 6.1 DETERMINATION OF BENEFITS UPON RETIREMENT Every Participant may terminate his or her employment with the Employer and retire for the purposes hereof on or after his or her Normal Retirement Date or Early Retirement Date. However, a Participant may postpone the termination of his or her employment with the Employer to a later date, in which event the participation of such Participant in the Plan, including the right to receive allocations pursuant to Section 4.3, shall continue until his or her Late Retirement Date. Upon a ParticipanCs Retirement Date, or attainment of his or her Normal Retirement Date without termination of employment with the Employer, or as soon thereafter as is practicable, the Administrator shall direct, at the election of the Participant, the distribution of all amounts credited to such Participant's Combined Account in accordance with Section 6.5. 23 6.2 DETERMINATION OF BENEFITS UPON DEATH (a) Upon the death of a Participant before his or her Retirement Date or other termination of his or her employment, all amounts credited to such Participanrs Combined Account shall become fully Vested. The Administrator shall direct, in accordance with the provisions of Sections 6.6 and 6.7, the distribution of the deceased Participant's accounts to the Participant's Beneficiary. (b) Upon the death of a Former Participant, the Administrator shall direct, in accordance with the provisions of Sections 6.6 and 6.7, the distribution of any remaining amounts credited to the accounts of such deceased Former Participant to such Former Participanrs Beneficiary. (c) The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the account of a deceased Participant or Former Participant as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclusive. (d)The designation of a Beneficiary shall be made on a form satisfactory to the Administrator. A Participant may at any time revoke his or her designation of a Beneficiary or change his or her Beneficiary by filing written notice of such revocation or change with the Administrator. The Participant may, at any time, designate a Beneficiary for death benefits payable under the Plan that are in excess of the Pre-Retirement Survivor Annuity. In the event no valid designation of Beneficiary exists at the time of the Participant's death, the death benefit shall be payable to his estate. (e) If the Plan provides an insured death benefit and a Participant dies before any insurance coverage to which he or she is entitled under the Plan is in effect, the death benefit from such insurance coverage shall be limited to the standard rated premium which was or should have been used for such purpose. (I) In the event of any conflict between the terms of this Plan and the terms of any Contract issued hereunder, the Plan provisions shall control. 24 6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY In the event ofa Participant's Total and Permanent Disability prior to his or her Retirement Date or other termination of employment, all amounts credited to such Participant's Combined Account shall become fully Vested. In the event of a Participant's Total and Permanent Disability, the Administrator, in accordance with the provisions of Sections 6.5 and 6.7, shall direct the distribution to such Participant of all amounts credited to such Participant's Combined Account as though he or she had retired. 6.4 DETERMINATION OF BENEFITS UPON TERMINATION (a) On or before the Anniversary Date, or other valuation date, coinciding with or subsequent to the termination of a Participanfs employment for any reason other than retirement, death, or Total and Permanent Disability, the Administrator may direct that the amount of the Vested portion of such Terminated Participant's Combined Account be segregated and invested separately. In the event the Vested portion of a Participant's Combined Account is not segregated, the amount shall remain in a separate account for the Terminated Participant and share in allocations pursuant to Section 4.3 until such time as a distribution is made to the Terminated Participant. The amount of the portion of the Participant's Combined Account which is not Vested may be credited to a separate account (which will always share in gains and losses of the Trust Fund) and at such time as the amount becomes a Forfeiture shall be treated in accordance with the provisions of the Plan regarding Forfeitures. In the event that the amount of the vested portion of the Terminated Participant's Combined Account equals or exceeds the fair market value of any insurance Contracts, the Trustee, when so directed by the Administrator and agreed to by the Terminated Participant, shall assign, transfer, and set over to such Terminated Participant all Contracts on his or her life in such form or with such endorsements, so that the settlement options and forms of payment are consistent with the provisions of Section 6.5. In the event that the Terminated Participant's vested portion does not at least equal the fair market value of the Contracts, if any, the Terminated Participant may pay over to the Trustee the sum needed to make the distribution equal to the value of the Contracts being assigned or transferred, or the Trustee, pursuant to the Participant's election, may borrow the cash value of the Contracts from the Insurer so that the value of the Contracts is equal to the vested portion of the Terminated Participant's Combined Account and then assign the Contracts to the Terminated Participant. Distribution of the funds due to a Terminated Participant shall be made on the occurrence of an event which would result in the distribution had the Terminated Participant remained in the employ of the Employer i.e. upon the Participant's death, Total and Permanent Disability, Early, Normal or Late Retirement Date. However, at the election of the Participant, the Administrator shall direct that the entire vested portion of the Terminated Participanfs Combined Account to be payable to such Terminated Participant provided the conditions, if any, set forth in the Adoption Agreement have been satisfied. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5. Notwithstanding the above and if elected in the Adoption Agreement, if the value of a Terminated Participant's Vested benefit derived 1Ì"0m Employer and Employee contributions does not exceed, and at the time of any prior distribution, has never exceeded $5,000, the Administrator shall direct that the entire Vested benefit be paid to such Participant in a single lump-sum without regard to the consent of the Participant or the Participant's spouse. 25 (b) The vested portion of any Participant's Account shall be a percentage of such Participant's Account determined on the basis of the Participant's number of Years of Service according to the vesting schedule specified in the Adoption Agreement. (c) Notwithstanding the vesting schedule above, upon the complete discontinuance of the Employer's contributions to the Plan or upon any full or partial termination of the Plan, all amounts credited to the account of any affected Participant shall become 100% Vested and shall not thereafter be subject to Forfeiture. (d) If this is an amended or restated Plan, then notwithstanding the vesting schedule specified in the Adoption Agreement, the vested percentage of a Participant's Account shall not be less than the vested percentage attained as of the later of the effective date of the Plan or adoption date of this amendment and restatement. The computation ora Participant's nonforfeitable percentage of his or her interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Article. (e)(I) Ifany Former Participant shall be reemployed by the Employer before a One-Year Break in Service occurs, he or she shall continue to participate in the Plan in the same manner as if such termination had not occurred. (2) If any Former Participant shall be reemploycd by the Employer before five (5) consecutive One-Year Breaks in Service, and such Former Participant had received a distribution of his or her entire Vested interest prior to his or her reemployment, his or her forfeited account shall be reinstated only if he or she repays the full amount distributed to him or her before the earlier of five (5) years after the ftrst date on which the Participant is subsequently reemployed by the Employer or the close of the first period of 5 consecutive One-Year Breaks in Service commencing after the distribution. If a distribution occurs for any reason other than a separation from service, the time for repayment may not end earlier than five (5) years after the date of separation. In the event the Former Participant does repay the full amount distributed to him, the undistributed portion of the Participanrs Account must be restored in full, unadjusted by any gains or losses occurring subsequent to the Anniversary Date or other valuation date preceding his termination. If an employee receives a distribution pursuant to this section and the employee resumes employment covered under this plan, the employee's employer-derived account balance will be restored to the amount on the date of distribution if the employee repays to the plan the full amount of the distribution attributable to employer contributions before the earlier of 5 years after the first date on which the participant is subsequently re-employed by the employer, or the date the participant incurs five (5) consecutive One-Year Breaks in Service following the date of the distribution. If a non-vested Former Participant was deemed to have received a distribution and such Former Participant is reemployed by the Employer before five (5) consecutive One-Year Breaks in Service, then such Participant will be deemed to have repaid the deemed distribution as of the date of reemployment. (3) If any Former Participant is reemployed after a One-Year Break in Service has occurred, Years of Service shall include Years of Service prior to his One-Year Break in Service subject to the following rules: (i) Any Former Participant who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions shall lose credits if his or her consecutive One-Year Breaks in Service equal or exceed the greater of (A) five (5) or (B) the aggregate number of his or her pre-break Years of Service; 26 (ii) After five (5) consecutive One-Year Breaks in Service, a Former Participant's vested Account balance attributable to pre-break service shall not be increased as a result of post-break service; (iii) A Former Participant who is reemployed and who has not had his or her Years of Service before a One-Year Break in Service disregarded pursuant to (i) above, shall participate in the Plan as of his date of reemployment; (iv) Ifa Former Participant again becomes eligible to participate (a One-Year Break in Service previously occurred, but employment had not terminated), he shall participate in the Plan from the fITSt day on which he again becomes eligible. (I) In determining Years of Service for purposes of vesting under the Plan, Years of Service shall be excluded as specified in the Adoption Agreement. (g) In determining Years of Service for purposes of vesting under the Plan, Years of Service will be credited to Participants with respect to periods of qualified military service as provided in Code Section 414(u). 6.5 DISTRIBUTION OF BENEFITS (a)(l) Unless otherwise elected as provided below, a Participant who is married on the "annuity starting date" and who does not die before the "annuity starting date" shall receive the value ofall of his benefits in the form of a Joint and Survivor Annuity, unless the Employer, in the Adoption Agreement, has elected to not have the Joint and Survivor Annuity rules apply. The Joint and Survivor Annuity is an annuity that commences immediately and shall be equal in value to a single life annuity. Such joint and survivor benefits following the Participant's death shall continue to the spouse during the spouse's lifetime at a rate equal to 50%'ofthe rate at which such benefits were payable to the Participant. This Joint and Survivor Annuity shall be considered the designated qualified Joint and Survivor Annuity and automatic form of payment for the purposes of this Plan. However, the Participant may elect to receive a smaller annuity benefit with continuation of payments to the spouse at a rate of seventy-five percent (75%) or one hundred percent (100%) of the rate payable to a Participant during his lifetime which alternative Joint and Survivor Annuity shall be equal in value to the automatic Joint and 50% Survivor Annuity. An unmarried Participant shall receive the value of his benefit in the form of a life annuity. Such unmarried Participant, however, may elect in writing to waive the life annuity. The election must comply with the provisions of this Section as if it were an election to waive the Joint and Survivor Annuity by a married Participant, but without the spousal consent requirement. The Participant may elect to have any annuity provided for in this Section distributed upon the attainment of the "earliest retirement age" under the Plan. The "earliest retirement age" is the earliest date on which, under the Plan, the Participant could elect to receive retirement benefits. (2) Any election to waive the Joint and Survivor Annuity must be made by the Participant in writing during the election period and be consented to by the Participant's spouse. If the spouse is legally incompetent to give consent, the spouse's legal guardian, even if such guardian is the Participant, may give consent. Such election shall designate a Beneficiary (or a form of benefits) that may not be changed without spousal consent (unless the consent of the spouse expressly permits designations by the Participant without the requirement of further consent by the spouse). Such spouse's consent shall be irrevocable and must acknowledge the effect of such election and be witnessed by a Plan representative or a notary public. Such consent shall not be required if it is established to the satisfaction of the Administrator that the required consent cannot be obtained because there is no spouse, the spouse cannot be located, or other circumstances that may be prescribed by Regulations. The election made by the Participant and consented to by his spouse may be revoked by the Participant in writing without the consent of the spouse at any time during the election period. The number of 27 revocations shall not be limited. Any new election must comply with the requirements of this paragraph. A former spouse's waiver shall not be binding on a new spouse. (3) The election period to waive the Joint and Survivor Annuity shall be the 90 day period after the Administrator provides the required written explanation to the Participant. (4) For purposes of this Section and Section 6.6, the "annuity starting date" means the fIrSt day of the fIrSt period for which an amount is paid as an annuity, or, in the case of a benefit not payable in the form of an annuity, the fIrSt day on which all events have occurred which entitles the Participant to such benefit. (5) With regard to the election, the Administrator shall provide to the Participant within a reasonable period of time prior to the "annuity starting date" a written explanation of: (i) the terms and conditions of the Joint and Survivor Annuity, and (ii) the Participant's right to make and the effect of an election to waive the Joint and Survivor Annuity, and (iii) the right of the Participanf s spouse to consent to any election to waive the Joint and Survivor Annuity, and (iv) the right of the Participant to revoke such election, and the effect of such revocation. Notwithstanding the above, if the Participant elects (with spousal consent) to waive the requirement that the written explanation be provided at least thirty (30) days before the "annuity starting date", the election period shall be extended to the thirtieth (30th) day after the date on which such explanation is provided to the Participant. Any distribution provided for in this Section may commence less than thirty (30) days after the notice required by Code Section 417(a)(3) is given if: (i) the Administrator clearly informs the Participant that the Participant has a right to a period of thirty (30) days after receiving the notice to consider whether to waive the Joint and Survivor Annuity and consent to a form of distribution other than a Joint and Survivor Annuity. (ii) the Participant is permitted to revoke an affumative distribution election at least until the "annuity starting date" or, if later at any time prior to the expiration of the 7-day period that begins the day after the explanation of the Joint and Survivor Annuity is provided to the Participant. (iii) the "annuity starting date" is after the time that the explanation of the Joint and Survivor Annuity is provided to the Participant. However, the "annuity starting date" may be before the date that any affirmative distribution election is made by the Participant and before the date that the distribution is permitted to commence under (iv) below, and (iv) distribution in accordance with the affirmative election does not commence before the expiration of the 7-day period that begins the day after the explanation of the Joint and survivor Annuity is provided to the Participant. 28 (b) In the event a married Participant duly elects pursuant to paragraph (a)(2) above not to receive his or her benefit in the form of a Joint and Survivor Annuity, or if such Participant is not married, in the form of a life annuity, the Administrator, pursuant to the election of the Participant, shall direct the distribution to a Participant or Beneficiary any amount to which he or she is entitled under the Plan in one or more of the following methods which are permitted pursuant to the Adoption Agreement: (1) One lump-sum payment in cash; (2) Payments over a period certain in monthly, quarterly, semiannual, or annual cash installments. In order to provide such installment payments, the Administrator may direct that the Participant's interest in the Plan be segregated and invested separately, and that the funds in the segregated account be used for the payment of the installments. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and his designated Beneficiary); (3) Purchase of or providing an annuity. However, such annuity may not be in any form that will provide for payments over a period extending beyond either the life of the Participant (or the lives of the Participant and his designated Beneficiary) or the life expectancy of the Participant (or the life expectancy of the Participant and his designated Beneficiary). (c) The present value of a Participant's Joint and Survivor Annuity derived ¡¡-om Employer and Employee contributions may not be paid without his written consent if the value exceeds, or has ever exceeded at the time of any prior distribution, $5,000. Further, the spouse of a Participant must consent in writing to any immediate distribution. If the value of the Participanes benefit derived from Employer and Employee contributions does not exceed $5,000 and has never exceeded $5,000 at the time of any prior distribution, the Administrator may immediately distribute such benefit without such Participant's consent. No distribution may be made under the preceding sentence after the "annuity starting date" unless the Participant and his or her spouse consent in writing to such distribution. Any written consent required under this paragraph must be obtained not more than 90 days before commencement of the distribution and shall be made in a manner consistent with Section 6.5(a)(2). (d) Any distribution to a Participant who has a benefit which exceeds, or has ever exceeded at the time of any prior distribution, $5,000 shall require such Participant's consent if such distribution commences prior to the later of his Normal Retirement Age or age 62. With regard to this required consent: (1) No consent shall be valid unless the P",!icipant has received a general description of the material features and an explanation of the relative values of the optional forms of benefit available wder the Plan that would satisfy the notice requirements of Code Section 417. (2) The Participant must be informed of his right to defer receipt of the distribution. If a Participant fails to consent to an immediate distribution, it shall be deemed an election to defer the commencement of payment of any benefit. However, any election to defer the receipt of benefits shall not apply with respect to distributions which are required under Section 6.5(e). (3) Notice of the rights specified under this paragraph shall be provided no less than 30 days and no more than 90 days before the "annuity starting date." 29 (4) Written consent of the Participant to the distribution must not be made before the Participant receives the notice and must not be made more than 90 days before the "annuity starting date." (5) No consent shall be valid if a significant detriment is imposed under the Plan on any Participant who does not consent to the distribution. (e) Notwithstanding any provision in the Plan to the contrary, the distribution ofa Participant's benefits, made on or after January I, 1985, whether under the Plan or through the purchase of an annuity Contract, shall be made in accordance with the following requirements and shall otherwise comply with Code Section 401(a)(9) and the Regulations thereunder (including Regulation Section 1.40 I (a)(9)-2), the provisions of which are incorporated herein by reference: (1) A Participant's benefits shall be distributed to him or her not later than April 1st of the calendar year following the later of (i) the calendar year in which the Participant attains age 70 1/2 or (ii) the calendar year in which the Participant retires. Alternatively, distributions to a Participant must begin no later than the applicable April I' as determined under the preceding sentence and must be made over the life of the Participant (or the lives of the Participant and the Participant's designated Beneficiary) or, if benefits are paid in the form of a Joint and Survivor Annuity, the life expectancy of the Participant (or the life expectancies of the Participant and his or her designated Beneficiary) in accordance with applicable Regulations. (2) Distributions to a Participant and his or her Beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code Section 40 1 (a)(9)(G) and the Regulations thereunder. (I) For purposes of this Section. the life expectancy of a Participant and a Participant's spouse (other than in the case of a life annuity) . shall be predetermined annually in accordance with applicable Regulations if permitted pursuant to the Adoption Agreement. If the Participant or the Participant's spouse may elect whether recalculations will be made, then the election. once made, shall be irrevocable. If no election is made by the time distributions must commence, then the life expectancy of the Participant and the Participant's spouse shall not be subject to recalculation. Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Regulation 1.72-9. (g) All annuity Contracts under this Plan shall be non-transferable when distributed. Furthermore, the terms of any annuity Contract purchased and distributed to a Participant or spouse shall comply with all of the requirements of this Plan. (h) Subject to any spouse's right of consent afforded under the Plan, the restrictions imposed by this Section shall not apply if a Participant has, prior to January I, 1984, made a written designation to have his retirement benefit paid in an alternative method acceptable under Code Section 401(a) as in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act of 1982. 30 (i) If a distribution is made at a time when a Participant who has not terminated employment is not fully vested in his or her Participanrs Account and the Participant may increase the Vested percentage in such account: (I) A separate account shall bc established for the Participant's interest in the Plan as of the time of the distribution, and (2) At any relevant time the Participant's vested portion of the separate account shall be equal to an amount ("X") determined by the formula: X equals P(AB plus (RxD» - (R x D) For purposes of applying the formula: P is the vested percentage at the relevant time, AB is thc account balance at the relevant time, D is the amount of distribution, and R is the ratio of the account balance at the relevant time to the account balance after distribution. 6.6 DISTRIBUTION OF BENEFITS UPON DEATH (a) Unless otherwise elected in the Adoption Agreement or as provided below, a vested Participant who dies before the annuity starting date and who has a surviving spouse shall have the Pre-Retirement Survivor Annuity paid to his surviving spouse. The Participants spouse may direct that payment of the Pre-Retirement Survivor Annuity commence within a reasonable period after the Participant's death. If the spouse does not so direct, payment of such benefit will commence at the time the Participant would have attained the later of his or her Normal Retirement Age or age 62. However, the spouse may elect a later commencement date. Any distribution to the Participanrs spouse shall be subject to the rules specified in Section 6.6(h). (h) Any election to waive the Pre-Retirement Survivor Annuity before the Participant's death must be made by the Participant in writing during the election period and shall require the spouse's irrevocable consent in the same manner provided for in Section 6.5(a)(2). Further, the spouse's consent must acknowledge the specific nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse Beneficiary need not be acknowledged, provided the consent of the spouse acknowledges that the spouse has the right to limit consent only to a specific Beneficiary and that the spouse voluntarily elects to relinquish such right. (c) The election period to waive the Pre-Retirement Survivor Annuity shall begin on the first day ofthc Plan Year in which the Participant attains age 35 and end on the date of the Participant's death. An earlier waiver (with spousal consent) may be made provided a written explanation of the Pre-Retirement Survivor Annuity is given to the Participant and such waiver becomes invalid at the beginning of the Plan Year in which the Participant turns age 35. In the event a Vested Participant separates ITom service prior to the beginning of the election period, the election period shall begin on the date of such separation ITom service. (d) With regard to the election, the Administrator shall provide each Participant within the applicable period, with respect to such Participant (and consistent with Regulations), a written explanation of the Pre-Retirement Survivor Annuity containing comparable information to that required pursuant to Section 6.5(a)(5) For the purposes of this paragraph, the term "applicable period" means, with respect to a Participant, whichever of the following periods ends last: (I) The period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; 31 (2) A reasonable period after the individual becomes a Participant. For this purpose, in the case of an individual who becomes a Participant after age 32, the explanation must be provided by the end of the three-year period beginning with the first day of the first Plan Year for which the individual is a Participant; (3) A reasonable period ending after the Plan no longer fully subsidizes the cost of the Pre-Retirement Survivor Annuity with respect to the Participant; . (4) A reasonable period ending after Code Section 401 (a)(I I) applies to the Participant; or (5) A reasonable period after separation ÍÌ"om service in the case of a Participant who separates before attaining age 35. For this purpose, the Administrator must provide the explanation beginning one year before the separation ÍÌ"om service and ending one year after separation. (e) The Pre-Retirement Survivor Annuity provided for in this Section shall apply only to Participants who are credited with an Hour of Service on or after August 23,1984. Former Participants who are not credited with an Hour of Service on or after August 23, 1984 shall be provided with rights to the Pre-Retirement Survivor Annuity in accordance with Section 303(e)(2) of the Retirement Equity Act of 1984. (t) If the value of the Pre-Retirement Survivor Annuity derived ÍÌ"om Employer and Employee contributions does not exceed $5,000 and has never exceeded $5,000 at the time of any prior distribution, the Administrator shall direct the immediate distribution of such amount to the Participant's spouse. No distribution may be made under the preceding sentence after the annuity starting date unless the spouse consents in writing. If the value exceeds, or has ever exceeded at the time of any prior distribution $5,000, an immediate distribution of the entire amount may be made to the surviving spouse, provided such surviving spouse consents in writing to such distribution. Any written consent required under this paragraph must be obtained not more than 90 days before commencement of the distribution and shall be made in a manner consistent with Section 6.5(a)(2). (g)(I) In the event there is an election to waive the Pre-Retirement Survivor Annuity, and for death benefits in excess of the Pre-Retirement Survivor Annuity, such death benefits shall be paid to the Participant's Beneficiary by either of the following methods, as elected by the Participant (or if no election has been made prior to the Participant's death, by his Beneficiary) subject to the rules specified in Section 6.6(h) and the selections made in the Adoption Agreement: (i) One lump-sum payment in cash; (ii) Payment in monthly, quarterly, semi-annua1, or annual cash installments over a period to be determined by the Participant or his Beneficiary. After periodic installments commence, the Beneficiary shall have the right to reduce the period over which such periodic installments shall be made, and the cash amount of such periodic installments shall be adjusted accordingly. In the event the death benefit payable pursuant to Section 6.2 is payable in installments, then, upon the death of the Participant, the Administrator may direct that the death benefit be segregated and invested separately, and that the funds accumulated in the segregated account be used for the payment of the installments. (h) Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant made on or after January I, 1985, shall be made in accordance with the following requirements and shall otherwise compiy with Code Section 40 1 (a)(9) and the Regulations thereunder. (I) If it is determined, pursuant to Regulations, that the distribution of a Participant's interest has begun and the Participant dies before his or her entire interest has been distributed to him or her, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution selected pursuant to Section 6.5 as of the date of death. 32 (2) If a Participant dies before he or she has begun to receive any distributions of his or her interest in the Plan or before distributions are deemed to have begun pursuant to Regulations, then his or her death benefit shall be distributed to his or her Beneficiaries in accordance with the following rules, subject to the selections made in the Adoption Agreement and Subsections 6.6(h)(3) and 6.6(i) below: (i) The entire death benefit shall be distributed to the Participant's Beneficiaries by December 31st of the calendar year in which the fifth anniversary of the Participant's death occurs; (ii) The 5-year distribution requirement of (i) above shall not apply to any portion of the deceased Participant's interest which is payable to or for the benefit of a designated Beneficiary. In such event, such portion shall be distributed over the life of such designated Beneficiary (or over a period not extending beyond the life expectancy of such designated Beneficiary) provided such distribution begins not later than December 31st of the calendar year immediately following the calendar year in which the Participant died; (iii) However, in the event the Participant's spouse (detennined as of the date of the Participant's death) is the designated Beneficiary, the provisions of (ii) above shall apply except that the requirement that distributions commence within one year of the Participant's death shall not apply. In lieu thereof, distributions must commence on or before the later of: (1) December 31st of the calendar year immediately following the calendar year in which the Participant died; or (2) December 31st of the calendar year in which the Participant would have attained age 70 112. If the surviving spouse dies before distributions to such spouse begin, then the 5-year distribution requirement of this Section shall apply as if the spouse was the Participant. (3) Notwithstanding subparagraph (2) above, or any selections made in the Adoption Agreement, if a Participant's death benefits are to be paid in the fonD of a Pre-Retirement Survivor Annuity, then distributions to the Participant's surviving spouse must commence on or before the later of: (I) December 31st of the calendar year immediately following the calendar year in which the Participant died; or (2) December 31st of the calendar year in which the Participant would have attained age 70 112. (i)For purposes of Section 6.6(hX2), the election by a designated Beneficiary to be excepted from the 5-year distribution requirement (ifpennined in the Adoption Agreement) must be made no later than December 31" of the calendar year following the calendar year of the Participant's death. Except, however, with respect to a designated Beneficiary who is the Participant's surviving spouse, the election must be made by the earlier of: (I) December 31" of the calendar year immediately following the calendar year in which the Participant died or, if later, the calendar year in which the Participant would have attained age 70 1/2; or (2) December 31" of the calendar year which contains the fifth anniversary of the date of the Participant's death. An election by a designated Beneficiary must be in writing and shall be ÚTevocable as of the last day of the election period stated herein. In the absence of an election by the Participant or a designated Beneficiary, the 5-year distribution requirement shall apply. OJ For purposes of this Section, the life expectancy of a Participant and a Participant's spouse (other than in the case of a life annuity) shall or shall not be redetennined annually as provided in the Adoption Agreement and in accordance with Regulations. If the Participant or the Participant's spouse may elect, pursuant to the Adoption Agreement, to have life expectancies recalculated, then the election, once made shall be ÚTevocable. If no election is made by the time distributions must commence, then the life expectancy of the Participant and the Participant's spouse shall not be subject to recalculation. Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Regulation Section 1.72-9. (k) In the event that less than 100% of a Participant's interest in the Plan is distributed to such Participant's spouse, the portion of the distribution attributable to the Participant's Voluntary Contribution Account shall be in the proportion that the Participant's Voluntary Contribution Account bears to the Participant's total interest in the Plan. 33 (I) Subject to any spouse's right of consent afforded under the Plan, the restrictions imposed by this Section shall not apply if a Participant has, prior to January I, 1984, made a wrinen designation to have his or her death benefits paid in an alternative method acceptable under Code Section 40 I (a) as in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act of 1982. 6.7 TIME OF SEGREGATION OR DISTRIBUTION Except as limited by Sections 6.5 and 6.6, whenever a distribution is to be made, or a series of payments are to commence, on or as of an Anniversary Date, the distribution or series of payments may be made or begun on such date or as soon thereafter as is practicable, but in no event later than 180 days after the Anniversary Date. However, unless a Former Participant elects in writing to defer the receipt of benefits (such election may not result in a death benefit that is more than incidental), the payment of benefits shall begin not later than the 60th day after the close of the Plan Year in which the latest of the following events occurs: (a) the date on which the Participant attains the earlier of age 62 or the Normal Retirement Age specified herein; (b) the 10th anniversary of the year in which the Participant commenced participation in the Plan; or (c) the date the Participant terminates his service with the Employer. Notwithstanding the foregoing, the failure of a Participant and, if applicable, the Participant's spouse, to consent to a distribution pursuant to Section 6.5(d), shall be deemed to be an election to defer the commencement of payment of any benefit sufficient to satisfY this Section. 6.8 DISTRIBUTION FOR MINOR BENEFICIARY In the event a distribution is to be made to a minor, then the Administrator may direct that such distribution be paid to the legal guardian, or if none, to a parent of such Beneficiary or a responsible adult with whom the Beneficiary maintains his or her residence, or to the custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor Beneficiary shall fully discharge the Trustee, Employer, and Plan trom further liability on account thereof. 34 6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN In the event that all, or any portion, of the distribution payable to a Participant or his or her Beneficiary hereunder shall, at the later of the Participant's attainment of age 62 or his or her Normal Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending a registered letter, return receipt requested, to the last known address, and after further diligent effort, to ascertain the whereabouts of such Participant or his or her Beneficiary, the amount so distributable shall be treated as a Forfeiture pursuant to the Plan. In the event a Participant or Beneficiary is located subsequent to his or her benefit being reallocated, such benefit shall be restored, first fi'om Forfeitures, if any, and then fi'om an additional Employer contribution if necessary. 6.10 PRE-RETIREMENT DISTRIBUTION For Profit Sharing Plans and 401(k) Profit Sharing Plans, if elected in the Adoption Agreement, at such time as a Participant shall have attained the age specified in the Adoption Agreement, the Administrator, at the election of the Participant, shall direct the distribution of up to the entire amount then credited to the accounts maintained on behalf of the Participant. However, no such distribution fi'om the Participan~s Account shall occur prior to 100% vesting. In the event that the Administrator makes such a distribution, the Participant shall continue to be eligible to participate in the Plan on the same basis as any other Employee. Any distribution made pursuant to this Section shall be made in a manner consistent with Section 6.5. 6. II ADVANCE DISTRIBUTION FOR HARDSHIP (a) For Profit Sharing Plans, if elected in the Adoption Agreement, the Administrator, at the election of the Participant, shall direct the distribution to any Participant in anyone Plan Year up to the lesser of 100% of his Participant's accounts valued as of the last Anniversary Date or other valuation date or the amount necessary to satisfy the irmnediate and heavy financial need of the Participant. Any distribution made pursuant to this Section shall be deemed to be made as of the fITSt day of the Plan Year or, if later, the valuation date irmnediately preceding the date of distribution, and the account fi'om which the distribution is made shall be reduced accordingly. Withdrawal under this Section shall be authorized only if the distribution is on account of: (I) Medical expenses described in Code Section 213(d) incurred by the Participant, his spouse, or any of his dependents (as defined in Code Section 152) or expenses necessary for these persons to obtain medical care; (2) The purchase (excluding mortgage payments) of a principal residence for the Participant; (3) Funeral expenses for a member of the Participant's family; (4) Payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant, his spouse, children, or dependents; or (5) The need to prevent the eviction of the Participant fi'om his principal residence or foreclosure on the mortgage of the Participant's principal residence. (b) No such distribution shall be made fi'om the Participant's Account until such Account has become fully Vested. (c) Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5. 35 6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS If elected on the Adoption Agreement and subject to the terms of state law, any distribution to any "alternate payee" under a domestic relations order, shall be treated as if made under the terms of a "qualified domestic relations order," as defined in Code Section 414(P). Notwithstanding the foregoing sentence, a Participant's benefits under this plan shall be subject to any domestic relations order entered before January 1, 1985, if payments had commenced as of such date. 6.13 SPECIAL RULE FOR NON-ANNUITY PLANS If elected in the Adoption Agreement, the following shall apply to a Participant in a Profit Sharing Plan or 401(1<) Profit Sharing Plan and to any distribution, made on or after the flTSt day of the first plan year beginning after December 31, 1988, &om or under a separate account attributable solely to accumulated deductible employee contributions, as deemed in Code Section 72(0)(5XB), and maintained on behalf of a participant in a money purchase pension plan, (including a target benefit plan): (a) The Participant shall be prohibited fi"om electing benefits in the form of a life annuity; (b) Upon the death of the Participant, the Participant's entire Vested account balances will be paid to his or her surviving spouse, or, if there is no surviving spouse or the surviving spouse has already consented to waive his or her benefit, in accordance with Section 6.6, to his designated Beneficiary; (c) Except to the extent otherwise provided in this Section and Section 6.5(b), the other provisions of Sections 6.2, 6.5 and 6.6 regarding spousal consent and the forms of distributions shall be inoperative with respect to this Plan. (d) If a distribution is made under Sections 6.2, 6.5 or 6.6, such distribution may commence less than 30 days after the notice described in Section 1.411(a)-II(c) of the Income Tax Regulations is given, provided that: (I) the Plan Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (2) the Participant, after receiving the notice, affirmatively elects a distribution. 36 ARTICLE VII TRUSTEE 7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE The Trustee shall have the following categories of responsibilities: (a) Consistent with the "funding policy and method" determined by the Employer, to invest, manage, and control the Plan assets subject, however, to the direction of an Investment Manager, if the Employer should appoint such manager as to all or a portion of the assets of the Plan; (b) At the direction of the Administrator, to pay benefits required under the Plan to be paid to Participants, or, in the event of their death, to their Beneficiaries; (c) To maintain records of receipts and disbursements and furnish to the Employer and/or Administrator for each Plan Year a written annual report per Section 7.7; and (d) If there shall be more than one Trustee, they shall act by a majority of their number, but may authorize one or more of them to sign papers on their behalf. 7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE (a) The Trustee shall invest and reinvest the Trust Fund to keep the Trust Fund invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Trustee shall deem advisable, including, but not limited to, stocks, common or preferred, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. The Trustee shall at all times in making investments of the Trust Fund consider, among other factors, the short and long-term fmancial needs of the Plan on the basis of information furnished by the Employer. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code or the Act so that at all times this Plan may qualiJ)- as a qualified Plan and Trust. (b) The Trustee may employ a bank or trust company pursuant to the terms of its usual and customary bank agency agreement, under which the duties of such bank or trust company shall be of a custodial, clerical and record-keeping nature. (c) The Trustee may &om time to time transfer to a common, collective, or pooled trust fund maintained by any corporate Trustee hereunder pursuant to Revenue Ruling 81-100, all or such part of the Trust Fund as the Trustee may deem advisable, and such part or all of the Trust Fund so transferred shall be subject to all the terms and provisions of the common, collective, or pooled trust fund which contemplate the commingling for investment purposes of such trost assets with trust assets of other trusts. The Trustee may withdraw &om such common, collective, or pooled trust fund all or such part of the Trust Fund as the Trustee may deem advisable. (d) The Trustee, at the direction of the Administrator and pursuant to instructions &om the individual designated in the Adoption Agreement for such purpose and subject to the conditions set forth in the Adoption Agreement, shall ratably apply for, own, and pay all premiums on Contracts on the lives of the Participants. Any initial or additional Contract purchased on behalf of a Participant shall have a face amount of not less than $1,000, the amount set forth in the Adoption Agreement, or the limitation of the Insurer, whichever is greater. If a life insurance Contract is to be purchased for a Participant, the aggregate premium for ordinary life insurance for each Participant 37 must be less than 50% of the aggregate contributions and Forfeitures allocated to a Participant's Combined Account. For purposes of this limitation, ordinary life insurance Contracts are Contracts with both non- decreasing death benefits and non-increasing premiums. If term or universal life insurance is purchased with such contributions, the aggregate premium must be less than 25% of the aggregate contributions and Forfeitures allocated to a Participant's Combined Account. If both term insurance and ordinary life insurance are purchased with such contributions, the amount expended for term insurance plus one-half of the premium for ordinary life insurance must be less than 25% of the aggregate Employer contributions and Forfeitures allocated to a Participant's Combined Account. The Trustee must distribute the Contracts to the Participant or convert the entire value of the Contracts at or before retirement into cash or provide for a periodic income so that no portion of such value may be used to continue life insurance protection beyond retirement. Notwithstanding the above, the limitations imposed herein with respect to the purchase of life insurance shall not apply, in the case of a Profit Sharing Plan, to the portion of a Participant's Account that has accumulated for at least two (2) Plan Years. Notwithstanding anything hereinabove to the contrary, amounts credited to a Participant's Qualified Voluntary Employee Contribution Account pursuant to Section 4.9, shall not be applied to the purchase of life insurance contracts. (e) The Trustee will be the owner of any life insurance Contract purchased under the terms of this Plan. The Contract must provide that the proceeds will be payable to the Trustee; however, the Trustee shall be required to pay over all proceeds of a life insurance Contract to the Participant's designated Beneficiary in accordance with the distribution provisions of Article VI. A Participant's spouse will be the designated Beneficiary pursuant to Section 6.2, unless a qualified election has been made in accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no circumstances shall the Trust retain any part of the proceeds. However, the Trustee shall not pay the proceeds in a method that would violate the requirements of the Retirement Equity Act, as stated in Article VI of the Plan, or Code Section 40 I (a)(9) and the Regnlations thereunder. (f) Unless authorized in writing by Nationwide to the contrary, a portion of the assets of the Trust Fund shall be invested in products provided by Nationwide Life Insurance Company, or its related or affiliated companies. 7.3 OTHER POWERS OF THE TRUSTEE The Trustee, in addition to all powers and authorities under common law, statutory authority .and other provisions of this Plan, shall have the following powers and authorities to be exercised in the Trustee's sole discretion: (a) To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained; (b) To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement; (c) To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate 38 securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property; (d) To cause any securities or other property to be registered in the Trustee's own name or in the name of one or more of the Trustees nominees, and to hold any investments in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust Fund; (e) To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing; (I) To keep such portion of the Trust Fund in cash or cash balances as the Trustee may, &om time to time, deem to be in the best interests of the Plan, without liability for interest thereon; (g) To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder; (h) To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (i) To settle, compromise, or submit to arbitration any claims, debts, or damages due or owing to or /Tom the Plan, to commenCe or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings; 0) To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel mayor may not be agent or counsel for the Employer; (k) To apply for and procure /Tom the insurer as an investment of the Trust Fund such annuity, or other Contracts (on the life of any Participant or group of participants) as the Administrator shall deem proper; to exercise, at any time or /Tom time to time, whatever rights and privileges may be granted under such annuity, or other Contracts; to collect, receive, and settle for the proceeds of all such annuity, or other Contracts as and when entitled to do so under the provisions thereof; (I) To invest funds of the Trust in time deposits or savings accounts bearing a reasonable rate of interest in the Trustee's bank; (m) To invest in Treasury Bills and other forms of United States govermnent obligations; (n) To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member fIrm of the New York Stock Exchange; (0) To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations; 39 (p) To pool all or any of the Trust Fund, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or any Affiliated Employer, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests; (q) To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan. (r) "Directed Investment Account" The powers granted to the Trustee shall be exercised in the sole fiduciary discretion of the Trustee. However, if elected in the Adoption Agreement, each Participant may direct the Trustee to separate and keep separate his or her interest in the Plan; and further each Participant is authorized and empowered, in his or her sole and absolute discretion, to give directions to the Trustee in such form as the Trustee may require concerning the investment of the Participanfs Directed Investment Account, which directions must be followed by the Trustee subject, however, to restrictions on payment of life insurance premiums. Neither the Trustee nor any other persons, including the Administrator or otherwise, shall be under any duty to question any such direction of the Participant or to review any securities or other property, real or personal, or to make any suggestions to the Participant in connection therewith, and the Trustee shall comply as promptly as practicable with directions given by the Participant hereunder. Any such direction may be of a continuing nature or otherwise and may be revoked by the Participant at any time in such form as the Trustee may require. The Trustee may refuse to comply with any direction from the Participant in the event the Trustee, in its sole and absolute discretion, deems such directions improper by virtue of applicable law, and in such event, the Trustee shall not be responsible or liable for any loss or expense which may result. Any costs and expenses related to compliance with the Participant's directions shall be borne by the Participant's Directed Investment Account. In the event the Participant fails to direct his Directed Investment Account, the Trustee shall qirect such account. Notwithstanding anything hereinabove to the contrary, the Trustee shall not, at any time after December 31, 1981, invest any portion of a Directed Investment Account in "collectibles" within the meaning of that term as employed in Code Section 408(m). 7.4 LOANS TO PARTICIPANTS (a) If specified in the Adoption Agreement, the Trustee (or, if loans are treated as Directed Investment pursuant to the Adoption Agreement, the Administrator) may, in the Trustee's (or, if applicable, the Administrator's) sole discretion, make loans to Participants or Beneficiaries under the following circumstances: (I) loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to highly compensated employees (as defined in Code Section 414(q» in an amount greater than the amount made available to other Participants; (3) loans shall bear a reasonable rate of interest; (4) loans shall be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time. (b) Loans shall not be granted to any Participant that provide for a repàyment period extending beyond such Participant's Normal Retirement Date. (c) Loans made pursuant to this Section (when added to the outstanding balance of all other loans made by the Plan to the Participant) shall be limited to the lesser of: (I) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans from the Plan to the Participant during the one year period ending on the day before the date on 40 which such loan is made, over the outstanding balance ofloans from the Plan to the Participant on the date on which such loan was made, or (2) (i) one-half(1/2) of the present value of the non. forfeitable accrued benefit of the Employee under the Plan. For purposes of this limit, all plans of the Employer shall be considered one plan. Additionally, with respect to any loan made prior to January I, 1987, the $50,000 limit specified in (I) above shall be unreduced. (d) No Participant loan shall take into account the present value of such Participant's Qualified Voluntary Employee Contribution Account. (e) Loans shall provide for level amortization with payments to be made not less frequently than quarterly over a period not to exceed five (5) years. However, loans used to acquire any dwelling unit which, within a reasonable time, is to be used (determined at the time the loan is made) as a principal residence of the Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. Notwithstanding the foregoing, loans made prior to January 1, 1987 which are used to acquire, construct, reconstruct or substantially rehabilitate any dwelling unit which, within a reasonable period of time, is to be used (determined at the time the loan is made) as a principal residence of the Participant or a member of his family (within the meaning of Code Section 267(c)(4» may provide for periodic repayment over a reasonable period of time that may exceed five (5) years. Additionally, loans made prior to January I, 1987, may provide for periodic payments which are made less frequently than quarterly and which do not necessarily result in level amortization. (I) An assignment or pledge of any portion of a Participant's interest in the Plan and a loan, pledge, or assignment with respect to any Contract purchased under the Plan, shall be treated as a loan under this Section. (g) Any loan made pursuant to this Section after August 18, 1985 where the vested interest of the Participant is used to secure such loan shall require the written consent of the Participant's spouse in a manner consistent with Section 6.5(a), provided the spousal consent requirements of such Section apply to the Plan. Such written consent must be obtained within the 90-day period prior to the date the loan is made. Any security interest held by the Plan by reason of an outstanding loan to the Participant shall be taken into account in determining the amount of the death benefit or Pre-Retirement Survivor Annuity. However, no spousal consent shall be required under this paragraph if the total accrued benefit subject to the security is not in excess 01'$5,000. (h) With regard to any loans granted or renewed on or after the last day of the first Plan Year beginning after December 31,1988, a Participant loan procedure shall be established which must include, but need not be limited to, the following: (I) the identity of the person or positions authorized to administer the Participant loan program; (2) a loan application procedure; (3) the basis on which loans will be approved or denied; (4) limitations, ifany, on the types and amounts of loans offered, including what constitutes a hardship or financial need if selected in the Adoption Agreement; 41 (5) the procedure under the program for determining a reasonable rate of interest; (6) the types of collateral which may secure a Participant loan; and (7) the events constituting default and the steps that will be taken to preserve plan assets. Such Participant loan procedure shall be contained in a separate written docwnent which, when properly executed, is hereby incorporated by reference and made a part of this Plan. Furthermore, such Participant loan procedure may be modified or amended in writing from time to time without the necessity of amending this Section of the Plan. (i) Unless indicated otherwise in the Adoption Agreement, loan payments will be suspended under this Plan as permitted under Code Section 414( u). 7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS At the direction of the Administrator, the Trustee shall, from time to time, in accordance with the terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be responsible in any way for the application of such payments. 7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES The Trustee shall be paid such reasonable compensation as set forth in the Trustee's fee schedule, if any, or as otherwise agreed upon in writing by the Employer and the Trustee. An individual serving as Trustee who already receives full-time pay from the Employer shall not receive compensation from this Plan. In addition, the Trustee shall be reimbursed for any reasonable expenses, including reasonable counsel fees incurred by it as Trustee. Such compensation and.expenses shall be paid from the Trust Fund unless paid or advanced by the Employer. All taxes of any kind and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect of, the Trust Fund or the income thereof, shall be paid from the Trust Fund to the extent permitted by law. 7.7 ANNUAL REPORT OF THE TRUSTEE Within a reasonable period of time after the later of the Anniversary Date or receipt of the Employer's contribution for each Plan Year, the Trustee, or its agent, shall furnish to the Employer and Administrator a written statement of account with respect to the Plan Year for which such contribution was made setting forth: (a) the net income, or loss, of the Trust Fund; assets; (b) the gains, or losses, realized by the Trust Fund upon sales or other disposition of the (c) the increase, or decrease, in the value of the Trust Fund; (d) all payments and distributions made from the Trust Fund; and (e) such further information as the Trustee and/or Administrator deems appropriate. The Employer, forthwith upon its receipt of each such statement of account, shall acknowledge receipt thereof in writing and advise the Trustee and/or Administrator of its approval or disapproval thereof. Failure by the Employer to disapprove any such statement of account within thirty (30) days after its receipt thereof shall be deemed an approval thereof. The approval by the Employer of any statement of account shall be binding as to all matters embraced therein as between the Employer and the Trustee to the same extent as if the account of the Trustee had been settled by judgment or decree in an action for a . judicial settlement of its account in a court of competent jurisdiction in 42 which the Trustee, the Employer and all persons having or claiming an interest in the Plan were parties; provided, however, that nothing herein contained shall deprive the Trustee of its right to have its accounts judicially settled if the Trustee so desires. 7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE (a) The Trustee may resign at any time by delivering to the Employer, at least thirty (30) days before its effective date, a written notice of resignation. (b) The Employer may remove the Trustee by mailing by registered or certified mail, addressed to such Trustee at the Trustee's last known address, at least thirty (30) days before its effective date, a written notice of removal. (c) upon the death, resignation, incapacity, or removal of any Trustee, a successor may be appointed by the Employer; and such successor, upon accepting such appointment in writing and delivering same to the Employer, shall, without further act, become vested with all the estate, rights, powers, discretion's, and duties of the predecessor with like respect as if originally named as a Trustee herein. Until such a successor is appointed, the remaining Trustee or Trustees shall have full authority to act under the terms of the Plan. (d) The Employer may designate one or more successors prior to the death, resignation, incapacity, or removal of a Trustee. In the event a successor is so designated by the Employer and accepts such designation, the successor shall, without further act, become vested with all the estate, rights, powers, discretion's, and duties of the predecessor with the like effect as if originally named as Trustee herein immediately upon the death, resignation, incapacity, or removal of the predecessor. (e) Whenever any Trustee hereunder ceases to serve as such, such Trustee shall furnish to the Employer and Administrator a written statement of account with respect to the portion of the Plan Year during which such Trustee served. This statement shall be either (i) included as part of the annual statement of account for the Plan Year required under Section 7.7, or (ii) set forth in a special statement. Any such special statement of account should be rendered to the Employer no. later than the due date of the annual statement of account for the Plan Year. The procedures set forth in Section 7.7 for the approval by the Employer of annual statements of account shall apply to any special statement of account rendered hereunder and approval by the Employer of any such special statement in the manner provided in Section 7.7 shall have the same effect upon the statement as the Employer's approval of an annual statement of account. No successor to the Trustee shall have any duty or responsibility to investigate the acts or transactions of any predecessor who has rendered all statements of account required by Section 7.7 and this subparagraph. 7.9 TRANSFER OF INTEREST Notwithstanding any other provision contained in this Plan, the Trustee, at the direction of the Administrator, shall transfer the vested interest, if any, of such Participant in his account to another trust forming part of a pension, profit sharing, or stock bonus plan maintained by such Participanrs new employer and represented by said employer in writing as meeting the requirements of Code Section 40 I (a), provided that the trust to which such transfers are made permits the transfer to be made. (a) Notwithstanding any provision of the plan to the contrary, with respect to distributions made after December 31,1992, a Participant shall be permitted to elect to have any "eligible rollover distribution" transferred directly to an "eligible retirement plan" specified by the Participant. The Plan provisions otherwise applicable to distributions continue to apply to the direct transfer option. The Participant shall, in the 43 manner prescribed by the Administrator, specify the amount to be directly transferred and the "eligible retirement plan" to receive the transfer. Aoy portion of a distribution which is not transferred shall be distributed to the Participant. (b) For purposes of this Section, the term "eligible rollover distribution" means any distribution other than (i) a distribution of substantially equal periodic payments (not less ftequently than annually) over the life or life expectancy of the Participant (or joint life or joint life expectancies of the Participant and the designated beneficiary) or a distribution over a period certain often years or more; (ii) amounts required to be distributed under Code Section 401(a)(9); (iii) the portion of any other distribution that is not includible in gross income; (iv) excess annual additions, and income allocable thereto, returned pursuant to Section 4.5; (v) corrective distributions of excess deferrals, together with the income allocable thereto, pursuant to Section 11.2(f); (vi) loans that are deemed distributed under Code Section 72(P); (vii) the cost of coverage under a life insurance contract (P.S. 58 costs) and (viii) similar items designated by the Commissioner in revenue rulings, notices and other gnidance published in the Internal Revenue Bulletin. (c) For purposes of this Section, the term "eligible retirement plan" means (i) an individual retirement account as described in Code Section 408(a); (ii) an individual retirement annuity as described in Code Section 408(b); (iii) an annuity plan as described in Code Section 403(a); or (iv) a defined contribution plan as described in Code Section 401(a) which is exempt ftom tax under Code Section 501(a) and which accepts rollover distributions, provided that the Plan Administrator of such plan represents in writing that such plan meets the requirements of Code Section 40 I (a). (d) The election described in subsection (a) shall also be available to the surviving spouse after the Participant's death; however, distributions to the surviving spouse may only be transferred to an individual retirement account or individual retirement annuity. For purposes of subsection (a), a spouse or former spouse who is the alternate payee under a qualified domestic relations order as derIDed in Code Section 414(P) will be treated as the Participant. 7.10 TRUSTEE INDEMNIFICATION The Employer agrees to indemnify and save harmless the Trustee against any and all claims, losses, damages, expenses and liabilities the Trustee may incur in the exercise and performance of the Trustee's powers and duties hereunder, unless the same are determined to be due to gross negligence or willful misconduct. ARTICLE VIII AMENDMENT, TERMINATION, AND MERGERS 8.1 AMENDMENT (a) The Employer shall have the right at any time to amend this Plan subject to the limitations of this Section. However, any amendment which affects the rights, duties or responsibilities of the Trustee and Administrator may only be made with the Trustee's and Administrator's written consent. Aoy such amendment shall become effective as provided therein upon its execution. The Trustee shall not be required to execute any such amendment unless the amendment affects the duties of the Trustee hereunder. (b) No amendment to the Plan shall be effective if it authorizes or permits any part of the Trust Fund (other than such part as is required to pay taxes and administration expenses) to be used for or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries or estates; or causes any reduction in the amount credited to the account of any Participant; or causes or permits any portion of the Trust Fund to revert to or become property of the Employer. 44 8.2 TERMINATION (a) The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee and Administrator written notice of such termination. Upon any full or partial termination, all amounts credited to the affected Participants' Combined Accounts shall become 100% vested and shall not thereafter be subject to forfeiture, and all unallocated amounts shall be allocated to the accounts ofall Participants in accordance with the provisions hereof. (b) Upon the full termination of the Plan, the Employer shall direct the distribution of the assets to Participants in a manner which is consistent with and satisfies the provisions of Section 6.5. Distributions to a Participant shall be made in cash (or in property if permitted in the Adoption Agreement) or through the purchase of irrevocable nontransferable deferred commitments ftom the Insurer. 8.3 MERGER OR CONSOLIDATION This Plan may be merged or consolidated with, or its assets and/or liabilities may be transferred to any other plan only if the benefits which would be received by a Participant of this Plan, in the event ora termination of the plan immediately after such transfer, merger or consolidation, are at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the transfer, merger or consolidation. ARTICLE IX MISCELLANEOUS 9.1 EMPLOYER ADOPTIONS (a) Any organization may become the Employer hereunder by executing the Adoption Agreement in form satisfactory to the Trustee, and it shall provide such additional information as the Trustee may require. The consent of the Trustee to act as such shall be signified by its execution of the Adoption Agreement. (b) Except as otherwise provided in this Plan, the affiliation of the Employer and the participation of its Participants shall be separate and apart ftom that of any other employer and its participants hereunder. 9.2 PARTICIPANT'S RIGHTS Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan. 9.3 ALIENATION (a) Subject to the exceptions provided below, no benefit which shall be payable to any person (including a Participant or his Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void. No such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of 45 any such person, nor shall it be subject to attachment or legal process for or against such person, and the same shall not be recognized except to such extent as may be required by law. (b) This provision shall not apply to the extent a Panicipant or Beneficiary is indebted to the Plan, for any reason, under any provision of this Plan. At the time a distribution is to be made to or for a Participant's or Beneficiary's benefit, such proportion of the amount to be distributed equal to such indebtedness shall be paid to the Plan, to apply against or discharge such indebtedness. Prior to making a payment, however, the Participant or Beneficiary must be given written notice by the Administrator that such indebtedness is to be so paid in whole or part from his or her Participant's Combined Account. If the Participant or Beneficiary does not agree that the indebtedness is a valid claim against his or her Vested Participant's Combined Account, he or she shall be entitled to a review of the validity of the claim in accordance with procedures provided in Section 2.10. (c) This provision shall not apply to a "qualified domestic relations order" defmed in Code Section 414(P), and those other domestic relations orders permitted to be so treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under the Plan. (d) Notwithstanding any provision of this Section to the contrary, an offset to a Participant's accrued benefit against an amount that the Panicipant is ordered or required to pay the Plan with respect to a judgement, order, or decree issued, or a settlement entered into, on or after August 5, 1997, shall be permitted in accordance with Code sectional 40 I (a)(1 3)(C). 9.4 CONSTRUCTION OF PLAN This Plan and Trust shall be construed and enforced according to the Code and the laws of the State or Commonwealth in which the Employer's principal office is located, other than its laws respecting choice of law, to the extent not pre-empted by the Code. 9.5 GENDER AND NUMBER Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in all of the other genders in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply. 9.6 LEGAL ACTION In the event any claim, suit, or proceeding is brought regarding the Trust Fund and/or Plan established hereunder to which the Trustee or the Administrator may be a party, and such claim, suit, or proceeding is resolved in favor of the Trustee or Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, anomey's fees, and other expenses pertaining thereto incurred by them for which they shall have become liable. 9.7 PROHIBITION AGAINST DIVERSION OF FUNDS (a) Except as provided below and otherwise specifically permitted by law, it shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral ammgementor by any other 46 means, for any part of the corpus or income of any Trust Fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants, Retired Participants, or their Beneficiaries. (b) In the event the Employer shall make a contribution under a mistake of fact, the Employer may demand repayment of such contribution at any time within one (1) year following the time of payment and the Trustees shall return such amount to the Employer within the one (1) year period. Earnings of the Plan attributable to the contributions may not be returned to the Employer but any losses attributable thereto must reduce the amount so returned. 9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE Neither the Employer nor the Trustee, nor their successors, shall be responsible for the validity of any Contract issued hereunder or for the failure on the part of the Insurer to make payments provided by any such Contract, or for the action of any person which may delay payment or render a Contract null and void or unenforceable in whole or in part. 9.9 INSURER'S PROTECTIVE CLAUSE The Insurer who shall issue Contracts hereunder shall not have any responsibility for the validity of this Plan or for the tax or legal aspects of this Plan. The Insurer shall be protected and held harmless in acting in accordance with any written direction of the Trustee, and shall have no duty to see to the application of any funds paid to the Trustee, at the Trustee's direction, nor be required to question any actions directed by the Trustee. Regardless of any provision of this Plan, the Insurer shall not be required to take or permit any action or allow any benefit or privilege contrary to the terms ofany Contract which it issues hereunder, or the rules of the Insurer. 9.10 RECEIPT AND RELEASE FOR PAYMENTS Any payment to any Participant, his or her legal representative, Beneficiary, or to any guardian or committee appointed for such Participant or Beneficiary in accordance with the provisions of this Plan, shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Trustee and the Employer. 9.II ACTION BY THE EMPWYER Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by the Employer's legally constituted authority. 9.12 HEADINGS The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. 9.13 APPROVAL BY INTERNAL REVENUE SERVICE Notwithstanding anything herein to the contrary, if, pursuant to a timely application filed by or in behalf of the Plan, the Commissioner of Internal Revenue Service or his delegate should determine that the Plan does not initially qualify as a tax-exempt plan and trust under Code Sections 401 and 501, respectively, and such determination is not contested, or if contested, is finally upheld, then if the Plan is a new plan, it shall be void from its establishment and all amounts contributed to the Plan, by the Employer, less expenses paid, shall be returned within one year. Thereafter, the Plan shall terminate and the Trustee shall be discharged from all further obligations. 47 If the disqualification relates to an amended plan, then the Plan shall operate as ifit had not been amended and restated, except with respect to any part of the amended Plan which shall not cause Plan disqualification. 9.14 UNIFORMITY All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. 9.15 PAYMENT OF BENEFITS Benefits under this Plan shall be paid, subject to Section 6.10 and Section 6.11 only upon death, Total and Permanent Disability, normal or early retirement, termination of employment, or upon Plan Termination. 9.16 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT ACT Notwithstanding any provision in this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. ARTICLE X PARTICIPATING EMPWYERS 10.1 ELECTION TO BECOME A PARTICIPATING EMPWYER Notwithstanding anything herein to the contrary, with the consent of the Employer and Trustee, any affiliated governmental employer may adopt this Plan and all of the provisions hereof, and participate herein and be known as a "Participating Employer", by a properly executed document evidencing said intent and will of such Participating Employer. 10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS (a) Each Participating Employer shall be required to select the same Adoption Agreement provisions as those selected by the Employer other than the Plan Year, the Fiscal Year, and such other items that must, by necessity, vary among employers. (b) Each such Participating Employer shall be required to use the same Trustee as provided in this Plan. (c) The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof. (d) The transfer of any Participant fi"om or to an Employer participating in this Plan, whether it be an Employee of the Employer or a Participating Employer, shall not affect such Participant's rights under the Plan, and all amounts credited to such Participant's Combined Account as well as his or her accumulated service time with the transferor or predecessor, and his or her length of participation in the Plan, shall continue to his or her credit. (e) Any expenses of the Plan which are to be paid by the Employer shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants. 10.3 DESIGNATION OF AGENT Each Participating Employer shall be deemed to be a part of this Plan; provided, however, that with respect to all of its relations with the Trustee and Administrator for the purpose of this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer as its agent. Unless the context of the 48 Plan clearly indicates the contrary, the word "Employer" shall be deemed to include each Participating Employer as related to its adoption of the Plan. 10.4 EMPWYEE TRANSFERS It is anticipated that an Employee may be transferred between Participating Employers, and in the event of any such transfer, the Employee involved shall carry his or her accumulated service and eligibility to the new Employer. No such transfer shall effect a termination of employment hereunder, and the Participating Employer to which the Employee is transferred shall thereupon become obligated hereunder with respect to such Employee in the same manner as was the Participating Employer ftom whom the Employee was transferred. 10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES Any contribution or Forfeiture subject to allocation during each Plan Year shall be allocated among all Participants ofall Participating Employers in accordance with the provisions of this Plan. On the basis of the information furnished by the Administrator, the Trustee shall keep separate books and records concerning the affairs of each Participating Employer hereunder and as to the accounts and credits of the Employees of each Participating Employer. The Trustee may, but need not, register Contracts so as to evidence that a particular Participating Employer is the interested Employer hereunder, but in the event of an Employee transfer ftom one Participating Employer to another, the transferring Employer shall immediately notify the Trustee thereof. 10.6 AMENDMENT Amendment of this Plan by the Employer at any time when there shall be a Participating Employer hereunder shall only be by the written action of each and every Participating Employer and with the consent of the Trustee, where such consent is necessary in accordance with the terms of this Plan. 10.7 DISCONTINUANCE OF PARTICIPATION Any Participating Employer shall be permitted to discontinue or revoke its participation in the Plan at any time. At the time of any such discontinuance or revocation, satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and other Trust Fund assets allocable to the Employees of such Participating Employer, who are Plan Participants, to such new Trustee as shall have been designated by such Participating Employer, in the event that it has established a separate pension plan for its Employees. If no successor is designated, the Trustee shall retain such assets for the Employees of said Participating Employer pursuant to the provisions of Article VII hereof. In no such event shall any part of the corpus or income of the Trust Fund as it relates to such Participating Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees of such Participating Employer. 10.8 ADMINISTRATOR'S AUTHORITY The Administrator shall have authority to make any and all necessary rules or regulations, binding upon all Participating Employers and all Participants, to effectuate the purpose of this Article. 49 ARTICLE XI CASH OR DEFERRED PROVISIONS Notwithstanding any provisions in the Plan to the contrary, the provisions of this Article shall apply with respect to any 401(k) Profit Sharing Plan, if such plan was adopted before May 7,1986. 11.1 FORMULA FOR DETERMINING EMPWYER'S CONTRIBUTION (a)For each Plan Year, the Employer shall contribute to the Plan: (i) The amount of the total salary reduction elections of all Participants made pursuant to Section 1l.2(a), which amount shall be deemed an Employer's Elective Contribution, plus (H) If specified in E3 of the Adoption Agreement, a matching contribution equal to the percentage specified in the Adoption Agreement of the Deferred Compensation of each Participant eligible to share in the allocations of the matching contribution, which amount shall be deemed an Employer's Non-Elective or Elective Contribution as selected in the Adoption Agreement, plus (Hi) If specified in E4 of the Adoption Agreement, a discretionary amount, ifany, which shall be deemed an Employer's Non-Elective Contribution. (b) All contributions by the employer shall be made in cash or in such property as is acceptable to the Trustee. II.2 PARTICIPANT'S SALARY REDUCTION ELECTION (a) If selected in the Adoption Agreement, each Participant may elect to defer his or her Compensation which would have been received in the Plan Year, but for the deferral election, subject to the limitations of this Section and the Adoption Agreement. A deferral election (or modification of an earlier election) may not be made with respect to Compensation which is currently available on or before the date the Participant executed such election, or if later, the latest of the date the Employer adopts this cash or deferred arrangement, or the date such arrangement first became effective. Any elections made pursuant to this Section shall become effective as soon as is administratively feasible. Additionally, each Participant may make a separate election to defer and have allocated for a Plan Year all or a portion of any cash bonus attributable to services performed by the Participant for the Employer during such Plan Year as specified in the Adoption Agreement. The amount by which compensation and/or cash bonuses are reduced shall be that Participant's deferrals and be treated as an Elective Contribution and allocated to that Participant's Elective Account. Once made, a Participant's election to reduce Compensation shall remain in effect until modified or terminated. Modifications may be made as specified in the Adoption Agreement, and terminations may be made at any time. Any modification or termination of an election will become effective as soon as is administratively feasible. 50 (b) The balance in each Participant's Elective Account shall be fully vested at all times and shall not be subject to Forfeiture for any reason. (c) Amounts held in the Participant's Elective Account and Qualified Non-Elective Account may be distributable as permitted under the Plan, but in no event prior to the earlier of: (1) a Participant's separation fi'om service, Total and Permanent Disability, or death; (2) a Participanrs attainment of age 59 1/2; (3) the financial hardship of a Participant, subject to the limitations of Section 11.4; (4) the termination of the Plan without the existence, at the time of Plan termination, of another defined contribution plan (other'than an employee stock ownership plan as defined in Code Section 4975(e)(7» or the establishment of a successor defined contribution plan (other than an employee stock ownership plan as derIDed in Code Section 4975(e)(7» by the Employer or an Affiliated Employer within the period ending twelve months after distribution of all assets from the Plan maintained by the Employer; (5) for Plan Years beginning before December 31, 1984 the date of the disposition by the Employer to an entity that is an unrelated entity of substantially all of the assets (within the meaning of Code Section 409(d)(2» with respect to a Participant who continues employment with the entity acquiring such assets; or (6) the date of the disposition by the Employer or an Affiliated Employer of its interest in a subsidiary (within the meaning of Code Section 409(d)(3» to an entity that is not an Affiliated Employer with respect to a Participant who continues employment with such subsidiary. (d) In any Plan Year beginning after December 31,1986, a Participant's deferrals made under this Plan and all other plans, contracts or arrangements of the Employer maintaining this Plan shall not exceed the limitation imposed by Code Section 402(g), as in effect for the calendar year in which such Plan Year began. If such dollar limitation is exceeded solely fi'om elective deferrals made under this Plan or any other Plan maintained by the Employer, a Participant will be deemed to have notified the Administrator of such excess amount which shall be distributed in a manner consistent with Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to the method provided in Code Section 415( d) in accordance with Regulations. (e) In the event a Participant has received a hardship distribution pursuant to Regulation 1.401(k)-I(d)(2)(iii)(B) fi'om any other plan maintained by the Employer or from his or her Participant's Elective Account pursuant to Section 11.4, then such Participant shall not be permitted to elect to have Salary Deferra1s contributed to the Plan on his or her behalf for a period of twelve (12) months following the receipt of the distribution. Furthermore, the dollar limitation under Code Section 402(g) shall be reduced, with respect to the Participanrs taxable year following the taxable year in which the hardship distribution was made, by the amount of such Participant's Salary Deferrals, if any, made pursuant to this Plan (and any other plan maintained by the Employer) for the taxable year of the hardship distribution. (f) If a Participanrs Salary Deferrals under this Plan together with any elective deferrals (as derIDed in Regulation Section 1.402(g)-1(b» under another qualified cash or deferred arrangement (as defined in Code Section 401 (k», a simplified employee pension (as defined in Code Section 408(k», a salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D», a deferred compensation plan under Code Section 457(c), an elective employer contribution under a simple retirement account described in Code section 408(P)(2)(A)(i) or a trust described in Code Section 501(c)(18) cumulatively exceed the limitation imposed by Code Section 402(g) (as adjusted annually in accordance with the method provided in Code Section 415( d) pursuant to Regulations) for such Participant's taxable year, the Participant may, not later than March 1st following the close of his or her taxable year, notifY the Administrator in writing of such excess and request that his or her Salary Deferrals under this Plan be reduced by an amount specified by the Participant. In such event, the Administrator shall direct the Trustee to distribute such excess amount (and any Income allocable to such excess amount) to the Participant not later than the flfSt April 15th following the close of the Participant's taxable year. Distributions in accordance with this paragraph may be made for any taxable year of the 51 Participant. Any distribution of less than the entire amount of Excess Deferrals and Income shall be treated as a pro rata distribution of Excess Deferrals and Income. The amount distributed shall not exceed the Participant's deferrals under the Plan for the taxable year. Any distribution on or before the last day of the Participant's taxable year must satisfY each of the following conditions: (I) the Participant shall designate the distribution as Excess Deferrals; (2) the distribution must be made after the date on which the Plan received the Excess Deferrals; and (3) the Plan must designate the distribution as a distribution of Excess Deferrals. Any distribution under this Section shall be made first from unmatched deferrals and, thereafter, simultaneously from deferrals which is matched and matching contributions which relate to such deferrals. However, any such matching contributions which are not vested shall be forfeited in lieu of being distributed. For the purpose of this Section, "income" means the amount of income or loss allocable to a Participant's Excess Deferrals and shall be equal to the sum of the allocable gain or loss for the taxable year of the Participant and the allocable gain or loss for the period between the end of the taxable year of the Participant and the date of distribution ("gap period"). The income or loss allocable to each such period is calculated separately and is determined by multiplying the income or loss allocable to the Participant's Deferrals for the respective period by a fraction. The numerator of the fraction is the Participant's Excess Deferrals for the taxable year of the Participant. The denominator is the balance, as of the last day of the respective period, of the Participant's Elective Account that is attributable to the Participanfs Deferrals reduced by the gain allocable to such total amount for the respective period and increased by the loss allocable to such total amount for the respective period. In lieu of the "fractional method" described above, a "safe harbor method" may be used to calculate the allocable income or loss for the "gap period." Under such "safe harbor method," allocable income or loss for the "gap period" shall be deemed to equal ten percent (10%) of the income or loss allocable to a Participant's Excess Deferrals for the taxable year of the Participant multiplied by the number of calendar months in the "gap period." For purposes of determining the number of calendar months in the "gap period," a distribution occurring on or before the fifteenth day of the month shall be treated as having been made on the last day of the preceding month and a distribution occurring after such fifteenth day shall be treated as having been made on the first day of the next subsequent month. Income or loss allocable to any distribution of Excess Deferrals on or before the last day of the taxable year of the Participant shall be calculated from the first day of the taxable year of the Participant to the date on which the distribution is made pursuant to either the "fractional method" or the "safe harbor method." 52 Notwithstanding the above, for any distribution under this Section which is made after August 15, 1991, such distribution shall not include any income for the "gap period". Further provided, for any distribution under this Section which is made after August 15, 1991, the amount oflncome may be computed using a reasonable method that is consistent with Section 4.3(c), provided such method is used consistently for all Participants and for all such distributions for the Plan Year. Notwithstanding the above, for the 1987 calendar year, income during the "gap period" shall not be taken into account. (g) At Normal Retirement Date, or such other date when the Participant shall be entitled to receive benefits, the fair market value of the Participant's Elective Account shall be used to provide benefits to the Participant or his or her Beneficiary. (h) Employer Elective Contributions made pursuant to this Section may be segregated into a separate account for each Participant in a federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate, or other short-term debt security acceptable to the Trustee until such time as the allocations pursuant to Section 11.3 have been made. herein. (i) The Employer shall adopt a procedure necessary to implement the salary reduction elections provided for 11.3 ALWCA nON OF CONTRIBUTION, FORFEITURES AND EARNINGS (a) The Administrator shall establish and maintain an account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other valuation date, all amounts allocated to each such Participant as set forth herein. (h) The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contributions for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution as follows: (I) With respect to the Employer's Elective Contribution made pursuant to Section 11.1(a), to each Participant's Elective Account in an amount equal to each such Participant's deferrals for the year. (2) With respect to the Employer's Matching Contribution made pursuant to Section 11.1(h), to each Participant's Account, or Participanrs Elective Account as selected in E3 of the Adoption Agreement, in accordance with Section 11.1(h). Except, however, a Participant who is not credited with a Year of Service during any Plan Year shall or shall not share in the Employer's Matching Contribution for that year as provided in E3 of the Adoption Agreement. (3) With respect to the Employer's Non-Elective Contribution made pursuant to Section Il.l(c), to each Participanrs Account in accordance with the provisions of Sections 4.3(h)(2) or 4.3(bX3), whichever is applicable. (c) Notwithstanding anything herein to the contrary, participants who terminated employment during the Plan Year shall share in the salary reduction contributions made by the Employer for the year of termination without regard to the Hours of Service credited. 53 (d) Notwithstanding anything herein to the contrary (other than Section 11.3(c), any Participant who terminated employment during the Plan Year shall or shall not share in the allocations of the Employer's Matching Contribution made pursuant to Section Il.l(b), the Employer's Non-Elective Contributions made pursuant to Section 11.1 (c), and Forfeitures as provided in the Adoption Agreement. 11.4 ADVANCE DISTRIBUTION FOR HARDSHIP (a) The Administrator, at the election of the Participant, shall direct the Trustee to distribute to any Participant in anyone Plan Year up to the lesser 01'(1) 100% of his or her accounts as specified in the Adoption Agreement valued as of the last Anniversary Date or other valuation date or (2) the amount necessary to satisfy the immediate and heavy financial need of the Participant. Any distribution made pursuant to this Section shall be deemed to be made as of the first day of the Plan Year or, if later, the valuation date immediately preceding the date of distribution, and the account from which the distribution is made shall be reduced accordingly. Withdrawal under this Section shall be authorized only if the distribution is on account of one of the following or any other items permitted by the Commissioner of Internal Revenue: (I) Medical expenses described in Code Section 213(d) incurred by the Participant, the Particpant's spouse, or any of his or her dependents (as defined in Code Section 152) or expenses necessary for these persons to obtain medical care; (2) The purchase (excluding mortgage payments) of a principal residence for the Participant; (3) Payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant, his or her spouse, children, or dependents; or (4) The need to prevent the eviction of the Participant 1Ì"0m his or her principal residence or foreclosure on the mortgage of the Participant's principal residence. vested. (b) No such distribution shall be made 1Ì"0m.the Participant's Account until such Account has become fully (c) No distribution shall be made pursuant to this Section unless the Administrator, based upon the Participant's representation and such other facts as are known to the Administrator, determines that all of the following conditions are satisfied: (I) The distribution is not in excess of the amount of the immediate and heavy financial need of the Participant (including any amounts necessary to pay any federal, state, or local taxes or penalties reasonably anticipated to result from the distribution); (2) The Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans maintained by the Employer, . (3) The Plan, and all other plans maintained by the Employer, provide that the Participant's Elective Contributions and voluntary Employee contributions will be suspended for at least twelve (12) months after receipt of the hardship distribution; and (4) The Plan, and all other plans maintained by the Employer, provide that the Participant may not make elective deferrals for the Participant's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code Section 54 402(g) for such next taxable year less the amount of such Participant's elective defenals for the taxable year of the hardship distribution. (d) Notwithstanding the above, distributions ftom the Participant's Elective Account and Qualified Non-Elective Account pursuant to this Section shall be limited solely to the Participant's defenals and any income attributable thereto credited to the Participant's Elective Account as of December 31, 1988. (e) Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all applicable notice and consent requirements of Code Sections 411(aXll) and 417 and the Regulations thereunder. 55 CITY COUNCIL AGENDA STATEMENT Item: Meeting Date: 12/4/01 ITEM TITLE: (a) Resolution approving an application for grant funds to the State of California Department of Parks and Recreation for Otay Park. (b) Resolution accepting a grant in the amount of $83,725 from the State of California for Otay Park; and amend the CIP No. PR214 budget to include these funds; and authorizing the Director of Parks & Recreation, or his designee, to sign the appropriate documentation with the State of California to accept the grant funds. SUBMITTED BY: Director Parks and Recreation .~J'~ REVIEWED BY: City Manager ~p ~?~'Y (4/Sths Vote: Yes X No .) The City of Chula Vista has received notice (Attachment A) of the award of grant funds from the State of California in the amount of $83,725 for improvements to Otay Park. The City must now submit an application for these grant funds to the State of California, Department of Parks and Recreation, in order to receive the funds. The State of California allows the City to apply for and accept the grant simultaneously. RECOMMENDATION: That the City Council adopt the Resolution(s): 1. Approving the application to the State of California, Department of Parks and Recreation, for the grant funds for the improvement of Otay Park; and 2. Accepting the grant in the amount of $83,725 from the State of California, Department of Parks and Recreation; and 3. Amending the CIP No. PR214 budget increasing the total appropriated to include these funds; and 4. Authorizing the Director Parks and Recreation, or his designee, to sign the appropriate and required grant documentation from the State. BOARDS/COMMISSIONS RECOMMENDATION: N/A DISCUSSION: The Legislature and the Governor approved the grant funds for FY 01/02, based upon legislative grants from various sources, for project(s) in the City of Chula Vista. The recommended project is the improvement of Otay Park. Ota¥ Park The CIP improvement project at Otay Park includes the renovation of the restroom that is inadequate and non-compliant with ADA standards. /2'/ Item__., Page 2 Meeting Date: 12/4/01 FISCAL IMPACT: The State of California Legislature has awarded the City of Chula Vista $83,725 in grant funds, disbursed through the State of California Parks and Recreation Department. Approval of this item will authorize the expenditure of these funds on renovation to the Otay Park. Attachment: Attachment A - State of California allocation letter. Attachment B - CIP No. PR214 OState of California · The Resources Agency Gray Davis, Governor DEPARTMENT OF PARKS AND RECREATION · P.O. Box 942896, Sacramento, CA 94296-0001 Rusty Areias, Director August20,2001 Andy Campbell Director of Parks and Recreation City of Chula Vista 276 Fourth Avenue Chula Vista, CA. 91910 Re: Project Name: OTAY PARK Project Number: GF-37-083 Project Amount: $83,725 The Legislature and Governor have approved the above referenced grant. To receive the funds, you must submit a complete application to this office. A Procedural Guide, with program information and application materials, is enclosed to assist you. The grant amount indicated has been reduced by 1.5% for administration costs. If you have any questions, please contact your project officer, Steve Shiflett, at (916) 651-8457 or e-mail at sshif@parks.ca.gov. Sincerely Odel T. King, Jr., Manager Office of Grants and Local Enclosure ATTACHMENT A RESOLUTION NO, 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CNULA VISTA APPROVING AN APPLICATION FOR GRAIqT FUNDS TO THE STATE OF CALIFORNIA DEPARTMENT OF PARKS AND RECREATION FOR OTAY PARK WHEREAS, the City of Chula Vista has received notice of the award of grant funds from the State of California in the amount of $83,725 for Otay Park; and WHEREAS, the City must now submit an application for these grant funds to the State of California Department of Parks and Recreation, in order to receive these funds; and WHEREAS, the State of California allows the City to apply for and accept the grant simultaneously. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby approve an application for grant funds to the State of California Department of Parks and Recreation for Otay Park. Presented by Approved as to form by Andy Campbell, Director CJ~th~ MA~ °K~nh; of Parks & Recreation t [J/ATTORNEY\RESO/GRANT PARK PROJECTS (November 26, 2001 (4:12PM)] RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING A GPJ~NT IN THE AMOUNT OF $83,725 FROM THE STATE OF CALIFORNIA FOR OTAY PARK; AND AMENDING THE CIP NO. PR214 BUDGET TO INCLUDE THESE FUNDS; AND AUTHORIZING THE DIRECTOR OF PARKS & RECREATION, OR HIS DESIGNEE, TO SIGN THE APPROPRIATE DOCUMENTATION WITH THE STATE OF CALIFORNIA TO ACCEPT THE GP~kNT FUNDS WHEREAS, the City of Chula Vista has received notice of the award of grant funds from the State of California in the amount of $83,725 for improvements to Otay Park; and WHEREAS, the City must now submit an application for these grant funds to the State of California Department of Parks and Recreation, in order to receive these funds; and WHEREAS, the State of California allows the City to apply for and accept the grant simultaneously. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby accept a grant in the amount of $83,725 from the State of California Department of Parks and Recreation for grant funds for Otay Park. BE IT FURTHER RESOLVED that the CIP No. PR214 budget is hereby amended to increase the total appropriated to include these funds. BE IT FURTHER RESOLVED that the Director of Parks and Recreation, or his designee, is hereby authorized to sign the appropriate and required grant documentation from the State. Presented by Approved as to form by Andy Campbell John M. Kah~y ~ Director of Parks & Recreation City Attorney [,I/ATTORNEY/reso/Gram Acceplance Park Pro/ects (November 27, 2001 (3 22PM)] CITY COUNCIL AGENDA STATEMENT Item: /'~ Meeting Date: 12/4/01 ITEM TITLE: (a) Resolution approving an application for Per Capita Grant funds to the State of California Department of Parks and Recreation for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander. (b) Resolution accepting a per capita grant in the amount of $1,581,000 from the State of California for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander; and establishing a new CIP for the Skate Park; and appropriating these grant revenues in the new CE?; and authorizing the Director of Parks & Recreation, or his designee, to sign the appropriate documentation with the State of California to accept the grant funds. SUBMITTED BY: Director Parks and Recreation.t~ REVIEWED BY: City Manager ~,~ ?~ (4/Sths Vote: Yes X No ) The City of Chula Vista has received notice (Attachment A) of the award of per capita grant funds from the State of California in the amount of $1,581,000. It is suggested that these ftmds be used to fund the construction of the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander. The City must now submit an application for these grant funds to the State of California, Department of Parks and Recreation, in order to receive the funds. The State of California allows the City to apply for and accept the grant simultaneously. RECOMMENDATION: That the City Council adopt the Resolution(s): 1. Approving the application to the State of California, Department of Parks and Recreation, for the per capita grant funds for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander; and 2. Accepting the grant in the amount of $1,581,000 from the State of California, Department of Parks and Recreation; and 3. Amending the CIP budget to establish the new CIP and appropriation of these funds for the Skate Park project; and 4. Authorizing the Director Parks and Recreation, or his designee, to sign the appropriate and required grant documentation from the State. BOARDS/COMMISSIONS RECOMMENDATION: N/A Item/~, Page 2 Meeting Date: 12/4/01 DISCUSSION: The Legislature and the Govemor approved the grant funds for FY 01/02, based upon the Per Capita Grant Program - under the Safe Neighborhood Parks, Clean Water, Clean Air, and Coastal Protection Bond Act of 2000, for project(s) in the City of Chula Vista. The recommended project is the Skate Park at Greg Rogers Park at the Boys and Girls Club on Oleander: Skate Park The City of Chula Vista has long realized that a need for a safe and secure skate park venue exists in the City of Chula Vista. The City Council on October 9, 2001 approved the design of the Skate Park FISCAL IMPACT: The State of California Legislature has awarded $1,581,000 to the City of Chula Vista in per capita grant funds, disbursed through the State of California Parks and Recreation Department. This action will authorize the expenditure of these funds. Attachments: Attachment A Per Capita Grant Notification Attachment B - Allocation Notification Attachment C October 9, 2001 Council Agenda Item ~te o~ Cafifomia o Th!~esource! Agency Gray ~avis, Go~ernor -~0EPARTMENT OF PARK~ AND RE~;REATION o P.O. Sox 942896 o 3acramento, CA ~4296=000! Rusty AreiaS~ Director (916) 653-7423 July 13, 2001 Per Capita Grant Recipient: Subject: Procedural Guide Enclosed is a copy of the procedural guide for the Per Capita Grant Program - under the Safe Neighborhood Parks, Clean Water, Clean Air, and Coastal Protection Bond Act of 2000. Please feel free to apply for your allocation at your convenience. However, you must secure a contract before June 30, 2003. If you have questions, please contact your project officer. Information regarding project officer assignments may be obtained from our website at www.parks.ca.gov/grantslcontact.htm. You may also contact the Office of Grants and Local Services at (916) 653-7423. Sincerely, Odel T. King, Jr., Manager Office of Grants and Local Services Enclosure ATTACHMENT A /3-3 The Safe Neighborhood Parks, Clean Water, Clean Air and Coastal Protection Bond Act of 2000 (Villaraigosa-Keeley Act) Per Capita Grant Program Allocations Cit~' and District Per Ca ~ita Allocations COuntY of Sacramento County of San Die,lo City of Citrus Heights I ~ City of Carlsbad $ 744,000 City of Elk Grove City of Chula Vista $ 1,581,000 City of Folsom $ 478,000 City of Coronado $ 224,000 City of Gait $ 164,000 City of Isleton $ 32,000 City of Del Mar $ 49,000 Sacramento $ 2,604,000 City of El Cajon $ 876,000 Arcade Creek R.P.D. $ 222,000 City of Encinitas $ 563,000 Arden Manor R.P.D. $ 72,000 City of Escondido $ 1,159~000 Arden Park R.P.D. $ 42,000 City of Imperial Beach $ 265,000 Carmichael R.P.D. $ 408,000 City of La Mesa $ 537,000 Cordova R.P.D. $ 866,000 City of Lemon Grove $ 235,000 Elk Grove C.S.D. $ 735,000 City of National City $ 502,000 Fair Oaks R.P.D. $ 299,000 City of Oceanside $ 1,458,000 Fulton-El Camino R.P.D. $ 250,000 City of Poway $ 447,000 Mission Oaks R.P.D. $ 595,000 City of San Diego, Parks $ 8,216,000 North Highlands R.P.D. $ 361,000 City of San Marcos $ 489,000 Orangevale R.P.D. $ 302,000 City of Santee $ 529,000 Rio Linda/Elverta P.R.D. $ 209,000 City of Solana Beach $ 130,000 Southgate R.P.D. $ 816,000 Sunrise R.P.D. $ 1,387,000 City of Vista $ 777,000 County of San Benito Lake Cuyamaca R.P.D. $ 35,000 City of Hollister I $ 191,000 Valley Center C.S.D. $ 183,000 City of San Juan BautistaI $ 30,000 county of San FranCisco County of San Bernardino City of San Francisco I $ 5,156,000 City of Adelanto I $ 141,000 County of San Joaquin , City of BarstowI $ City of Escalon $ 52,000 City of Bi9 Bear Lake $ City of Lathrop $ 90,000 City of Chino $ 605,000 City of Lodi $ 525,000 City of Chino Hills $ 546,000 City of Manteca $ 449,000 City of Colton $ 430,000 City of Ripon $ 94,000 City of Fontana $ 1,065,000 City of Stockton $ 1,591,000 City of Grand Terrace $ 123,000 City of Hesperia $ City of Tracy $ 492,000 City of Highland $ 403,000 County of san LUis Obispo City of Loma Linda $ 202,000 City of Arroyo Grande $ 149,000 City of Montclair $ 281,000 City of Atascadero $ 234,000 City of Needles $ 54,000 City of Grover Beach $ 116,000 City of Ontario $ 1,374,000 City of Morro Bay $ 90,000 City of Rancho Cucamonga $ 1,139,000 City of Paso Robles $ 207,000 City of Redlands $ 615,000 City of Pismo Beach $ 78,000 City of Rialto $ 759,000 City of San Luis Obispo $ 391,000 City of San Bernardino $ 1,690,000 Templeton C.S.D. $ 44,000 City of Twentynine Palms $ 137,000 CoUnt~ of San Marco City of Upland $ 624,000 City of Belmont $ 237,000 City of Victorville $ City of Yucaipa $ 361,000 City of Brisbane $ 41,000 Town of Apple Valley $ 517,000 City of Burlingame $ 268,000 Town of Yucca Valley $ 175,000 City of Daly City $ 949,000 Barstow R.P.D. $ 299,000 City of East Palo Alto $ 227,000 Big Bear Valley P.R.D. $ 136,000 City of Foster City $ 280,000 Bloomington P.R.D. $ 137,000 City of Half Moon Bay $ 103,000 Hesperia P.R.D. $ 639,000 City of Menlo Park $ 289,000 Morongo Valley C.S.D. $ 41,000 City of Millbrae $ 194,000 Rim of the World R.P.D. $ 272,000 City of Pacifica $ 372,000 Victorville R.P.D. $ 693,000 City of Redwood City $ 708,000 Page 6 of 9 ATTACHMENT B COUNCIL AGENDA STATEMENT Item: Meeting Date: 10/9/01 ITEM TITLE: Report on the Feasibility Study and Final Design for the Proposed Skate Park at Greg Rogers Park. SUBMITTED BY: Director of Parks and Recreation REVIEWED BY: City Manager (4/5ths Vote: Yes __No X ) The Parks & Recreation Department has long realized that a need for a safe and secure skate park venue exists in the City of Chula Vista. In order to evaluate the viability of a skate park a consultant was hired to produce a feasibility study on a skate park located at Greg Rogers Park on the Campus of the Oleander Boys and Girls Club. The feasibility study, which included two public workshops, and a presentation to a Special Combined Meeting of the Parks and Recreation Commission and the Boys and Girls Club Board of Directors has been completed. The presentation tonight will include the final design and the feasibility study's finding. STAFF RECOMMENDATION: That the City Council: · Accept the proposed final design as presented, · Direct staff to enter into the process for preparation of the construction documents, · Approve the tentative funding/budget recommendation as outlined in Attachment C, and · Direct staff to develop an operational MOU with the Boys and Girls Club. BOARDS/COMMISSIONS RECOMMENDATIONS: At a special combined meeting of the Parks and Recreation Commission and Boys and Girls Club Board of Directors on August 16, 2001 it was unanimously approved to go forward with the Skate Park concept (Attachment A). DISCUSSION: Background Youth Summits conducted in early 1990 highlighted the lack of legal and safe venues for skateboards and skates. · In 2000 the public meeting for the Parks Master Plan called for skate facilities inclusion in future parks. · Throughout this period, a history of requests by the public to City leaders for a skate facility has persisted. · In 2000 the Boys & Girls Club of Chula Vista postponed receipt of CDBG funding for a soccer facility in favor of exploring the possibility of a skate facility at the Oleander Campus. · Parks and Recreation solicited RFPs for a feasibility study for a skate park and accepted/selected Purkiss-Rose-RSI, Landscape Amhitects. //5'-.~ ATTACHMENT C Item No. __ Page ~2 Meeting Date: 10/9/01 · On May 8, 2001 the proposed skate park report was presented to council when they unanimously approved that: Staff develop a concept plan for a skate park at Greg Rogers Park on the campus of Oleander Boys & Girls Club. co Staff continue with the feasibility study and convene public workshops with respect to the proposed facility. o Staff enter into MOU discussions for the operation of the skate park by the Boys & Girls Club of Chula Vista. · On June 7 and July 19, 2001 public work shops were held at the Oleander Boys and Girls club where community members were given the opportunity to ask questions, comment, and help design the skate park. The response was overwhelmingly positive and the elementary school age children through young adults that chose to participate in the design were very excited about being included in the process. · The request for Purkiss Rose to continue on with the preparation of the construction documents is due to their excellent performance during the feasibility study. Issues: · Safety and Liability: The public liability concerns regarding public operated skate parks was addressed by California Assembly Bill 1296. This information and information from other cities was given to the City Attorney for comment (Attachment B). · Financing: The preliminary budget for the skate park is approximately $1,397,509. It is proposed that financing be provided through the Proposition 12 Per Capita Grant from the State of California ($1,185,009) and the Boys and Girls Club approved CDBG funds ($212,500). The proposed budget and funding options are outlined in Attachment C. FISCAL IMPACT: None at this time. ATTACHMENTS: Attachment A - Parks & Recreation Commission Minutes August 16, 2001 Attachment B - City Attorney's Letter on Skateboarding Liability Attachment C - Skate Park Cost Estimate CITY OF CHULA VISTA PARKS AND RECREATION COMMISSION Minutes Thursday - 6:30 p.m. August 16, 2001 Mercy Building 430 F Street SPECIAL JOINT MEETING WITH BOYS & GIRLS CLUB 1. ROLL CALL Radcliffe P, Rude P, Salcido P_,Weidner_P_, RamosE_, Perondi P 2. INTRODUCTION OF BOYS & GIRLS CLUB GUESTS 3. PRESENTATION BY PURKISS ROSE Steve Rose of Purkiss Rose (Skatepark Consultant) gave a short presentation on the design for the City of Chula Vista Skatepark at the Boys & Gids Club site on Oleander. A brief question and answer period followed with Mr. Rose's associates responding. Questions and Answers are as follows: Q: What about storage containers? A: Theycan be moved. Q: What about peripherallighting? A: Lighting already exists for alley and lighting is planned for the perimeter of the skatepark. Q: How is this design perceived by others? A: The design has been shown to top-flight skaters and their response was top- notch. Q: Will BMX bikes be allowed? A: No. Bikes can gouge pieces of concrete from skate areas and be quite expensive to repair. Q: What will attract skaters to this park? A: It caters to everything the skater likes including a street element. It also will have an event area for non-structured skating and a spectator area as well. Q: What about the liability issues? A: It is planned for an ordinance be established that would require helmets and protective elbow and knee pads to be worn. As well as signs requiring protective gear must be worn and a written release must be on file. Boys & Gids Club will have their own insurance and ID cards are planned. Q: What isthe budget? A: The budget is around $1.8 million at this time. We hope to trim that down before it goes to Council in September/October. Parks & Recreation Commission Minutes August 16, 2001 Page 1 ATTACHMENT A Q: What about the MOU with the Boys & Girls Club. A: Negotiations with the Boys & Gids Club will commence after approval is received from the City Council. MSCU (Rude/Ramos) that the proposal for the Chula Vista Skate Park be approved. Adjournment at 7:50 p.m. to the regularly scheduled meeting of September 20, 2001. Parks & Recreation Commission Minutes August 16, 2001 Page 2 ATTACHMENT A ~ OF CHUIA VISTA office Of the City Attorney MEMORANDUM DATE: August 16, 2001 TO: Andy Campbell, Director of Parks & Recreation FROM: Bart C. Miesfeld, Assistant City Attorne~~'~ SUBJECT: Skate Park Proposed Plan This memorandum shall serve as a general discussion concerning liability issues related to the construction, use and maintenance of the proposed Skate Park Facility within the City of Chula Vista. As with many recreational and sports activities, the potential for injury to participants and subsequent liability claims always exists. However, there are three significant legal factors related to the proposed Skate Park and its use which may greatly reduce potential liability to the City and its employees. The following is a brief discussion of each of these three points. I. LIABILITY FOR SKATEBOARDING AS A HAZARDOUS RECREATIONAL ACTIVITY IS LIMITED BY GOVERNMENT CODE SECTION 831.7 AND HEALTH AND SAFETY CODE SECTION 115800 California Government Code section 831.7 provides that a public entity or public employee is not liable to anyone who participates in "hazardous recreational activity" for any damage or injury arising out of the activity. In September 1997, Health and Safety Code section 115800 was established to specifically designate skateboarding at any facility or park owned or operated by a public entity as a '~hazardous recreational activity" provided the following conditions are met: (a) The person skateboarding is 14 years of age or older, 1 ATTACHMENT B (b) The skateboarding that caused the injury was a stunt, trick or luge skateboarding, and (c) The skateboard park is on public property that complies with the requirement that no person shall be permitted to ride a skateboard within the park unless that person is wearing a helmet, elbow pads and knee pads. Furthermore, with respect to any skateboard facility owned or operated by a local public agency, where the Skateboard Facility is designed and maintained for the purpose of recreational skateboard use, and that is not supervised on a regular basis, the requirement that no one shall be permitted to ride a skateboarding unless that person is wearing a helmet, elbow pads and knee pads maybe satisfied by (1) the local public agency adopting an ordinance requiring any person riding a skateboard at the facility to wear a helmet, elbow pads and knee pads, and (2) the posting of signs at the facility affording reasonable notice that any person riding a skateboard in the facility must wear a helmet, elbow pads and knee pads and that any person failing to do so will be subject to citation under the ordinance. If all of the conditions regarding Government Code section 831.7 and Health and Safety Code section 115800 are met, California law would provide a limit to liability against the City of Chula Vista and its employees in relation to the Skateboard Park Facility. Obviously, it would be important the City follow such requirements in the construction and use of this proposed facility. You should also be aware that California law requires that local public agencies maintain a record of all known and reported injuries incurred by skateboarders in a public skateboard park facility. In addition, public entities are required to provide copies of records regarding such information along with other details of the incidents and to file such records with the Judicial Council on an annual basis. Finally, the current Health and Safety Code section 115800 will be repealed by its own provisions on January 1, 2003. II. LIABILITY LIMITATION FOR REASONABLY APPROVED PLAN OR DESIGN As you are aware, potential liability may exist against a public entity where it creates or, after notice, fails to remedy a dangerous condition of public property. Government Code section 830.6 provides that a public entity may claim immunity from liability for a dangerous condition that is inherent in the officially approved plan or design of construction of the public property. For such immunity to be available, the defendant public entity must show (a) the 2 ATTACHMENT B plaintiff's injury was caused by an approved feature of the design, (b) the design was approved by the authorized public body, and (c) substantial evidence exists that the plan or design was reasonably approved. This immunity, commonly referred to as the ~design immunity" would not be available if the actual construction of the facility did not adhere to the approved plan or design. Consequently, construction of a reasonably designed facility such as the facility proposed herein should substantially adhere to the detailed approved plan or design by the City Council. III. LIABILITY RELEASE California law provides that those persons who voluntarily engage or assume risks that are known to them may be precluded from seeking to impose liability against others if they should become injured as a result of such risks. We are all aware that skateboarding involves some risk of injury. Participants in the proposed Skateboard Park Facility would be voluntarily choosing to skateboard at the City facility in light of such known risks. Public entities and other jurisdictions may require that persons using their Skateboard Park Facilities sign a written agreement expressing their voluntary assumption of such risks and thereby releasing the public entity from liability. The use of such a limited release of liability should be considered at this facility. IV. CONCLUSION Although liability related to the construction, use and maintenance of a proposed recreational facility can never be eliminated, consideration of the above noted principals may greatly reduce any potential for liability against the City. The City Attorney's office in conjunction with Risk Management will be working diligently on any procedures and policies related to this facility which would encourage the safe recreational use as a Skateboard Park Facility and limit any potential liability to the City. 3 ATTACHMENT B /3-,¥ CHULA VISTA SKATE PARK COST ESTIMATE PRELIMINARYi COST DESCRIPTION ESTIMATE MOBILIZATION/MOVE-IN Permits/Fees Equipment Construction Preparation Sub-Total $ 50,000.00 I SITE PREPARATION Clearing/Grubbin9 $ 1,500.00 Demolition $ 1,000.00 Earthwork - Gradin9 $ 14,962.50 Drainage $ 8,000.00 Trenching/Backfill $ 6,537.50 Sub-Total $ 32,000.00 SKATE PARK CONSTRUCTION Gradin9 $ 25,000.00 Drainage $ 16,363.00 Skate Park Constsruction $ 460,000.00 Sub-Total $ 501,363.00 BUILDING/STRUCTURE Restrooms Concession Office Storable Check-in Sub-Total $140,000 SITE IMPROVEMENTS Plaza Area Hardscape $ 62,930.00 Entry Treatment Hardscape $ 32,600.00 Event & Perimeter Area Hardscape $ 119,307.00 Turnaround Renovation Hardscape $ 8,763.00 Sub-Total $ 223,600.00 Skate Park Estimate (10/01) -1 ATTACHMENT C SITE AMENITIES Bleachers (2 sets) 3-stack $ 10,000.00 Furniture/Receptacles $ 19,800.00 Drinkin~l Fountains $ 3,000.00 Fencing/Gates (small chain link - 10'x 914') $ 45,700.00 Shade Structure $ 40,000.00 Sub-Total $ 118,500.00 ELECTRICAL Service/Under~round $ 32,000.00 Security Li~htin~ $ 12,500.00 Outlets $ 2,500.00 Skate Park Li~htin~l $ 55,000.00 Security System $ 3,000.00 Sub-Total $ 105,000.00 A/E FEES Design Construction Documents Consultants Sub-total $ 100,000.00 TOTALS Sub-total $1,270,463.00 10% Contingency $ 127,046.30 TOTAL $1,397,509.30 Boys & Girls Club Contribution (from approved CDBG fund 2000/2001/ $ 212,500.00 !City's Contribution (from Proposition 12 Per Capita Grant) $1,185,009.30 $1,397,509.30 Skate Park Estimate (10/01) -2 ATTACHMENT C RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING kN APPLICATION FOR PER CAPITA GRANT FUNDS TO THE STATE OF CALIFORNIA DEPARTMENT OF PARKS AND RECREATION FOR THE SKATE PARK AT GREG ROGERS PARK ADJACENT TO THE BOYS A_ND GIRLS CLUB ON OLEANDER WHEREAS, the City of Chula Vista has received notice of the award of per capita grant funds from the State of California in the amount of $1,581,000; and WHEREAS, it is suggested that these funds be used to fund the construction of the Skate Park at Greg Rogers Park adjacent to the Boys and Girl Club on Oleander; and WHEREAS, the City must now submit an application for these grant funds to the State of California Department of Parks and Recreation, in order to receive these funds; and WHEREAS, the State of California allows the City to apply for and accept the grant simultaneously. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby approve an application for per capita grant funds to the State of California Department of Parks and Recreation for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander. Presented by Approved as to form by Andy Campbell, Director J?~n M. Kaheny of Parks & Recreation C'ity Attorney [J ~ATTORNEY/RESO/GRANT PARK PROJECTS (skate park) (November 29, 2001 (~ 1 42AM)] RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING A PER CAPITA GRAIqT IN THE AMOUNT OF $1,581,000 FROM THE STATE OF CALIFORNIA FOR THE SKATE PARK AT GREG ROGERS PARK ADJACENT TO THE BOY AND GIRLS CLUB ON OLEANDER; AND ESTABLISHING A NEW CIP FOR THE SKATE PARK; AND APPROPRIATING THESE GP3kNT REVENUES IN THE NEW CIP; AND AUTHORIZING THE DIRECTOR OF PARKS & RECREATION, OR HIS DESIGNEE, TO SIGN THE APPROPRIATE DOCUMENTATION WITH THE STATE OF CALIFORNIA TO ACCEPT THE GR3kNT FUNDS WHEREAS, the City of Chula Vista has received notice of the award of per capita grant funds from the State of California in the amount of $1,581,000 for funding the construction of the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander; and WHEREAS, the City must now submit an application for these grant funds to the State of California Department of Parks and Recreation, in order to receive these funds; and WHEREAS, the State of California allows the City to apply for and accept the grant simultaneously. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby accept a per capita grant in the amount of $1,581,000 from the State of California Department of Parks and Recreation for grant funds for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander. BE IT FURTHER RESOLVED that the CIP budget is hereby amended to establish the new CIP and appropriate these funds for the Skate Park project. BE IT FURTHER RESOLVED that the Director of Parks and Recreation, or his designee, is hereby authorized to sign the appropriate and required grant documentation from the State. Presented by Approved as to form by Director of Parks & Recreation City Attorney ~ ~TTORNEY/reso/Grant Acceptance Park Projects Skate Park (November 29, 2001 (11:41AM)] COUNCIL AGENDA STATEMENT MEETING DATE: December 4, 2001 ITEM TITLE: Resolution waiving the City's formal bidding process as impractical and awarding the contract for $102,760 to Purkiss Rose-RSI for architectural design services for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club at Oleander and authorize the City Manager to negotiate and execute an agreement between the City of Chula Vista and Purkiss Rose-RSI. SUBMITTED BY: Director Parks and Recreation~ REVIEWED BY: City Manager )i~ (4/5tbs Vote: YES NO X ) RECOMMENDATION: That Council waive the City's formal bidding process and award Purkiss Rose-RSI the contract for architectural design services for the Skate Park and authorize the City Manager to negotiate and execute an agreement between the City and Purkiss Rose-RSI, in a form to be approved by the City Attorney's office. BOARD/COMMISSION RECOMMENDATION: N/A DISCUSSION: The Parks & Recreation Department has long realized that a need for a safe and secure skate park venue exists in the City of Chula Vista. At the Council Meeting of October 9, 2001 the design for the skate park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander was approved. The approved design and feasibility study was conducted and produced by Purkiss Rose-RSI, the successful bidder of the RFP process. Whereas Purkiss Rose-RSI performed admirably and successfully completed the design and feasibility study it is recommended that Purkiss Rose-RSI provide consulting services for the creation of the construction documents and assist City staff during the construction project. Due to the status of the project, timing issues, and since Purkiss Rose-RSI has successfully worked with the City previously, staff recommends that the bidding process be waived and the City Manager be authorized to negotiate and execute an agreement with Purkiss Rose-RSI, in a form to be approved by the City Attorney. FISCAL IMPACT: Approval of this item will authorize the expenditure of $102,760 in funds previously budgeted in the newly established CIP for the Skate Park. Attachment: Attachment A - October 9, 2001 Council Item Attachment B Two-Party Agreement between City of Chula Vista and Purkiss Rose-RSI COUNCIL AGENDA STATEMENT Item: /¢ Meeting Date: 10/9/01 ITEM TITLE: Report on the Feasibility Study and Final Design for the Proposed Skate Park at Greg Rogers Park. SUBMITTED BY: Director of Parks and Recreation REVIEWED BY: City Manager (4/5ths Vote: Yes No X ) The Parks & Recreation Department has long realized that a need for a safe and secure skate park venue exists in the City of Chula Vista. In order to evaluate the viability of a skate park a consultant was hired to produce a feasibility study on a skate park located at Greg Rogers Park on the Campus of the Oleander Boys and Girls Club. The feasibility study, which included two public workshops, and a presentation to a Special Combined Meeting of the Parks and Recreation Commission and the Boys and Girls Club Board of Directors has been completed. The presentation tonight will include the final design and the feasibility study's finding. STAFF RECOMMENDATION: That the City Council: · Accept the proposed final design as presented, · Direct staff to enter into the process for preparation of the construction documents, · Approve the tentative funding/budget recon~mendation as outlined in Attachment C, and · Direct staffto develop an operational MOU with the Boys and Girls Club. BOARDS/COMMISSIONS RECOMMENDATIONS: At a special combined meeting of the Parks and Recreation Commission and Boys and Girls Club Board of Directors on August 16, 2001 it was unanimously approved to go for~vard with the Skate Park concept (Attachment A). DISCUSSION: Background · Youth Summits conducted in early 1990 highlighted the lack of legal and safe venues for skateboards and skates. · In 2000 the public meeting for the Parks Master Plan called for skate facilities inclusion in future parks. · Throughout this period, a history of requests by the public to City leaders for a skate facility has persisted. · In 2000 the Boys & Girls Club of Chula Vista postponed receipt of CDBG funding for a soccer facility in favor of exploring the possibility of a skate facility at the Oleander Campus. · Parks and Recreation solicited RFPs for a feasibility study for a skate park and accepted/selected Purkiss-Rose-RSI, Landscape Amhitects. ATTACHMENT A Item No. /~ Page 2 Meeting Date: 10/9/01 · On May 8, 2001 the proposed skate park report was presented to council when they unanimously approved that: o Staff develop a concept plan for a skate park at Greg Rogers Park on the campus of Oleander Boys & Girls Club. c> Staff continue with the feasibility study and convene public workshops with respect to the proposed facility. c) Staff enter into MOU discussions for the operation of the skate park by the Boys & Girls Club of Chula Vista. · On June 7 and July 19, 2001 public work shops were held at the Oleander Boys and Girls club where community members were given the opportunity to ask questions, comment, and help design the skate park. The response was overwhelmingly positive and the elementary school age children through young adults that chose to participate in the design were very excited about being included in the process. · The request for Purkiss Rose to continue on with the preparation of the construction documents is due to their excellent performance during the feasibility study. Issues: · Safety and Liability: The public liability concerns regarding public operated skate parks was addressed by California Assembly Bill 1296. This information and information from other cities was given to the City Attorney for comment (Attachment B). · Financing: The preliminary budget for the skate park is approximately $1,397,509. It is proposed that financing be provided through the Proposition 12 Per Capita Grant fi'om the State of California ($1,185,009) and the Boys and Girls Club approved CDBG funds ($212,500). The proposed budget and funding options are outlined in Attachment C. FISCAL IMPACT: None at this time. ATTACHMENTS: Attachment A - Parks & Recreation Commission Minutes - August 16, 2001 Attachment B - City Attorney's Letter on Skateboarding Liability Attachment C - Skate Park Cost Estimate CITY OF CHULA VISTA PARKS AND RECREATION COMMISSION Minutes Thursday -6:30 p.m. August 16, 2001 Mercy Building 430 F Street SPECIAL JOINT MEETING WITH BOYS & GIRLS CLUB 1. ROLL CALL Radcliffe P, Rude P, Salcido P_, Weidner_P_, RamosE_, Perondi P 2. INTRODUCTION OF BOYS & GIRLS CLUB GUESTS 3. PRESENTATION BY PURKISS ROSE Steve Rose of Purkiss Rose (Skatepark Consultant) gave a short presentation on the design for the City of Chula Vista Skatepark at the Boys & Gids Club site on Oleander. A brief question and answer period followed with Mr, Rose's associates responding. Questions and Answers are as follows: Q: Whatabout storage containers? A: They can be moved. Q: What about peripherallighting? A: Lighting already exists for alley and lighting is planned for the perimeter of the skatepark. Q: How is this design perceived by others? A: The design has been shown to top-flight skaters and their response was top- notch. Will BMX bikes be allowed? A: No. Bikes can gouge pieces of concrete from skate areas and be quite expensive to repair. Q: What will attract skaters to this park? A: It caters to everything the skater likes including a street element. It also will have an event area for non-structured skating and a spectator area as well. Q: What about the liability issues? A: It is planned for an ordinance be established that would require helmets and protective elbow and knee pads to be worn, As well as signs requiring protective gear must be worn and a written release must be on file. Boys & Girls Club will have their own insurance and ID cards are planned. Q: Whatis the budget? A: The budget is around $1.8 million at this time. We hope to trim that down before it goes to Council in September/October. Parks & Recreation Commission Minutes August 16, 2001 Page 1 Q: What about the MOU with the Boys & Girls Club. A: Negotiations with the Boys & Girls Club will commence after approval is received from the City Council. MSCU (Rude/Ramos) that the proposal for the Chula Vista Skate Park be approved. Adjournment at 7:50 p.m. to the regularly scheduled meeting of September 20, 2001. Parks & Recreation Commission Minutes August 16, 2001 Page 2 CHUIA VI~A Office of the City Attorney MEMORANDUM DATE: August 16, 2001 TO: Andy Campbell, Director of Parks & Recreation FROM: Bart CJ Miesfeld, Assistant City Attorne~,~~'~ SUBJECT: Skate Park Proposed Plan This memorandum shall serve as a general discussion concerning liability issues related to the construction, use and maintenance of the proposed Skate Park Facility within the City of Chula Vista. As with many recreational and sports activities, the potential for injury to participants and subsequent liability claims always exists. However, there are three significant legal factors related to the proposed Skate Park and its use which may greatly reduce potential liability to the City and its employees. The following is a brief discussion of each of these three points. I. LIABILITY FOR SKATEBOARDING AS A HAZARDOUS RECREATIONAL ACTIVITY IS LIMITED BY GOVERNMENT CODE SECTION 831 7 AND HEALTH AND SAFETY CODE SECTION 115800 California Government Code section 831.7 provides that a public entity or public employee is not liable to anyone who participates in ~'hazardous recreational activity" for any damage or injury arising out of the activity. In September 1997, Health and Safety Code section 115800 was established to specifically designate skateboarding at any facility or park owned or operated by a public entity as a "hazardous recreational activity" provided the following conditions are met: (a) The person skateboarding is 14 years of age or older, (b) The skateboarding that caused the injury was a stunt, trick or luge skateboarding, and (c) The skateboard park is on public property that complies with the requirement that no person shall be permitted to ride a skateboard within the park unless that person is wearing a helmet, elbow pads and knee pads. Furthermore, with respect to any skateboard facility owned or operated by a local public agency, where the Skateboard Facility is designed and maintained for the purpose of recreational skateboard use, and that is not supervised on a regular basis, the requirement that no one shall be permitted to ride a skateboarding unless that person is wearing a helmet, elbow pads and knee pads maybe satisfied by (1) the local public agency adopting an ordihance requiring any person riding a skateboard at the facility to wear a helmet, elbow pads and knee pads, and (2) the posting of signs at the facility affording reasonable notice that any person riding a skateboard in the facility must wear a helmet, elbow pads and knee pads and that any person failing to do so will be subject to citation under the ordinance. If all of the conditions regarding Government Code section 831.7 and Health and Safety Code section 115800 are met, California law would provide a limit to liability against the City of Chula Vista and its employees in relation to the Skateboard Park Facility. Obviously, it would be important the City follow such requirements in the construction and use of this proposed facility. You should also be aware that California law requires that local public agencies maintain a record of all known and reported injuries incurred by skateboarders in a public skateboard park facility. In addition, public entities are required to provide copies of records regarding such information along with other details of the incidents and to file such records with the Judicial Council on an annual basis. Finally, the current Health and Safety Code section 115800 will be repealed by its own provisions on January 1, 2003. II. LIABILITY LIMITATION FOR REASONABLY APPROVED PLAN OR DESIGN As you are aware, potential liability may exist against a public entity where it creates or, after notice, fails to remedy a dangerous condition of public property. Government Code section 830.6 provides that a public entity may claim immunity from liability for a dangerous condition that is inherent in the officially approved plan or design of construction of the public property. For such immunity to be available, the defendant public entity must show (a) the 2 plaintiff's injury was caused by an approved feature of the design, (b) the design was approved by the authorized public body, and (c) substantial evidence exists that the plan or design was reasonably approved. This immunity, commonly referred to as the ~design immunity" would not be available if the actual construction of the facility did not adhere to the approved plan or design. Consequently, construction of a reasonably designed facility such as the facility proposed herein should substantially adhere to the detailed approved plan or design by the City Council. III. LIABILITY RELEASE California law provides that those persons who voluntarily engage or assume risks that are known to them may be precluded from seeking to impose liability against others if they should become injured as a result of such risks. We are all aware that skateboarding involves some risk of injury. Participants in the proposed Skateboard Park Facility would be voluntarily choosing to skateboard at the City facility in light of such known risks. Public entities and other jurisdictions may require that persons using their Skateboard Park Facilities sign a written agreement expressing their voluntary assumption of such risks and thereby releasing the public entity from liability. The use of such a limited release of liability should be considered at this facility. IV. CONCLUSION Although liability related to the construction, use and maintenance of a proposed recreational facility can never be eliminated, consideration of the above noted principals may greatly reduce any potential for liability against the City. The City Attorney's office in conjunction with Risk Management will be working diligently on any procedures and policies related to this facility which would encourage the safe recreational use as a Skateboard Park Facility and limit any potential liability to the City. 3 CHULA VISTA SKATE PARK COST ESTIMATE PRELIMINARY! COST DESCRIPTION ESTIMATE MOBILIZATION/MOVE-IN Permits/Fees Equipment Construction Preparation Sub-Total $ 50,000.00 SITE PREPARATION Clearing/Grubbing $ 1,500.00 Demolition $ 1,000.00 Earthwork - Grading $ 14,962.50 Drainage $ 8,000.00 Trenching/Backfill $ 6,537.50 Sub-Total $ 32,000.00 SKATE PARK CONSTRUCTION Grading $ 25,000.00 Drainage } 16,363.00 Skate Park Constsruction 460,000.00 Sub-Total I $ 501,363.00 BUILDING/STRUCTURE Restrooms Concession Office Storage Check-in Sub-Total $140,000 SITE IMPROVEMENTS Plaza Area Hardscape i $ 62,930.00 Entry Treatment Hardscape I $ 32,600.00 Event & Perimeter Area Hardscape ! $ 119,307.00 Turnaround Renovation Hardscape i $ 8,763.00 Sub-Total ! $ 223,600.00 Skate Park Estimate (10/01) -1 SITE AMENITIES Bleachers (2 sets) 3-stack $ 10,000.00 Furniture/Receptacles $ 19,800.00 Drinking Fountains $ 3,000.00 Fencing/Gates (small chain link - 10' x 914') $ 45,700.00 Shade Structure $ 40,000.00 Sub-Total ! $ 118~500.00 ELECTRICAL Service/Underground I$ 32,000.00 Security Lighting $ 12,500.00 Outlets i $ 2,500.00 Skate Park Lighting $ 55,000.00 Security System $ · 3,000.00 Sub-Total $ 105,000.00 AJE FEES Design Construction Documents Consultants Sub-total $ 100,000.00 TOTALS Sub-total $1,270,463.00 10% Contingency $ 127,046.30 TOTAL $1,397,509.30 Boys & Girls Club Contribution (from approved CDBG fund 2000/2001) $ 212,500.00 City's Contribution (from Proposition 12 Per Capita Grant) $1,185,009.30 $1,397,509.30 Skate Park Estimate (10/01) -2 Parties and Recital Page(s) Agreement between City of Chula Vista and Purkiss Rose RSI, Landscape Architects for Landscape Architectural Services This agreement ("Agreement"), dated ,2001 for the purposes of reference only, and effective as of the date last executed unless another date is otherwise specified in Exhibit A, Paragraph 1 is between the City-related entity as is indicated on Exhibit A, paragraph 2, as such ("City"), whose business form is set forth on Exhibit A, paragraph 3, and the entity indicated on the attached Exhibit A, paragraph 4, as Consultant, whose business form is set forth on Exhibit A, paragraph 5, and whose place of business and telephone numbers are set forth on Exhibit A, paragraph 6 ("Consultant"), and is made with reference to the following facts: Recitals WHEREAS, City desires Professional Design Services for the Design Development, Construction Documents, and Construction Administration Phases for the Chula Vista Skate Park Project at Greg Rogers Park; and WHEREAS, pursuant to Chula Vista Municipal Code Section 2.56.070 that competitive bidding is impractical, and waive the normal consultant selection process because of Purkiss Rose, RSI's historic significant time and effort in preparation of the Skate Park Feasibility Study, for which they were chosen through the City's standard bidding process; and WHEREAS, following review of Consultant's performance, the positive working relationship that has been established between the City and the Consultant, the City desires to continue to retain Consultant services to produce the construction documents for the skate park; and WHEREAS, Consultant warrants and represents that they are experienced and staffed in a manner such that they are and can prepare and deliver the services required of Consultant to City within the time frames herein provided all in accordance with the terms and conditions of this Agreement; and WHEREAS, the Director of Parks and Recreation has otherwise negotiated the details of this agreement in accordance with procedures set forth in Sections 2.56.220-224 of the Chula Vista Municipal Code. 2ptyagm PurkissoRose-RSUCity of Chula Vista 11/19/2001 Page 1 /~/~ -Jif' ATTACHMENT B NOW, THEREFORE, BE IT RESOLVED that the City and Consultant do hereby mutually agree as follows: 1. Consultant's Duties A. General Duties Consultant shall perform all of the services described on the attached Exhibit A, Paragraph 7, entitled "General Duties"; and, B. Scope of Work and Schedule In the process of performing and delivering said "General Duties", Consultant shall also perform all of the services described in Exhibit A, Paragraph 8, entitled" Scope of Work and Schedule", not inconsistent with the General Duties, according to, and within the time frames set forth in Exhibit A, Paragraph 8, and deliver to City such Deliverables as are identified in Exhibit A, Paragraph 8, within the time frames set forth therein, time being of the essence of this agreement. The General Duties and the work and deliverables required in the Scope of Work and Schedule shall be herein referred to as the "Defined Services". Failure to complete the Defined Services by the times indicated does not, except at the option of the City, operate to terminate this Agreement. C. Reductions in Scope of Work City may independently, or upon request from Consultant, from time to time reduce the Defined Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction in the compensation associated with said reduction. D. Additional Services In addition to performing the Defined Services herein set forth, City may require Consultant to perform additional consulting services related to the Defined Services ("Additional Services"), and upon doing so in writing, if they are within the scope of services offered by Consultant, Consultant shall perform same on a time and materials basis at the rates set forth in the "Rate Schedule" in Exhibit A, Paragraph 11 (C), unless a separate fixed fee is otherwise agreed upon. All compensation for Additional Services shall be paid monthly as billed. E. Standard of Care Consultant, in performing any Services under this agreement, whether Defined Services or Additional Services, shall perform in a manner consistent with that level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions and in similar locations. 2ptyagm PurkisseRose-RSI/City of Chula Vista 9/2001 Page 2 F. Insurance Consultant represents that it and its agents, staff and subconsultants employed by it in connection with the Services required to be rendered, are protected against the risk of loss by the following insurance coverage's, in the following categories, and to the limits specified, policies of which are issued by Insurance Companies that have a Best's Rating of"A, Class V" or better, or shall meet with the approval of the City: Statutory Worker's Compensation Insurance and Employer's Liability Insurance coverage in the mount set forth in the attached Exhibit A, Paragraph 9. Commercial General Liability Insurance including Business Automobile Insurance coverage in the amount set forth in Exhibit A, Paragraph 9, combined single limit applied separately to each project away from premises owned or rented by Consultant, which names City as an Additional Insured, and which is primary to any policy which the City may otherwise carry ("Primary Coverage"), and which treats the employees of the City in the same manner as members of the general public ("Cross-liability Coverage"). Errors and Omissions insurance, in the amount set forth in Exhibit A, Paragraph 9, unless Errors and Omissions coverage is included in the General Liability policy. G. Proof of Insurance Coverage. (1) Certificates of Insurance. Consultant shall demonstrate proof of coverage herein required, prior to the commencement of services required under this Agreement, by delivery of Certificates of Insurance demonstrating same, and further indicating that the policies may not be canceled without at least thirty (30) days written notice to the Additional Insured. (2) Policy Endorsements Required. In order to demonstrate the Additional Insured Coverage, Primary Coverage and Cross-liability Coverage required under Consultant's Commercial General Liability Insurance Policy, Consultant shall deliver a policy endorsement to the City demonstrating same, which shall he reviewed and approved by the Risk Manager. H. Security for Performance. (1) Performance Bond. In the event that Exhibit A, at Paragraph 19, indicates the need for Consultant to provide a Performance Bond (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Performance Bond"), then Consultant shall provide to the City a performance bond by a surety and in a form and amount satisfactory to the Risk Manager or City 2ptyagm PurkisseRose-RSI/City of Chula Vista 11/19/2001 Page 3 Attorney which amount is indicated in the space adjacent to the term, "Performance Bond", in said Paragraph 19, Exhibit A. (2) Letter of Credit. In the event that Exhibit A, at Paragraph 19, indicates the need for Consultant to provide a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Letter of Credit"), then Consultant shall provide to the City an irrevocable letter of credit callable by the City at their unfettered discretion by submitting to the bank a letter, signed by the City Manager, stating that the Consultant is in breach of the terms of this Agreement. The letter of credit shall be issued by a bank, and be in a form and amount satisfactory to the Risk Manager or City Attorney which amount is indicated in the space adjacent to the term, "Letter of Credit", in said Paragraph 19, Exhibit A. (3) Other Security In the event that Exhibit A, at Paragraph 19, indicates the need for Consultant to provide security other than a Performance Bond or a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Other Security"), then Consultant shall provide to the City such other security therein listed in a form and amount satisfactory to the Risk Manager or City Attorney. I. Business License Consultant agrees to obtain a business license from the City and to otherwise comply with Title 5 of the Chula Vista Municipal Code. 2. Duties of the City A. Consultation and Cooperation City shall regularly consult the Consultant for the purpose of reviewing the progress of the Defined Services and Schedule therein contained, and to provide direction and guidance to achieve the objectives of this agreement. The City shall permit access to its office facilities, files and records by Consultant throughout the term of the agreement. In addition thereto, City agrees to provide the information, data, items and materials set forth on Exhibit A, Paragraph 10, and with the further understanding that delay in the provision of these materials beyond 30 days after authorization to proceed, shall constitute a basis for the justifiable delay in the Consultant's performance of this agreement. B. Compensation Upon receipt of a properly prepared billing from Consultant submitted to the City periodically as indicated in Exhibit A, Paragraph 18, but in no event more frequently than monthly, on the day of the period indicated in Exhibit A, Paragraph 18, City shall compensate Consultant for all services rendered by Consultant according to the terms and conditions set forth in Exhibit A, 2ptyagm Purkiss*Rose-RSl/City of Chula Vista 11/19/2001 Page 4 Paragraph 11, adjacent to the governing compensation relationship indicated by a "checkmark" next to the appropriate arrangement, subject to the requirements for retention set forth in paragraph 19 of Exhibit A, and shall compensate Consultant for out of pocket expenses as provided in Exhibit A, Paragraph 12. All billings submitted by Consultant shall contain sufficient information as to the propriety of the billing to permit the City to evaluate that the amount due and payable thereunder is proper, and shall specifically contain the City's account number indicated on Exhibit A, Paragraph 18 (C) to be charged upon making such payment. 3. Administration of Contract Each party designates the individuals ("Contract Administrators") indicated on Exhibit A, Paragraph 13, as said party's contract administrator who is authorized by said party to represent them in the routine administration of this agreement. 4. Term. This Agreement shall terminate when the Parties have complied with all executory provisions hereof. 5. Liquidated Damages The provisions of this section apply ifa Liquidated Damages Rate is provided in Exhibit A, Paragraph 14. It is acknowledged by both parties that time is of the essence in the completion of this Agreement. It is difficult to estimate the amount of damages resulting from delay in performance. The parties have used their judgment to arrive at a reasonable amount to compensate for delay. Failure to complete the Defined Services within the allotted time period specified in this Agreement shall result in the following penalty: For each consecutive calendar day in excess of the time specified for the completion of the respective work assignment or Deliverable, the consultant shall pay to the City, or have withheld from monies due, the sum of Liquidated Damages Rate provided in Exhibit A, Paragraph 14 ("Liquidated Damages Rate"). Ti~ne extensions for delays beyond the consultant's control, other than delays caused by the City, shall be requested in writing to the City's Contract Administrator, or designee, prior to the expiration of the specified time. Extensions of time, when granted, will be based upon the effect of delays to the work and will not be granted for delays to minor portions of work unless it can be shown that such delays did or will delay the progress of the work. 6. Financial Interests of Consultant A. Consultant is Designated as an FPPC Filer. 2ptyagm Purkiss.Rose-RSI/City of Chula Vista 11/19/2001 Page 5 If Consultant is designated on Exhibit A, Paragraph 15, as an "FPPC filer", Consultant is deemed to be a "Consultant" for the purposes of the Political Reform Act conflict of interest and disclosure provisions, and shall report economic interests to the City Clerk on the required Statement of Economic Interests in such reporting categories as are specified in Paragraph 15 of Exhibit A, or if none are specified, then as determined by the City Attorney. B. Decline to Participate. Regardless of whether Consultant is designated as an FPPC Filer, Consultant shall not make, or participate in making or in any way attempt to use Consultant's position to influence a governmental decision in which Consultant knows or has reason to know Consultant has a financial interest other than the compensation promised by this Agreement. C. Search to Determine Economic Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant warrants and represents that Consultant has diligently conducted a search and inventory of Consultant's economic interests, as the term is used in the regulations promulgated by the Fair Political Practices Commission, and has determined that Consultant does not, to the best of Consultant's knowledge, have an economic interest which would conflict with Consultant's duties under this agreement. D. Promise Not to Acquire Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will not acquire, obtain, or assume an economic interest during the term of this Agreement which would constitute a conflict of interest as prohibited by the Fair Political Practices Act. E. Duty to Advise of Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will immediately advise the City Attorney of City if Consultant learns of an economic interest of Consultant's which may result in a conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated thereunder. F. Specific Warranties Against Economic Interests. Consultant warrants and represents that neither Consultant, nor Consultant's immediate family members, nor Consultant's employees or agents ("Consultant Associates") presently have any interest, directly or indirectly, whatsoever in any property which may be the subject matter of the Defined Services, or in any property ~vithin 2 radial miles from the exterior boundaries of any property which may be the subject matter of the Defined Services, ("Prohibited Interest"), other than as listed in Exhibit A, Paragraph 15. Consultant further warrants and represents that no promise of future employment, remuneration, consideration, gratuity or other reward or gain has been made to Consultant or 2ptyagm Purkiss,,Rose-RSI/City of Chula Vista 11/19/2001 Page 6 Consultant Associates in connection with Consultant's performance of this Agreement. Consultant promises to advise City of any such promise that may be made during the Term of this Agreement, or for 12 months thereafter. Consultant agrees that Consultant Associates shall not acquire any such Prohibited Interest within the Term of this Agreement, or for 12 months after the expiration of this Agreement, except with the written permission of City. Consultant may not conduct or solicit any business for any party to this Agreement, or for any third party which may be in conflict with Consultant's responsibilities under this Agreement, except with the written permission of City. 7. Hold Harmless and Indemnification 7.1. Indemnification and Hold Harmless Agreement. With respect to any liability, including but not limited to claims asserted or costs, losses, attorney fees, or payments for injury to any person or property caused or claimed to be caused by the acts or omissions of the Consultant, or the Consultant's employees, agents and officers, arising out of any services performed involving this project, except liability for Professional Services covered under Section 7.2 the Consultant agrees to defend, indemnify, protect and hold harmless the City, its agents, officers, or employees from and against all liability. Also covered is liability arising from, connected with, caused by, or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents, or officers, or any third party. The Consultant's duty to indemnify, protect, and hold harmless shall not include any claims or liabilities arising from the sole negligence or sole willful misconduct of the City, its agents, officers, or employees. This Section in no way alters, affects or modifies the Consultant's obligation and duties under Section 1 herein and Exhibit A to this Agreement. 7.2. Indemnification for Professional Services As to the Consultant's professional obligation, work or services involving this Project, the Consultant agrees to indemnify, defend and hold harmless the City, its agents, officers, and employees from and against any and all liability, claims, costs, and damages, including but not limited to, attorneys fees, losses or payments for injury to any person or property, caused directly or indirectly from the negligent acts, errors or omissions of the Consultant or the Consultant's employees, agents, or officers; provided, however, that the Consultant's duty to indemnify shall not include any claims or liability arising from the negligence or willful misconduct of the City, its agents, officers and employees. 8. Termination of Agreement for Caus~ If, through any cause, Consultant shall fail to fulfill in a timely and proper manner Consultant's obligations under this Agreement, or if Consultant shall violate any of the covenants, 2ptyagm Purkiss*Rose-RSUCity of Chula Vista 11/19/2001 Page 7 agreements or stipulations of this Agreement, City shall have the right to terminate this Agreement by giving written notice to Consultant of such termination and specifying the effective date thereof at least five (5) days before the effective date of such termination. In that event, all finished or unfinished documents, data, studies, surveys, drawings, maps, reports and other materials prepared by Consultant shall, at the option of the City, become the property of the City, and Consultant shall be entitled to receive just and equitable compensation for any work satisfactorily completed on such documents and other materials up to the effective date of Notice of Termination, not to exceed the amounts payable hereunder, and less any damages caused City by Consultant's breach. 9. Errors and Omissions In the event that the City Administrator determines that the Consultants' negligence, errors, or omissions in the performance of work under this Agreement has resulted in expense to City greater than would have resulted if there were no such negligence, errors, omissions, Consultant shall reimburse City for any additional expenses incurred by the City. Nothing herein is intended to limit City's rights under other provisions of this agreement. 10. Termination of Agreement for Convenience of City City may terminate this Agreement at any time and for any reason, by giving specific written notice to Consultant of such termination and specifying the effective date thereof, at least thirty (30) days before the effective date of such termination. In that event, all finished and unfinished documents and other materials described hereinabove shall, at the option of the City, become City's sole and exclusive property. If the Agreement is terminated by City as provided in this paragraph, Consultant shall be entitled to receive just and equitable compensation for any satisfactory work completed on such documents and other materials to the effective date of such termination. Consultant hereby expressly waives any and all claims for damages or compensation arising under this Agreement except as set forth herein. 11. Assignability The services of Consultant are personal to the City, and Consultant shall not assign any interest in this Agreement, and shall not transfer any interest in the same (whether by assignment or novation), without prior written consent of City. City hereby consents to the assignment of the portions of the Defined Services identified in Exhibit A, Paragraph 17 to the subconsultants identified thereat as "Permitted Subconsultants". 12. Ownership, Publication, Reproduction and Use of Material All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced under this Agreement shall be the sole and exclusive property of City. No such materials or properties produced in whole or in part under this Agreement shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express written consent of City. City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), 2ptyagm Purkiss,Rose-RSI/City of Chula Vista 11/19/2001 Page 8 distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced under this Agreement. 13. Independent Contractor City is interested only in the results obtained and Consultant shall perform as an independent contractor with sole control of the manner and means of performing the services required under this Agreement. City maintains the right only to reject or accept Consultant's work products. Consultant and any of the Consultant's agents, employees or representatives are, for all purposes under this Agreement, an independent contractor and shall not be deemed to be an employee of City, and none of them shall be entitled to any benefits to which City employees are entitled including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Therefore, City will not withhold state or federal income tax, social security tax or any other payroll tax, and Consultant shall be solely responsible for the payment of same and shall hold the City harmless with regard thereto. 14. Administrative Claims Requirements and Procedures No suit or arbitration shall be brought arising out of this agreement, against the City unless a claim has first been presented in writing and filed with the City and acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by this reference as if fully set forth herein, and such policies and procedures used by the City in the implementation of same. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. 15. Attorney's Fees Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorney's fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. 16. Statement of Costs In the event that Consultant prepares a report or document, or participates in the preparation ora report or document in performing the Defined Services, Consultant shall include, or cause the inclusion of, in said report or document, a statement of the numbers and cost in dollar amounts of all contracts and subcontracts relating to the preparation of the report or document. 17. Miscellaneous A. Consultant not authorized to Represent City 2ptyagm Purkiss.Rose-RSl/City of Chula Vista 11/19/2001 Page 9 Unless specifically authorized in writing by City, Consultant shall have no authority to act as City's agent to bind City to any contractual agreements whatsoever. B. Consultant is Real Estate Broker and/or Salesman If the box on Exhibit A, Paragraph 16 is marked, the Consultant and/or their principals is/are licensed with the State of California or some other state as a licensed real estate broker or salesperson. Otherwise, Consultant represents that neither Consultant, nor their principals are licensed real estate brokers or salespersons. C. Notices All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such party, postage prepaid, registered or certified, ~vith return receipt requested, at the addresses identified herein as the places of business for each of the designated parties. D. Entire Agreement This Agreement, together with any other written document referred to or contemplated herein, embody the entire Agreement and understanding between the parties relating to the subject matter hereof. Neither this Agreement nor any provision hereof may be amended, modified, waived or discharged except by an instrument in writing executed by the party against which enforcement of such amendment, waiver or discharge is sought. E. Capacity of Parties Each signatory and party hereto hereby warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all resolutions or other actions have been taken so as to enable it to enter into this Agreement. F. Governing Law/Venue This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in the federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as close thereto as possible. Venue for this Agreement, and performance hereunder, shall be the City of Chula Vista. 2ptyagm Purkiss*Rose-RSI/City of Chula Vista 11/19/2001 Page 10 Signature Page to Agreement between City of Chula Vista and PurkisseRose-RSI, Landscape Architects IN WITNESS WHEREOF, City and Consultant have executed this Agreement thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms: Dated: ,200__ City of Chula Vista by: Shirley Horton, Mayor Attest: Susan Bigelow, City Clerk Approved as to form: John M. Kaheny, City Attorney Dated: PurkisseRose-RSI By: Steve Rose, Principal Exhibit List to Agreement (X) Exhibit A (X) Exhibit B 2ptyagm Purkiss,~Rose-RSI/City of Chula Vista 11/19/2001 Page 11 Exhibit A to Agreement between City of Chula Vista and PurkissoRose-RSI 1. Effective Date of Agreement: _, 2001 2. City-Related Entity: (X) City of Chula Vista, a municipal chartered corporation of the State of California ( ) Redevelopment Agency of the City of Chula Vista, a political subdivision of the State of California () Industrial Development Authority of the City of Chula Vista, a ( ) Other: , a ("City") 3. Place of Business for City: City of Chula Vista, 276 Fourth Avenue, Chula Vista, CA 91910 4. Consultant: PurkisseRose-RSI Steve Rose, Principal 801 North Harbor Blvd. Fullerton, CA 92832 5. Business Fom~ of Consultm~t: ( ) Sole Proprietorship (X) Partnership ( ) Corporation 6. Place of Business, Telephone and Fax Number of Consultant: 801 North Harbor Blvd. Fullerton, CA 92832 Telephone (714) 871-3638 Fax (714) 871-1188 2ptyagm PurkisseRose-RSI/City of Chula Vista 11/19/2001 Page 12 7. General Duties: 7.1 Greg Rogers Park Improvement Plan for Skate Park Venue - Consultant shall provide professional Design Services for the Master Plan Design Development, Construction Documents, and Construction Administration Phases for the Chula Vista Skate Park Project at Greg Rogers Park as required to prepare, ~ubmit, and obtain the approval from the City Council. All Consultant services shall be performed to the satisfaction of the Director of Parks and Recreation. Services shall include meeting with staff, master plan design development, construction document phase, and the construction administration phase with accompanying support documents as outlined in Paragraph 8, Detailed Scope of Work. 8. Detailed Scope of Work ("Detailed Services"): 8.1 Detailed Scope of Work: Consultant shall provide the following services, all to the satisfaction of the Director of Parks and Recreation: 8.2 Skate Park Master Plan Design Development (Deliverable No. 1): a. Staff Input: Meet with City staff, upon request, (including Boys and Girls Club Representative) (see Paragraph 8.6, Meetings) to review plans, architectural elements, selection of materials, and equipment. b. Based on the input from City staff, consultant shall refine the design layout, develop architectural floor plans and elevations, select materials, site amenities, site furniture, colors, etc, and shall continue refining the skate park master plan until approved by the City Contract Administrator. c. Consultant shall perform a site survey to include utilities and existing conditions. Perform a geotechnical study to understand the history of site, profiles, soil makeup, and any cut and fill properties. 8.3 Construction Documents (Deliverable No. 2): a. Consultant shall prepare construction documents for the skate park at Greg Rogers Park based on City approved final design development plans and budget, in accordance with deliverables schedule (Paragraph 9.3). These construction documents shall include: · Demolition Plans * Grading and Drainage Plans · Site Improvement Plans (drop offarea, walks, plaza, event are, fences, signage, etc) · Skate Park Plans, including the following features: · One (1) Bowl, 7' to 9' deep · Ramps, 21 split between Mat ramps and transitions, 2 to 6 feet high · Two (2) Stairs, one with 6 steps and one with 11 steps · Sixteen Ledges, 1' to 3' high · Extended Ledges, averaging 1 foot high 2ptyagm Purkiss,.Rose-RSI/City of Chula Vista 11/19/2001 Page 13 · Pyramid, 2 feet high · Manual Pad, 18 inches high Three Roll Overs, 18 inches to 3 feet high · Rails, 18 inches to 36 inches high · Building (760 sq fi) to include ticket sales/office, concession stand, and storage space. · Chain Link (penal style) perimeter of skate park (10' x 914') · Two Sets of 3-stack bleachers w/shade structures · Benches · Lighting · Security System · Plaza Area Hardscape · Entry Treatment Hardscape · Event & Perimeter Area Hardscape · Turnaround Renovation Hardscape · Landscape & Irrigation · Electrical Plans · Architectural Plans · Park Amenities Plan · Irrigation Plans · Planting Plans · Construction Details · Specifications Consultant shall review these proposed features and analyze the appropriateness of the features for this skate park and make a written recommendation to the City. b. Estimate of Probable Cost: Consultant shall provide a written itemized analysis of costs of all design elements and features for the Project before final construction documents are produced. Review with City staff and make recommendations. Work with City staff to develop a cost strategy including the budget and/or phasing of improvements. c. Construction Documents shall be in the form of scaled, dimensioned drawings as necessary to communicate the design intent, sizes and material selection for all scope items. d. Instruments of Service/Electronic Media shall be produced as hard copy, original drawings and specifications are the deliverable instruments of service. If work is prepared in electronic media format the Consultant will provide electronic copies for convenience only. Electronic media will be prepared in AutoCAD ® Release 14 format. In accepting and utilizing any drawings or other data on any form of electronic media generated and provided by the Consultant, the City agrees that all such drawings and data are instruments of service of the Consultant. The electronic flies submitted by the Consultant to the City are submitted for an acceptance period of five working days. Any defects the City discovers during this period will be reported to the Consultant and will be corrected. 2ptyagm Purkiss..Rose-RSldCity of Chula Vista 11/19/2001 Page 14 8.4 Construction Administration Phase (Deliverable No. 3): a. Bidding: Upon receipt by City of contractor's bids to construct Greg Rogers Skate Park, Consultant shall provide the City with input, advice, and assistance in the evaluation of all such bids, including: · Contractor's ability to comply with all bid documents. · Contractor's ability to perform detailed scope of work. · Contractor's performance on similar job in the last two years. b. Construction: While construction is in progress on the Greg Rogers Skate Park, with City staff's oversight, consultant shall review and submit recommendations as to the approval of contractor's requested addenda, extra work/change orders, material submittals, color samples and provide clarification to plans and specifications. In addition, Consultant shall attend concrete pre-pour and concrete post-pour operations for the project. 8.5 Filing Application: Consultant shall prepare, upon request of City's contract administrator, the appropriate plans and documents, which are required by the City and complete and submit the City's Processing Application Form for the Greg Rogers Skate Park. 8.6 Meetings: Consultant shall attend and provide written agendas and meeting notes for all meetings: a. Pre-Application Meeting: Meet with City staff to familiarize the Consultant with City's design issues and expectations related to the development of the skate park. b. Periodic Meetings: Attend a maximum of six meetings as requested by the Contract Administrator in addition to those meetings, presentations, site visits, and similar tasks set forth elsewhere in this agreement. c. Park and Recreation Commission Presentation: Present, upon request of City's Contract Administrator, the Skate Park Master Plan to the Parks and Recreation Commission. Respond to comments as directed by City Staff and present to Parks and Recreation Commission alternatives until Skate Park Master Plan is found acceptable to the Commission. d. City Council Presentation: Present, upon request of City's Contract Administrator, the Final Skate Park Master Plan to City Council for approval. Provide revisions or response to conditions of approval as directed by City staff. If required by City's Contract Administrator, attend subsequent City Council Meetings to present requested information on the project until the Plan is approved. e. Site visits: Consultant shall be present for the following: · Pre-construction · Shotcrete pre-pour application · Shotcrete post-pour · Final inspection walk through and preparation of punch list 8.7 City Approval - Consultant shall continue working with City staff and the Director of Parks and Recreation to obtain approval of the Skate Park Master Plan from the City Council. 2ptyagm PurkisseRose-RSI/City of Chula Vista 11 / 19/2001 Page 15 9. Schedule, Milestone, Time-Limitations within which to Perform Services 9.1 Date for Commencement of Consultant Services: (X) Same as Effective Date of Agreement 9.2 Deliverables - Dates or Time Limits for Delivery of Deliverables: Deliverable No. 1: Due no later than 14 weeks from date of Commencement of Consultant Services. Draft Skate Park Master Plan Design Development: Consultant shall prepare, based on the input from City staff, the design layout, architectural floor plans and elevations, select materials, site amenities, site furniture, colors, etc. Colored and mounted for presentation to Parks and Recreation Commission_purposes: Site Plan at appropriate scale (1) copy Site Cross Sections at appropriate scale (as needed to communicate design intent) Plan view of Buildings with programming completed to define the building footprint and costs (1) copy Elevations (all sides) of buildings at ~¼" scale (1) copy Entry Sketch perspective drawing (1) copy A construction materials and colors sample board (1) copy First run of construction drawings for staff review Electrical and mechanical drawings On site drawings Grading Plans Waste Water Evacuation Plan Written text providing complete information on concept, implementation, cost estimate, phasing, and all other information necessary to communicate the Draft Park Master Plan (1) each Deliverable No. 2: Due no later than 18 weeks from date of Commencement of Consultant Services. Construction Documents: Construction documents for the skate park at Greg Rogers Park shall be prepared based on the approved final design development plans and budget. These construction drawings shall include: Demolition Plans Grading and Drainage Plans Site Improvement Plans (drop off area, walks, plaza, event are, fences, signage, etc) Skate Park Plans Electrical Plans Architectural Plans Park Amenities Plan Irrigation Plans Planting Plans 2ptyagm Purkiss *Rose-RSI/City of Chula Vista 11/19/2001 Page 16 Construction Details Prepare documents for bidding construction o£the skate park using City's standard format and prepare a colored presentation board. Deliverable No. 3: Construction Administration: Bidding: Upon receipt of contractor's bids Consultant shall provide assistance during the bidding phase by providing any clarification or in£ormation as to the reputation/expertise of the construction companies bidding on the project. Oversight: With City stafl's direction, consultant shall review and submit recommendations as to the approval of contractor's addenda, extra work/change orders, material submittals, color samples and provide clarification to plans and specifications. 9.4 Date for completion of all Consultant services: Nine months from the date of this agreement. Times for performance may be extended in the sole discretion of the Director of Parks and Recreation, but in no event will the date for completion be extended beyond one year from the date of City Council approval o£this agreement. 10. Insurance Requirements: (X) Statutory Worker's Compensation Insurance (X) Employer's Liability Insurance coverage: $1,000,000. (X) Commercial General Liability Insurance: $1,000,000. () Errors and Omissions insurance: None Required (included in Commercial General Liability coverage). () Errors and Omissions Insurance: $500,000.00 (not included in Commercial General Liability coverage). · Materials Required to be Supplied by City to Consultant: The City will provide civil engineering drawings for the site providing grades property boundaries, boundaries, restrictions and easements, adjacent street improvement drawings providing services and utility lines. 12. Compensation: A. ( ) Single Fixed Fee Arrangement. 2ptyagm Purkiss*Rose-RSI/City of Chula Vista 11/19/2001 Page 17 For performance of all of the Defined Services by Consultant as herein required, City shall pay a single fixed fee in the amounts and at the times or milestones or for the Deliverables set forth below: Single Fixed Fee Amount: $102,760.00, payable as set forth in Exhibit B. ( ) 1. Interim Monthly Advances. The City shall make interim monthly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest flee loans which must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 19 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Contractor shall have represented in writing that said percentage of completion of the phase has been performed by the Contractor. The practice of making interim monthly advances shall not convert this agreement to a time and materials basis of payment. B. ( X ) Phased Fixed Fee Arrangement. For the performance of each phase or portion of the Defined Services by Consultant as are separately identified below, City shall pay the fixed fee associated with each phase of Services, in the amounts and at the times or milestones or Deliverables set forth. Consultant shall not commence Services under any Phase, and shall not be entitled to the compensation for a Phase, unless City shall have issued a notice to proceed to Consultant as to said Phase. Phase Fee for Said Phase ( ) 1. Interim Monthly Advances. The City shall make interim monthly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest free loans which must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 19 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Contractor shall have represented in writing that said percentage 2ptyagm Purkiss*Rose~RSl/City of Chula Vista 11/19/2001 Page 18 of completion of the phase has been performed by the Contractor. The practice of making interim monthly advances shall not convert this agreement to a time and materials basis of payment. C. ( ) Hourly Rate Arrangement For performance of the Defined Services by Consultant as herein required, City shall pay Consultant for the productive hours of time spent by Consultant in the performance of said Services, at the rates or amounts set forth in the Rate Schedule, attached as Exhibit B, according to the following terms and conditions: (1) ( ) Not-to-Exceed Limitation on Time and Materials Arrangement Notwithstanding the expenditure by Consultant of time and materials in excess of said Maximum Compensation amount, Consultant agrees that Consultant will perform all of the Defined Services herein required of Consultant for $102,760.00 including all Materials, and other "reimbursables" ("Maximum Compensation"). (2) ( ) Limitation without Further Authorization on Time and Materials Arrangement At such time as Consultant shall have incurred time and materials equal to ("Authorization Limit"), Consultant shall not be entitled to any addi- tional compensation without further authorization issued in writing and approved by the City. Nothing herein shall preclude Consultant from providing additional Services at Consultant's own cost and expense. ( ) Hourly rates may increase by 6% for services rendered after August, 2002, if delay in providing services is caused by City. t3. Materials Reimbursement Arrangement For the cost of out of pocket expenses incurred by Consultant in the performance of services herein required, City shall pay Consultant at the rates or amounts set forth below: ( ) None, the compensation includes all costs. Cost or Rate ( ) Reports, not to exceed $ ( ) Copies, not to exceed $ : ( ) Travel, not to exceed $ : (X) Printing, not to exceed $ : Actual Cost (X) Postage, not to exceed $ : Actual Cost ) Delivery, not to exceed $ ) Long Distance Telephone Charges, not to exceed $ ) Other Actual Identifiable Direct Costs: 2ptyagm Purkiss,,Rose-RSldCity of Chula Vista 11/19/2001 Page 19 ., not to exceed $ : ., not to exceed $ : 14. Contract Administrators: City: Andy Campbell, Director Parks and Recreation Department 276 Fourth Avenue Chula Vista, CA 91910 (619) 409-5966 Consultant: Steve Rose, Principal Purkiss Rose RSI 801 North Harbor Boulevard Fullerton, CA 92832 15. Project Manager: Steve Rose shall be the Project Manager and shall provide overall management services and coordination of subconsultants on behalf of the Consultant and shall remain the Project Manager for the entire term of this Contract unless City, in writing, agrees to a replacement. 16. Liquidated Damages Rate: ( ) SNA per day. ( ) Other: 17. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of Interest Code: (X) Not Applicable. Not an FPPC Filer. ( ) FPPC Filer Category No. 1. Investments and sources of income. Category No. 2. Interests in real property. Category No. 3. Investments, interest in real property and sources of income subject to the regulatory, permit or licensing authority of the department. Category No. 4. Investments in business entities and sources of income which engage in land development, construction or the acquisition or sale of real property. 2ptyagm Purkiss *Rose-RSUCity o f Chula Vista 11/19/2001 Page 20 ( ) Category No. 5. Investments in business entities and sources of income of the type which, within the past two years, have contracted with the City of Chula Vista (Redevelopment Agency) to provide services, supplies, materials, machinery or equipment. ( ) Category No. 6. Investments in business entities and sources of income of the type which, within the past two years, have contracted with the designated employee's department to provide services, supplies, materials, machinery or equipment. ( ) Category No. 7. Business positions. ( ) List "Consultant Associates" interests in real property within 2 radial miles of Project Property, if any: 18. ( ) Consultant is Real Estate Broker and/or Salesman 19. Permitted Subconsultants: Allwest Geoscience, Inc., Geotechnical Testing 1210 N. Barsten Way Anaheim, CA 92806-1822 Tel: 714.238.9255 Fax: 714.238.1105 Consolidated Engineering, Electrical Engineers 14661 Myford Road, Suite C Tustin, CA 92780 Tel: 714.832.6346 Fax: 714.832.9427 Correia Consulting and Design, Structural Engineers 16912 Bolsa Chica Road, Suite 101 Huntington Beach, CA 92649 Tel: 714.840.5582 Fax: 714.840.869l Crane Architectural Group 801 No. Harbor Blvd. Fullerton, CA 92832 Tel: 714.5525.0363 Land Development Design Corp., Civil Engineers 1910 S. Archibald Ave., Suite N Ontario, CA 91761 Tel: 909.930.1466 Fax: 909.930.1468 2ptyagm Purkiss,,Rose-RSI/City of Chula Vista 11/19/2001 Page 21 20. Bill Processing: A. Consultant's Billing to be submitted for the following period of time: ( ) Monthly ( ) Quarterly ( X ) Other: As specified on Exhibit B. B. Day of the Period for submission of Consultant's Billing: ( ) First of the Month ( ) 15th Day of each Month ( ) End of the Month ( X ) Other: As specified in Paragraph 12.A Compensation C. City's Account Number: 21. Security for Per formance ( ) Performance Bond, $. ( ) Letter of Credit, $ ( ) Other Security: Type: Amount: $ (X) Retention. If this space is checked, then notwithstanding other provisions to the contrary requiring the payment of compensation to the Consultant sooner, the City shall be entitled to retain, at their option, either the following "Retention Percentage" or "Retention Amount" until the City determines that the Retention Release Event, listed below, has occurred: (X) Retention Percentage: 10% ( ) Retention Amount: $ Retention Release Event: (X) Completion of All Consultant Services to the satisfaction of, and as solely determined by the Director of Parks and Recreation. ( ) Other: 2ptyagm Purkiss~,Rose-RSI/City of Chula Vista 11/19/2001 Page 22 EXHIBIT B FEE SCHEDULE Rate Schedule Design Development, upon completion of Deliverable No. 1 to the satisfaction of the City's Contract Administrator $15,444.00 Construction Documentation, upon completion of Deliverable No. 2 to the satisfaction of the City's Contract Administrator $69,390.00 Bidding and Construction Administration, upon completion of Deliverable No. 3 to the satisfaction of the City's Contract Administrator $7,650.00 TOTAL $92,484.00* *Reflects 10% Retention 2ptyagm Purkiss,,Rose-RSI/City of Chula Vista 11/I9/2001 Page 23 EXHIBIT C FEE SCHEDULE Purkiss Rose~PSI Principal ........................................................................................................ $115/hr Project Manager ................................................................................................ 85/hr Skate Park Designer .......................................................................................... 75/hr Project Captain .................................................................................................. 70/hr Draftsperson ...................................................................................................... 65/hr Clerical and Word Processing Staff .................................................................. 35/hr Allwest Geoscience, Inc., Geotechnical Testing Technician ....................................................................................................... $49/hr Senior Technician ............................................................................................. 55/hr Field Supervisor ................................................................................................ 65/hr Surveyor Technician ......................................................................................... 45/hr Licensed Surveyor ............................................................................................ 75/hr Senior Project Cost Analyst .............................................................................. 65/hr Field Engineer/Geologist .................................................................................. 55/hr Staff Engineer/Geologist ................................................................................... 65/hr Project Engineer/Geologist ............................................................................... 75/hr Senior Engineer/Geologist ................................................................................ 85/hr Associate Engineer/Geologist/Hydrogeologist ............................................... 100/hr Typist/Clerical Personnel .................................................................................. 35/hr Wordprocessor .................................................................................................. 45/hr Consolidated Engineering, Electrical Engineers Principal Engineer ........................................................................................... $95/hr Project Engineer ................................................................................................ 80/hr Design Engineer ................................................................................................ 70/hr Design/Drafting ................................................................................................. 50/hr Clerical .............................................................................................................. 30/hr Correia Consulting and Design, Structural Engineers Principal Engineer (Court Dposition) ........................................................... $200/hr Principal Engineer ........................................................................................... 150/hr Senior Project Engineer .................................................................................... 90/hr Project Engineer ................................................................................................ 75/hr Staff Engineer ................................................................................................... 60/hr Jr. Engineer/Designer ........................................................................................ 60/hr 2ptyagm Purkiss,,Rose-RSI/City of Chula Vista 11/19/2001 Page 24 Draftsman .......................................................................................................... 60/hr Clerical .............................................................................................................. 45/hr Crane Architectural Group Principal ........................................................................................................ $11 O/hr Staff Architect ................................................................................................... 90/hr Project Designer ................................................................................................ 70/hr Project Manager ................................................................................................ 35/hr CADD Draftsman ............................................................................................. 35/hr Draftsman .......................................................................................................... 32/hr Clerical .............................................................................................................. 30/hr Land Development Design Corp., Civil Engineers Design Engineers/Principal ............................................................................. $75/hr Design Draftsmen ............................................................................................. 55/hr Survey Crew (2-man) ......................................................................................................... 115/hr (3-man) ......................................................................................................... 180/l'rr 2ptyagm PurkissoRose-RSI/City of Chula Vista 11/19/2001 Page 25 RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE CITY'S FORMAL BIDDING PROCESS AS IMPRACTICAL AND AWARDING THE CONTRACT FOR $102,760 TO PURKISS ROSE-RSI FOR ARCHITECTURAL DESIGN SERVICES FOR THE SKATE PARK AT GREG ROGERS PARK ADJACENT TO THE BOYS AND GIRLS CLUB AT OLEANDER AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE AN AGREEMENT BETWEEN THE CITY OF CHUI,A VISTA AND PURKISS ROSE-RSI WHEREAS, the Parks and Recreation Department has long realized that a need for a safe and secure skate park venue exists in the City of Chula Vista; and WHEREAS, at the Council meeting of October 9, 2001, the design for the skate park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander was approved; and WHEREAS, the approved design and feasibility study was conducted and produced by Purkiss Rose-RSI, the successful bidder of the RFP process; and WHEREAS, since Purkiss Rose-RSl performed admirably and successfully completed the design and feasibility study, it is recommended that Purkiss Rose-RSI provide consulting services for the creation of the construction documents and assist City staff during the construction project; and WHEREAS, due to the status of the project, tinting issues, and since Purkiss Rose-RSl has successfully worked with the City previously, staff recommends that the bidding process be waived and the City Manager be authorized to negotiate and execute an agreement with Purkiss Rose-RSI, in a form to be approved by the City Attorney. NOW, THEREFORE, BE 1T RESOLVED that the City Council of the City of Chula Vista does hereby waive the City's formal bidding process as impractical and award the contract for $102,760 to Purkiss Rose-RSl for architectural design services for the Skate Park at Greg Rogers Park adjacent to the Boys and Girls Club on Oleander. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to negotiate and execute an agreement between the City of Chula Vista and Purkiss Rose-RSI, a copy of which shall be kept on file in the office of the City Clerk Presented by Approved as to form by Andy Campbell John M. Kaheny Director of Parks and Recreation City Attorney J attmneyheso~ Skate Pink Pmkiss Rose COUNCIL AGENDA STATEMENT ITEM /5 MEETING DATE: December 4, 2001 ITEM TITLE: Resolution waiving the City's formal bidding process, and award the architectural services consulting contract for $49,000 to Arch Pac, Inc. for architectural design services for the Loma Verde Pool renovation. SUBMITTED BY: Director Parks and Recreation REVIEWED BY: City Manager ~ v9~ (4/5ths Vote: YES __ NO X ) RECOMMENDATION: That Council waive the City's formal bidding process, and award the architectural services consulting contract to Arch Pac, Inc. and authorize the City Manager to negotiate and execute an agreement between the City and Arch Pac, Inc., in a form to be approved by the City Attorney's office. BOARD/COMMISSION RECOMMENDATION: N/A DISCUSSION: The Parks and Recreation Department's approved CIP No. PR-226 identifies the Loma Verde Pool Renovation project to include removal of existing island to increase the programmable area of the pool, removal and disposal of current decking, installing rim-flow gutters, resurfacing pool, provision of depth markers in tile and coping and replacement of and repair of deck equipment. This project requires the services of an architect to design and furnish plans and specifications to allow a pool contractor to perform the tasks associated with the pool renovation. Due to the status of the project, timing issues, and since Arch Pac, Inc. has successfully performed the design renovation project at Parkway Pool, staff recommends that the bidding process be waived and the City Manager be authorized to negotiate and execute an agreement with Arch Pac, Inc., in a form to be approved by the City Attorney. FISCAL IMPACT: if approved by Council, the $49,000 for this contract is available in CIP No. PR-226. Attachments: Attachment A - PR-226 Attachment B - Arch Pac Proposal for Architectural Services PROPOSAL FOR ARCHITECTURAL SERVICES 1.0 INTRODUCTION 1~ 1 ~CH PAC~ ~C, og Encini~as, C~ffo~ia (hereina~er refe~ to as "~C~TECT"), proposes to provide consul(rog desi~ ~s, CITY OF C~A ~STA (hereh~er refe~ed to ~ "CL~NT") for the foHow~g project: Rehabilitation & Renovation of ~ e~sting 50 meter "U" shaped pool with a di~ng area and a shallow area ~th ADA ramp ~d long steps. Work to be accomplished ~ll include a new cantilever ~tter, re-plaster, pool decking, demolition of pe~nsula and ~A ramp & steps, new circulation piping and pool circulation equipment. The peninsula will be replaced with pool area. The pool area and volume (gallons) will be increased. The pool is located at Loma Verde Park in Chula Vista, CA. 2.0 SCOPE OF WO~ 2.1 ~C~CT shill provide consulting se~ces ~ requir~ to peffo~ renovation of the pool as described above. By pro,ding detailed plus and specifications. 3.0 SCOPE OF SER~CES 3A In confo~ce with the above scope of work, ~C~TECT shall ~mish pl~s ~d specifications to ~low a pool ~ntra~or to peffo~ the foHo~ng: 3.1.1 Remove ~d replace pool plaster/fiberglass ~d pool tile and targets 3.1.2 Remove ~d replace e~sting pool ~er system 3.1.3 Remove and replace concrete dec,rig 3.1.4 Replace ladders ~d st~c~ons 3.1.5 Repla~ tile, ~tters, lane lines, w~ng markers, etc. 3.1.6 Locate st~ing blocks 3.1.7 Replace rope ~chor's 3.1.8 Repla~ gu~er ~th new ~er 3.1.9 New circulation piping 3.1.10 New unde~ater & deck lighting 3.1.11 Modi~ mec~cal equipmem to acco~odate new volume 3.1.12 Provide wfi~en plus ~d spe(~tions for the r~o~ended mat~ / product ~es ~d to ensure the proper applicatio~ inst~lation ~d construction of s~e. 3.1.9 Plus ~d spe(~cations will meet all applicable Feder~, State (DSA), Coumy, CiW codes and T-24 ~d ~A. The pl~s sh~l capable of being a~ached to the Cities, St~dmd Bid Documems. 3.1.10 Plus ~d specifications shill ~low prospective bidders ~d the selected comra~or to be capable of supplying fll required matefifls, ~ppfies, labor ~d equipment as requked to complete the renovation proj~t ~ desi~ ~d specified. 3.1.11~C~TECT sh~ renew as-b~t dra~gs of facifi~. 3.1.12 ~C~CT sh~l also attend a pr~bid meeting ~th the City st~ ~d potenti~ bidders at the project site. (Job Wflk) 3.1.13~C~CT shall ~sit the site at least six times during the constm~ion process. 3.1.14~C~CT shill review subdued shop dra~ngs & a~built dra~gs. ATTACHMENT B 4.1 As-built drawings of existing facility. 4.2 Geo-Technical Investigation (Soil Report) 5.0 COMPENSATION 5.1 CLIE~ shall compensate ARCHITECT for ser~ces rendered as follows: 5.1.1 Basic Services: The Scope of Services described above the ARCHTECT shall be compensated an amount not-to-exceed $49,000 (forty nine - thousand). 5. 1.2 Additional Services: If requested, additional services will be billed for on an hourly basis, in conformance with the rates outlined in Article 5.3, below. 5.1.3 Reimbursable Expenses: In addition to basic compensation. a) Reimbursable expenses other than those listed herein shall be authorized in advance by CLIENT. b) Reimbursable expenses will be billed at 1.2 times ARCHITECT'S direct cost and shall include the following: · Special delivery and handling of documents and correspondence such as courier and overnight delivery services. · Reproduction and plotting. · Travel & Fuel expended on client's behal£ 5.2 Terms of Payment: 5.2.1 Payments will be made based upon percentage of completion in not less than monthly installments. 5.3 Hourly Rates: 5.3.1 Architect or Engineer $125.00 per hour 5.3.2 Associate- 95.00"" 5.3.3 CAD Technician- 75.00"" 5.3.5 Clerical- 50.00 .... 6.0 TIME 6.1 ARCHITECT shall work with the CLIENT to develop a project delivery schedule. 7.0 AUTHORIZED SIGNATURE 7.1 This proposal is valid for ninety (90) calendar days from the date referenced above and is submitted for and in behalf of ARCHITECT and my be accepted by signing below and returning to Arch Pac, Inc.: Arch Pac, Inc. erin& au ~Vloe er, c 'tect President CITY OF CHULA VISTA Date: PROPOSAL FOR ARCHITECTURAL SERVICES 1.0 INTRODUCTION 1.1 ARCH PAC, ~C, o~ Enci~tas, C~fo~a (here~er refe~ed to as "~C~CT"), proposes to pro,de consd~g desi~ se~ces, CITY OF C~A ~STA (here~er refe~ed to as "CL~") for the follo~ng project: Rehabilitation & Renovation o~ existing 50 meter "~' shaped pool with a diving area and a shallow area with ADA r~p and long steps. Work to be accomplished will include a new camilever ~er, re-plaster, pool d~ng, demolition ofpe~nsula ~d ~A ramp & steps, new circulation piping and pool circulation equipmem. The pe~nsula will be replaced with pool area. The pool area and volume (g~lons) will be increased. The pool is located at Loma Verde Park in Chula Vista, CA. 2.0 SCOPE OF WO~ 2.1 ~C~TECT sh~ prohde consulting se~ces as required to peffom renovation of the pool as described above. By probing det~led plans ~d specifications. 3.0 SCOPE OF SER~CES 3.1 ~ coffo~ce with the above scope of work, ~CHITECT shill ~mish pl~s and specifications to allow a pool ~mmctor to peffom the follo~ng: 3.1.1 Remove ~d replace pool plaster/fiber~ass ~d pool tile and t~gets 3.1.2 Remove ~d rephce efi~ing pool ~er system 3.1.3 Remove ~d replace concrete d~king 3.1.4 Replace ladders ~d st~chons 3.1.5 Replace tile, ~ers, lane lines, wa~ng markers, etc. 3.1.6 Locate st~ing blocks 3.1.7 Replace rope ~chor's 3.1.8 Replace ~er Mth new gutter 3.1.9 New drculation piping 3.1.10 New unde~ater & deck lighting 3.1.11 Modi~ m~hmc~ ~uipmem to acco~odate new vol~e 3.1.12 Pro,de ~tten pl~s ~d sp~ffimtions for the re~end~ ~tefifl / produ~ ~es and to ensure the proper applicatio~ instillation ~d construction of sine. 3.1.9 Plus ~d specifications MI1 me~ fll appficable Feder~, State (DSA), County, City codes ~d T-24 ~d ~A. The plus sh~ capable ofbehg a~ached to the Cities, St~d~d Bid Documents. 3.1.10 Plus ~d specifications shill fllow prospective bidders and the sele~ed contractor to be cap,lc of supplying ~1 r~uired mated~s, suppfies, labor ~d equipment as requk~ to complete the renovation proj~t as design~ ~d specifiC. 3.1.11~C~TECT shill renew as-built dra~ngs of faciliW. 3.1.12 ~C~TECT shill also attend a pre-bid meeting ruth the City st~ and potenti~ bidders at the proj~t site. (Job Walk) 3.1.13~C~TECT shill hsit the site m least six t~es during the constm~ion process. 3.1.14~C~CT shall rehew submitted shop ~aMngs & as-built dra~ngs. o9/2o/o 4.2 Geo-Tec~cal Invesfig~on (Soil R~o~) 5.0 CO~ENSA~ON 5.1 CL~NT sh~ compen~te ~C~TECT for se~ces rendered as follows: 5.1.1 Basic Se~ees: The Scope of S~ices described above the ARCHTECT sh~l be compensated an amount not-to-exceed $49,000 (fo~ nine - thousand). 5.1.2 Addition~ Se~i~s: If requested, additional ~s ~11 be bill~ for on ~ hourly basis, in coffo~ ~th the rates outlined ~ ~icle 5.3, below. 5.1.3 Re~bursable Expenses: In addition to basic eompen~tion. a) Reimbursable expenses other th~ those listed herein shall be authofiz~ in advice by CL~NT. b) Reimbursable expenses ~11 be billed at 1.2 t~es ~C~CT'S direct cost ~d sh~l include the follo~ng: * Sp~i~ delive~ ~d ~dling of documents and eo~espoMenee such ~ courier ~d ove~t delive~ se~ces. ~ Reproduction ~d plotting. * Travel & Fuel expended on cliem's be~[ 5.2 Te~s of Pa~ent: 5.2.1 Paymems ~H be made based upon pereemage of completion in not less th~ mont~y inst~ents. 5.3 Hourly Rates: 5.3.1 ~c~tect or En~n~r $125.00 per hour 5.3.2 Associate- 95.00"" 5.3.3 C~ Technician- 75.00"" 5.3.5 Cleficfl- 50.00"" 6.0 6.1 ~C~TECT sh~l work ~th the CL~NT to develop a project de~ve~ schedule. 7.0 AUtO,ED SIGNATU~ 7.1 T~s proposfl is v~id for nineW (90) ~end~ days ~om the date referenced above ~d is sub~tted for and in behoof ~C~TECT ~d my be accepted by si~ng below and remmng to ~ch Pac, Inc.: ~ch Pae, Inc. r, ~chtect President CITY OF CHULA VISTA Date: RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE CITY'S FORMAL BIDDING PROCESS, AND AWARDING THE ARCHITECTURAL SERVICES CONSULTING CONTRACT FOR $49,000 TO ARCH PAC, INC. FOR ARCHITECTURAL DESIGN SERVICES FOR THE LOMA VERDE POOL RENOVATION WHEREAS, the Parks and Recreation Department's approved CiP No. PR-226 identifies the Loma Verde Pool Renovation project to include removal of existing island to increase the programmable area of the pool, removal and disposal of current decking, installing rim-flow gutters, resurfacing pool, provision of depth markers n tile and coping and replacement of an repair of deck equipment; and WHEREAS, the project requires the services of an amhitect to design and furnish plans and specifications to allow a pool contractor to perform the tasks associated with the pool renovation; and WHEREAS, due to the status of the project, timing issues, and since Arch Pac, Inc. has successfully performed the design renovation project at Parkway Pool, staff recommends that the bidding process be waived and the City Manager be authorized to negotiate and execute an agreement with Amh Pac, Inc. in a fom~ to be approved by the City Attorney. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby waive the City's formal bidding process and award the architectural services consulting contract for $49,000 to Arch Pac, Inc. for architectural design services for the Loma Verde Pool renovation. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to negotiate and execute an agreement between the City of Chula Vista and Arch Pac, Inc., a copy of which shall be kept on file in the office of the City Clerk. Presented by Approved as to form by Andy Campbell il eny Director of Parks and Recreation 'City Attorney J: atlml~ey\~cso\ Loma Verde Pool Bid Page 1, Item: ff~ Meeting Date: 12/4/01 COUNCIL AGENDA STATEMENT ITEM TITLE: Resolution 2001- approving an individual Park Master Plan and Neighborhood Park Name for Park P-2 of Otay Ranch SPA One, Village One. SUBMITTED BY: Director of Parks and Recreation ~ REVIEWED BY: City Manager ~I: ~ (4/5ths Vote: Yes__No X ) INTRODUCTION: The Otay Ranch Company is requesting approval of a neighborhood park master plan and park name for park P-2 located in Village One at the eastern edge of the project ownership in Village One. RECOMMENDATION: That Council approve the Park Master Plan and park name "Harvest Park" for the 6.86 acres public neighborhood park site located in the Otay Ranch SPA Village One project. BOARDS/COMMISSIONS RECOMMENDATION: The Parks and Recreation Commission in attendance at their regular meeting on November 15, 2001, voted unanimously (4-0-0-2) (Attachment A) to approve the proposed Parks Master Plan and associated name. DISCUSSION: The proposed public park site is located in Otay Ranch (Attachment B) that is governed by the Otay Ranch General Development Plan (GDP). The GDP, adopted in October 1993, combines many of the concepts of neo-traditional or new urbanism planning with the qualities of traditional contemporary community planning. The Otay Ranch GDP is based on a neo-traditional concept where each village contains a central focus, either a village square or main street. This central focus is referred to as the Village Core. The previously approved Village One core is a main street concept, with commercial uses south of East Palomar and Heritage Elementary School and Heritage Park site (currently under construction) north of East Palomar. The P-2 park site is located approximately 'A mile northeast of Heritage Park. The P-2 Park is the second public neighborhood park in Village One. Adjacent to SPA One is Village Five. Village Five contains three parks: Cottonwood, (opened in August), Breezewood (nearing completion), and Santa Cora (soon to be under construction). Village One and Five park locations and sizes have been identified in the previously approved GDP and Otay Ranch SPA One; Parks, Recreation, Open Space and Trails Master Plan documents. The documents state that the concept of the village park system is to provide diverse park and recreation opportunities within Otay Ranch SPA One to meet the Page 2, Item: ~ Meeting Date: 12/4/01 recreational and open space needs of each village. The design of thc neighborhood park is consistent with the conceptual park plan identified in those documents. The Otay Ranch SPA One Parks, Recreation, Open Space and Trails Master Plan envisioned its neighborhood parks oriented to the residents of the neighborhood or sub-community area in which they are located and to help provide a component ora balanced recreation activities system when combined with other parks and recreation facilities. Park Pro~yamming The applicant's Landscape Architect met with City sta£fon numerous occasions to review alternate design schemes for the park site. The following is a general description of the proposed Master Plan. Harvest Park (P-2) is 6.86 net acre neighborhood park located at the southeast corner of Santa Flora Road and East Palomar. To the south of the park site is Gold Run Drive. Single-family residences are situated around the site. The park's recreational facilities (Attachment C) include an open turf area suitable for a soccer field, children's play area with accessible play equipment, picnic facilities, children's basketball shoot activity area, pedestrian walkways and paths, a comfort station, on-site parking, and pedestrian and security lighting. Vehicular access to the park is via a park entrance driveway aligned with Pleasanton Road at Santa Flora Road. Pedestrian access to the park occurs along the East Palomar adjacent sidewalk, at the Santa Flora Road parking lot entrance. The children's play area is situated in the northeast corner of the park. An additional facility at the park is the children's drop shot basketball feature that brings a unique recreational opportunity to this park. Picnic facilities located at the park include two shade structures with tables, as well as, additional picnic tables on concrete pads in turf areas. The turf area with soccer field is oriented in a north-south direction adjacent to the park's eastern slope. The slope provides for informal spectator gathering, as well as, providing additional buffering for residences situated along Gold Run Drive. A majority of the park site is planted with turf. Accent planting include palm trees that tie in with the East Palomar palm theme. Groves of trees are situated along the grassy slope. The comfort station (Attachment D) is conveniently located adjacent to the parking lot with proximity to the tot lot and picnic areas. The floor plan of the comfort station responds to the park's budget by providing the minimum facilities considered appropriate for the park's size and function. The park's comfort station design takes into consideration the architectural vernacular of the modernized agrarian theme of the Otay Ranch. Split face block exterior walls are contrasted with the galvanized corrugated roofing material. The construction materials are consistent with the materials approved for the Heritage Park site currently under construction within Village One. Page 3, Item: /~ Meeting Date: 12/4/01 The proposed park's design is consistent with the concept plan contained in the Otay Ranch SPA One; Parks, Recreation, Open Space and Trails Plan document in that it incorporated key recreational £acilities envisioned for the site. Once approved, the Master Plan will be the basis £or the preparation o£ construction drawings and specifications that are used to build the park. Park Name The park name proposed by the applicant (Harvest Park) was chosen to reflect the agrarian theme prevalent in the Otay Ranch project area. FISCAL IMPACT: Staff has performed a review of the preliminary park construction estimate of probable cost provided by the applicant's Landscape Architect. The overall estimated cost of construction is within the established budget for the park ($1,391,964). While changes to the cost estimate are anticipated as the Park Master Plan evolves into construction drawings, staff is o£the opinion that the estimates are a reliable representation of anticipated costs. Construction cost will be borne by the developer in response to the Park Acquisition and Development (PAD) Fee obligation requirements of SPA One, and as defined by the Otay Ranch Parks Agreement. Long-term park maintenance costs for public parks will be addressed through the City's General Fund. Attachments: A. Parks and Recreation Commission Minutes (November 15,2001) B. SPA One Park & Trails Location Plan C. Harvest Park Master Plan D, Comfort Station Building Elevations City of Chula Vista Parks and Recreation Commission Minutes Thursday- 6:30 p.m. November 15, 2001 Mercy Building 276 Fourth Avenue Director Campbell informed the Commission that in order to go forward with tonight's meeting, a vice chair had to be elected. MSUC Salcido/Rude to elect Commissioner Larry Perondi as Vice Chair for the Parks and Recreation Commission. (Vote 4-0-0-2) (Weidner/Radcliffe Absent) 1. Roll Call Radcliffe A, Rude P, Salcido P_, Weidner A. Ramos _P_, and Perondi _P 6. Harvest Park Joe Gamble of the Parks and Recreation Department presented an overview of the project area. He stated that Harvest Park is the second park in Village 1 of SPA 1. Joe introduced Ms. Ranie Hunter of the Otay Ranch Company. Ms. Hunter, Vice-President of the Otay Ranch Company introduced herself and stated that six years ago, the Olay Ranch Company presented to the Parks and Recreation Commission an overall plan for the project within SPA 1. She stated that in addition to the public parks in Village 1, there are a series of private parks that have been constructed and are actively being used by the residents. She stated that the private and public parks complete the whole park system in Otay Ranch. She stated that the Olay Ranch Company has been actively developing along the Telegraph Canyon Road - Olay Lakes Road corridor for the past three-years. Village I has entitlements for up to 3,000 units, most of which are already built and occupied. In addition to the parks that are under construction, Heritage Elementary school opened in July, as well as, Corky McMillin Elementary next to Cottonwood Park that opened in September. Ms. Hunter also explained that the other unique thing about Otay Ranch is the pedestrian linkage throughout the Village; everything is centered around the Village Core. Units are split 50-50 between multi-family and single family homes. Heritage Park is the centerpiece for Village 1. In addition, Harvest Park will be a real critical facility for the community on the eastern of the Village 1. Ms. Hunter concluded her presentation by stating that they are anxious to get this park under construction, because it's the last piece in the Village. Ms. Hunter introduced Mr. Jim Kuhlken, Landscape Architect of Marquez Kuhlken, L.A. to discuss the design of Harvest Park. Mr. Kuhlken stated that Harvest Park is 6.8 acres, is generally flat with a 4 to 1 slope along the east side, and a minor slope towards Palomar Street. Mr. Kuhlken discussed the program intended for the park, which includes: a soccer field, which measures 225' x 360', includes a tot lot area, children's play area, picnic gazebos, picnic tables with BBQ units, and a children's drop shot. There are 25 parking spaces, as well as, parking along the two side streets, Re-grading will be done to the park along East Palomar Street so that pedestrians will be able to walk up to the park from East Palomar Street. The parking lot as well as the pedestrian corridor, has security lighting. The 4 to 1 slope will be turfed and will provide informal seating for soccer. Palm trees matching East Palomar Street will be sited at key locations throughout the park. Sections of 3-foot high chain-link fence will parallel East Palomar Street to act as a ball barrier. Mr, Kuhlken discussed the design of the Comfort Station, which is located between the picnic shelters. He stated that an SDG&E required electrical room and small park storage area will be provided in the building. Discussion was held on material used to build the comfort station. The roof is corrugated metal, which will also be used for the picnic shelter roofs. Discussion was hem on completion of this park to be in the summer of 2003. Total budget is $1,391,000.00. Commissioner Rude asked if this parking lot was gated. Mr. Kuhlken responded that it was not. Commissioner Salcido inquired if the drainage for the field had been submitted for review to the Youth Sports Council? Mr. Kuhlken responded that the drainage design was carefully reviewed by staff and will be graded, to 1%%. MSUC Salcido/Ramos to approve and send this report to the City Council for approval. Vote: (4-0-0-2) (Weidner/Radcliffe absent) MSUC Rude/Ramos to accept the name Harvest Park as proposed. Vote: 4-0-0-2 (Weidner/Radcliffe absent) /~ ,~ Z/ ATTACHMENT B _.~ i 0 · ~ ' ~ ~ ~'~- ' ~.i '~'- ATTACHMENT C Z Y · ~ ATTACHMENT D RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN INDIVIDUAL PARK MASTER PLAN AND NEIGHBORHOOD PARK NAME FOR PARK P-2 OF OTAY RANCH SPA ONE, VILLAGE ONE WHEREAS, the Otay Ranch Company is requesting approval of a neighborhood park master plan and park name for park P-2 located in Village One at the eastern edge of the project ownership in Village One; and WHEREAS, the proposed park design is consistent with the concept plan contained in the Otay Ranch SPA One, Parks, Recreation, Open Space and Trails Plan document in that it incorporates key recreational facilities envisioned for the site and once approved, the Master Plan will be the basis for the preparation of construction drawings and specifications that are used to build the park; and WHEREAS, the Environmental Review Coordinator has determined that the project is exempt from environmental review under Section 15304, Class 4(b) exemption (Minor Alterations to Land) identified by CEQA; and WHEREAS, the park name proposed by the applicant (Harvest Park) was chosen to reflect the agrarian theme prevalent in the Otay Ranch project area; and WHEREAS, the Parks and Recreation Commission, at it meeting on 11/15/0I, unanimously approved the proposed Park Master Plan and voted for the park to be named "Harvest Park". NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve an individual Park Master Plan and park name "Harvest Park" for the 6.86 acres of public neighborhood park site located in the Otay Ranch SPA Village One Project, attached hereto as Exhibit "A". Presented by Approved as to form by Andy Campbell j oS&~~.- Director of Parks and Recreation City Attorney EXHIBIT "A" Pagel, Item I~ Meeting Date 12/04/01 COUNCIL AGENDA STATEMENT ITEM TITLE: Public Heating to take public testimony on the formation of Community Facilities District No. 2001-1 (San Miguel Ranch) and to consider the authorization to levy special taxes and to incur a bonded indebtedness secured by such special taxes A) Resolution of the City Council of the City of Chula Vista, California, Forming and Establishing Community Facilities District No. 2001- 1 (San Miguel Ranch), Designating Improvement Areas Therein and Authorizing Submittal of Levy of Special Taxes within each such Improvement Area to the Qualified Electors thereof B) Resolution of the City Council of the City of Chula Vista, California, Declaring Necessity to incur Bonded Indebtedness for each Improvement Area of Community Facilities District No. 2001-1 (San Miguel Ranch), Submitting to the Qualified Electors of each such Improvement Area, a Proposition to incur a Bonded Indebtedness Secured by the Levy of a Special Tax within such Improvement Area to Finance certain types of Public Facilities and giving Notice thereon SUBMITTED BY: Director of Public Work~ REVIEWED BY: City Manager ¢ ~ (4/Sths Vote: Yes No X ) On June 19, 2001, Council accepted the NNP-Trimark San Miguel Ranch, LLC application and approved the initiation of proceedings to consider the formation of Community Facilities District No. 2001-1 (CFD No. 2001-1). On September 25, 2001, Council approved the Resolution of Intention to form Community Facilities District No. 2001 - I (CFD No. 2001-1) and the Resolution of Intention to Incur a Bonded Indebtedness of CFD No. 2001-1 for each Improvement Area therein and set the public hearing for November 6, 2001. At the request of the NNP-Trimark San Miguel Ranch, LLC the City continued the public hearing to December 4, 2001. CFD No. 2001-1 will fund the construction of public facilities, such as roadways for the San Miguel project. In addition, a portion of the proceeds may be authorized to be used for certain Transportation projects, as directed by the City. Tonight's action will continue the formal proceedings leading to the establishment of Community Facilities District No. 2001-1, the designation of Improvement Area A and Improvement Area B therein and the authorization, subject to the approval of the qualified electors of each Improvement Area, to levy special taxes within each Improvement Area and to issue bonds for each Improvement Area secured by the levy of such special taxes. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. Page 2, Item~ Meeting Date 12/04/01 RECOMMENDATION: That Council: · Open the Heating, take public testimony, close the public heating; · Approve the Resolution (A) Forming and Establishing Community Facilities District No. 2001-1 ( San Miguel Ranch ), Designating Improvement Areas therein and Authorizing submittal of Levy of Special Taxes within each such Improvement Area to the Qualified Electors thereof; · Approve the Resolution (B) Declaring Necessity to incur Bonded Indebtedness for each Improvement Area of Community Facilities District No. 2001-1 (San Miguel Ranch), Submitting to the Qualified Electors of each such Improvement Area, a Proposition to incur a Bonded Indebtedness Secured by the Levy ora Special Tax within such Improvement Area to Finance certain types of Public Facilities and giving Notice thereon. DISCUSSION: Background Two concurrent public hearings are to be held for the purpose of considering the formation of Community Facilities District No. 2001-1 (San Miguel Ranch) and to consider the authorization to levy special taxes and to incur a bonded indebtedness secured by such special taxes. The Resolution of Intention to form the district was approved by City Council on September 25, 2001. Community Facilities Districts (CFD) provide the necessary funding for the acquisition of public improvements by levying an annual "special tax", which is collected from the property owners in conjunction with the property taxes. There is no direct cost to the City. All expenses related to the district administration (including levying and collecting the special taxes) are funded by the district. The ultimate security behind the bonds are the properties located within the district, not the City's General Fund or its ability to tax property within its jurisdiction. The district will be formed in conformance with the "City of Chula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts" (CFD Policy) as adopted on January 13, 1998 and amended on July 28, 1998. District Boundaries Exhibit 1 (See Attachments) represents the boundaries of the proposed CFD No. 2001-1 that include all parcels located within San Miguel Ranch owned by Trimark Pacific Homes. Exhibit A also depicts the boundaries of each of the proposed Improvement Areas (A & B) designated within CFD No. 2001-1. The site is bordered on the north by the existing, unincorporated residential area of Sunnyside, and SDG&E's Miguel Substation and transmission line right-of-way. The western boundary is the vacant Bonita Meadows site; while to the south are the existing Estancia single-family subdivision, Page 3, Item 'I Meeting Date 12/04/01 the Mackenzie Creek neighborhood park, and thc Thurgood Marshall Elementary School. The eastern boundary is the developing single-family neighborhoods within Rolling Hills Ranch and the Auld Golf Course. At buildout, the entire San Miguel Ranch ~vill contain within Improvement Area A~503 Single Family Detached Residences, 458 Attached Residences, 9.87 commercial acres, 43 acres of Community Facilities, and 13 acres for an Elementary School site. For Improvement Area B- contains approximately 285 Single Family Estate Residences. In addition there is some 247 acres being dedicated for open space use. There is one large parcel that recently was formed which will be exempt due to the future use as part of the SR 125 extension. This parcel's westerly edge is the dividing line between the two proposed Improvement Areas A and B. The Improvements On September 25, 2001 Council declared its intention to approve the authorization to levy a separate "Rate and Method of Apportionment" for Improvement Area A and Improvement Area B. The master developer (Trimark Pacific Homes) intends to sell only the bonds for Improvement Area A at this time. The bonds for Improvement Area B will be sold at a later date in the future, given certain City of Chula Vista threshold requirements and other facilities constraints. Preliminary estimates show that the maximum tax revenue (using the proposed taxes) from all the taxable properties within only Improvement Area A would support a total bonded indebtedness of approximately $14.1 million (assuming a 7.0% interest rate and a 30-year term on the bonds). A bond sale amount of $14.1 million will finance approximately $11.2 million in facilities (i.e. grading, landscaping, streets, utilities, drainage, sewer, etc). The maximum tax revenue (using the proposed taxes) from all taxable properties within only Improvement Area B would support a total bonded indebtedness of approximately $5.3 million (assuming a 7.0 % interest rate and a 30 year term on the bonds). A bond sale amotmt of $5.3 will finance approximately $4.1 million in facilities (similar to the Improvement Area A). The balance provided by each Improvement Area would provide for a reserve fund, capitalized interest and pay district formation and bond issuance costs. The developer is proposing the financing of backbone streets and associated improvements (i.e., grading, sewer, streets, landscaping, and utilities) and public facilities D1F improvements. Following is a general description of the proposed facilities including, but not limited to: Improvement Area A · Mount Miguel Road East · Proctor Valley Road East · Calle La Marina · Paseo Vera Cruz Page 4, Item Meeting Date 12/04/01 · Calle La Quinta · Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 · Interim Transportation Facilities Improvement Area B · Mount Miguel Road West · Proctor Valley Road West · Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 · Interim Transportation Facilities As noted above, it is currently estimated that only $19.4 million will be available for funding by this district. However, the district will be sized for $21 million to give the City flexibility in sizing the bonds and to take advantage of lower interest rates should they occur. A final priority list and cost estimates for each of the eligible improvements for CFD No. 2001-1 financing by Improvement Area will be brought later to Council in conjunction with the Acquisition/Financing Agreement and other bond documents. The City may, in its sole discretion, elect to authorize and make the proceeds of any series of bonds issued for the District available to pay the cost of construction or the pumhase price for the acquisition of Improvements for Interim Transportation Facilities. This could result in the revision of the facilities priority structure for the utilization of such proceeds. Ultimately, as subdivision exactions, the developer will finance required improvements that this CFD district cannot finance. In addition, the proposed CFD lies within the City ofChula Vista's Transportation Development Impact Fee (TDIF) benefit area that places a cap on the CFD's ability to finance certain TDIF improvements. Staffand the consultant team are working with the developer to maximize the TDIF facilities to be constructed by the District The developer has recently indicated that there will be a map revision request submitted to the City related to Planning Area D - 109 Attached Units and Planning Area I - 107 Detached Units. This request will be to change Planning Area D to a Detached project with 107 Units and a revision to Planning Area I reducing the Units to 105. The Rate and Method of Apportionment (RMA) and the Bond Authorization have been revised to reflect this potential land use revision. If during the City Council review this map revision is denied then the RMA will be amended, the special tax rate, number of units and exempt acreage adjusted. In addition, the City will not allow the bond capacity to exceed the special tax revenues that may be generated by the levy of the special taxes within Improvement Areas A and B. The actual amount to be financed by CFD No. 2001-1 for each of the Improvement Areas within CFD No. 2001-1 would depend upon a number of factors including final interest rate on the bonds Page 5, Item I ~ Meeting Date 12/04/01 and the valuc to lien ratio. The amount and may be higher or less than the potential bond costs mentioned above. Special Tax Report A copy of thc Special Tax Report ("Community Facilities District Report Mello-Roos Community Facilities Act o£ 1982 Community Facilities District No. 2001-1 for San Miguel Ranch) prepared by the Special Tax Consultant, McGill Martin Self, Inc.~ is included as Exl~ibit 2, and is on file, and available for public review in thc City Clerk's O£~ce. Said report incorporates the "Rate and Method o£ Apportionment" (RMA) (previously approved by Council on September 25,2001), that establishes thc procedures £or levying the special taxes in CFD No. 2001-1. The district is divided into the £ollowing three Land Use Class classi~cations witl~in each Improvement Area: Land Use Classes: 1) Applies only to Developed Residential Property; 2) Applies only to Developed Commercial Property; and 3) Applies only to Undeveloped Property The proposed Tax I~ates for each Improvement Area are as follows: · Residential Developed Parcels (single family residences) are taxed on the square footage of the building. The proposed residential tax rates are as follows: Residential Developed Parcels Maximum Annual Special Tax $475.00 per Unit plus $.34 per square foot of Land Use Class 1 - Improvement Area A Residential Floor Area $475.00 per Unit plus $.32 per square foot of Land Usc Class 1 - Improvement Area ~ l~esidential Floor Area At the time the tax is levied, developed parcels ara those parcels for which a building permit has been issued. This tax rate l~as been determined by a preliminary "2% maximum tax" analysis. Said analysis, which is based on estimated house sizes and prices, sets the amount o£the maximum special tax that may be levied by CFD No. 2001-1 on residential parcels. It should be noted that a ~nal test will be required at escrow closing using actual house sale prices. If the 2% limit is exceeded, the developer is required to buy down the lien to an amount su£~c~¢nt to meet thc 2°~o criteria · Commercial Developed Parcels arc taxed based on the acreage of the parcel. The proposed commercial tax rates are as follows: Page 6, Item ]7 Meeting Date 12/04/01 Commercial Developed Parcels Maximum Annual Special Tax Land Use Class 2 - Improvement Area A $5,091 per acre of Comxnercial Property Land Use Class 2 - Improvement Area B $5,091 per acre of Commemial Property At the time the tax is levied, developed parcels are those parcels for which a building permit has been issued. · The Undeveloped Land category includes all the parcels for which a building permit has not been issued. The tax on Undeveloped Land is based on the total acreage of the parcel (Refer to table below). During buildout, the collection from developed properties is not enough to cover the annual debt service and the undeveloped land taxes will cover the shortfall. The City Administrator will determine whether an undeveloped land tax is needed to meet the annual debt service. Even if no development occurs and the whole property remains undeveloped, the proposed tax will generate enough tax to cover the debt service on the bonds. The Undeveloped Property rates within both Improvement Areas are similar to the rates approved for other CFDs formed within Otay Ranch's Villages. This is based upon the land use mixes, facilities needs, exempted acreage, and square footage cost. The developer considers these tax rates to be reasonably supported by the proposed land use categories for San Miguel Ranch. Undeveloped Property Maximum Annual Special Tax Land Class 3 - Improvement Area A $10,376 per acre of Undeveloped Property Land Class 3 - Improvement Area B $4,578 per acre of Undeveloped Property The RMA determines that no special tax shall be levied on up to a net of approximately 122 acres within Improvement Area A and another 104 acres within Improvement Area B of Property Owner Association Property and Public Property. These acreages include all the parcels to be conveyed to a Property Owner Association or dedicated to the City. Any dedication of public property above the exempted acreage stated above would require a discharge of debt such that no public lands would be taxed. On the other hand, any Property Owner Association Property above the exempted acreage will be classified as Taxable Property Owner Association Parcel at the rates of $10,376 per acm for Improvement Area A and $ 4,578 per acre for Improvement Area B. These categories were created to provide additional assurance to prospective bond purchasers that the collectible tax will always cover the annual debt service. Since there will be a separate bond sale for each improvement area, the special tax for identical houses in area "A" and "B" will not be the same. Page 7, Item Meeting Date 12/04/01 Collection of Taxes First, the maximum special taxes will first be levied on thc Developed Property. Second, if this pool of funds is not enough to meet the annual debt service, as may be the case in thc early years of development, thc City Administrator will levy a tax on thc Undeveloped Property. Again, if additional monies are needed after thc first two steps have been completed, the special tax shall be levied proportionately on each parcel from thc Assigned Special Tax to the Maximum Annual Special Tax by the application of thc Backup Special Tax. If after these three steps arc exhanstcd and there is still a need for additional monies, then the special tax shall bc levied proportionately on each parcel for thc Assigned Special Tax to thc Maximum Annual Special Tax. After build-out, if determined by the City Administrator that thc annual tax need is less than the collectible tax from thc Developed Parcels, thc special taxes to be levied in that specific year will bc reduced proportionally. Since the taxable properties within Improvement Area A and Improvement Area B are proposed to bc taxed at rates based on the square footage of thc home or commercial property the bondholders require protection in thc event that thc developer builds less than projected. Thc RMA for each Improvement Area includes a Backup Special Tax where when each Final Map is recorded within an Improvement Area thc Backup Special Tax will be applied or modified based on the actual square footage of Developed Property or Commercial Property. Thc Backup Special Tax formula includes the Backup Special Tax times the acreage (Final Map), divided by the number of lots (Final Map). The Backup Special Tax for Improvement Area A is $10,376 and Improvement Area B is $4,578. Thc two proposed "Rates and Methods of Apportionment" also include provisions for the prepayment of the special taxes in thc event thc developer or a future property owner decides to do SO. Value to Lien Ratio Policy Council policy reqnires aminimum4:l value-to-lienratio. Aratiooflessthan4:l,but cqualtoor 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. A final appraisal and lien ratio analysis would be available for Council consideration prior to bond sale, which is planned for early in 2002. If the final analysis shows parcels which fail to meet the 4:1 or 3:1 ratio, the developer wguld be required to either: · Provide cash or letters of credit to maintain the lien ratio within the City criteria; or, · The principal amount of the bonds to be issued for each Improvement Area of the CFD No. 2001-I will be reduced to comply with City policy; or, · Provide sufficient information to convince Council that a lesser lien ratio is prudent. Page 8, Item Meeting Date 12/04/01 Maximum Tax Policy Council Policy establishes that the maximum annual CFD special taxes applicable to any newly developed residential property shall be no mom than 1% of the sale price of thc house. In addition, thc 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, has been completed and all homes fall within the 2% limit. A final test will be performed at escrow closing using thc actual sale price of thc house. Council Policy requires that at or prior to each closing of escrow, thc escrow company shall apply a "calculation formula" previously approved by the City Engineer to determine the aggregate of regular County taxes, Mello-Roos taxes, and assessment installments. If the 2% limit were exceeded, the developer would be required to provide cash to buy down the lien to an amount sufficient to meet the 2% tax ceiling. Compliance with this procedure would ensure that thc aggregate tax to be paid by the purchaser of thc house meets the City's criteria, since thc 2% limit is a City policy thc limit is not being included in the rate and method of the district. There is the potential of exceeding the 2% tax ceiling if housing prices fall after the initial sale. Resolutions There are two resolutions on today's agenda that, if adopted, will accomplish the following: RESOLUTION FORMING AND ESTABLISHING CO1VLMUNITY FACILITIES DISTRICT NO. 2001-I is thc formal action forming and establishing Community Facilities District No. 2001-1 (San Migucl Ranch), designating improvement areas, and authorizing submittal of levy of special taxes to thc qualified electors, and performs the following: · Sets thc name of thc District and the Improvement Areas; · Identifies thc Special Tax Report for each Improvement Ama prepared by McGill Martin Self, Inc. as the report to be used for all future proceedings; · Establishes a Special Tax for each Improvement Area secured by a continuing lien to secure the bonds issued for each Improvement Area. The Special Tax for each Improvement Area is set forth in the separate Rates and Methods of Apportionment, which will be approved by thc adoption of this Resolution; · Implements the provisions of the Local Agency Special Tax and Bond Accountability Act which became effective on January 1, 2001 by specifying that: · Each special tax shall be levied for the specific purposes set forth in the Resolution. · The proceeds of the levy of each such special tax shall be applied only to the specific applicable purposes set forth in the Resolution. · The District shall establish a separate account into which the proceeds of each such special tax shall be deposited. Page 9, Item Meeting Date 12/04/01 · The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with the City Council as required pursuant to Government Code Section 50075.3. · Submits the levy of the special tax to the property owners of each Improvement Area; and · Describes the type of facilities to be financed by the district. RESOLUTION DECLARING NECESSITY TO iNCUR BONDED INDEBTEDNESS is a formal action submitting to the Qualified Electors for each Improvement Area of Community Facilities Disthct No. 2001 - 1 (San Miguel Ranch), a Proposition to incur a Bonded Indebtedness Secured by the Levy of a Special Tax within such Improvement Areas to Finance certain types of Public Facilities and performs the following: · Declares that a bond issuance is necessary; · Describes the type of facilities to be financed within each Improvement Area and collectively within the district; · Limits the bond term to 30 years for each bond issue; · Further implements the provisions of the Local Agency Special Tax and Bond Accountability Act by specifying that: · Such bonded indebtedness shall be incurred for the applicable specific single purpose set forth in the Resolution. · The proceeds of any such bonded indebtedness shall be applied only the applicable specific purpose identified in the Resolution. · The document or documents establishing the terms and conditions for the issuance of any such bonded indebtedness shall provide for the creation of an account into which the proceeds of such indebtedness shall be deposited. · The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with this City Council as required by Government Code Section 53411. · Submits two ballot propositions to the property owners of each Improvement Area to (a) incur a bonded indebtedness not to exceed $21 million (Improvement Area A - $15 million and Improvement Area B $6 million) to pay for authorized facilities pursuant to the special tax formula and to levy a special tax, and (b) to establish an appropriations limit for the district; and · Establishes an election procedure. Notice All property owners within the district have been notified of the public hearing through the mail as well as a published notice in the San Diego Daily Transcript or any other adjudicated newspaper in general circulation. Page 10, Item Meeting Date 12/04/01 Future Actions Adoptions of tonight's Resolutions will Form and Establish CFD No. 2001-1, to direct staff to prepare the necessary ballot documents, and to a hold special election on December 12, 2001. The City Council on the December 18, 2001 Agenda will hear and certify the election results, and assuming the ballot measures are passed by the requisite vote of the qualified electors of each improvement Area, have the first reading of the Ordinances to levy Special Taxes within each Improvement Area. FISCAL IMPACT: There will be no direct fiscal impact to the City. The developer will pay all formation costs and has deposited money to fund initial consultant costs, and City costs in accordance with the approved Reimbursement Agreement. The City will receive the benefit of the full cost recovery for staff time involved in district formation and administration activities. Staff anticipates that most of the CFD No. 2001-1 administration will be contracted out. The CFD administration cost is estimated at $75,000 annually. In accordance with the CFD Policy, as consideration for the City's agreement to use the City's bonding capacity to provide the financing mechanism for the construction of the proposed improvements, the developer will pay one percent (1%) of the total bond authorization. Said requirement will be memorialized in the Acquisition/Financing Agreement that will be brought to Council at a later date. Based on a series of bond sales, in a total aggregate amount of $21 million (Improvement Area A - $15 million and Improvement Area B - $6 million), said monetary compensation would be $210,000. Said amount shall be paid prior to bond sale (scheduled for spring 2002) and will be deposited into the General Fund. The CFD Policy also stipulates that said compensation is not eligible for financing by CFD No. 2001-1. Attachments: Exhibit 1: Recorded Boundary Map for CFD No. 2001-1 Exhibit 2: Special Tax Report: "Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area A and Improvement Area B". J: \ Engineer\AGENDA\CAS 120401 (City Final),doc COMMUNITY FACILITIES DISTRICT MELLO-ROOS COMMUNITY FACILITIES ACT 1982 SPECIAL TAX REPORT COMMUNITY FACILITIES DISTRICT NO. 2001-1 IMPROVEMENT AREAS A AND B SAN MIGUEL RANCH For the City of Chula Vista 276 Fourth Avenue Chula Vista, California 91910 CI'IY OF CHULA VISTA Prepared by McGill Martin Self, Inc. 344 F Street Suite 100 Chula Vista, California 91910 November 6, 2001 TABLE OF CONTENTS Page I. INTRODUCTION . II. PROJECT DESCRIPTION ......................................................................... 2-3 III. DESCRIPTION AND ESTIMATED COST OF PROPOSED FACILITIES ........................ 3 A. Description of Proposed Public Improvements ................................... 3-4 B. Estimated Cost of Proposed Public Improvements .............................. 4-5 IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES .................................... 6 A. Projected Bond Sales ............................................................... 6 B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded Indebtedness .........................................................................6 C. Incidental Expenses to be Included in the Annual Levy of Special Taxes .. 6 V. RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX ..................... 7 A. Explanation for Special Tax Apportionment .................................... 7-8 B. Maximum Annual Special Tax Rates ............................................ 8 C. Backup Special Tax ................................................................ 8 D. Accuracy of Information ........................................................... 9 VI. BOUNDARIES OF COMMUNITY FACILITIES DISTRICT .................................. 9 VII. GENERAL TERMS AND CONDITIONS ....................................................... 9 A. Substitution Facilities .............................................................. 9 B. Interim Transportation Facilities .................................................. 9 C. Appeals .............................................................................. 9 EXHIBITS Exhibit A Recorded Boundary Map Exhibit B-1 Rate and Method of Apportionment - Improvement Area A Exhibit B-2 Rate and Method of Apportionment Improvement Area B Exhibit C Assigned Maximum Special Tax Rates I. INTRODUCTION WHEREAS, the City of Chula Vista did, pursuant to the provision of the Mello-Roos Commtmity Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2, Title 5 of the Govemment Code of the State of California (hereinafter referred to as the "Act"), and specifically Section 53321.5 thereof, expressly order the filing of a written "Report" with the legislative body of the proposed Community Facilities District. This Community Facilities District being Conununity Facilities District No. 2001-1 (San Miguel Ranch) shall hereinafter be referred to as: "CFD No. 2001-1"; and WHEREAS, the Resolution Ordering and Directing the Preparation of a Report for Proposed Community Facilities District No. 2001-I (San Miguel Ranch) did direct that said Report generally contain the following: FACILITIES: A full and complete description of the public facilities the acquisition of which are proposed to be financed through the CFD. COST ESTiMATE: A general cost estimate setting forth costs of acquiring such facilities. SPECIAL TAX: Further particulars and documentation regarding the rate and method of apportionment for the authorized special tax. NOW, THEREFORE, I, John Lippitt P.E., the Director of Public Works of the City of Chula Vista, and the appointed responsible officer directed to prepare this Special Tax Report or cause the Report to be prepared pursuant to the provisions of the Act, do hereby submit this Report. Community Facilities District No. 2001 1 Page 1 San Miguel Ranch November 2001 II. PROJECT DESCRIPTION CFD No. 2001-1 encompasses approximately 782.98 gross acres of land located in the portion of the south San Diego City of Chula Vista known as "San Miguel Ranch". Refer to Exhibit A - for a reduced copy of the Recorded Boundary Map. Of this acreage, approximately 257.38 acres is expected to be developed by several merchant builders for residential and commercial development, 43 acres for Community Facilities and 13 acres for an Elementary school site. This Community Facilities District (CFD No. 2001-1) is divided by SR 125 into two separate areas, Improvement Area A and Improvement Area B. Improvement Area A Improvement Area A consists of approximately 474.86 gross acres of land to the east of SR 125 in CFD No. 2001-1. Of this acreage, approximately 125.61 acres is designated for residential housing. Currently Continental Residential Inc., Pardee Construction Company and Trimark Pacific Homes have purchased Planning Areas. Continental Residential Inc. has purchased Planning Area C and will build approximately 110 single-family attached units. Pardee Construction Company has purchased Planning Area D and will build approximately 107 single- family detached homes. Both of these areas, Iots will have a minimum size of 4,000 square feet. Trimark Pacific Homes (related entity to NNP-Trimark San Miguel, LLC) have purchased Planning Area I and will build approximately 105 single-family homes. These lots will have a minimum size of 6,000 square feet. The remaining 348 single-family attached product will be built as part of Planning Areas A and B, and the remaining 496 single-family detached homes will be built as part of Planning Area E, F, G, H and 1. These lots will be built out as other memhant builders purchase units and/or NNP- Trimark San Miguel, LLC proceeds with construction. At build-out, it is expected that Improvement Area A will consist of approximately 603 Single Family Detached Units, 458 Single Family Attached Units, 9.87 acres for commercial development, 43 acres for Community Facilities and 13 acres for an Elementary school site as shown on the approved master Map No. CVT 99-04. The Single Family Uses are anticipated to generate approximately 2,101,125 square feet of residential building square footage. The total exempt acreage for this improvement area including the 10% contingency factor is 352.93 acres. Special taxes for CFD No. 2001-1 (San Miguel Ranch) Improvement Area A shall be levied to Taxable Property to satisfy the Special Tax Requirement as follows: First, to Developed Property up to the Maximum Annual Special Tax; Second, if necessary, to Undeveloped Property up to the Maximum Annual Special Tax for Undeveloped Property; Third, if necessary, Maximum Annual Special Tax derived by the application of the Backup Special Tax increased proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax and Community Facilities District No. 200l I Page 2 San Miguel Ranch November 2001 Fourth, if necessary, Special Tax increased proportionately, to Undeveloped Property pursuant to Section E of Exhibit B-1 up to the Maximum Annual Special Tax for Undeveloped Property. Improvement Area B Improvement Area B consists of approximately 308.12 gross acres of land to the west of SR 125 in CFD No. 2001-I. Of this acreage, approximately 121.90 acres is designated for residential estate housing. Lots in Planning Area J range from 7,000 square feet to 12,500 square feet and lots in planning Area K and L range from 15,000 to 27,000 square feet for these Estate residences. At build-out it is expected that there will be approximately 285 Single Family Estate Residences as shown on the approved Master Map No. CVT 99-04. The Single Family Uses are anticipated to generate approximately 1,059,432 square feet of residential building square footage. The total exempt acreage for this improvement area including the 15% contingency factor is 204.5 acres. Special taxes for CFD No. 2001-1 (San Miguel Ranch) Improvement Area B shall be levied to Taxable Property to satisfy the Special Tax Requirement as follows: First, to Developed Property up to the Maximum Annual Special Tax; Second, if necessary, to Undeveloped Property up to the Maximum Annual Special Tax for Undeveloped Property; · Third, if necessary, Maximum Annual Special Tax derived by the application of the Backup Special Tax increased proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax and Fourth, if necessary, Special Tax increased proportionately, to Undeveloped Property pursuant to Section E of Exhibit B-2 up to the Maximum Annual Special Tax for Undeveloped Property. III. DESCRIPTION AND ESTIMATED COST OF PROPOSED FACILITIES A. Description of Proposed Public Improvements A community facilities district may provide for the purchase, construction, expansion, or rehabilitation of any real or tangible property, including public facilities and infrastructure improvements with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development or rehabilitation occurring within the community facilities district. In addition, a community facilities district may pay in full all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay or any indebtedness secured by any tax, fee, charge, or assessment levied within the area of the community facilities district. Community Facilities District No. 2001 ! Page 3 San Miguel Ranch November 2001 The facilities described in this Report are all facilities which the legislative body creating CFD No. 2001-1 is authorized to own, construct, or finance, and which are required, in part, to adequately meet the needs of CFD No. 2001-1. In addition, the facilities meet the criteria for authorized public facilities set forth in the City's Statement of Goals and Policies regarding the establishment of Community Facilities Districts. The actual facilities described herein are those currently expected to be required to adequately meet, in part, the needs of CFD No. 2001-1. Because the actual needs of CFD No. 2001-1 arising as development progresses therein may differ fi.om those currently anticipated, CFD No. 2001-1 reserves the right to modify the actual facilities proposed herein to the extent CFD No. 2001-1 deems necessary, in its sole discretion to meet those needs. The Special Taxes required to pay for the construction or financing of said facilities will be apportioned as described in the Rate and Method of Apportionment (RMA) of the Special Tax for CFD No. 2001-1 Improvement Area A (Exhibit B-l) and CFD No. 2001- l Improvement Area B (Exhibit B-2). Proceeds of the proposed bonded indebtedness of CFD No. 2001-1 will be used to finance backbone streets and associated improvements (i.e., grading, sewer, streets, landscaping, utilities, etc.), public facilities DIF improvements and interim transportation facilities. Following is a general description of the proposed facilities: Improvement Area A ,, Mount Miguel Road East Proctor Valley Road East Calle La Marina Paseo Vera Cruz o Calle La Quinta Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD 2001-1 Improvement Area B o Mount Miguel Road West o Proctor Valley Road West ,, Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 In addition to the above improvements, this CFD's bonding capacity maybe used for certain SR125 interim transportation facilities within the greater eastern territories of Chula Vista. These transportation facilities will be traffic capacity adding improvements and could include the following projects: Community Facilities District No 2001-1 Page 4 San Miguel Ranch November 2001 Interim SR-125 1-805/East "H" Street an additional on-ramp lane to 1-805 B. Estimated Cost of Proposed Public Improvements The facilities and the estimated costs herein are subject to review and confirmation. The costs listed in Table 1, are estimates only, based upon current construction and land costs and actual costs may differ from those estimates herein. Based on the current CFD No. 2001-1 cost estimates of approximately $19.4 million, with $11.2 million set aside for reimbursement of eligible costs for Improvement Area A and $4.1 million set aside for reimbursement of eligible costs for Improvement Area B to be financed with CFD bond proceeds, the balance will be bom by the developers. TABLE t IMPROVEMENT AREA A Facilities Improvements Estimated Cost Mount Miguel Road East $5,710,906 Proctor Valley Road East $459,153 Calle La Marina $3,661,229 Paseo Vera Cruz $717,259 Calle La Quinta $974,186 Those Facilities to be financed from the Proceeds of Public Facilities Development Impact Fees payable as a condition of development of property within CFD No. 2001-1 Community Facilities District No 2001-I Page 5 San Miguel Ranch November 2001 IMPROVEMENT AREA B Facilities Improvements Estimated Cost · Mount Miguel Road West $3,824,396 · Proctor Valley Road West $1,375,454 * Those Facilities to be financed from the Proceeds of Public Facilities Developmem Impact Fees payable as a condition of development of property within CFD No. 2001-1 IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES A. Project Bond Sale For CFD No. 2001-1 there will be two separate issuance of bonds. One for Improvement Area A and one for Improvement Area B each with its own accounting, processing, and specifics to its obligated improvements within the CFD No. 2001-1. The bond amount for CFD No. 2001-1 Improvement Area A will be $14.1 million, which will finance approximately $11.2 million in facilities. The bonds issued by CFD No. 2001-1 Improvement Area B will be $5.3 million, which will finance approximately $4.1 million in facilities. The bonds issued by CFD No. 2001-1 Improvement Areas A and B will meet the terms and conditions of special tax bonds set forth in the City's Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts. B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded Indebtedness for Improvement Areas A and B Pursuant to Section 53345.3 of the Act, bonded indebtedness may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the proposed debt is to be incurred, including, but not limited to, the costs of legal, fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the district due and payable prior to the expiration of one year from the date of completion of the facilities, not to exceed two years; election costs; and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs. The reserve fund is estimated to be the maximum allowable under Federal Tax Law. All other incidental bond issuance expenses are estimated at 4 percent of the face amount of the bonds. Communiiy Facilities District No. 200 I- ! PaRe 6 San Miguel Ranch November 2001 C. Incidental Expenses to be Included in the Annual Levy. of Special Taxes for Improvement Areas A and B Pursuant to Section 53340 of the Act, the proceeds of any special tax may only be used to pay, in whole or part, the cost of providing public facilities, services and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; the costs associated with the creation of the district, issuance of bonds, determination of the mount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the district; any other expenses incidental to the construction, completion, and inspection of the authorized work; and the retirement of existing bonded indebtedness. While the actual cost of administering CFD No. 2001-1 may vary, it is anticipated that the amount of special taxes, which can be collected, will be sufficient to fund at least $75,000 in annual administrative expenses prior to build-out of the project. V. RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX All of the property located within CFD No. 2001-1, unless exempted by law, shall be taxed for the purpose of providing necessary facilities to serve CFD No. 2001-1. Pursuant to Section 53325.3 of the Act, the tax imposed "is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property." The Special Tax "may be based on benefit received by parcels of real property, the cost of making facilities or authorized services available to each parcel or other reasonable basis as determined by the legislative body," although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. As shown in Exhibit B-t and B-2, for Improvement Area A and Improvement Area B respectively, the amended Rate and Method of Apportionment provides information sufficient to allow each property owner within CFD No. 2001-1 to estimate the maximum annual Special Tax he or she will be required to pay. Sections A through C, below, provide additional information on the Rate and Method of Apportionment of the Special Tax for CFD No. 2001-1. A. Explanation for Special Tax Apportionment When a community facilities district is formed, a Special Tax may be levied on each parcel of taxable property ~vithin the CFD to pay for the construction, acquisition and rehabilitation of public facilities, to pay for authorized services or to repay bonded indebtedness or other related expenses incurred by CFD No. 2001-1. This Special Tax must be apportioned in a reasonable manner; however, the tax may not be apportioned on an ad valorem basis. When more than one type of land use is present within a community facilities district, several criteria may be considered when apportioning the Special Tax. Generally, criteria based on building square footage, acreage, and land uses are selected, and categories Community Facilities District No. 2001 l Page 7 3'an Miguel Ranch November 2001 based on such criteria are established to differentiate between parcels of property. These categories are a direct result of the developer's projected product mix, and are reflective of the proposed land use types within that community facilities district. Specific Special Tax levels are assigned to each land use class, with all parcels within a land use class assigned the same Special Tax rate. The Act does not require the Special Taxes to be apportioned to individual parcels based on benefit received. However, in order to insure fairness and equity, benefit principles have been incorporated in establishing the Special Tax rates for CFD No. 2001-1. The major assumption inherent in the Special Taxes rates set forth in the Rate and Method of Apportionment is that the level of benefit received from the proposed public improvements is a function of land use. Tiffs assumption is borne out through an examination of commonly accepted statistical measures. For example, in measuring average weekday vehicle trip-ends, the Institute of Transportation Engineer's 1995 Trip Generation report identifies land use as the primary determinant of trip-end magnitude. Commercial land uses typically generate more thp- ends than do single family residential land use. Similarly, larger single family detached dwellings typically generate a greater number of trip-ends than do smaller single family detached homes, and therefore, will tend to receive more benefit from road grading, road landscaping and road improvements. Drainage and flood control requirements generally vary with the amount of impervious ground cover per parcel. It follows that larger homes which have more impervious ground cover will create relatively more drainage flow than smaller homes. Special taxes for CFD No. 2001-1 Improvement Areas A and B (San Miguel Ranch) shall be levied to Taxable Property to satisfy the Special Tax Requirement as outlined in the CFD No. 2001-1 Improvement Area A and B RMA's. The Land Use Class Categories of Taxation have been established for CFD No. 2001-l. The categories are defined as follows: Residential Developed Parcels (single and multi-family residences) are taxed on the square footage of the building; Undeveloped Parcels are taxed based on acreage of the parcel; and Based on the types of public facilities that are proposed for CFD No. 2001-1 and the factors described above, the Special Taxes assigned to specific land uses are generally proportionate to the relative benefits received by them, and, accordingly, the Special Taxes in CFD No. 2001-1 can be considered fair and reasonable. Community Facilities District No. 2001-1 Page 8 San Miguel Ranch November 2001 B. Maximum Annual Special Tax Rates Exhibit C lists the Maximum Annual Special Tax rates that may be levied against Developed Property, and Undeveloped Property within CFD No. 2001-1. Exhibit C also lists the Backup Special Tax (described later). The City Council will annually determine the actual amount of the Special Tax levy based on the method described in RMA and subject to the maximum Special Tax rates contained in Exhibit C. The City will levy a Special Tax to the extent necessary, sufficient to meet the Special Tax Requirement. C. Backup Special Tax When a Final Map is recorded within each Improvement Area, the Backup Special Tax for Assessors Parcels of Developed Property classified as Residential Property or Commercial Property will be determined pursuant to section c.l.b of Exhibit B-1 for Improvement Area A and c. 1 .b of Exhibit B-2 for Improvement Area B. D. Accuracy of Information In order to establish the Maximum Annual Special Tax rates and the Backup Special Tax as set forth in the Rate and Method of Apportionment for CFD No. 2001-1, McGill Martin Self, Inc. has relied on information including, but not limited to absorption, land- use types, building square footage, and net taxable acreage which were provided to McGill Martin Self, Inc. by others. McGill Martin Self, Inc. has not independently verified such data and disclaims responsibility for the impact of inaccurate data provided by others, if may, on the Rate and Method of Apportionment for CFD No. 2001-1, including the inability to meet the financial obligations of CFD No. 2001-1. VI. BOUNDARIES OF COMMUNITY FACILITIES DISTRICT The boundaries of CFD No. 2001-1 include all land on which the Special Taxes may be levied. The Recorded Map of the area included within CFD No. 2001-1 is provided as Exhibit A. VII. GENERAL TERMS AND CONDITIONS A. Substitution Facilities The description of the public facilities, as set forth herein, are general in their nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans may show substitutes, in lieu or modifications to thc proposed work in order to accomplish the work of improvement, and any such substitution shall not be a change or modification in the Community Facilities District No. 2001-I Page 9 5'an Miguel Ranch Novetnber 2001 proceedings as long as the facilities provide a service and are of a type substantially similar to that as set forth in this Report. B. Interim Transportation Facilities The City may, in its sole discretion, elect to authorize and make the proceeds of any subsequent series of bonds available to pay the cost of construction or the purchase price for the acquisition of Improvements for Interim Transportation Facilities. This could result in the revision of the facilities priority structure for the utilization of such proceeds. C. Appeals Any landowner who feels that the amount of the Special Tax is in error may file a notice with the City Administrator, appealing the levy of the Special Tax pursuant to the procedure specified in Exhibit B-1 and B-2. As appropriate the City Administrator will then review the appeal and, if necessary, meet with the applicant. If the findings of the representative verify that the amount of the Special Tax should be modified or changed, then, as appropriate, the Special Tax levy shall be corrected. J:\Engineer~AG EN DA\S p EC IAL TAX REPORT-CFD-2001 - 1 ( I 10601 )doc Community Facilities District No. 2001-I Page 10 San Miguel Ranch November 2001 EXHIBIT A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1 (San Miguel Ranch) RECORDED BOUNDARY MAP J:~Engineer~AGENDA\SPECIAI, TAX REPORT-CFD-200t-I(110601) doc Community Facilities District No. 200l - I Page 11 San Miguel Ranch November 2001 o ooooooo moo mm~~ ~.~ x!¢~ I~_ EXHIBITS B-1 & B-2 SEE THE RESOLUTION FOR THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR EACH IMPROVEMENT AREA RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA FORMING AND ESTABLISHING COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH), DESIGNATING IMPROVEMENT AREAS THEREIN AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES WITHIN EACH SUCH IMPROVEMENT AREA TO THE QUALIFIED ELECTORS THEREOF WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the "City Council"), has previously declared its intention to form a community facilities district and to designate improvement areas (each, an "improvement Area") therein and ordered the preparation of a Special Tax Report relating to the initiation of proceedings to create such community facilities district pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of Califomia (the "Act") and the City o f Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community Facilities District Law"). This community facilities district shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH) (the "District"); and, WHEREAS, notice ora public hearing relating to the establishrnent of the District, the extent of the District, the designation of the hnprovement Areas within the District, the financing of certain types of public facilities and ali other related matters has been given, and a Community Facilities District Report, as ordered by this City Council, has been presented to this City Council and has been made a part of the record of the hearing to establish sach District; and, WHEREAS, all communications relating to the establishment of the District, the designation of the Improvement Areas within the District, the financing of certain types of public facilities and the proposed rate and method of apportionment of special tax have been presented, and it has further been determined that a majority protest as defined by law has not been received against these proceedings; and, WHEREAS, inasmuch as there have been less than twelve (12) registered voters residing within the territory of each Improvement Area of the District for at least the preceding ninety (90) days, the authorization to levy special taxes within each Improvement Area of the District shall be submitted to the landowners of each such hnprovement Area, such landowners being the qualified electors as authorized by law. NOW, THEREFORE, BE iT RESOLVED AS FOLLOWS: SECTION 1. RECITALS. The above recitals are all true and con'ect. SECTION 2. DETERMINATIONS. It is hereby determined by this City Council that: A. All prior proceedings pertaining to the formation of the District and designation of the Improvement Areas were valid and taken in conformity with the requirements of the law, and specifically the provisions of the Community Facilities District Law, and that this finding and determination is made pursuant to the provisions of Government Code Section 53325.1. B. The written protests received, if any, do not represent a majority protest as defined by the applicable provisions of the Community Facilities District Law and, therefore, the special tax proposed to be levied within each Improvement Area of the District has not been precluded by majority protest pursuant to Section 53324 of the Government Code of the State of California. C. The District as proposed conforms with the City of Chula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts (the "Goals and Policies"), as amended; provided, however, the City Council has granted an exception to the requirements of such Goals and Policies as they pertain to certain of the facilities authorized to be financed by the District. D. Less than twelve (12) registered voters have resided within the territory of each Improvement Area within the District for each of the ninety (90) days preceding the close of the public hearing, therefore, pursuant to the Act the qualified electors of each of the Improvement Areas within the District shall be the landowners of such Improvement Area as such term is defined in Govenanent Code Section 53317(f) and each such landowner who is the owner of record as of the close of the public hearing, or the authorizcd representative thereof, shali have one vote for each acre or portion of an acre of land that she or he owns within such hnprovement Area. E. The time limit speci fled by the Community Facilities District Law for conducting an election to submit the levy of the special taxes to the qualified electors of each improvement Area of the District and the requirements for impartial analysis and ballot arguments have been waived with the unanimous consent of the qualified electors of each such Improvement Area. F. The City Clerk, acting as the election official, has consented to conducting any required election on a date which is less than 125 days following the adoption of any resolution fornfing and establishing the District. SECTION 3. COMMUNITY FACILITIES DISTRICT REPORT. The Community Facilities District Report for the District (the "Report"), as now subnfitted by McGill Martin Self, Inc., Special 2 Tax Consultant, shall stand as the report as required pursuant to Government Code Section 53321.5 for all future proceedings and all terms and contents are approved as set forth therein. SECTION 4. NAME OF DISTRICT. The City Council does hereby establish and declare the formation of the District known and designated as "COMMUNITY FACILITIES DISTRICT NO. 2001-0l (SAN MIGUEL RANCH)." SECTION 5. BOUNDARIES OF DISTRICT AND IMPROVEMENT AREAS. The boundaries of the District and each of the Improvement Areas are generally described as follows: All property within the boundaries of COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH), as shown on a boundary map as previously approved by this legislative body, such map designated by the name of this District, a copy of which is on file in the Office of the City Clerk. The boundary map of the proposed District and the Improvement Areas therein has been filed pursuant to Sections 3111 and 3113 of the Streets and Highways Code of the State of California in the Office of the County Recorder of the County of San Diego, at Page of Book __ of the Book of Maps of Assessment and Community Facilities Districts for such County. SECTION 6. DESIGNATION OF IMPROVEMENT AREAS. For purposes of financing of, or contributing to the financing of the types of facilities described in Section 7 below, this City Council, acting pursuant to Government Code Section 53350, hereby designates portions of the District as the following hnprovement Areas as shown on the Boundary Map of the District: IMPROVEMENT AREA A IMPROVEMENT AREA B SECTION 7. DESCRIPTION OF TYPES OF FACILITIES AUTHORIZED TO BE FINANCED. A general description of the types of public facilities which this legislative body is authorized by law to construct, own or operation, which are the types of facilities proposed to be financed under these proceedings, are generally described in Exhibit A attached hereto and incorporated herein by this reference. The types of facilities as above-described are facilities which the City Council is authorized by law to contribute revenue to or to construct, own or operate. It is hereby further determined that the proposed types of facilities are necessary to meet increased demands placed upon the City as a result of development occurring within the District, and the costs and expenses charged to this District represent the fair share costs of thc facilities attributable to this District and the Improvement Areas therein. For a full and complete description of such types of facilities, reference is made to the Report, a copy of which is on file in the Office of the City Clerk. In addition to financing the above described types of facilities, the financing of those incidental expenses described in the Report are also approved and authorized. SECTION 8. SPECIAL TAX. Except where funds are otherwise available a special tax, secured by recordation of a continuing lien against all non-exempt real property in each of the Improvement Areas within the proposed District, is hereby authorized, subject to voter approval, to be levied within the boundaries of each such Improvement Area. For particulars as to the rate and method of apportionment of the special tax proposed to be levied within each Improvement Area, reference is made to the attached and incorporated Exhibit "B" (the "Special Tax Formulas"), which sets forth in sufficient detail the method of apportionment of the special tax applicable to each hnprovement Area to allow each landowner or resident within such Improvement Area to estimate the maximum amount that such person will have to pay. Such special tax shall be utilized to pay directly for the previously described types of facilities, to pay debt service on bonds issued by the District for each Improvement Area to assist in financing such types of facilities, to replenish any reserve fund established for such bonds, and to pay thc costs of administering the bonds, the District and each respective Improvement Area. The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes; provided, however, the District may utilize a direct billing procedure for any special taxes that cannot be collected on the County tax roll or may, by resolution, elect to collect the special taxes at a different time or in a different manner if necessary to meet its financial obligations. Under no circumstances will the special tax to be levied against any parcel within an hnprovement Area used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within such Improvement Area by more than 10 percent. This legislative body further authorizes that special taxes may be prepaid and satisfied by payment of the prepayment amount calculated pursuant to the Special Tax Formulas. Upon recordation ora Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California against the property within each Improvement Area, a continuing lien to secure each levy of the special tax shall attach to all non-exempt real property in such Improvement Area and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the legislative body ceases. SECTION 9. SPECIAL TAX ACCOUNTABILITY MEASURES. Pursuant to and in compliance with the provisions of Government Code Section 50075.1, this City Council hereby establishes the 4 following accountability measures pertaining to the levy by the District of the special taxes described in Section 8 above: A. Each such special tax shall be levied for the specific purposes set forth in Section 8. above. B. The proceeds of the levy of each such special tax shall be applied only to the specific applicable purposes set forth in Section 8. above. C. The District shall establish a separate account into ~vhich the proceeds of each such special tax shall be deposited. D. The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with the City Council as required pursuant to Government Code Section 50075.3. SECTION 10. PREPARATION OF ANNUAL TAX ROLL. The name, address and telephone number of the office, department or bureau which will be responsible for preparing annually a current roll of special tax levy obligations by Assessor's parcel number and which shall be responsible for estimating future special tax levies pursuant to Section 53340.1 of the Government Code of the State of California, are as follows: Engineering Department City of Chula Vista 276 Fourth Avenue Chula Vista, CA 92010 (619) 691-5021 SECTION 1 I. SUBSTITUTION FACILITIES. The description of the types of public facilities, as set forth above, is general in its nature. The final nature and location of such facilities will be determined with the City's approval and upon the preparation of final plans and specifications therefor. Such final plans may show substitutes in lieu of, or modification to, the above described types of facilities and any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in this Resolution and has been approved by the City. SECTION 12. APPEALS AND INTERPRETATION PROCEDURE. Any landowner or resident who feels that the amount or formula 6fthe special tax is in error may file a notice with the District appealing the levy of the special tax. An appeals panel of 3 members, as appointed by the District, will then meet and promptly review thc appeal, and if necessary, meet with the applicant. If the findings of the appeals panel verify that the special tax should be modified or changed, a recommendation at that time will be made to the City Council, acting in its capacity as the legislative body of the District, and, as appropriate, the special tax levy shall be corrected, and if applicable in any case, a refund shall be granted. 5 t't Interpretations may be made by the City Council, acting in its capacity as the legislative body of the District, by Resolution for purposes of clarifying any vagueness or ambiguity as it relates to any category, zone, rate or definition contained in the applicable Special Tax Formula. SECTION 13. ELECTION. This City Council herewith submits the levy of the special tax within each Improvement Area to the quali fled electors of each such Improvement Area, such electors being the landowners in each such Improvement Area, with each landowner having one (1) voter for each acre or portion thereof of land which he or she owns within such Improvement Area. Presented by Approved as to form by John P. Lippitt John M.Kaheny Director of Public Works City Attorney J:\Altorncy\leso\DFD01 iSMR Formation 6 EXHIBIT A DESCRIPTION OF TYPES OF FACILITIES The types of public facilities authorized to be financed by the levy of special taxes within each Improvement Area shall include streets, landscaping within public rights-of-way, sewers and public utilities as may be authorized by the goals and policies of the City Council pertaining to the use of the Community Facilities District Law. A-I RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1, IMPROVEMENT AREA A (San Miguel Ranch) A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property within the City of Chula Vista Community Facilities District No. 2001-1 ("CFD No. 2001-1, Improvement Area A") and collected each Fiscal Year commencing in Fiscal Year 2002-03, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," and "Undeveloped Property," as described below. All of the real property in CFD No. 2001-1, Improvement Area A, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the parcel. If the preceding maps are not available, the Acreage shall be determined by the City Engineer. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2001-1, Improvement Area A including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-1, Improvement Area A or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-1, Improvement Area A or any designee thereof of complying with City, CFD No. 2001-1, Improvement Area A or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2001-1, Improvement Area A or any designee thereof related to an appeal of the Special Tax; and the costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2001-1, Improvement Area A for any other administrative purposes of CFD No. 2001-1, Improvement Area A, city of Chula Vista September 6, 2001 Community Facilities' District No. 2001-1 // San Miguel Ranch - Improvement Area A / r/ ? ~ Page 1 including attom~y's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or pamel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C. 1 .a. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the Indenture in excess of the reserve requirement as defined in such Indenture, delinquent special tax payments, the Special Tax prepayments collected to pay interest on Bonds, and other soumes of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax amount set forth in Section C.l.b. below. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 2001-1, Improvement Area A under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2001-1, Improvement Area A' means City of Chula Vista, Community Facilities District No. 2001-1, Improvement Area A (San Miguel Ranch). "City" means the City of Chula Vista. "Commercial Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more non-residential structures, excluding Community Purpose Facility Property. "Community Purpose Facility Property" means all Assessor's Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2452. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2001-1, Improvement Area A. "County" means the County of San Diego. City of Chula Vista September 6, 2001 Community Facilitiex Dixtrict No. 2001-1 San Miguel Ranch Improvement Area ,4 f ~ ?/' !: i~ Page 2 "Developed Property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to March 1 of thc prior Fiscal Year. "Final Map" means a subdivision of property created by recordation ora final map, parcel map, or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means thc period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Tables 1 and 2 of Section C. "Lot(s)" means an individual legal lot created by a Final Map for which a building permit for residential construction has been or could be issued. "Master Developer" means the owner of the predominant amount of Undeveloped Property in CFD No. 2001-1, Improvement Area A. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C below, that may be levied in any Fiscal Year on any Assessor's Pamel of Taxable Property. "Occupied Residential Property" means all Assessor's Parcels of Residential Property which have closed escrow to an end user. "Outstanding Bonds" means all Bonds which remain outstanding. "Property Owner Association Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area A owned by or dedicated to a property owner association, including any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessor's Parcels of Developed Property within CFD No. 2001-l, Improvement Area A. For Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acm to the Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within CFD No. 2001-1, Improvement Area A. "Public Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area A that is used for rights-of-way or any other purpose and is owned by City of Chula Vista September 6, 2001 Community Facilities' District No. 2001-1 San Miguel Ranch- Improvement Area A / r~ ~ ,~ Page3 or dedicated to the federal government, the State of California, the County, the City or any other public agency. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to appropriate records kept by the City's Building Department. Residential Floor Area will be based on the building permit(s) issued for each dwelling unit prior to it being classified as Occupied Residential Property, and shall not change as a result of additions or modifications made after such classification as Occupied Residential Property. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2001-1, Improvement Area A to: (i) pay annual debt service on all Outstanding Bonds as defined in Section A.; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) and pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD No. 2001-1, Improvement Area A; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2001-1, Improvement Area A which are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch - Improvement Area A / ~' ~ ?)~ 7 Page4 B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2001-1, Improvement Area A shall be classified as Developed Property or Undeveloped Property and shall be subject to the levy of annum Special Taxes determined pursuant to Sections C and D below. Furthermore, Developed Property shall be classified as Residential Property or Commercial Property. C, MAXIMUM ANNUAL SPECIAL TAX RATE 1. Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Commercial Property that is classified as Developed Property shall be the greater of (1) the Assigned Special Tax described in Table 1 below or (2) the amount derived by application of the Backup Special Tax. a. Assigned SpecialTax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property Land Use Class Description Assigned Special Tax Residential Property $475.00 per unit plus $0.34 per I square foot of Residential Floor Area 2 Comanercial Property $5,091 per Acre of Commercial Property b. Backup Special Tax When a Final Map is recorded within Improvement Area A, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Comrnercial Property shall be determined as follows: For each Assessor's Parcel of Developed Property classified as Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Residential Property within the Final Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following formula: Oty of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 J 7 ~ ~ ~ Page5 San Miguel Ranch - Improvement Area A $10,376 x A L The terms above have the following meanings: B - Backup Special Tax per Lot in each Fiscal Year. A- Acreage classified or to be classified as Residential Property in such Final Map. L Lots in the Final Map ~vhich are classified or to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Commercial Property or for each Assessor's Parcel of Undeveloped Property to be classified as Commercial Property within the Final Map area, the Backup Special Tax shall be determined by multiplying $10,376 by the total Acreage of the Commemial Property and Undeveloped Property to be classified as Commercial Property within the Final Map area. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Commemial Property or Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Map, then the Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the amount of Backup Special Tax that would have been generated if such change did not take place. Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property shall be the amount shown in Table 2 below: TABLE 2 Maximum Annual Special Tax for Undeveloped Property Land Use Class Description Maximum Annual Special Tax 3 Undeveloped Property $10,376 per Acre City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 I r'/ "~'~)tO San Miguel Ranch Improvement Area A / Page 6 D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2002-03 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Pamel of Undeveloped Property, excluding any Assessor's Parcels classified as Undeveloped Property pursuant to Section E, at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel classified as Undeveloped Property pursuant to Section E at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Notwithstanding the above, under no cimumstances will the Special Tax levied against any Assessor's Parcel of Occupied Residential Property be increased by more than ten percent per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Assessor's Parcel of CFD No. 2001-1, Improvement Area A. E. EXEMPTIONS The CFD Administrator shall classify as exempt property (i) Assessor's Parcels defined as Public Property, (ii) Assessor's Parcels defined as Property Owner Association Property, (iii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor's Parcels defined as Community Purpose Facility Property or (v) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all City of Chula Vista September 6, 2001 Communi~ Facilities District No. 200l-I San Miguel Ranch Improvement Area A } ~7 ~ fffl Page 7 Taxable Property to less than 121.93 Acres. Notwithstanding the above, the CFD Administrator shall not classify an Assessor's Parcel as exempt property if such classification would reduce the sum of all Taxable Property to less than 121.93 Acres. Assessor's Parcels which cannot be classified as exempt property because such classification would reduce the Acreage of all Taxable Property to less than 121.93 Acres will be classified as Undeveloped Property and shall be taxed as a part of the fourth step in Section D. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes exempt property. The Maximum Annual Special Tax obligation for any Public Property which cannot be classified as exempt property as described in the first paragraph of Section E shall be prepaid in full by the seller pursuant to Section H.1, prior to the transfer/dedication of such property. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Undeveloped Property pursuant to the fourth step in Section D. F. REVIEW/APPEAL COMMITTEE The Council shall establish as part of the proceedings and administration of CFD No. 2001- 1, Improvement Area A a special three-member Review/Appeal Committee. Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may file a written notice with the Review/Appeal Committee appealing the amount of the Special Tax levied on such Assessor's Parcel. The Review/Appeal Committee may establish such procedures as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. G. MANNER OF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2001-1, Improvement Area A may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels which are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-I SanMiguelRanch-lmprovementAreaA ] ~[~' ~/ Page8 H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "Outstanding Bonds" means all previously issued Bonds which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Annual Special Taxes. 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied by an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Public Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Pamel as though it was already designated as Developed Property, City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 SanMiguelRanch-lmprovementArea~t J ~ ¢~' Page9 based upon the building permit ~vhich has already been issued for that Assessor's Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. 2. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Maximum Annual Special Tax revenues excluding any Assessor's Parcels which have been prepaid. 3. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or phncipal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 6. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 7. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 8. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 9. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount computed pursuant to paragraph 8 (the "Defeasance Amount"). 10. Verify the administrative fees and expenses of CFD No. 2001-1, Improvement Area A, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the City of Chula Vista September 6, 2001 Community Facilities District No. 200l-I San Miguel Ranch - lmprovement Area A ] ~s] ~ ~/~ Page IO prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 12. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 2 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 13. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 9, and 10, less the amounts computed pursuant to paragraphs 11 and 12 (the "Prepayment Amount"). 14. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, 11, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 10 shall be retained by CFD No. 2001- 1, Improvement Area A. The Prepayment Amount may be insufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 7 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Board shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Annual Special Taxes that may be levied on Taxable Property within CFD No. 2001-1, Improvement Area A both prior to and after the proposed prepayment is at least I. 1 times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch -- lmprovement Area A / t~ ~ ¢¢ Page l l 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula: PP = (PF~ x F) + A These terms have the following meaning: PP: the partial prepayment PE = the Prepayment Amount calculated according to Section H.1, minus Administrative Expenses and Fees pursuant to Step 10. F -- the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Annual Special Tax. A= the Administrative Expenses and Fees pursuant to Step 10. The owner of an Assessor's Parcel who desires to partially prepay the Maximum gamual Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Paragraph 14 of Section H.1, and (ii) indicate in the records of CFD No. 2001-1, Improvement Area A that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2002-03 to the extent necessary to fully satisfy the Special Tax Requirement for a period no longer than 2037-38. J:\Engineer~AGENDA\SanMigueI-RMA ~ RevisedA.doc City of Chula Vista September 6, 2001 Community Facilities District No. 200l-1 San Miguel Ranch - lmprovement Area A ] r~ ~ ~5 Page l2 RATE AND METHOD OF APPORTIONMENT FOR CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 2001-1, IMPROVEMENT AREA B (San Miguel Ranch) A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property within the City of Chula Vista Community Facilities District No. 2001-1 ("CFD No. 2001-1, Improvement Area B") and collected each Fiscal Year commencing in Fiscal Year 2002-03, in an amount determined by the City Council through the application of the appropriate Special Tax for "Developed Property," and "Undeveloped Property as described below. All of the real property in CFD No. 2001-1, Improvement Area B, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, record of survey, or other recorded document creating or describing the parcel. If the preceding maps are not available, the Acreage shall be determined by the City Engineer. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2001-1, Improvement Area B including, but not limited to, the following: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2001-1, Improvement Area B or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2001-1, Improvement Area B or any designee thereof of complying with City, CFD No. 2001-1, Improvement Area B or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2001-1, Improvement Area B or any designee thereof related to an appeal of the Special Tax; and the costs associated with the release of funds from an escrow account, if any. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2001-l, Improvement Area B for any other administrative purposes of CFD No. 2001-1, Improvement Area B, City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch- Improvement ?trea B ] r~ ,. ~ ,~ Page l including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel number. "Assessor's Parcel Map" means an official map of the County Assessor of the County designating parcels by Assessor's Parcel number. "Assigned Special Tax" means the Special Tax for each Land Use Category of Developed Property as determined in accordance with Section C. 1 .a. "Available Funds" means the balance in the reserve fund established pursuant to the terms of the indenture in excess of the reserve requirement as defined in such Indenture, delinquent special tax payments,, the Special Tax prepayments collected to pay interest on Bonds, and other sources of funds available as a credit to the Special Tax Requirement as specified in such Indenture. "Backup Special Tax" means the Special Tax amount set forth in Section C. 1.b. below. "Bonds" means any bonds or other debt (as defined in the Act), whether in one or more series, issued by CFD No. 2001-1, Improvement Area B under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD No. 2001-1, Improvement Area B" means City of Chula Vista, Community Facilities District No. 2001-1, Improvement Area B (San Miguel Ranch). "City" means the City of Chula Vista. "Commercial Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more non-residential structures, excluding Community Purpose Facility Property. "Community Purpose Facility Property" means ail Assessor's Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2452. "Council" means the City Council of the City, acting as the legislative body of CFD No. 2001-1, Improvement Area B. "County" means the County of San Diego. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch Improvement Area B Page 2 "Developed Property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to March 1 of the prior Fiscal Year. "Final Map" means a subdivision of property created by recordation ora final map, parcel map, or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which residential building permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Tables I and 2 of Section C. "Lot(s)" means an individual legal lot created by a Final Map for which a building permit for residential construction has been or could be issued. "Master Developer" means the owner of the predominant amount of Undeveloped Property in CFD No. 2001-1, Improvement Area B. "Maximum Annual Special Tax" means the maximum annual Special Tax, determined in accordance with the provisions of Section C below, that may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Property. '~Occupied Residential Property" means all Assessor's Parcels of Residential Property which have closed escrow to an end user. "Outstanding Bonds" means all Bonds which remain outstanding. "Property Owner Association Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area B owned by or dedicated to a property owner association, including any master or sub-association. "Proportionately" means for Developed Property that the ratio of the actual Special Tax levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessor's Parcels of Developed Property within CFD No. 2001-1, Improvement Area B. For Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum A~mual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property within CFD No. 2001-1, Improvement Area B. ~'Public Property" means any property within the boundaries of CFD No. 2001-1, Improvement Area B that is used for rights-of-way or any other purpose and is owned by or CiO' of Chula Vista September 6, 200l Community Facilities District No. 200l-1 ~ l San Miguel Ranch - Improvement Area B [ ~ ~~ ~> Page 3 dedicated to the federal government, the State of California, the County, the City or any other public agency. "Residential Property" means all Assessor's Parcels of Developed Property for which a building permit has been issued for purposes of constructing one or more residential dwelling units. "Residential Floor Area" means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be made by reference to appropriate records kept by the City's Building Department. Residential Floor Area will be based on the building permit(s) issued for each dwelling unit prior to it being classified as Occupied Residential Property, and shall not change as a result of additions or modifications made after such classification as Occupied Residential Property. "Special Tax" means the annual special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Special Tax Requirement "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2001-1, Improvement Area B to: (i) pay annual debt service on all Outstanding Bonds as defined in Section A.; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture; (v) and pay directly for acquisition and/or construction of public improvements which are authorized to be financed by CFD No. 2001-l, Improvement Area B; (vi) less a credit for Available Funds. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries ofCFD N6. 2001-1, Improvement Area B which are not exempt from the Special Tax pursuant to law or Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, all Taxable Property within CFD No. 2001-1, Improvement Area B shall be classified as Developed Property or Undeveloped Property and shall be subject to the levy of annual Special Taxes determined pursuant to Sections C and D below. Furthermore, Developed Property shall be classified as Residential Property or Commercial Property. City of Chula l~ista September 6, 2001 Community Facilities District No. 200l l ~ San Miguel Ranch - lmprovement Area B j q ~ Page4 C. MAXIMUM ANNUAL SPECIAL TAX RATE Developed Property The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or Commercial Property that is classified as Developed Property shall be the greater of (1) the Assigned Special Tax described in Table 1 below or (2) the amount derived by application of the Backup Special Tax. a. Assigned SpecialTax The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in Table 1. TABLE 1 Assigned Special Tax for Developed Property Land Use Class Description Assigned Special Tax 1 Residential Property $475.00 per unit plus $0.32 per square foot of Residential Floor Area 2 Commercial Property $2,263 per Acre of Commercial Property b. Backup SpecialTax When a Final Map is recorded within Improvement Area B, the Backup Special Tax for Assessor's Parcels of Developed Property classified as Residential Property or Corrm~ercial Property shall be determined as follows: For each Assessor's Parcel of Developed Property classified as Residential Property or for each Assessor's Parcel of Undeveloped Property to be classified as Residential Property within the Final Map area, the Backup Special Tax shall be the rate per Lot calculated according to the following formula: $4,578 x A L The terms above have the following meanings: B = Backup Special Tax per Lot in each Fiscal Year. A = Acreage classified or to be classified as Residential Property in such Final Map. City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 San Miguel Ranch . Improvement Area B i ~ ~i) ~ Page5 L = Lots in the Final Map which are classified or to be classified as Residential Property. For each Assessor's Parcel of Developed Property classified as Commercial Property or for each Assessor's Parcel of Undeveloped Property to be classified as Commercial Property within the Final Map area, the Backup Special Tax shall be determined by multiplying $4,578 by the total Acreage of the Commercial Property and Undeveloped Property to be classified as Commemial Property within the Final Map area. Notwithstanding the foregoing, if Assessor's Parcels of Residential Property, Commercial Property or Undeveloped Property for which the Backup Special Tax has been determined are subsequently changed or modified by recordation of a new or amended Final Map, then the Backup Special Tax applicable to such Assessor's Parcels shall be recalculated to equal the amount of Backup Special Tax that would have been generated if such change did not take place. 2. Undeveloped Property The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped Property shall be the amount shown in Table 2 below: TABLE 2 Maximum Annual Special Tax for Undeveloped Property Land Use Class Description Maximum Annual Special Tax 3 Undeveloped Property $4,578 per Acre D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2002-03 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Special Tax Requirement. Second: If additional monies are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property, excluding any Assessor's Parcels classified as Uity of Chula Vista September 6, 200l Co~nmuni~y Facilities District No. 2001 ] San Migue! Ranch- Improvement Area B / ~/ ~'' ~ /. Page6 Undeveloped Property pursuant to Section E, at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Third: If additional mottles are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel whose Maximum Annual Special Tax is derived by the application of the Backup Special Tax and shall be increased Proportionately from the Assigned Special Tax up to the Maximum Annual Special Tax for each such Assessor's Parcel. Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel classified as Undeveloped Property pursuant to Section E at up to 100% of the Maximum Annual Special Tax for Undeveloped Property. Notwithstanding the above, under no cimumstances will the Special Tax levied against any Assessor's Parcel of Occupied Residential Properly be increased by more than ten pement per year as a consequence of delinquency or default in the payment of Special Taxes by the owner of any other Assessor's Parcel of CFD No. 2001-1, Improvement Area B. E. EXEMPTIONS The CFD Administrator shall classify as exempt property (i) Assessor's Parcels defined as Public Property, (ii) Assessor's Parcels defined as Property Owner Association Property, (iii) Assessor's Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor's Parcels defined as Community Purpose Facility Property or (v) Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, provided that no such classification would reduce the sum of all Taxable Property to less than 103.61 Acres. Notwithstanding the above, the CFD Administrator shall not classify an Assessor's Parcel as exempt property if such classification would reduce the sum of all Taxable Property to less than 103.61 Acres. Assessor's Parcels which cannot be classified as exempt property because such classification would reduce the Acreage of all Taxable Property to less than 103.61 Acres will be classified as Undeveloped Property and shall be taxed as a part of the fourth step in Section D. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes exempt property. The Maximum Annual Special Tax obligation for any Public Property which cannot be classified as exempt property as described in the first paragraph of Section E shall be prepaid in full by the seller pursuant to Section H.1, prior to the transfer/dedication of such property. Until the Maximum Annual Special Tax obligation for any such Public Property is prepaid, the property shall continue to be subject to the levy of the Special Tax as Undeveloped Property pursuant to the fourth step in Section D.. City of Chula Vista September 6, 2001 Community Facilities D/strict No. 2001-1 San Miguel Ranch Improvement ,4rea B / ~; ~ 5G~ Page7 F. REVIEW/APPEAL COMMITTEE The Council shall establish as part of the proceedings and administration of CFD No. 2001- 1, Improvement Area B a special three-member Review/Appeal Committee. Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel is in error may file a written notice with the Review/Appeal Cotnmittee appealing the amount of the Special Tax levied on such Assessor's Parcel. The Review/Appeal Committee may establish such procedures as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. G. MANNEROF COLLECTION The annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2001-l, Improvement Area B may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on Assessor's Parcels which are delinquent in the payment of Special Taxes. Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. H. PREPAYMENT OF SPECIAL TAX The following definition applies to this Section H: "Outstanding Bonds" means all previously issued Bonds which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Maximum Annual Special Taxes. 1. Prepayment in Full The Maximum Annual Special Tax obligation may only be prepaid and permanently satisfied by an Assessor's Parcel of Developed Property, Undeveloped Property for which a building permit has been issued, or Public Property. The Maximum Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of City of Chula Vista September 6, 200l Community Facilities District No. 200l-I San Miguel Ranch - Improvement Area B j ['i] S,.~ Page 8 the Assessor's Pamel to pay the Special Tax permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Total: equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: l. For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped Property. 2. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of the total expected Maximum Annual Special Tax revenues excluding any Assessor's Parcels which have been prepaid. 3. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). City of Chula Vista September 6, 2001 Comtnunity Facilities District No. 2001-1 ,1 San Miguel Ranch - Improvement Area B j V7 ~ ~ Page 9 5. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 6. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 7. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 8. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 9. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount computed pursuant to paragraph 8 (the "Defeasance Amount"). 10. Verify the administrative fees and expenses of CFD No. 2001-1, Improvement Area B, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 12. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 2 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 13. The Maximum Annual Special Tax prepayment is equal to the sum of the mounts computed pursuant to paragraphs 3, 4, 9, and I0, less the amounts computed pursuant to paragraphs 11 and 12 (the "Prepayment Amount"). 14. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, 11, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. Ciiy of Chula Vista September 6, 2001 Commun#y Facilities District No. 2001-1 San Miguel Ranch Improvement Area B } ~] ~ ~ 5 Page 10 The amount computed pursuant to paragraph 10 shall be retained by CFD No. 2001- l, Improvement Area B. The Prepayment Amount may be insufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 7 above, the CFD Administrator shall remove the current Fiscal Year's Special Tax levy for such Assessor's Parcel fi.om the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Board shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Am~ual Special Taxes that may be levied on Taxable Property within CFD No. 2001-1, Improvement Area B both prior to and after the proposed prepayment is at least 1. I times the maximum annual debt service on all Outstanding Bonds. Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon the terms and conditions established by the Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. 2. Prepayment in Part The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula: PP = (PE x F) + A These terms have the following meaning: PP - the partial prepayment PE = the Prepayment Amount calculated according to Section H.1, minus Administrative Expenses and Fees pursuant to Step 10. F - the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the Maximum Annual Special Tax. A- the Administrative Expenses and Fees pursuant to Step 10. City of Chula Vista September 6, 200l Community Facil#ies District No. 2001-1 Sa~ Miguel Ranch - Improvement ~1rea B ]--~] ~ 5 ¢ Page 11 The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if applicable. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the fimds remitted to it according to Paragraph 14 of Section 1.1, and (ii) indicate in the records of CFD No. 2001-1, Improvement Area B that there has been a partial prepayment of the Maximum Annual Special Tax and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such Assessor's Parcel pursuant to Section D. I. TERM OF MAXIMUM ANNUAL SPECIAL TAX The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2002-03 to the extent necessary to fully satisfy the Special Tax Requirement for a period no longer than 203%40. J:\Engineer~AGEN DA\SanMiguel-RMA -ReviscdB doc City of Chula Vista September 6, 2001 Community Facilities District No. 2001-1 SanMiguelRanch lmprovementAreaB ]17' 57 Pagel2 EXHIBIT C CITY OF CHULA VISTA COMMUNITY FACILITiES DISTRICT NO. 2001-1 iMPROVEMENT AREAS A AND B (San Miguel Ranch) MAXIMUM SPECIAL TAX RATES FOR DEVELOPED PROPERTY AND UNDEVELOPED PROPERTY Maximum Annual Special Tax for Developed Property in Land Use Class 1 Community Facilities District No. 2001-1 Residential Developed Parcels Maximum Annual Special Tax $475.00 per unit plus $.34 per square foot of Land Use Class 1 - Improvement Area A Residential Floor Area $475.00 per unit plus $.32 per square foot of Land Use Class 1 - Improvement Area B Residential Floor Area Maximum Annual Special Tax for Developed Property in Land Use Class 2 Community Facilities District No. 2001-1 Commercial Developed Parcels Maximum Annual Special Tax Land Use Class 2 - Improvement Area A $5,091 per acre of Commercial Property Land Use Class 2 - Improvement Area B $5,091 per acre of Commercial Property Maximum Annual Special Tax for Undeveloped Property in Land Use Class 3 Community Facilities District No. 2001-1 _ Undeveloped Property Maximum Annual Special Tax Land Use Class 3 - Improvement Area A $10,376 per acre of Undeveloped Property Land Use Class 3 - Improvement Area B $4,578 per acre of Undeveloped Property J:\Engineer\AGENDA\SPECIAL TAX REPOR ['4';FD 2001-1(110601)doc Community Ph~cilities District No 2001-! Page 14 San Miguel Ranch November 2001 RESOLUTION NO. RESOLUTION OF THE CITY OF CHULA VISTA DECLARING NECESSITY TO INCUR A BONDED INDEBTEDNESS FOR EACH IMPROVEMENT AREA OF COMMUNITY FACILITIES DISTRICT NO. 2001-01 (SAN MIGUEL RANCH), SUBMITTING TO THE QUALIFIED ELECTORS OF EACH SUCH IMPROVEMENT AREA A PROPOSITION TO INCUR A BONDED INDEBTEDNESS SECURED BY THE LEVY OF A SPECIAL TAX WITHIN SUCH IMPROVEMENT AREA TO FINANCE CERTAIN TYPES OF PUBLIC FACILITIES AND GIVING NOTICE THEREON WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA (the "City Council"), has previously declared its intention and held and conducted a public hearing relating to the issuance of bonds to be secured by special taxes to finance certain public facilities in a community facilities district and improvement areas designated therein, as authorized pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title $ of the Government Code of the State of California (the "Act") and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, $ and 7 of Article XI of the Constitution of the State of California (the "Ordinance") (the Act and the Ordinance may be referred to collectively as the "Community Facilities District Law"). This Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 2001-1 (SAN M1GUEL RANCH) (the "District") and the improvement areas shall be designated as IMPROVEMENT AREA A and IMPROVEMENT AREA B (each, an "Improvement Area" and, collectively, the "Improvement Areas"); and, WHEREAS, at this time the City Council desires to proceed to make the detemfination of necessity to incur a separate bonded indebtedness for each of the Improvement Areas, to declare the purpose for such debt, and to authorize the submittal of a separate proposition to the qualified electors of each such hnprovement Area, being the landowners of each such Improvement Area, all as authorized and required by law; WHEREAS, the City Council further desires to authorize the submittal of propositions to such qualified electors of each Improvement Area to (a) authorize the levy of special taxes within each such Improvement Ama and (b) to establish an appropriation limit for the District; WHEREAS, ali of the qualified electors of each Improvement Area have waived the time limits specified in the Act pertaining to thc conduct of the election and the requirements for impartial legal analysis and arguments have also been waived by the unanimous consent of the qualified electors of each Improvement Area; and WHEREAS, the City Clerk, as the Election Official, has concurred in the shortening of time for conducting the election. NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: SECTION 1. RECITALS. The above recitals are all true and correct. SECTION 2. NECESSITY FOR BOND ISSUES. The City Council hereby expressly declares and states that it is necessary to incur a separate bonded indebtedness of the District for each Improvement Area thereof as authorized under the terms and provisions of the Community Facilities District Law, in order to finance the types of public facilities described in Section 3 below. SECTION 3. BOND INDEBTEDNESS FOR IMPROVEMENT AREA A. The specific single purpose for the proposed bonded indebtedness for Improvement Area A is as follows: To finance a portion of the costs of the acquisition or construction of certain public facilities consisting of the types of facilities described in Exhibit A hereto (the "Facilities") which is incorporated herein by this reference, appurtenances and appurtenant work and any and all of those applicable incidental costs described in and authorized by Government Code Section 53345.3. For a further description of the Facilities, reference is made to the Report. SECTION 4. BOND INDEBTEDNESS FOR IMPROVEMENT AREA A. The specific single purpose for the proposed bonded indebtedness for Improvement Area A is as follows: To finance a portion of the costs of the acquisition or construction of the Facilities, appurtenances and appurtenant work and any and all of those applicable incidental costs described in and authorized by Government Code Section 53345.3. For a further description of such facilities, reference is made to the Report. SECTION 5. TERRITORY TO PAY FOR BONDED INDEBTEDNESS. This City Council determines that the property within Improvement Area A will pay for thc bonded indebtedness referred to in Section 3 above. A general description of Improvement Area A is as follows: All property within the boundaries of Improvement Area A of Community Facilities District No. 2001-01 (San Miguel Ranch), as shown on a map as previously approved by the City Council, such map designated by the name of this District, a copy of which is on file in the Office of the City Clerk (the "Boundary Map"). This City Council determines that the property within Improvement Area B will pay for the bonded indebtedness refelTed to in Section 4 above. A general description of Improvement Area B is as follows: All property within the boundaries of Improvement Area B of Community Facilities District No. 2001-01 (San Miguel Ranch), as shown on the Boundary Map. 2 SECTION 6. BOND AMOUNT. The amount of the proposed bonded indebtedness, including the cost of the Facilities, together with all incidental expenses, shall not exceed the following: A. Improvement Area A - $13,500,000 B. Improvement Area B - $6,000,000 SECTION 7. BOND TERM This City Council hereby further determines that the maximum term of bonds and/or any series shall not exceed forty (40) years, and such bonds may be issued in differing series, at differing times. The maximum rate of interest to be paid on such bonds may not exceed the greater of either twelve percent (12%) per annum or the maximum rate permitted by law at the time of sale of aoy of such bonds. The bonds issued for each Improvement Area, except where other funds are made available, shall be paid exclusively from the annual levy of the special tax within such Improvement Area, and are not secured by any other taxing power or funds of the District or the City. SECTION 8. ACCOUNTABILITY MEASURES. Pursuant to and in compliance with the provisions of Article 1.5 (commencing with Section 53410) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code, this City Council hereby establishes the following accountability measures pertaining to any bonded indebtedness incurred by or on behalf of the District: A. Such bonded indebtedness shall be incurred for the applicable specific single purpose set forth in the Section 3 or 4 above, as applicable. B. The proceeds of any such bonded indebtedness shall be applied only the applicable specific purpose identified in Section 3 or 4 above, as applicable. C. The document or documents establishing the terms and conditions for the issuance of any such bonded indebtedness shall provide for the creation of an account into which the proceeds of such indebtedness shall be deposited. D. The City Manager or his or her designee, acting for and on behalf of the District, shall annually file a report with this City Council as required by Government Code Section 53411. SECTION 9. ELECTION. The propositions related to the incurring of the bonded indebtedness shall be submitted to the appropriate qualified voters, together with ballot propositions to authorize the levy of special taxes within the hnprovement Areas and to establish an appropriations limit for the District, at a special election to be held on the 13th day of November, 2001, and such election shall be a special election to be conducted by the City Clerk (the "Election Official"). If any proposition for the levy of the special tax and any proposition for incurring the bonded indebtedness receive the approval of two-thirds (2/3) or more of the votes cast on each respective proposition, bonds may be authorized, issued and sold for the applicable purpose set forth herein and the applicable special tax may be levied as provided in Resolution of Formation. If the proposition to establish the appropriations limit for the District receives the approval of a majority of the votes cast on such proposition, such appropriations limit shall be established. SECTION 10. BALLOTS. The ballot proposals to be submitted to the qualified voters of each Improvement Area at the election shall generally be as follows: IMPROVEMENT AREA A PROPOSITION A Shall the City of Chula Vista Community Facilities District No. 2001-01 (San Miguel Ranch), subject to accountability measures set forth in Resolution No. , levy a special tax throughout Improvement Area A of such district pursuant to the rate and method of apportionment thereof set forth in such resolution for the purposes of paying debt service on bonds of such district issued for Improvement Area A, replenishing the reserve fund for such bonds, paying costs of administering such indebtedness and such district and paying directly for facilities described in such resolution? PROPOSITION B Shall the City of Chula Vista Community Facilities District No. 2001-01 (San Miguel Ranch), subject to accountability measures set forth in Resolution No. , incur a bonded indebtedness for Improvement Area A of such district in an amount not to exceed $13,500,000 for the specific single purpose of financing the facilities described in such resolution? IMPROVEMENT AREA B PROPOSITION C Shall the City of Chula Vista Community Facilities District No. 2001-01 (San Miguel Ranch), subject to accountability measures set forth in Resolution No. , levy a special tax throughout Improvement Area B of such district pursuant to the rate and method of apportionment thereof set forth in such resolution for the purposes of paying debt service on bonds of such district issued for Improvement Area B, replenishing the reserve fund for such bonds, paying costs of administering such indebtedness and such district and paying directly for facilities described in such resolution? 4 PROPOSITION D Shall the City of Chula Vista Community Facilities District No. 2001-01 (San Miguel Ranch), subject to accountability measures set forth in Resolution No. _, incur a bonded indebtedness for Improvement Area B of such district in an amount not to exceed $6,000,000 for the specific single purpose of financing the facilities described in such resolution? IMPROVEMENT AREAS A AND B PROPOSITION E Shall the City of Chula Vista Community Facilities District No. 2001-01 (San Miguel Ranch) establish an Article XIIIB appropriations limit equal to $19,500,000? SECTION 11. VOTE The appropriate mark placed in the voting square after the word "YES" shall be counted in favor of the adoption of the proposition, and the appropriate mark placed in the voting square after the word "NO" in the manner as authorized, shall be counted against the adoption of such proposition. SECTION 12. ELECTION PROCEDURE The Election Official is hereby authorized to take any and all steps necessary for the holding of such election. The Election Official shall perform and render all services and proceedings incidental to and connected with the conduct of the election, which services shall include, but not be limited to, the following activities as are appropriate to the election: A. Prepare and furnish to the election officers necessary election supplies for the conduct of the election. B. Cause to be printed the requisite number of official ballots, tally sheets and other necessary fornls. C. Furnish and address official ballots for thc qualified electors of each improvement Area. D. Cause the official ballots to be delivered to the qualified electors or their authorized representatives, as required by law. E. Receive the returns of the election and supplies. F. Sort and assemble the election material and supplies in preparation for the canvassing o f the returns. G. Canvass the returns of the election. H. Furnish a tabulation of the number of votes given in the election. I. Make all arrangements and take the necessary steps to pay all costs of the election incurred as result of services performed by the District and pay costs and expenses of all election officials. J. Conduct and handle all other matters relating to the proceedings and conduct of the election in the manner and form as required by law. PREPARED BY: APPROVED AS TO FORM BY: John P. Lippitt John M. Kaheny v Director of Public Works City Attorney 6 EXHiBiT A DESCRIPTION OF TYPES OF FACILITIES The types of public facilities authorized to be financed by the levy of special taxes within each Improvement Area shall include streets, landscaping within public rights-of-way, sewers and public utilities as may be authorized by the goals and policies of the City Council pertaining to the use of the Community Facilities District Law. J:'attome~,',reso,c fd Ol-I SMR Necessity to incur bonded mdcbtcdncss COUNCIL AGENDA STATEMENT Item Meeting Date r)~n~mh~r ITEM TITLE: PUBLIC HEARING: Regarding the Proposed Assessment of Certain Delinquent Solid Waste Service Charges as Liens Upon the Respective Parcels of Land and Placement of Delinquent Charges on the Next Regular Tax Bill for Collection RESOLUTION No. Assessing Delinquent Solid Waste Service Charges as Liens Upon the Respective Parcels of Land and Approving Placement of Delinquent Charges on the Next Regular Tax Bill SUBMITTED BY: Assistant City Manager Powell~ REVIEWED BY: City Manager ~'~ ~ ~ (4/5ths Vote: Yes No X ) In order to adequately protect the City's interest in delinquent solid waste service charges and ensure that collection efforts are directed towards the responsible property owner in the event of a change of ownership, staff is recommending approval for liens against affected properties as a preliminary action to placing the delinquencies on the property tax rolls if they remain unpaid. Adoption of this resolution will enhance the collection process for delinquent solid waste service charges by reducing the amount of uncollectible losses and ensure that payment will be received on a more timely basis. RECOMMENDATION: That Council open the public hearing to consider assessing delinquent solid waste service charges as liens on the affected properties, consider all testimony, and adopt the resolution overruling all protests and assessing these charges as liens upon the respective parcels of land. BOARDS/COMMISSIONS RECOMMENDATIONS: Not applicable. DISCUSSION: In November 1998, City Council amended Municipal Code Section 8.24 to require participation in solid waste service and eliminate suspension of solid waste service for nonpayment. To ensure that all residents pay their fair share of the costs of this program, the ordinance also allows delinquent solid waste service charges to be assessed as liens upon the affected properties and ultimately placed on the property tax bills for collection. The ordinance states that upon notification of the property Page 2, Item_ Meeting Date D~embe~ owners, a public hearing is set for solid waste service accounts that are over ninety days delinquent. At the hearing the City Council considers the delinquent accounts together with any objections or protests by interested parties. At the conclusion of the hearing, the City Council, may either approve the delinquency and amount owed on the accounts as submitted or as modified or corrected by the City Council. Lastly, the City Council adopts a resolution assessing such amounts as liens upon the respective parcels of land, and the amounts are charged to the property owners on the next regular property tax bill. As these amounts are collected, the monies are remitted to Pacific Waste Services less the City's Franchise Fees, AB939 fees and late charges. Because charges can only be submitted for placement on the property tax bills once a year in August, staff is recommending assessing liens on the affected properties midyear as to better ensure the City's chances for collection. If the City were to address these delinquent charges only once a year in August, the effectiveness of using the property tax bill as a means of collection would be significantly reduced as the owners of record in August would not necessarily be the people responsible for the delinquent charges. In cases where properties are sold or transferred, assessing liens midyear holds the correct parties responsible for the delinquent charges. In cases where property owners choose to refinance their mortgages, the midyear liens will ensure the City receiving payment in a more timely manner as the delinquent charges would be paid through escrow during the refinancing process. In August 2001, City Council approved 400 delinquent solid waste service charges valued at $89,716 to be placed on the forthcoming property tax bill. Since then, Pacific Waste Services has identified and submitted an additional 353 delinquent accounts valued at $48,172 to the city for collection. (listing available at the City Clerk's office). The account status and property ownership on these accounts have been verified by both Pacific Waste and City staff. Many of these delinquent accounts were listed in the August public hearing as they continue to remain unpaid. These property owners were notified of their delinquencies through a series of past due notices sent by Pacific Waste until they were ultimately submitted to the City for collection. City staff also sent out a past due letter, and three weeks ago, these property owners were notified of the public hearing and were asked to pay their delinquent solid waste service charges by December 3, 2001 to avoid a lien being placed on their property. City staff has been working with Pacific Waste to resolve any customer disputes as they arise and payment arrangements have been set up as needed. Staff will continue to update this list as payments are received and accounts are cleared. A final list will be submitted to the City Council for consideration as soon as all payments are recorded. Staff is recommending that the City Council approve the final list of delinquent solid Page 3, Item_ / ~ Meeting Date ~ waste accounts as submitted, and that these charges be forwarded to the County and assessed as liens on the respective parcels of land and ultimately placed on the next regular tax bill for collection. FISCAL IMPACT: By using the property tax bill as the ultimate collection method for delinquent solid waste service charges, an estimated $129,500 should be collected in FY 01-02. These funds would then be forwarded to Pacific Waste Services less the city's Franchise Fees, AB939 fees and late charges. The city should recognize an estimated $11,700 increase in Franchise Fees, $2,300 in AB939 fees, and $8,000 in late charges for FY01-02. RESOLUTION NO. 2001- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ASSESSING DELINQUENT SOLID WASTE CHARGES AS LIENS UPON THE RESPECTIVE PARCELS OF LAND AND APPROVING PLACEMENT OF DELINQUENT CHARGES ON THE NEXT REGULAR TAX BILL WHEREAS, in October, 1998, the City Council amended Chapter 8.24 of the Chula Vista Municipal Code to establish collection methods for delinquent solid waste service accounts to be placed on the property tax bill for collection; and WHEREAS, the ordinance states upon notification of the property owners, a public hearing is set for solid waste service accounts which are over sixty days delinquent; and WHEREAS, at the hearing, the City Council is to consider the delinquent accounts together with any objections or protests by interested parties; and WHEREAS, at the conclusion of the hearing, the City Council may either approve the delinquency and amount owed on the accounts as submitted or as modified or corrected by the city Council; and WHEREAS, a public hearing on delinquent assessments was properly noticed for December 4, 2001, at which all protests or objections presented were considered by the City Council; and WHEREAS, staff is recommending that the City Council approve the final listing of delinquent solid waste service accounts as submitted and that these charges be forwarded to the County for placement on the next regular tax bill for collection; and WHEREAS, any delinquent accounts that are cleared by December 3, 2001, as a result of the public hearing set for December 4, 2001, will be removed from the list prior to the submittal of these charges to the County. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby (1) overrule any and all protests or objections presented at the public hearing and (2) approve, with respect to the delinquent account list presented by staff and on file in the office of the City Clerk, assessing delinquent solid waste service charges as liens upon the respective parcels of land and the placement of such delinquent charges on the next corresponding regular tax bill unless cleared by December 3, 2001. Presented by Approved as to form by Robert Powell Jo~/M. Kaheny Assistant City Manager ~ Attorney J~attorney~reso~solid waste delinquency COUNCIL AGENDA STATEMENT Item No.: Meeting Date: 12/4/01 1TEM TITLE: Reconsideration of the designation of 769 Broadway, The Henry Fischer House. SUBMITTED BY: Director of Planning and Building //~ Cdff-~t~L (4/5ths Vote: Yes No X ) REVIEWED BY: City Manager Based upon the recommendation of the Resource Conservation Commission on August 21~ 2001 Council considered the designation of the Henry Fischer House, 769 Broadway as a historic site. City Council also considered several other potential actions that could be taken to preserve the house. At that time Council requested that staff return with information on a number of issues including the feasibility of the City preserving the house as a museum. In this report, staff has provided the answers to Council's questions pertaining to this issue. The Environmental Review Coordinator has determined that this project is exempt per the California Environmental Quality Act (CEQA), Section 1533, Class 31, Historical Resources Restoration and Rehabilitation. RECOMMENDATION: That Council accept this report and take no action regarding designation or preservation of the Henry Fischer house (as requested by the property owner). BOARDS/COMMISSIONS RECOMMENDATION: This request was brought to the RCC at the June 11, 2001 meeting. The owner, Mr. Canuto Lopez, was present at this meeting and originally stated that he did not want the site designated. However during the RCC's consideration Mr. Lopez reconsidered his position and stated that he would not be opposed to Council designating his property as historic. The RCC made the following recommendations to the City Council: (Attachment 1). · Designate the Henry Fischer House as a historic site. · Research possible City-owned sims where the Fischer House could be moved permanently or temporarily. · Appropriate the necessary funds to preserve the house by moving it to another location within the City Of Chula Vista (at no cost to the owner) · Direct staff to negotiate with the property owner for the purchase of the house in order to ensure its long-term preservation. / Page 2, Item No.: ~ Meeting Date: 12/4/01 DISCUSSION: In April 2001 a realtor from Realty Executives informed staff that the property at 769 Broadway was in escrow and that once the transaction was complete the new buyers intended to demolish the existing structure. (Attachment 2) The buyer's agent wanted to ensure that the City would not object to the demolition of the structure, which was built in the late 1800's. The property is not on the local register of historic sites nor is a historic site permit attached to the property. The City, therefore, does not have the ability to block or delay the demolition. The item was taken to City Council on August 21, 2001. (Attachment 3) Rather than taking any formal action at that time Council requested that staff research and respond to the following questions: 1. Does the owner want to donate the house to the City? 2. What are the tax advantages of donating a house? 3. What would the cost be to move the house? 4. Provide a list of suitable sites for relocation of the house. Does the owner want to donate the house? Subsequent to the August 21, 2001 Council meeting, staff communicated with the owner of the Fischer House on his intentions pertaining to the house. Mr. Canuto Lopez, the legal owner of the property, stated to staff that he does not want the house to be designated nor does he want to donate the house to the City. He stated that although he understood that there would be little or no detriment to his property rights by designating the site, he is still opposed to the designation. He further stated that he intends to keep the house regardless of the sale of the Io~t. Staff advised him that if he retained ownership of the house it might be beneficial for him to have the house designated so that he could be eligible to participate in the Mills Act program. He said that the RCC had advised him of all of his options at their June 11, 2001 meeting, and that he simply was not interested in participating in the City's historic preservation program. In the event that Council would like to pursue the preservation of the Fischer House by designating the property without the consent of the owner, staff has proceeded in answering the remainder of Council's questions pertaining to this issue. Tax advantages of donating a house? Determining the tax advantages of donating a house can be very complicated and is typically done by a certified tax accountant. If Mr. Lopez were to reconsider his current position and was to decide that he was in favor of donating the house then it would be advisable for him (or Staff if so directed by Council) to consult with a tax attorney or a certified accountant at that time. Page 3, Item No.: /7 Meeting Date: 12/4/01 What would the cost be to move the house? Prior to relocating the house it would have to be determined that the house is structurally sound to be moved. This cannot be determined without a thorough on-site inspection, for which the owner has declined to give authorization. Based on square footage and the county assessed value, as of 9/10/1997, the structure was valued at $57,000. In addition, staff was provided an estimate of $45,000 for a house mover. This cost is for basic removal and does not cover additional extraneous costs. To re-site the house, including all miscellaneous costs, could total up to $300,000.00. (Attachment 4) Additionally there may be substantial additional costs in relocating the three families that currently occupy the converted apartment units. The Chula Vista Historic Homeowners group and the Chula Vista Heritage Museum have notified staff that they would sponsor any fundraising opportunities necessary to help raise money to save the house from demolition. The Historic Homeowners group obtained a bid from a reputable house mover of approximately $30,000, and state that they have obtained commitments from an architectural engineer to donate services in helping with the relocation. Provide a list of suitable sites for relocation. There are numerous city owned vacant parcels on the west side of 1-805. If directed by Council staff would conduct a comprehensive analysis in order to determine those most suitable and available for relocation. Conclusion: The Henry Fischer house, one of the few remaining Victorian style homes in Chula Vista, does have some historic value. (Attachment 5) If the owner was interested in participating in the City's historic preservation program, staff would concur with the RCC that the structure would be worthy of designation. Staff finds that it would be beneficial if the owner voluntarily participated in the City's historic preservation program. Staff has informed Mr. Lopez of the benefits of the City's preservation program including the Mills Act program as well as the possible tax benefits of donating the house to the City. Mr. Lopez as previously stated is not interested in participating in the program. At this time the owner of the Henry Fischer house is not compelled to participate. Mr. Lopez does not want the house designated, nor does he want to donate the house. The owner further stated that the house is no longer in peril and will not be demolished. Mr. Lopez was notified that the Chula Vista City Council would be revisiting the issue of designating his house at tonight's meeting. To date the City of Chula Vista has pursued a voluntary historic preservation program. This Page 4, Item No.: ~[ Meeting Date: 12/4/01 has proven to be a successful approach in that almost fifty homeowners have willingly participated in the program without any significant inducements. It is for this reason that staff would not recommend designating the Fischer House against the property owner's will. FISCAL IMPACT: There is no fiscal impact associated with the designation of the property as historic or to place the house on Chula Vista's List of Historic Sites. However, as discussed in staff's report there would however be substantial fiscal impacts if Council decides to either purchase or move the Fischer House. Attaclm~ents 1. June 11, 2001 RCC Minutes 2. Locator Map 3. August 21, 2001 City Council Minutes 4. Re-Siting Estimate 5. Photos J:\Planning\Lynnette\henry fischer agenda stmt..doc MINUTES OF A SPECIAL MEETING OF THE RESOURCE CONSERVATION COMMISSION June 11, 2001 Mercy Building Conference Room 430 "F" Street MEETING CALLED TO ORDER: Chair Cindy Burrascano called the meeting to order at 6:34 p.m. ROLL CALL/MOTION TO EXCUSE: MEMBERS PRESENT: Chair Cindy Burrascano, Vice-Chair Charles Bull, Commissioners Juan Diaz, Steve Thomas, Pamela Bensoussan, Doug Reid and Teresa Thomas (6:37) STAFF PRESENT: Marilyn Ponseggi, Environmental Review Coordinator Maria Muett, Associate Planner Frank Rivera, Senior Civil Engineer John Schmitz, Acting Principal Planner Joan Isaacson, TEP Linda Bond, Recording Secretary OTHERS PRESENT: Joe Monaco, Dudek & Associates Chris Teng, McGill Ma~tin Self Canuto Lopez, Resident Norma Lopez, Resident APPROVAL OF MINUTES: April 2 and May 14, 2001 The appropriate Commissioners were not present to approve the April 2, 2001 minutes. MSC (BulI/S. Thomas) to approve the May 14, 2001 minutes. Vote: (4-0-2- 1 ) with Diaz and Reid abstaining and T. Thomas absent. ORAL COMMUNICATIONS: None. OlD BUSINESS 1. Designation of the Henry Fischer House on the City of Chula Vista List of Historic Sites Ms_ Marilyn Ponseggi (Environmental Review Coordinator) indicated that, at the last meeting, there was discussion that there had been a request for a demolition permit for the Henry Fischer house. At that time, the Commission asked staff to place on the agenda consideration of the Henry Fischer house for designation as a historic ATTACHMENT 1 (1 OF 2~ RCC Minutes - 2 - June 11. 2001 site. Mr. & Ms. Lopez, the owners of the property, have expressed to staff that they do not want the site designated. Ms. Maria Muett (Associate Planner) indicated that staff was contacted regarding the demolition, and that the RCC requested this be looked at as a proposed designated site. The Henry Fischer house was part of the 1985 City of Chula Vista Historical Resources Inventory. It was not included in the list of historical sites. Since the site has not been designated and does not have a City of Chula Vista historical site permit, the City is obligated to issue a demolition permit. In accordance with Section 2.32.070 of the Chula Vista Municipal Code, the RCC has the authority to recommend to the City Council when it comes to historical site designations. Ms. Muett described the history and architecture of the house, in 1987, Mr. Olen A. Hoy, then owner of the house, requested that the City accept the house as a historical site. At that time, the Commission was concerned about the financial risk the City would incur to move, store and restore the house. The RCC voted to not accept the property at their January 11, 1988 meeting. The Commission discussed the integrity of the house and its histodc links at length. MSUC (Bensoussan/T. Thomas) to recommend to the City Council the following: a) Designate the Henry Fischer House as Historic Site ¢¢-46 on the City of Chula Vista List of Historic Structures; b) Appropriate the necessary funds to preserve the house by moving it to another location within the City of Chula Vista at no cost to the owner; c) Direct staff to negotiate with the property owner for the purchase of the house in order to ensure its long-term preservation. Vote: (7-0-0-0) APPROVAL OF MINUTES (Cont'd) MSC (Bensoussan/S. Thomas) to approve the minutes of April 2, 2001. Vote: (4-0-3-0) with Burrascano, Bull and Reid abstaining. NEW BUSINESS 2. EIR-01-03- SaLt Creek Interceptor Sewer Program EIR Ms. Ponse99i stated that the Final EIR contains the revised EIR text, comments, responses to comments and an Addendum to the Final EIR. The purpose of the Addendum is to discuss refinements that have been made to the project and to analysis the refinements in relation to the analysis of issues contained in the Draft ~IR. The public facilities elements of the General Plan identified the need for a sewe~ within the Salt Creek alignment. The Otay Ranch GDP and draft MSCP Subarea Plan all contemplate a sewer in this location. The Salt Creek Sewer Interceptor has been planned and sized to accommodate build-out of the City under the current General Plan. As a result of concerns raised by some of the environmental groups and the resource agencies, two policy options were analyzed ATTACHMENT I (2 OF 2) PROJECT LOCATION CHULA VISTA PLANNING AND BUILDING DEPARTMENT LOCATOR PROJECT PROJECT DESCRIPTION: APPUCANT: THE HENRY FISCHER HOUSE (~ pROJEC* Proposed Historical Site Designation ADDRED~: 769 BROADWAY NORTH No Scale h:\home\planning\locators\,cdr 11/09/01 ATTACHHENT 2 ORAL COMMUNICATIONS (Continued) - James Berry, 885 Ash Avenue, requested an exemption from the Property Based Business Improvement District (PBID) for Branch 61 of the Fleet Reserve Association, located at 288 Third Avenue. He explained that Branch 61 formed a business enterprise called Chib 61, a non- profit veterans organization with one full-time and one part-time employee. If the club has to pay the assessment for the PBID. it would have to suspend contributions to charitable organizations it supports in Chula Vista. Mayor Horton referred the matter to City Manager Rowlands and requested that staff contact Mr. Berry. BOARD AND COMMISSION RECOMMENDATIONS 10. REQUEST BY THE RESOURCE CONSERVATION COMMISSION TO DESIGNATE THE HENRY FISCHER HOUSE AS A HISTORIC STRUCTURE City Staff received a communication regarding the potential demolition of the Henry Fischer house located at 769 Broadway Avenue. Since the site has not been designated and does not have a City historic site permit, the City is obligated to issue a demolition permit. Based on these circumstances, the Resource Conservation Commission considered the designation of the Henry Fischer house as a historic structure at its June 11, 2001 meeting. In accordance with Municipal Code Section 2.32.070, the Resource Conservation Commission recommends the historic listing of the Henry Fischer house. (Resource Conservation Conunission) Commission recommendation: Council designate the Henry Fischer house as Historic Site No. 46 on the Chula Vista List of Historic Sites; research possible City-owned sites where the Fischer House could be moved permanently or temporarily; appropriate funds to preserve the house by moving it to another location within the City and at no cost to the owner; and direct staff to negotiate with the property owner for the purchase of the house to ensure its long4erm preservation. Staff recommendation: Council find that the Henry Fischer House meets the local criteria for designation as a historic site, adopt the proposed resolution, and deny the Commission's other recommendations based on the fact that the City does not have a program for moving or relocating historic structures and thc're are no funds allocated in the budget to move structures to another location for preservation purposes: Associate Planner Muett presented the proposal and delineated the City's criteria for relocating historical structures. Mayor Honon asked if the homeowner, Mr. Lopez, were willing to donate the house to the City. Ms. Muett replied that staffhad been unable to contact Mr. Lopez but the house is reportedly in escrow. Therefore, it may be the prospective buyers who are seeking to demolish the house, rather than Mr. Lopez. Mayor Horton asked staff to try to find out if the new buyer would be interested in donating the house to the City. She also requested that staff identify possible tax , su(~ ~ donat:km. Environmental Coordinator Pomseggi reported that staff had made numerous attempts to locate the realtor for the property. Mayor Horton asked staff to - provide a list of suitable sites for a historic home of this quality and to find out what it would cost to move the house. Page 4 - Council Minutes 08/21/0 I ATTACHMENT 3 ( 1 OF ?~ BOARD AND COMMISSION RECOMMENDATIONS (Continued) Pamela Bensoussan, representing the Resource Conservation Commission, explained the difference between a historic site designation and the historic permit process and stated that the Commission's intenl was to intervene only should thc house be in peril. Nancy Parks, 124 Hilltop Drive, reported that the Henry Fischer house may be the oldest remaining house in Chula Vista. She stated that the previous owner had offered to donate the house to thc City, and staff's recommendation at that time was to decline the offer. Ms. Parks asked the Council to accept the Commission recommendations, including the historic permit process, to come forward with a plan that would encompass future historic preservation, and to develop a program lo address situations such as the Fischer house. She also commented that a historic homeowner recently obtained a bid of $30,000 from a reputable house moving company. Frank Roscnnan, 66 Montebello Street, proposed that the Henry Fischer house be relocated to un vacant site next to the museum. He stated that volunteers had offered their services to tonsure that the house would be structurally sound for relocation, and over 300 signa~-'es were obtained in support of preserving the Fischer house. He urged the Council to implement a program for historical home preservation. Corinne McCall, 642 Second Avenue, expressed appreciation for Council's interest in historic preservation. She stated that there are few historic homes left and saving the Fischer house would be a source of civic pride. Councilmember Salas asked whether or not a historic designation could occur without the concurrence of the property owner and if the City could prevent an owner from demolishing a historic home. Ms. Ponseggi responded that a historic designation could occur without the property owner's concurrence. Deputy City Attorney Hanson commented that the historic permit process could buy the City approximately one year to seek a way to avoid dcunolition, but hc did not believe that the City would have any control after that time. City Attorney Kaheny stated that '/here was no certainty as to whether or not the propea-ty was in escrow, and whether or not the prospective buyer had been notified of this procee, ding. He felt it was in the best interests of the City to continue the item until such time as the status of the property was established. ACTION: Mayor Horton moved to continue the item to the meeting of September 18, 2001. Councilmember Davis seconded the motion, and it carried 5-0. ACTION ITEMS 11. CONSDEKATION OF ADDING A SERGEANT AND AGENT TO THE SCHOOL RESOURCE OFFICER PROGRAM AND AMENDING THE BUDGET AND APPROPRIATING FUNDS THEREFOR (4/STHS VOTE REQUIRED) During the June Il, 2001 budget workshop, Council requested that the Police D~partment report on the feasibility of adding a full-time School Resource Officer to every high school in the City. (Chief of Police) Page5 - CouncilMinutes 08/21/01 ' ATTACHMENT 3 (2 OF 2) oLu~. PROJECTS JOB&©DRESS DATB: ~./~/~d/ SUPERVISOR 1. Permits S 35. Mirrors-Tub Doors S 2. Plans & Spec S 6.000 00 37. Garage Doors: S 3. Survay& Engineen $ 3,00000 38. Fixed Glass: S 1,O00.00 4. Soil Test: $ 2,500.00 39. Carpentry Finish: S 6,000.00 5. Spec. al Inspectons: $ 2,000.00 40. Mail Box: S 100.00 $ 13,500 00 $ 7,10000 6. Demolition: $ 41.Door & Jambs S 16,000.00 7. Shonng: $ 42. Both Accessories: S 2,000.00 8. Grading: $ 6.000.00 43. Hardware Finish: S ' 4,000.00 9. Ornamental Iron: $ 44 Fire E×tinshers: S 10. Structural Steel: $ 45. Electrical Wireing: S 14,000.00 $ 6,000.00 $ 36,000.00 11. Reinforcing Steel: $ 1,000.00 56. Sheetmetal: S 12. Elevator: $ 57. Roof Hatch: S 13. Masonry: $12,00000 58. Skylites: $ 14. Masonry Retaining: S 59. Cabinets: S 15. Foundation Slab: $ 6,000.00 60. Balconys: S $ 19,000.00 16. French Frains: $ 61. Insulation: S 17. Back Fill: S 62. Drywall: S 18. Termite Control: $14,000 00 63. Lath/Plaster: S 4,500.00 19. Gypcrete: $ 64. Painting: S 15,000.00 20. PlumDing: $12,000.00 65. Ceramic Tile: $ 8,000.00 S 26,000 00 $ 27,500.00 21. Plumbing Fixtures: $ 6,000.00 55. Formica: S 22. Sewer tie-in: $ 3,000 00 67. Marble Tops: S 23. Water tie-in: S 2,000.00 68. Drapes: $ 24. Water profing: S 69. Carpets: S 8.500.00 25. Wa~r proof decks: $ 70. Linoleum: S 11,000.00 $ 8,500.00 26. Tru Span concrete: S 71. Flooring: $ 6,600.00 27. lvlasanry veneer: $ 72. Stairs: $ 7,700.00 28. Carpentry Rough: $10,000.00 73. Refrigerator: 29. Hardware Rough: $ 1,500.00 74. Oven/Range: $ 30. Lumber Rough: $ 4,000.00 75. Dood: $ $15,500.00 $ 14,200.00 31. Fire Sprinklers: S 76. Dishwasher: S 32. Roofing: $18,000.00 77. Others: $ 33. Wardrobe Mirrors: $ 78. Finish Grade: $ 2,000.00 34. Fireplace: 8 12,000.00 79. Flate Work: $ 8,000.00 35. Glass Windows: $ 80. Clean up: $ 4,000.00 $ 30,000.00 $ 12,000.00 81. Paving: 85. Utilities: S 82Fencing: 87 Water Meter: $ 6,500.00 S :: ndscape: S 5,00000 88. Back Flow Meter: S 2,500.00 84. Wheel stop/strip: S 89. Contingency: S 30,000.00 d5. Pool: S 90. House Mover $ 45,000.00 $ 5,000.00 S 84,00000 TOTAL: S 303,30[}.00 Page l /~,./? ATTACHMENT 4 COUNCIL AGENDA STATEMENT Item No.: Meeting Date: 12/4/01 ITEM TITLE: Consideration of request for designation of the George Steese House as Historic Structure- 224 Fig Avenue Resolution of the City Council of the City of Chula Vista designating the George Steese House as a Historic site and placing the George Steese House on the City of Chula Vista List of Historic Sites in accordance with the Municipal Code Section 2.32.070(A). SUBMITTED BY: Director of Planning and Building REVIEWED BY: U~ty Manager ~4 ~ (4/5ths Vote: Yes__ No X ) The property owner, Veronica Lugo, has requested that her property at 224 Fig Avenue, the George Steese house, be considered for inclusion on Chula Vista's List of Historic Sites. (Attachment 1) The Resource Conservation Commission (RCC) considered the designation of the property at their October 15, 2001 meeting and recommends that the house be placed on Chula Vista's List of Historic Sites. RECOMMENDATION: Staff recommends that the City Council find that the George Steese House meets the local criteria for designation of the site and therefore should designate 224 Fig Avenue as Historic site//48 on the City of Chula Vista List of Historic Structures. BOARDS/COMMISSIONS RECOMMENDATION: The Resource Conservation Commission recommends that the City Council designate the George Steese House, 224 Fig Avenue as Historic Site #48 on the City Of Chula Vista List of Historic Structures. (Attachment 2) DISCUSSION: Municipal Code Authority In accordance with Section 2.32.070 of the City Of Chula Vista Municipal Code, the RCC shall recommend to the City Council the designation of any site, which it has found to meet the local criteria as a historical site and that the Commission shall also recommend if the Historical Site Permit Process should be imposed on the site. Page 2, Item No.: ~) Meeting Date: 12/4/01 The Historical Site Permit Process has provisions to stay the issuance of permits for demolition or modification in order for the RCC to make a recommendation to the City Council about potential actions that could be taken to preserve the site. The RCC elected not to recommend the Historic Site Permit for this site. The City has adopted six criteria that are used to determine if a particular property should be included on the Historic Site List (Attachment 3). A site must be found to meet at least one of the six criteria to be selected for designation. Owner Participation On September 25, 2001 staff received an application for historic designation from the property owner, Veronica Lugo. (Attachment 4) The owner Veronica Lugo was in attendance when her house was considered for designation at the October 15, 2001 Resource Conservation Commission meeting. A letter has been sent to the property owner notifying her of the current pending City Council action regarding her property. Past History The George Steese House was part of the 1985 City Of Chula Vista Historic Resources inventory. The City Of Chula Vista Historic Resources Inventory prepared in 1985 states that the home was built in 1929. (Attachment 5) The lot was purchased and developed by George and Irene Steese. The survey further indicates that the house retains integrity of design and materials and is a charming example of Tudor style in modern form. Tudor style homes are based on a variety of late Medieval English prototypes, ranging from thatched roofed folk cottages to grand manor homes. American eclectic expressions emphasize the steeply pitched, front facing gables. Most Tudor houses have stucco masonry, masonry- veneered walls and sometimes have wooden wall cladding. Other identifying features are: · steeply pitched roofs, usually side-gabled · a facade dominated by one or more prominent cross gables usually steeply pitched · decorative half timbering · tall narrow windows, usually in multiple groups and with multi-pane glazing · massive chimneys commonly crowned by decorative chimney pots. Features of the Site According to the Historic Resources Inventory, the George Steese House is a one story house that features a high cross gable roof with three street facing gable ends, a double gable on the left and a single on the right. The central section of the house is recessed between the gabled sections and a small, walled entrance patio fills the space. A large exterior chimney stands at Page 3, Item No.: ~ Meeting Date: 12/4/01 the front of the house near the entrance. The chimney has a stucco exterior to just above the eave level and then continues up with brick on the outside. Four chimney pots grace the top of this chimney. Other details of the home include vents in the gable ends, paired casement windows with wooden frames, and shutters on some windows. (Attachment 6) Conclusion: The house has several interesting features of the Tudor style that contribute to its architectural character. It is one of several Tudor style homes that add value to the City's eclectic housing inventory. The house appears to have evidence of its original features. Additional research found very little information on the primary owner, Mr. George Steese. Though it cannot be determined that the house is linked to a historic personage the house does appear to meet criteria //4 and //6. The RCC is recommending that the City Council find that the George Steese house meets these criteria, distinguishing architectural characteristics that are identifiable (Criteria//4), and continues to have evidence of the original features (Criteria//6). Therefore the RCC recommends placing the home on the City's List of Historic Sites. The RCC has further recommended that a Historic Site Permit not be issued for this site. FISCAL IMPACT: There is no fiscal impact associated with the inclusion of 224 Fig Street, the George Steese house, on the Chula Vista's List of Historic Sites. Attachments: 1.) Locator Map 2.) Resource Conservation Commission minutes/October 15, 2001 3.) Local Historic Criteria 4.) Owner's application for historic designation 5.) Historic Resources Inventory Worksheet 6.) Photos of the property J:\Planning\Lynnette\historic designation\224 fig designation Agenda Stmt..doc CHULA VISTA PLANNING AND BUILDING DEPARTMENT LOCAIOR ~ROJECI VE~ONIC^ LUGO PROJECTDESCRIP'aON:  APPLICANT: PROJECT 224 FIG AVENUE Proposed Historical Site Designation ADDRESS: SCALE: FILE NUMBER: NORTH No Scale ¢,~ 0 - F h:\home\pranning\locators 11/12/01 ATTACHNENT 1 RCC Minutes - 3 - October 15, 2001 always been or whether they want to take historic preservation in the City to a higher level and start imposing this on properties that the owners may not be in agreement. Ms. Ponseggi recommended that, if the RCC is going to seriously consider recommending to the Council that they put the historic site permit on this property, that the RCC continue this to the next meeting. Let staff urge the property owners to be here because the RCC really needs to have some interaction with the property owners and understand what their feelings would be on that before the RCC makes that recommendation to City Council. The code calls for the RCC making a designation and also considering whether or not to make that recommendation. Commissioner Bensoussan indicated that the staff report does not specify which designation the property owners are after. Their goals to preserve the house are made very adamantly in their application, so she didn't think it would counter the spirit of what they are attempting to do. She didn't think the code said anything about it being a voluntary program. Ms. Ponseggi indicated that it has been an unofficial policy for the City that it be a voluntary program. Staff should include in the report if the property owners were or were not in agreement. MSC (Bensoussan/Diaz) to designate the house with a simple designation. Vote: (5-0-0-1)with Reid absent. MSC (Bensoussan/Diaz) to designate the house with a historic permit. Vote: (4-1-0-1) with Burrascano opposed and Reid absent. Chair Bull felt it should be noted that the property owners were not present to comment on these actions. 3. Request for Designation of the George Steese House, 224 Fig Street Ms. Tessitore-Lopez reported that this house was included in the Chula Vista Historic Resources Inventory but was not included in the official list of historic sites. The house was built in 1929 and is an example of the Tudor style in modern form, which retains integrity of design and materials. The house has several interesting features of the Tudor style that contribute to its architectural character. Although it cannot be determined if the house is linked to a historic personage, it appears to meet Criteria #4 and #6. Ms. Veronica Lugo (Owner, 224 Fig Street, Chula Vista, CA 91910) stated that a lot of the interior of the house is original. She would like the house researched. MSC (Bensoussan/Thomas) for historic designation. Vote: (5-0-0-1) with Reid absent. Commissioner Diaz left the meeting at 7:35 p.m. ATTACHMENT 2 (1 OF 2) RCC Minutes - 4 - October 15, 2001 Commissioner Bensoussan asked Ms. Lugo if she understood about historic permits. Ms. Lugo responded in the negative. Chair Bull suggested that staff make the historic permit material available to owners. Ms. Lugo was not aware that it was two separate items. She is interested in the Mills Act. She was not aware of the requirements under a permit. Ms. Tessitore~Lopez stated that she would send that information to her. Commissioner Bensoussan stated for the record that the code needs revising. It affords no real direction. Ms. Ponseggi indicated that the General Plan that is being updated needs to have very strong policies regarding historic preservation in order for staff to have a code that has real teeth in it. All of the land use regulations stem from the General Plan, and if the General Plan is silent on something, it makes it that much more difficult to adopt ordinances because staff does not have a policy direction. The City does not have a historic preservation code now. What the policy says is: "other duties of the RCC". Request for Designation of the Almond Picketing House, 181 Madrona Street Ms. Tessitore-Lopez reported that this house is part of the Chula Vista Historic Resources Inventory but not included in the official list of historic sites. The house was built in 1929 and is a late version bungalow with a hint of Colonial Revival. The house may meet Criteria #4 and #6. However, the additions of a carport and brick fa~;ade are features that are not found in this type of architecture and may compromise the historic integrity of the structure. Staff requests that the Commission specifically address the carpor~ and brick fa~;ade to determine the impact of these features with respect to the criteria for designation. Commissioner Bensoussan noted that the staff report under BACKGROUND was incorrect. The house is 'east' of Second Avenue and 'west' of Elm Avenue. She had looked at the house, and the brick seems more ominous in the photograph than it does in person. The carport is actually a design feature that was used in a lot of houses at the beginning of the century except this is a modern version. She would recommend that the owner make a few changes to give it a more authentic look. Chair Bull stated that the question the RCC has to decide, even if the house did not have the brick work and carport which definitely detracts from its original nature, is to what extent the RCC is going to list California bungalows because there are so many of them. Ms. Ethel M. Carter (Secondary Owner, 181 Madrona Street, Chula Vista, CA 91910) stated that they have already started taking the bricks down. ATTACHMENT 2 (2 OF 2) CITY OF CHULAVISTA LOC~_~L CKITERIA FOR HISTORICAL SITE DESIGNATION: · Bears a relationship to overall heritage on a local, state, or national basis. This Mission of San Diego, for example, is local bm is also part of a statewide system that is recogulzed nationally. · Relates to a historic personage who played an important role historically, on a local, state, or national basis. However, the individual need not be known nationally, as long as it was someone who made a sigulficant contribution on a local basis. Ideally, this includes a site where the individual lived or where a notewortJay historical contribution or achievement took place. · May be a site where an important event took place. This would be an event sjaubolic of a phase of history that could reach the national level. The site of the si~m~ing of a historic document, for example, xdll satisfy this criterion. · The site should have distinguishing architectural characteristics that are identifiable. This includes sa uctures of a particular architectural st3,1e recognizable today. · The site may be archaeolo~cally siguifieant in its association uSth pre-hiqtory of the area. a site demonstrating existence of an ancient commnnity (indian~ indigenous to the area, for example) could satisfy this criterion. Has inte~ity. This is where the site continues to have evidence of the original features. Enough of the original structure or the site is intact to be distinguishable as having historical value. ATTACHMENT 3 CITY OF CnL LA. V ~ ?LA*LNING & BUILDING DE?ARTMENT HSstohc Designation ~ ~ 276 Fo~ Av~nu~ ~U~A ChulaVi~CA 919t0 APPL1CATIONFO~ [ ~PLIC.~/O~R ~O~TION Case ~ Applican~O~er Name: Verzn~ca Luco Date SubindeX: Applican~OwnerAddress: 224 ~o ~ven~e, Chela Phone: (619) 671-8089 Seconda~ Owne~ Name: N/'~ Owner Add~ess: Same as Phone: OW*N-ER A_PPROYAJL IS REQUIRED SIGNAl: ~t~'~ O ~ SIGNA~: DAm 1 [ PROPER~ mIOm~TION Prope~Address: 224 ~i9 ~venue. Chu!a Vis~a, Ca!ifor~Ja, 91910 Commonname:VeronJca T,ueo House Histoficname:Ganrga M. ~f. ae~e wou=e Year Built: ~ 9 2 9 Approximate Prope~ s~ze (in f~t) or approximate acreage 6 5 ~4 se. f~ - Ownemhip is: Pdvate ~ or Public Present Use: re=id¢~t, ia~ OfiginalUse: residential Archite~ural Style: mwfinr Assessors Parcel Numar (Required): 568-012-08 Zone: R-i Use the revere si~e of 5his ~o~ or a seDamm piece ~f ¢~Der m~y be a~ached for questions ~-3. Please ~escfibe, in detail, histo~cal aspens of the site or s~um as well as any other 7a~0~ which may ~ete~ine the prope~ as a histvfic site/lan0ma~ (i.e. special aesthet}~; cultural, ~rch~e~ural, or enDineefinD fa~o~; and any dates, events, OF Oe~ons ~ssociated with the site or stm~ure). See a~ched es~bli~hed criteria for desiDnation. Please see ag~ac~ed. 2. Has the site or stm~ure been altered in any way from its ofiDinal desiDn? Yes No X (If yes, explain) 3. BFieSy describe the present physical con0~ion of th~ pFvpe~ include a ratinD of poor, fair, pood, OF excellent. GOOD physical ccndition ~O "~ ATTACHHENT 4 (1 OF 3) Historic Designation Application Form 224 Fig Avenue, Chula Vista, CA 91910 Continuation Page I of 2 COMPLETE LEGAL DESCRIPTION OF THE PROPERTY Lot 8 (eight) of Block 'B' of Smailes Park Subdivision, according to Map No. 2109, filed in the office of the County Recorder of Chula Vista HISTORIC/LANDMARK INFORMATION 1. This house is a gorgeous example of the Tudor architectural style in modem form. One of the outstanding features of this house is its roo£ It features a high cross gable roof with three street-facing gable ends: a double gable on the left and a single on the right. The central section of the house is recessed between the gable sections and a small, walled entrance patio fills the space. A large exterior chimney is located at the front of the house, near the entrance. The chimney has a stucco exterior to just above the eave level and then continues up with brick on the outside. It is topped with four chinmey pipes. Other details of the home include vents in the gable ends, paired casement windows with wooden frames and shutters on some windows. An additional feature of this home is two trees located in the front yard, a cedar tree and a jacaranda tree. Although the age of these trees is currently unknown, they appear to be of significant age. In addition to the beauty of these, neighbors as well as visitors to the area appreciate the shade these two provide. This home retains integhty of design and materials. It continues to have evidence of its original features. Furthermore, it has the potential to yield additional information of importance to the history of Chula Vista. Preliminary research has revealed that on August 9, 1928 George M. Steese and his wife, Irene G. Steese, were granted Lot 8 of Block "B" of Smailes Park Subdivision in consideration of the sum often dollars. The grant deed stipulated that the residence to be constructed should not be worth less than $2500. Furthermore, prior to placing any building on said property complete plans of the buildings and landscaping had to be furnished by the buyer to the seller for approval. On August 29, 1928 purchase title was recorded at request of the Union Title Insurance Company. Water was connected to the lot on September 4, 1928. It is estimated that this house was constructed by 1929. In 1932, George M. Steese served in the United States Army. ATTACHMENT 4 (2 OF 3) Historic Designation Application Form 224 Fig Avenue, Chula Vista, CA 91910 Continuation Page 2 of 2 HISTORIC/LANDMARK INFORMATION 1. (cont'd) From 1960 to July 1997 Everett Massey and his wife Dolores Massey owned and lived in this home. Everett and Dolores Massey had two children, a son and daughter(Deborah). Dolores Masseydied February 1997 oflung cancer; she spent her last days in this house. Everett Massey moved to Ohio in 1997. Sources: Historic Resources Inventory, dated 9/10/85 Personal conversation with Everett Massey, May 1997 ATTACHMENT 4 ( 3 OF 3) HISTORIC RESOURCES INVENTORY c D IDENTIFICATION Everett Massey House ~. Str~tor~l~dr~s: 224 Fig Street C~ Chu!a Vista ~ 92010 ~un~ San Diego 4. ~ar~t numar: 568-012-08 5. ~e~ Everett & Dolores Massey ~d~: 224 Fig Street ~ Chula Vista ~ 92010 ~.~ioi~: ~bllc ~iv~.. x S. ~ U.:' residential O6~inal ~: residential D~C~I~ON 7a. ~i~ ~l.: Tudor This one sto~ouse features a high cross g~le roof with three street-facing'~le ends: a doyle g~!e on ~e left ~d a single on the right. The central section of ~e house is recessed be~een ~e g~led sections ~d a smallr walled entrance patio fills ~e space. A large exterior chimney studs at ~e front of the house near ~e entr~ce. The ch~ey ~s a stucco exterior to just ~ove ~ne eave level ~d ~en continues up wi~h brick on the outside. Fo~, ch4mney-pots grace ~e top of ~is chimney. Other details of ~e h6me include vents in the g~!e ends, paired casement windows with wooden fr~es. ~d shutters on some windows." Hem 8. Czanstrucdo~ date: ~'~mamcl ~ Fac':ua~ . 9. Arc~i~ L~ZLlC n OWTi lQ. Builder unknown 11. Fm~ta~ - 5Q ~>':O~, 133 . ' 1985 ATTACHMENT 5 (1 OF 2) 15. Su~u~: (~ ~ ~ ~ if ~) O~n la~ ~ ~i~i~ O~ ~i~ P~lic Worb ~j~ SIGNIFI~NCE 19. Bri~ ~ h~ ~d/m ~ ~n~ (i~u~ ~ ~ ~ ~ ~ w~ ~ On A~st 4, Z928, George ~. S~eese a~ ~s ~Ee, ~=e~e, bo;~ht Z929, th~s ~o~se ~a~ bee~ co~st~c~e~. Z~ [932~ ~o=~e S~eese se~ve~ ~a ~e O~te~ States-~y. ' ~s ~o~se ~s a cham~:ex~Ze off the styles ~e~e ~o~[a~ ~ ~e O~te~ States ~;o~ ~o~t [9Z8 to [940. 20. Main me of m hi~tmfi~ ~an~: (If ~ man one i~ ~/7~NORTR cS~,~'-'~-,d, n~ in ~ of i~) A~ x ~ · L~ L E~I~ 21. Water recor~ City dir~ries _ CV Tax ~ses~nt Rolls ~ o~.~ 9-10-1985 ATTACHMENT 5 (2 OF 2) I ' RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DESIGNATING THE GEORGE STEESE HOUSE AS A HISTORIC SITE AND PLACING THE GEORGE STEESE HOUSE ON THE CITY OF CHULA VISTA'S LIST OF HISTORIC SITES IN ACCORDANCE WITH THE MUNICIPAL CODE SECTION 232.70(A). WHEREAS, the George Steese House is a house of Tudor architecture located at 224 Fig Avenue in the City OfChula Vista (APN 568-012-08-00) constructed in 1929; and, WHEREAS, staff received communication from the property owner, Veronica Lugo, requesting that the George Steese House be designated as a historical site on the City of Chula Vista List of Historic Sites; and, WHEREAS, State of California Historic Eligibility Criteria requires that a site be found significant at a local, state, or national level, under one or more of the criteria for designation; and WHEREAS, the Resource Conservation Commission determined that the George Steese House meets one of the local criterion for designation because it is shown that it has distinguishing architectural characteristics that are identifiable and, WHEREAS, the Resource Conservation Commission determined that the George Steese House meets one ofthe local criterion for designation because it continues to have evidence ofthe original features. WHEREAS, the Resource Conservation Commission at their regular meeting on October 15,200 I voted 5-0-0- I (with Commissioner Reid absent) to recommend that the City Council place the George Steese House on the City of Chula Vista List of Historic Sites; and WHEREAS, the Environmental Review Coordinator has detennined that this project is exempt per the California Environmental Quality Act (CEQA), Section 15331, Class 3 I, Historical Resources Restoration and Rehabilitation. NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby approve the designation of the George Steese House, 224 Fig Avenue, as a Historic Site and determines that it is hereby placed on the City ofChula Vista List of Historic Sites. Presented by: Approved as to form by: Robert A. Leiter Director of Planning & Building Do- '1, !f~ ro/L. John M. Kaheny City Attorney dO -' ¡¿I November 14th, 2001 MEMO TO: City Clerk '\ .K/ Patly Wesp .lIP[! APPOINTMENT OF DEPUTY MAYOR FROM: SUBJECT: Mayor Horton has requested that the following be docketed for the December 4th Council meeting: APPOINTMENT OF DEPUTY MAYOR FOR 2002 Thank You! Cc: Mayor Horton Armando Buelna J() -/1 - / ~~f?- :;l~; CllY OF CHUlA VISfA MEMORANDUM OFFICE OF THE CITY CLERK November 28,2001 TO: Honorable Mayor and Members ofthe City Council Susan Bigelc!t: CMC/ AAE, City Clerk FROM: RE: Past Deputy Mayors For your information, and in response to the Mayor's request, I am providing the following list of Deputy Mayors for the last several years: 1994 Shirley Horton 1995 Jerry Rindone 1996 John Moot 1997 Steve Padilla 1998 Jerry Rindone 1999 Mary Salas 2000 John Moot 2001 Patty Davis ;JJ. ./1- d- November 28th, 2001 MEMO TO: The Honorable ~~~& City Council Patty Wesp ¡¡y-O CITY MANAGER PERFORMANCE EVALUATION FROM: SUBJECT: Since Council did not conduct the evaluation of the City Manager as scheduled on November 19th, it has been rescheduled under Closed Session following the regular Council meeting of Tuesday, December 4th, Ce: City Manager City Clerk Armando Buelna ;25