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Home My WebLink About2020-07-20 Agenda PacketAGENDA - Revised Final City Council/Public Financing Authority Regular Meeting Monday, July 20, 2020 at 5:00 PM MAYOR AND CITY COUNCIL LYN SEMETA, Mayor JILL HARDY, Mayor Pro Tem PATRICK BRENDEN, Councilmember KIM CARR, Councilmember BARBARA DELGLEIZE, Councilmember ERIK PETERSON, Councilmember MIKE POSEY, Councilmember Recorded live from the City Council Chambers 2000 Main Street Huntington Beach, CA 92648 SPECIAL NOTICE REGARDING COVID-19 STAFF OLIVER CHI, City Manager MICHAEL E. GATES, City Attorney ROBIN ESTANISLAU, City Clerk ALISA BACKSTROM, City Treasurer On March 4, 2020, Governor Newsom proclaimed a State of Emergency in California as a result of the threat of COVID-19. On March 17, 2020, Governor Newsom issued Executive Order N-29-20 which allows a local legislative body to hold public meetings via teleconferencing, and to make public meetings accessible telephonically or otherwise electronically to all members of the public seeking to observe and to address the local legislative body. Pursuant to Executive Order N-29-20, please be advised that some members of the Huntington Beach City Council and/or City staff may participate in this meeting telephonically or electronically. PUBLIC PARTICIPATION/AUDIO/VIDEO ACCESS TO BROADCASTED MEETINGS: Pursuant to Executive N-29-20 and given the current health concerns, members of the public are encouraged to access the meeting live on-line at https://huntingtonbeach.legistar.com, or can elect to view the meeting via cable television channel HBTV-3. To ensure the public’s right to fully participate in providing meaningful public comments at the July 20, 2020, City Council meeting: 1.The Council Chambers will be open for public attendance to provide public comments. Social distancing measures will be in place, and once a participant has made a public comment, the participant will be asked to exit the Council Chambers. The City will provide an area for viewing the Council meeting on television to a limited number of participants. During Public Comments, members of the public may provide a comment, on an agendized or non-agendized item, in person with a 3-minute time limit; or, 2.The public may submit a comment telephonically. At 6:00 PM, individuals wishing to provide a comment on agendized or non-agendized items may call (669) 900-6833 and enter Webinar ID 989 1737 1594. Once a caller has entered the meeting, they will be placed in a holding queue. Callers will be prompted to speak in the order received, and after the Clerk confirms the last three digits of their phone number, are encouraged, but not required to identify themselves by name. Each caller will be provided 3 minutes to speak. Individuals wishing to provide comments on items scheduled for Closed Session should enter the call queue at 5:00 PM. Members of the public may submit SUPPLEMENTAL COMMUNICATION (information received by the City Clerk's Office following distribution of the Council agenda packet): Members of the public wishing to submit written (supplemental) communication on agenda items for distribution to the City Council and placed into the administrative record can email SupplementalComm@Surfcity-hb.org. Supplemental Communications received by 2:00 PM the day of the meeting will be distributed to City Council prior to consideration of agenda-related items, and will be announced, but not read, and placed into the administrative record during the Supplemental Communications portion of the Meeting. In addition, any communications sent to city.council@surfcity-hb.org on Council agenda items will be treated as Supplemental Communications and announced, but not read, during the meeting. MEETING ASSISTANCE NOTICE: In accordance with the Americans with Disabilities Act, services are available to members of our community who require special assistance to participate in public meetings. If you require special assistance, 48-hour prior notification will enable the City to make reasonable arrangements for an assisted listening device (ALD) for the hearing impaired, American Sign Language interpreters, a reader during the meeting and/or large print agendas. Please contact the City Clerk's Office at (714) 536- 5227 for more information. 1 Page 1 of 9 City Council/Public Financing Authority 5:00 PM - COUNCIL CHAMBERS CALL TO ORDER ROLL CALL AGENDA July 20, 2020 Posey, Delgleize, Hardy, Semeta, Peterson, Carr, Brenden ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS PERTAINING TO CLOSED SESSION ITEMS (3 Minute Time Limit) - At 5:00 PM, individuals wishing to provide a comment on a Closed Session item may call (669) 900-6833 and enter Webinar ID: 989 1737 1594. Once a caller has entered the meeting, their call will be placed in a holding queue and will be answered in the order received. When invited to speak, callers are encouraged to identify themselves by name, and can speak for no more than 3 minutes. RECESS TO CLOSED SESSION CLOSED SESSION ANNOUNCEMENT(S) 1. ***New*** 20-1782 Mayor Semeta to announce: Pursuant to Government Code §54956.8, the City Council takes this opportunity to publicly introduce and identify designated property negotiator, City Manager Oliver Chi, who will be participating in today's Closed Session discussions regarding negotiations with Shigeru Yamada Living Trust and Mitsuru Yamada Living Trust concerning price and terms of payment for the disposition of real property located at 17642 Beach Blvd., Huntington Beach, California CLOSED SESSION 2.20-1759 Pursuant to Government Code § 54956.9(d)(1), the City Council shall recess into Closed Session to confer with the City Attorney regarding the following lawsuit: Cruz (Martin & Ana) and N.B.C. v. City of Huntington Beach, et al.; USDC Case No. 8:19-cv-1449-DOC (ADSx) 3.20-1767 Pursuant to Government Code § 54956.9(d)(4), the City Council shall recess into Closed Session to confer with the City Attorney regarding whether to authorize the City Attorney to provide Amicus Support in the Appeal to the Ninth Circuit Court of Appeals in the 2 Page 2 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 case Kathy Craig/Gary Witt v. County of Orange, et al., Case Nos. 19-55324, 19-56188 ***New*** 6:00 PM – COUNCIL CHAMBERS RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING ROLL CALL Posey, Delgleize, Hardy, Semeta, Peterson, Carr, Brenden PLEDGE OF ALLEGIANCE INVOCATION In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. 5.20-1684 Marsha Rechsteiner of Saints Simon and Jude Catholic Church, and member of the Greater Huntington Beach Interfaith Council CLOSED SESSION REPORT BY CITY ATTORNEY AWARDS AND PRESENTATIONS 6.20-1742 Mayor Semeta to call on John Etheridge to invite the Huntington Beach City Council to the Rededication Ceremony of the Surfing Walk of Fame on August 1 7.20-1749 Mayor Semeta to present the Making A Difference Award to President and Founder Justine Mackoff of the Free Rein Foundation ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) 4.20-1781 Pursuant to Government Code § 54956.8, the City Council shall recess to Closed Session to give instructions to the City's Negotiator, Oliver Chi, City Manager, regarding negotiations with Shigeru Yamada Living Trust and Mitsuru Yamada Living Trust, concerning price and terms of payment for the disposition of real property located on a portion of 17642 Beach Boulevard, Huntington Beach, California 3 Page 3 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 PUBLIC COMMENTS (3 Minute Time Limit) - At 6:00 PM, individuals wishing to provide a comment on an agendized or non-agendized item may call (669) 900-6833 and enter Webinar ID: 989 1737 1594. Once a caller has entered the meeting, their call will be placed in a holding queue and will be answered in the order received. When invited to speak, callers are encouraged to identify themselves by name, and can speak for no more than 3 minutes. COUNCIL COMMITTEE - APPOINTMENTS - LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES CITY MANAGER'S REPORT 8.20-1492 Ascon Landfill Site Update 9.20-1739 Update of the City COVID-19 Response Plan and Actions for Review and Discussion CONSENT CALENDAR 10.20-1738 Approve and Adopt Minutes Recommended Action: A)Approve and adopt the City Council/Public Financing Authority special meeting minutes of June 29, 2020, as written and on file in the office of the City Clerk; and, B)Approve and adopt the City Council emergency meeting minutes of July 1, 2020, as written and on file in the office of the City Clerk; and, C)Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated July 6, 2020, as written and on file in the office of the City Clerk. 11.20-1743 Adopt Resolution No. 2020-47 establishing Permit Parking District “Z” affecting residents along the Heil Avenue frontage road between Goldenwest Street and Gothard Street, and Sabot Lane between Heil Avenue and Sunlight Drive Recommended Action: Adopt Resolution No. 2020-47, “A Resolution of the City Council of the City of Huntington Beach Establishing Permit Parking District ‘Z’ Within the City of Huntington Beach.” 12.20-1753 Approve and authorize execution of a Professional Services Contract between the City of Huntington Beach and Hinderliter, De Llamas and Associates, for Sales and Use Tax Auditing Services 4 Page 4 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 Recommended Action: Approve and authorize the Mayor and City Clerk to execute a “Professional Services Contract Between the City of Huntington Beach and Hinderliter, De Llamas and Associates, for Sales and Use Tax Auditing Services.” 13.20-1754 Approve and authorize execution of the Professional Services Contract between the City of Huntington Beach and Noll & Tam Architects to Complete a Library Facilities Master Plan Utilizing Restricted Library Development Impact Fee Funds; and, approve appropriation of funds Recommended Action: Approve and authorize the City Manager to execute “Professional Services Contract Between the City of Huntington Beach and Noll & Tam Architects for a Library Facilities Master Plan” and appropriate $289,697 in the Library Development Impact Fund (Business Unit 22950001). 14.20-1766 Approve Appointments and Reappointments to the Huntington Beach Youth Board with Terms to Expire May 31, 2021 Recommended Action: A)As recommended by City Council Member liaisons Jill Hardy and Kim Carr, approve the appointment of the following students to a one-year term on the Huntington Beach Youth Board with terms to expire May 31, 2021: Vivian Bui - Huntington Beach High School, At-Large Member Luke Blankenbaker - Huntington Beach High School, At-Large Member Kenady Osborne - Marina High School, At-Large Member Emma Weston - Edison High School, At-Large Member B)As recommended by City Council Member liaisons Jill Hardy and Kim Carr, approve the reappointment of the following students to a one-year term on the Huntington Beach Youth Board with terms to expire May 31, 2021: Jenna Ali - Huntington Beach High School, Representative Bella Brannon - Ocean View High School, Representative Samuel Dater- Edison High School, Representative Kathryn Robinson - Marina High School, Representative Caitlin Sheetz - Edison High School, At-Large Member 15.20-1778 City Council Position on Legislation Pending Before Congress and the State Legislature as Recommended by the City Council Intergovernmental Relations Committee (IRC) Recommended Action: 5 Page 5 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 A)Approve a City position of Support on Senate Bill 1386 (Moorlach) “Local Government: Assessments, fees, and charges on water hydrants”; and , B)Approve a City position of Watch on Assembly Bill 1063 (Petrie-Norris) - “Planning and zoning law on housing elements, accessory dwelling units, and adequate site substitutes”; and , C)Approve a City position of Oppose on Senate Bill 1120 (Atkins) - “Subdivisions: tentative maps”; and, D)Approve a City position of Oppose on Senate Bill 1385 (Caballero) - “Local planning: housing, commercial zones”; and, E)Approve a City position of Watch on Senate Constitutional Amendment 1 (Allen) - “Public housing projects”; and, F)Approve a City position of Oppose on Senate Bill 1299 (Portantino) - “Housing development: incentives, rezoning of idle retail sites”; and , G)Approve a City position of Watch on Assembly Bill 2345 (Gonzalez) - “Planning and zoning: density bonuses, annual report, affordable housing”; and , H)Approve a City position of Watch on the Library Stabilization Fund Act (Reed and Levin) . 16.20-1744 Adopt Ordinance Nos. 4214, 4212, 4215, 4216, and 4213, approving Zoning Text Amendment (ZTA) No. 19-005 and Municipal Code Amendment adding Chapter 5.110 (Group Homes) Approved for introduction July 7, 2020, Vote: 7-0 Recommended Action: A)Find that the project will not have any significant effect on the environment and is categorically exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendment to the HBZSO will have a significant effect on the environment (Attachment No. 1); and, B)Approve Zoning Text Amendment No. 19-005 with findings (Attachment No. 1), approve amendment to Huntington Beach Municipal Code adding Chapter 5.110 (Group Homes), and adopt: Ordinance No. 4214, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 203 of the Huntington Beach Zoning and Subdivision Ordinance Titled Definitions (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4212, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance 6 Page 6 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 Titled Use Classifications (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4215, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 210 of the Huntington Beach Zoning and Subdivision Ordinance Titled R Residential Districts (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4216, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance Titled Site Standards (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4213, “An Ordinance of the City Council of the City of Huntington Beach Amending Title 5 of the Huntington Beach Municipal Code Titled Business Licenses and Regulations;” (Attachment Nos. 2 - 6). ADMINISTRATIVE ITEMS 17.20-1746 Approve the Revised Master Plan for the Redevelopment of the Rodgers Seniors’ Center Site and direct staff to complete the design process and issue a bid package for construction Recommended Action: Approve the revised Rodgers Seniors’ Center Site Master Plan, as included in Attachment 3, and direct staff to complete the design process and issue a bid package for construction. 18.20-1763 Adopt Resolution No. 2020-52 authorizing the execution and delivery by the City of a Master Site Lease, Master Lease Agreement, Master Indenture, Bond Purchase Agreement, Continuing Disclosure Certificate, Second Amendment to Site Lease and a Second Amendment to Lease Agreement in connection with the issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in one or more series, approving the issuance of such bonds in an aggregate principal amount of not to exceed $21,000,000, authorizing the distribution of an official statement and authorizing the execution of necessary documents and certificates and related actions in connection therewith Recommended Action: A)Adopt Resolution No. 2020-52, “A Resolution of the City Council of the City of Huntington Beach Authorizing the Execution and Delivery by the City of a Master Site Lease, A Master Lease Agreement, A Master Indenture, A Bond Purchase Agreement, A Continuing Disclosure Certificate, A Second Amendment to Site Lease and a Second 7 Page 7 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 Amendment to Lease Agreement in Connection with the Issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in One or More Series, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $21,000,000, Authorizing the Distribution of an Official Statement and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith;” and, B)Authorize the City Manager and City Clerk to take all administrative and budgetary actions necessary to perform the bond refunding. 19.20-1764 Adopt Public Financing Authority Resolution No. 25 authorizing the execution and delivery by the Authority of a Master Site Lease, a Master Lease Agreement, a Master Indenture, a Bond Purchase Agreement, a Second Amendment to Site Lease and a Second Amendment to Lease Agreement in connection with the issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in one or more series, approving the issuance of such bonds in an aggregate principal amount of not to exceed $21,000,000, authorizing the distribution of an official statement and authorizing the execution of necessary documents and certificates and related actions in connection therewith Recommended Action: A)Adopt Resolution No. 25, “A Resolution of the Board of Directors of the Huntington Beach Public Financing Authority Authorizing the Execution and Delivery by the Authority of a Master Site Lease, A Master Lease Agreement, A Master Indenture, A Bond Purchase Agreement, A Second Amendment to Site Lease and a Second Amendment to Lease Agreement in Connection with the Issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in One or More Series, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $21,000,000, Authorizing the Distribution of an Official Statement and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith;” and, B)Authorize the Executive Director and Authority Secretary to take all administrative and budgetary actions necessary to perform the bond refunding. 20.20-1777 Authorize and direct the City Manager to execute a Ground Lease Agreement, in a form approved by the City Attorney, to lease real property located at 17642 Beach Blvd. by and between the City of Huntington Beach and Shigeru Yamada, Trustee of the Shigeru ***Removed*** 8 Page 8 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 Yamada Living Trust, and Mitburu Yamada, Trustee of the Mitsuru Yamada Living Trust; Approve allocation of funds necessary to lease the property for a period not to exceed 8 months; and Approve allocation of funds necessary to acquire 17642 Beach Blvd Recommended Action: A)Authorize and direct the City Manager to execute a Ground Lease Agreement, in a form approved by the City Attorney, by and between the City of Huntington Beach and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitburu Yamada, Trustee of the Mitsuru Yamada Living Trust to acquire the Property; and B)Appropriate funds of $120,000 from COVID-19 monies available to the City; and C)Appropriate funds of $3,250,000 from Fund 352 for acquisition of the Property. ORDINANCES FOR INTRODUCTION 21.19-1130 Approve for Introduction Ordinance No. 4201 repealing Chapter 8.48 and adopting a new Chapter 8.48 of the Huntington Beach Municipal Code (HBMC) relating to Public Nuisance Abatement of Abandoned, Wrecked, Dismantled or Inoperative Vehicles Recommended Action: Approve for introduction Ordinance No. 4201, “An Ordinance of the City of Huntington Beach Repealing Chapter 8.48 and Adopting New Chapter 8.48 of the Huntington Beach Municipal Code Relating to Public Nuisance Abatement of Abandoned Vehicles.” (Attachment No. 1) COUNCILMEMBER ITEMS 22.20-1760 Submitted by Mayor Semeta - Consideration of a Prohibition on the City’s use of Public Funds for any Tax Measure Advocacy Recommended Action: After assessing the situation, I believe that Huntington Beach should enact safeguards to prevent the use of public funds to advocate for a tax measure under the guise of information or education. I am requesting that the City Council vote to direct the City Attorney to prepare a resolution to prohibit the City’s use of public funds for informational or educational campaigns regarding any local tax measure. The resolution should be placed on a future City Council meeting agendafor consideration within 30 days. 23.20-1761 Submitted by Councilmember Peterson - Proposed establishment of 9 Page 9 of 9 City Council/Public Financing Authority AGENDA July 20, 2020 a 40+ Bed Temporary Emergency Shelter at the City’s Public Works Yard on Gothard Street Recommended Action: Pursuant to the powers of the City to address a health and safety crisis, and pursuant to the City’s Emergency Declaration, direct the City Manager bring back a proposal in 2 weeks for the establishment of a 40+ bed temporary emergency shelter in the City Public Works Yard on Gothard Street. The shelter should be considered temporary and be constructed with basic necessities. 24.20-1762 Submitted by Councilmember Posey - Consideration of a Resolution of the City Council acknowledging Hoag Memorial Hospital Presbyterian for their continued delivery of the highest quality Health Care and supporting their efforts to seek independence as a Community-Based Hospital for Orange County Recommended Action: I recommend that the City Council direct the City Manager to prepare a Resolution, similar to the attached document, to support Hoag’s efforts to seek independence from its current affiliation with Seattle-based Providence Health. COUNCILMEMBER COMMENTS (Not Agendized) ADJOURNMENT The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Monday, August 3, 2020, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov 10 City of Huntington Beach File #:20-1782 MEETING DATE:7/20/2020 Mayor Semeta to announce: Pursuant to Government Code §54956.8, the City Council takes this opportunity to publicly introduce and identify designated property negotiator, City Manager Oliver Chi, who will be participating in today's Closed Session discussions regarding negotiations with Shigeru Yamada Living Trust and Mitsuru Yamada Living Trust concerning price and terms of payment for the disposition of real property located at 17642 Beach Blvd., Huntington Beach, California City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™11 From:Fikes, Cathy To:Agenda Alerts Subject:FW: On the Agenda published. Date:Thursday, July 16, 2020 11:23:16 AM From: larry mcneely <lmwater@yahoo.com> Sent: Thursday, July 16, 2020 11:18 AM To: CITY COUNCIL <city.council@surfcity-hb.org> Subject: On the Agenda published. First I want to comment on Agenda Item #18 brought forward by Patrick Brenden. This item is asking our council to effective close escrow and Pay for the Toxic site and Lease the Toxic property next door for eight months for $120,000 long before we can place a shovel in the ground and a waste $120,000. We entered a agreement once again without the required Due Diligence on who's advice ? the new staff that recently joined our city our City Manager Oliver Chi and Community Development Director Ursula Luna, why was our City Attorney Micheal Gates left out ? As you should know when entering escrow this is the time to place requirements as soils testing, termite testing, land use requirements capabilities and to make sure there are no no property encumbrances as contractor liens and a clear clean title to the property. These are to be included in the escrow instructions to be completed Before escrow can close, NOT AFTER THE FACT. Due Diligence is to be performed before escrow is entered and Again we have another Pipeline Shelter Fiasco. And this location was purchased under the False guise of Woman, Children and Seniors living on our streets, while there may be a few these are not the people camping in our parks doing drugs and leaving their needles all over. The Street People who are the major source of complaints to our police department are stealing from our cars for the loose change and anything of value and stealing our bicycles and setting up chop shops and selling parts and bikes swapped with parts to make them unrecognizable. The question are you going to vote to approve such a Crazy Effort when we will be forced to delay any efforts to open a shelter because of the conditions, OK your choice but you have been warned. This as the homeless issues explode in our our community. What will be the True costs of the purchase of this property the clean up costs the delays Michael Poseys SB2 funds that took away our building and development standards ? Lets get off this Crazy Train and wake up. Now Agenda Item #21. brought forward by Erik Peterson. This is a Get It Done and Address the Real Issuers and Problems. Place a temporary mobile shelter facility on city owned property. Take action Now that will have a effect on the homeless population by un-tying our police hands. Where ever we place these people we will have opposition this is temporary until we can get help for all ages of homeless and get past the False Misrepresentation of the numbers of Woman,Children and Seniors living on out streets. I hope you heed the advise of those looking into these issuers without input from those who gain financially by their Homeless efforts. We have been Duped long enough look for your selves identify the problems and issues talk to our Chief of Police Ignore the carpetbaggers and special interests who gain profits off these people and rely on volunteer efforts and money to support their gains. We have seen how volunteers are asked to support causes and spend their time and efforts for a cause from their Hearts, Just take the example of the Bolsa Chica Wetlands Preservation Efforts this as Patrick Brenden collects over $100,000 as a CEO ??? what happened to working for a cause from your Hearts and not financial Gain and Political support. Shame on You Patrick Brenden I get it i see the Advisory Board and the Directors all the names of Developers and Special Interests who gain off your votes and have found a new way to direct money into a election through employment as a CEO for a nonprofit who rely on volunteers and their heartfelt donations. Wake Up 12 From:Fikes, Cathy To:Agenda Alerts Subject:Homeless housing! Date:Thursday, July 16, 2020 12:41:28 PM Importance:High From: Gary Tarkington <garytarkington@msn.com> Sent: Thursday, July 16, 2020 12:35 PM To: CITY COUNCIL <city.council@surfcity-hb.org>; Chi, Oliver <oliver.chi@surfcity-hb.org> Subject: Homeless housing! Importance: High Here you go, what so many of us think!! First I want to comment on Agenda Item #18 brought forward by Patrick Brenden. This item is asking our council to effectively close escrow and Pay for the Toxic site and Lease the Toxic property next door for eight months for $120,000 long before we can place a shovel in the ground and a waste $120,000. We entered an agreement once again without the required Due Diligence on who's advice? the new staff that recently joined our City Manager Oliver Chi and Community Development Director Ursula Luna, why was our City Attorney Micheal Gates left out? As you should know when entering escrow this is the time to place requirements as soils testing, termite testing, land use requirements capabilities, and to make sure there are no property encumbrances as contractor liens and a clear clean title to the property. These are to be included in the escrow instructions to be completed Before escrow can close, NOT AFTER THE FACT. Due Diligence is to be performed before escrow is entered and Again we have another Pipeline Shelter Fiasco. And this location was purchased under the False guise of Woman, Children, and Seniors living on our streets, while there may be a few these are not the people camping in our parks doing drugs and leaving their needles all over. The Street People who are the major source of complaints to our police department are stealing from our cars for the loose change and anything of value and stealing our bicycles and setting up chop shops and selling parts and bikes swapped with parts to make them unrecognizable. The question are you going to vote to approve such a Crazy Effort when we will be forced to delay any efforts to open a shelter because of the conditions, OK your choice but you have been warned. This as the homeless issues explode in our community. What will be the True costs of the purchase of this property the cleanup costs the delays Michael Poseys SB2 funds that took away our building and development standards? Let's get off this Crazy Train and wake up. Now Agenda Item #21. brought forward by Erik Peterson. This is a Get It Done and Address the Real Issuers and Problems. Place a temporary mobile shelter facility on city-owned property. Take action Now that will have an effect on the homeless population by un-tying our police hands. Where ever we place these people we will have opposition this is temporary until we can get help for all ages of homeless and get past the False Misrepresentation of the numbers of Women, Children, and Seniors living on out streets. I hope you heed the advice of those looking into these issuers without input from those who gain financially by their Homeless efforts. We have been Duped long enough look for your selves identify the problems and issues talk to our Chief of Police Ignore the carpetbaggers and special interests who gain profits off these people and rely on volunteer efforts and money to support their gains. We have seen how volunteers are asked to support causes and spend their time and efforts for a cause from their Hearts, Just take the example of the 13 Bolsa Chica Wetlands Preservation Efforts this as Patrick Brenden collects over $100,000 as a CEO ??? what happened to working for a cause from your Hearts and not financial Gain and Political support. Shame on You Patrick Brenden I get it I see the Advisory Board and the Directors all the names of Developers and Special Interests who gain off your votes and have found a new way to direct money into an election through employment as a CEO for a nonprofit who rely on volunteers and their heartfelt donations. Wake Up Ann Tarkington, Huntington Beach, CA. 14 City of Huntington Beach File #:20-1759 MEETING DATE:7/20/2020 Pursuant to Government Code § 54956.9(d)(1), the City Council shall recess into Closed Session to confer with the City Attorney regarding the following lawsuit: Cruz (Martin & Ana) and N.B.C. v. City of Huntington Beach, et al.; USDC Case No. 8:19-cv-1449-DOC (ADSx) City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™15 City of Huntington Beach File #:20-1767 MEETING DATE:7/20/2020 Pursuant to Government Code § 54956.9(d)(4), the City Council shall recess into Closed Session to confer with the City Attorney regarding whether to authorize the City Attorney to provide Amicus Support in the Appeal to the Ninth Circuit Court of Appeals in the case Kathy Craig/Gary Witt v. County of Orange, et al., Case Nos. 19-55324, 19-56188 City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™16 City of Huntington Beach File #:20-1781 MEETING DATE:7/20/2020 Pursuant to Government Code § 54956.8, the City Council shall recess to Closed Session to give instructions to the City's Negotiator, Oliver Chi, City Manager, regarding negotiations with Shigeru Yamada Living Trust and Mitsuru Yamada Living Trust, concerning price and terms of payment for the disposition of real property located on a portion of 17642 Beach Boulevard, Huntington Beach, California City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™17 City of Huntington Beach File #:20-1684 MEETING DATE:7/20/2020 Marsha Rechsteiner of Saints Simon and Jude Catholic Church, and member of the Greater Huntington Beach Interfaith Council City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™18 City of Huntington Beach File #:20-1742 MEETING DATE:7/20/2020 Mayor Semeta to call on John Etheridge to invite the Huntington Beach City Council to the Rededication Ceremony of the Surfing Walk of Fame on August 1 City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™19 City of Huntington Beach File #:20-1749 MEETING DATE:7/20/2020 Mayor Semeta to present the Making A Difference Award to President and Founder Justine Mackoff of the Free Rein Foundation City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™20 City of Huntington Beach File #:20-1492 MEETING DATE:7/20/2020 Ascon Landfill Site Update City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™21 City of Huntington Beach File #:20-1739 MEETING DATE:7/20/2020 Update of the City COVID-19 Response Plan and Actions for Review and Discussion City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™22 City of Huntington Beach File #:20-1738 MEETING DATE:7/20/2020 REQUEST FOR COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Robin Estanislau, CMC, City Clerk PREPARED BY:Robin Estanislau, CMC, City Clerk Subject: Approve and Adopt Minutes Statement of Issue: The City Council/Public Financing Authority special meeting minutes of June 29, 2020, City Council emergency meeting minutes of July 1, 2020, and the City Council/Public Financing Authority regular meeting minutes of July 6, 2020, require review and approval. Financial Impact: None. Recommended Action: A) Approve and adopt the City Council/Public Financing Authority special meeting minutes of June 29, 2020, as written and on file in the office of the City Clerk; and, B) Approve and adopt the City Council emergency meeting minutes of July 1, 2020, as written and on file in the office of the City Clerk; and, C) Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated July 6, 2020, as written and on file in the office of the City Clerk. Alternative Action(s): Do not approve and/or request revision(s). Analysis: None. Environmental Status: Non-Applicable. Strategic Plan Goal: Non-Applicable - Administrative Item City of Huntington Beach Printed on 7/17/2020Page 1 of 2 powered by Legistar™23 File #:20-1738 MEETING DATE:7/20/2020 Attachment(s): 1. June 29, 2020 CC/PFA special meeting minutes 2. July 1, 2020 CC emergency meeting minutes 3. July 6, 2020 CC/PFA regular meeting minutes City of Huntington Beach Printed on 7/17/2020Page 2 of 2 powered by Legistar™24 Minutes City Council/Public Financing Authority Special Meeting City of Huntington Beach Monday, June 29, 2020 6:00 PM - Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 A video recording of the 6:00 PM portion of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 6:00 PM — COUNCIL CHAMBERS CALLED TO ORDER — 6:04 PM ROLL CALL Present: Posey, Delgleize, Hardy, Semeta, Peterson (remotely), Carr, and Brenden Absent: None PLEDGE OF ALLEGIANCE — Led by Councilmember Brenden ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meeting" Act, City Clerk Robin Estanislau announced supplemental communication that was received by her office following distribution of the Council agenda packet: Public Hearing #1. (20-1719) PowerPoint communication entitled City of Huntington Beach — FY 2020/21 Budget Adoption submitted by Dahle Bulosan, Chief Financial Officer. PUBLIC COMMENTS (3 Minute Time Limit) — 43 In-Person Speakers; 3 Comments by Phone At 6:00 PM, individuals wishing to provide a comment on an agendized or non-agendized item may call 1+ (669) 900-6833 and enter Webinar ID: 941 8390 5102. Once a caller has entered the meeting, their call will be placed in a holding queue and will be answered in the order received. When invited to speak, callers are encouraged to identify themselves by name, and can speak for no more than 3 minutes. The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Amory Hanson, a 2020 Candidate for City Council and member of the Historic Resources Board, was called to speak and expressed his wishes that the City of Huntington Beach hold deliberative meetings, and read excerpts from the infamous children’s book “Green Eggs and Ham,” by Dr. Seuss. (00:03:00) Stan Arrollado, a resident of Huntington Beach for over 45 years, was called to speak and shared his support for the City of Huntington, Police Department, City Council and citizens regarding recent Black Lives Matter protests. (00:04:32) 25 City Council/Public Financing Authority Special Meeting Minutes, June 29, 2020 Page 2 of 7 Leslie Gilson, self-described Gibbs Park Restoration Coordinator for the last 13 years, was called to speak and shared the efforts of a team of volunteers to maintain Gibbs Park, and asked that the new budget include funding for parks, trees and landscaping. (00:07:40) Juana Mueller was called to speak and asked that funds for necessary Central Park irrigation system upgrades be included in the new budget. (00:09:03) Jean Nagy, Huntington Beach Tree Society volunteer, was called to speak and asked that funds necessary for City parks irrigation system supervision, repairs and maintenance be included in the new budget, as well as for completion of the Huntington Lake Boardwalk. (00:10:37) Chad Kroeger, a self-described activist, was called to speak and shared his opinions on current events and requested that the City support renaming the International Space Station, the “Tom Cruise International Space Station.” (00:13:20) JT Parr was called to speak and shared his opinions on current events, requested that the City support renaming the International Space Station, the “Tom Cruise International Space Station,” and sang lines from the song “Stranger” by Brittany Spears. (00:15:21) Kathryn Levassiur was called to speak and stated her continued advocacy for Short-Term Rental tax and regulations, her support for Black Lives Matter issues, and the City's obligation for meaningful transparency regarding racial and gender profiles of employees. (00:18:13) Mary LeBoeuf, volunteer at the wetland on Beach Boulevard at Pacific View Drive, was called to speak and asked why the City has paid for vector control for land she has been told by the City belongs to the Waterfront Condominium Complex. Mayor Semeta asked that she complete a blue card for follow-up. (00:20:44) An anonymous person was called to speak and shared their opinions and support for recent Black Lives Matter issues. (00:22:08) Chelsea O'Reilly was called to speak and shared her opinions and support for Black Lives Matter issues. (00:24:46) Natasha Mangham, a life-long resident of Huntington Beach, was called to speak and shared her opinions and support for Black Lives Matter budget issues. (00:28:03) Blake Stavros was called to speak and shared his opinions and support for Black Lives Matter issues. (00:30:31) Scott Brewsaugh, a resident of Huntington Beach since 1984, was called to speak and shared his experiences, opinions and support for Black Lives Matter issues. (00:32:28) Max Power was called to speak and shared his opinions and support for Black Lives Matter issues. (00:35:12) David Blackgold, a three-year resident of Huntington Beach, was called to speak and described an alleged trespassing incident he experienced with Huntington Beach Police at a local Starbucks two years ago. (00:37:55) An anonymous person was called to speak and stated their appreciation for Council dialogue, and opinions and support for Black Lives Matter issues. (00:41:56) 26 City Council/Public Financing Authority Special Meeting Minutes, June 29, 2020 Page 3 of 7 Kandice Pasquarella was called to speak and shared her personal experiences, and opinions and support for Black Lives Matter issues. (00:43:54) An anonymous person, a life-time resident of Huntington Beach, was called to speak and shared their personal experiences, and opinions and support for Black Lives Matter issues. (00:46:51) Turron Warren was called to speak and shared his opinions and support for Black Lives Matter issues. (00:50:11) Tiana Gutierrez was called to speak and shared her opinions and support for Black Lives Matter issues. (00:52:54) Brittany Baddon, 33-year resident of Huntington Beach, was called to speak and shared her personal experiences, and opinions and support for Black Lives Matter issues. (00:54:44) Antoinette Nguyen, a 20-year resident of Huntington Beach, was called to speak and shared her personal experiences, and opinions and support for Black Lives Matter budget issues. (00:57:57) Jennifer McLean, a resident of Huntington Beach for nearly 20 years, was called to speak and shared her opinions and support for Black Lives Matter budget issues. (01:01:22) Robi Fredrick, a 21-year resident of Huntington Beach, was called to speak and shared her opinions and support for Black Lives Matter budget issues. (01:04:34) An anonymous person was called to speak and shared their opinions and support for Black Lives Matter issues. (01:07:08) Oscar Rodriguez, a life-long resident of Huntington Beach and 2020 Candidate for City Council, was called to speak and stated support for following local health official directions regarding COVID-19, and support for Black Lives Matter issues. (01:08:46) Kira Linton, a life-time resident and homeowner in Huntington Beach, was called to speak and stated support for Black Lives Matter issues. (01:10:58) Megan Fowler, a 10-year resident of Huntington Beach, was called to speak and stated support for Black Lives Matter issues, and asked for actions to support City Council's recent words of unity. (01:14:14) Felix Carlson was called to speak and shared her opinions and support for Black Lives Matter issues. (01:17:36) Joy Baumeister was called to speak and shared her opinions and support for Black Lives Matter budget issues. (01:19:49) An anonymous person was called to speak and stated their opinions and support for Black Lives Matter issues. (01:21:34) An anonymous person was called to speak and stated their opinions and support for Black Lives Matter issues. (01:23:56) Julia Geer, who was educated in Huntington Beach, was called to speak and stated her opinions and support for Black Lives Matter issues. (01:26:36) 27 City Council/Public Financing Authority Special Meeting Minutes, June 29, 2020 Page 4 of 7 Katie Grothjan, who was educated in Huntington Beach, was called to speak and stated her opinions and support for Black Lives Matter issues. (01:29:09) Dora Lee, who was born and raised in Huntington Beach, was called to speak and stated her opinions and support for Black Lives Matter issues. (01:30:33) Callie Saccachio, born, raised and educated in Huntington Beach, was called to speak and stated her opinions and support for Black Lives Matter issues. (01:33:44) Tanner Davis was called to speak and stated her opinions and support for Black Lives Matter issues. (01:36:12) Justin Frazier, a Marine veteran, was called to speak and stated his opinions and support for Black Lives Matter issues. (01:38:07) Jeanette Cookmeyer, a resident of Seal Beach, was called to speak and stated her opinions and support for Black Lives Matter budget issues. (01:41:26) David Owen Jones was called to speak and stated his opinions and support for Black Lives Matter issues. (01:43:55) Cleopatra El Rashidy was called to speak and stated her opinions and support for Black Lives Matter budget issues. (01:46:52) Marcus, a musician, was called to speak and expressed appreciation for the opportunity to speak, and stated his request that Council listen to the hurting people who have spoken. (01:50:11) Caller #355, Erica, was invited to speak and stated her opinions and support for Black Lives Matter budget issues. (01:51:56) Caller #857, Susan Hartful, a resident of Huntington Beach and public school educator, was invited to speak and stated her opinions and support for wearing masks and social distancing to prevent the spread of COVID-19. (01:54:29) Caller #668, Michelle McLean, a life-time resident of Huntington Beach, was invited to speak and stated her opinions and support for Black Lives Matter budget issues. (01:57:47) At 8:15 p.m. the City Council took a brief recess and reconvened the meeting at 8:30 p.m. PUBLIC HEARING 20-1719 Adopted Resolution No. 2020-39 to adopt a Budget for the City for Fiscal Year 2020/2021; Resolution No. 2020-32 establishing the Gann Appropriation Limit and Financial Policies; and Resolution No. 2020-46 with Budget Option 3 — implement a Self-Designated Separation Incentive Program for all eligible Safety and Miscellaneous employees (Continued from June 15, 2020, with Public Hearing Closed) City Manager Oliver Chi presented a PowerPoint communication entitled: FY 2020/21 Budget Adoption with slides titled: FY 2020/21 Budget Overview, The COVID-19 Economic Context - An Unprecedented Contraction, Economists Are Projecting An Uneven Economic Recovery, Economic Reality Necessitates Structural Organizational Changes, Early Retirement Program Recommended, Two Early 28 City Council/Public Financing Authority Special Meeting Minutes, June 29, 2020 Page 5 of 7 Retirement Program Options Initially Assessed, Additional Workforce Reduction Program Options Assessed, Survey Conducted of Eligible Miscellaneous and Public Safety Staff, Option 1: Modified CalPERS Early Retirement Program, Modified CalPERS Early Retirement Program, Costs vs. Cost Savings, Summary Assessment, Option 2: Modified CalPERS Early Retirement Program (Miscellaneous) and Self-Designed Separation Incentive Program (Safety), Modified CalPERS (Misc.) and Self Designed (Safety), Costs vs. Cost Savings, Summary Assessment, Option 3: Use of Self- Designed Separation Program, Self-Designed Program, Costs vs. Cost Savings, Summary Assessment, Option 4: Deploying Layoff & Employee Concession Procedures, Layoff & Employee Concessions, Summary Assessment, Budget Balancing Options Summary, Additional Workforce Reduction Options Assessed, Budget Balancing Options - Comparison Summary, FY 2020/21 Budget Summary, City Council Approval Requested, and Questions? Councilmember Delgleize clarified with City Manager Chi that Council is expected to select one of the four Workforce Reduction Program Options which were presented for a balanced budget. Mayor Pro Tem Hardy confirmed with City Manager Chi that approximately seventeen percent (17%) of eligible employees need to participate in order for the budget to balance, of which 145 are Miscellaneous and 64 are Safety fully vested employees. City Manager Chi confirmed that Options 1, 2, 3 provide the numbers needed to balance the budget. There was further discussion on how much the CalPERS option would add to Unfunded Liability and the likelihood that tenured Public Safety staff might possibly increase Workers Compensation claims. Option 4 could result in the smallest budget reduction since the positions tend to be at the lowest salaries, as well as the required meet and confer process could take some time to complete. Mayor Pro Tem Hardy stated her support for a retirement incentive program as being most cost effective, specifically Option 3 as it would not increase the CalPERS Unfunded Liability, and moved the item as presented with inclusion of W orkforce Reduction Option 3. Councilmember Carr stated her support for Workforce Reduction Option 3, and for providing a second to the motion if rather than approving the budget currently showing funding for three (3) additional positions in Safety, she would like to hold two (2) of those positions for the Homeless Task Force and bring that issue back in November when the homeless shelter is operated by the City. Mayor Pro Tem Hardy was open to considering her amendment, but requested additional discussion. Mayor Pro Tem Hardy and Assistant Chief of Police Kelly Rodriguez discussed Safety staffing issues, specifically clarification on the current need for management when addressing the homeless situation, and the on-going efforts to recruit entry-level staff as well as using lateral changes. Mayor Pro Tem Hardy and City Manager Chi reviewed the Police Management side letter addressing new staff, and confirmed there are currently eight (8) officer positions that are authorized but unfunded. The proposed budget would fund two (2) of those positions. Currently, there is also one (1) Lieutenant and one (1) Sargent position which are authorized but unfunded. The proposed budget would fund the Lieutenant position. Councilmember Carr clarified her position that homelessness is currently the biggest issue to address within the City, but in her opinion there comes the point where available resources need to be reallocated for more efficiency in meeting the most pressing need, and the appropriate action is to remain mean and lean, not increase that budget. Councilmember Brenden and City Manager Chi discussed there is no breakdown of numbers between the Police and Fire Departments because of the anonymous nature of the survey. Councilmember Brenden summarized the need for restructuring citywide and expressed his opinion that the best way to 29 City Council/Public Financing Authority Special Meeting Minutes, June 29, 2020 Page 6 of 7 efficiently deliver services while shrinking the workforce is Option 3 as the least costly way to move forward. He also stated his agreement with Councilmember Carr regarding returning at mid-year for a budget review to address the Police Department staffing needs. Councilmember Posey and City Manager Chi discussed details for Option 3 and the expectation that most new hires in Safety tend to be Public Employees' Pension Reform Act (PEPRA) employees which on average cost about thirty-six percent (36%) less than Classic employees. Councilmember Posey shared his thoughts on the declining park development impact fees and asked that a line item be added to the budget showing City Attorney fees to determine if court fines and fees are actually covering City Attorney Office expenses. City Manager Chi confirmed that the City Attorney's Office budget for 2020/21 Professional Services costs shows a greater number than last year's budget because of reallocation from the non-departmental category. Councilmember Posey stated he expects more transparency and detail on those costs for the next budget review. Councilmember Posey stated his support for filling funded Police Department positions, with two (2) of those positions dedicated to the homelessness effort after the City has control of the Navigation Center. Mayor Pro Tem Hardy restated her motion to include Workforce Reduction Option 3, and accepted Councilmember Carr’s request to return to Council on November 2 to consider reassignment of two of three funded/underfilled Police Department positions to the Homeless Task Force. Councilmember Carr provided a second to the motion. Councilmember Posey and City Manager Chi discussed plans related to Channel 3 funding and programming. City Manager Chi stated that Public, Educational and Government (PEG) channel fees are restricted funds, and the plan is to adjust programming expenditures to ensure they do not exceed the revenue stream. Councilmember Posey and City Manager Chi discussed the rationale behind budgeting for two (2) additional Code Enforcement Officers. Councilmember Peterson, calling in remotely, discussed with City Manager Chi details on CalPERS Unfunded Accrued Liability (UAL) payments, and potential impacts from the economic shutdown due to COVID-19. There was further discussion on funding for Option 3, which City Manager Chi described as a one-time cost that would be made up with reduced salary costs moving ahead, and confirmed the plan is to NOT use Reserve funds. Councilmember Peterson stated he will not support any staff reduction plan that offers any incentive. Councilmember Delgleize stated her support for Option 3 and for Councilmembers Carr and Hardy regarding another look at police staffing in November. Mayor Semeta stated her opinion that "quality of life for the people served" is the ultimate goal when making staffing decisions, and she supports immediate funding for Safety management to be adequately managing homeless issues. She also stated she does not support Option 3 because of the extra expense for incentives. Councilmember Posey stated he also does not like Option 3, but believes it is better and more cost efficient than Option 4 would be, and suggested revisiting temporary pay cuts for Department Heads as another means of reducing costs. Councilmember Delgleize thanked City Manager Chi for his efforts on the budget, and stated her opinion that since time is money, she will support Option 3 vs. Option 4. 30 City Council/Public Financing Authority Special Meeting Minutes, June 29, 2020 Page 7 of 7 A motion was made by Hardy, second Carr to adopt Resolution No. 2020-39, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2020/21;" and, authorize the Professional Services included in the FY 2020/2021 budget to be representative of the services projected to be utilized by departments in FY 2020/2021; and, adopt Resolution No. 2020-32, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2020/2021" of $1,001,044,445; and, approve budget adjustments to the FY 2020/2021 Proposed Budget in the Funds and by the amounts contained in Attachment 2, Exhibit A-1; and, Budget Option 3: approve and direct staff to implement the Self-Designed Separation Incentive Program for all eligible Safety and Miscellaneous employees, authorizing the City Manager to take all administrative and budgetary actions necessary to implement the program and return to Council on November 2 to consider reassignment of two of three funded/unfilled Police Department positions to the Homeless Task Force. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Carr, and Brenden NOES: Semeta, and Peterson ADJOURNMENT — 9:40 PM to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Monday, July 6, 2020, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov __________________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary _________________________________________ Mayor-Chair 31 Minutes City Council Emergency Meeting City of Huntington Beach Wednesday, July 1, 2020 6:00 PM - Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 A video recording of the 6:00 PM portion of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 6:00 PM - COUNCIL CHAMBERS CALL TO ORDER — 6:01 PM ROLL CALL Present: Posey, Delgleize, Hardy, Semeta, Carr, and Brenden Absent: Peterson ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) — None PUBLIC COMMENTS (3 Minute Time Limit) — 15 by Phone At 6:00 PM, individuals wishing to provide a comment on an agendized or non-agendized item may call (669) 900-6833 and enter Webinar ID: 962 2522 6995. Once a caller has entered the meeting, their call will be placed in a holding queue and will be answered in the order received. When invited to speak, callers are encouraged to identify themselves by name, and can speak for no more than 3 minutes. The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Caller Emmett was invited to speak and shared his support for keeping the beaches closed. (00:02:19) Caller Angie was invited to speak and shared her support for keeping the beaches open. (00:03:03) Caller 1018, Linda Fish, a resident of Sunset Beach, was invited to speak and asked that Sunset Beach be closed for the July 4th weekend. (00:03:40) An anonymous caller was invited to speak and stated her support for keeping the beaches closed. (00:05:04) Caller 115, an anonymous caller, was invited to speak and stated her support for keeping the beaches closed for the July 4th weekend. (00:06:06) 32 City Council/Public Financing Authority Emergency Meeting Minutes, July 1, 2020 Page 2 of 4 Caller Ruth was invited to speak and shared her support for keeping the beaches closed for the July 4th weekend. (00:08:09) Caller Mi Kubu was invited to speak and shared her support for keeping the beaches closed. (00:10:25) Caller Eric, a resident of Huntington Beach and Emergency Room Physician, shared his support for keeping the beaches closed for the July 4th weekend. (00:11:22) Caller Bridgett Cobb, a long-time Downtown resident, was invited to speak and shared her support for keeping the beaches closed for the July 4th weekend. (00:12:17) Caller David Martin was invited to speak and shared his support for keeping the beaches open for the July 4th weekend. (00:14:16) Caller Bonnie was invited to speak and shared her support for keeping the beaches closed for the July 4th weekend. (00:15:27) Caller 927, an anonymous caller, was invited to speak and shared her support for keeping the beaches closed for the July 4th weekend. (00:16:23) Caller 989, Gail Brice, a resident of Sunset Beach, was invited to speak and shared her support for keeping the beaches closed for the July 4th weekend. (00:17:04) Caller 982, Beth, a resident of Huntington Beach, was invited to speak and shared her support for keeping the beaches closed for the July 4th weekend. (00:19:30) Caller 578, Amory Hanson, a Candidate for City Council in 2020 and member of the Historic Resources Board, was invited to speak and stated his request that the City allow deliberative boards and commissions to meet in July, even if they are virtual meetings. (00:20:18) ADMINISTRATIVE ITEMS 1. 20-1740 Emergency meeting held to consider the closure of all City controlled beaches and associated infrastructure during the period between July 3 - 5, 2020, to protect public health, safety, and welfare during the COVID-19 pandemic City Manager Oliver Chi presented a PowerPoint communication entitled: July 4th Holiday Beach Closure Consideration with slides titled: Background and Huntington Beach Options Councilmember Delgleize reported that the entire Board of Supervisors for Riverside are in quarantine, and she has received multiple messages from residents urging closure of Huntington and Sunset Beaches for the July 4th weekend. Mayor Semeta and City Manager Chi discussed that it is up to the Council to decide if he and staff will have the authority to close beaches and if so, which days. Mr. Chi stated that the intent is to impact residents as little as possible while promoting health and safety. There was discussion of the challenges of being the only beach open with good weather and higher than normal surf conditions, and City Manager Chi stated his opinion it will be important for Huntington Beach to coordinate with the plans of other beach cities in the area. Councilmember Posey stated his opinion that it is important to look at how the beach can be closed, but have minimal impact on local businesses, and therefore he would like to see the beach closed on July 33 City Council/Public Financing Authority Emergency Meeting Minutes, July 1, 2020 Page 3 of 4 4th, leaving authority to close on July 5th with the City Manager. He added that Downtown businesses can provide take-out and possibly outside dining service. Councilmember Posey also suggested closing beach parking lots but leaving the bike path open. Councilmember Carr stated her concern regarding large groups congregating at the beach, and support for closing the beach on July 4th. Councilmember Carr, Police Chief Handy and Fire Chief Haberle discussed the challenges of keeping the beach open for early hours for surfing and active recreation only on July 3rd, 4th and 5th, with parking and infrastructure closed. Chief Handy highlighted the challenges his department already faces in today's atmosphere in addition to clearing the beach, and the other issues that will require safety staff attention such as fireworks, parties, expanded parade routes and marine safety. Councilmember Delgleize suggested that regardless of the policy in effect for Huntington Beach, Sunset Beach should be closed for the weekend because of their proximity to Los Angeles and their closed beaches. Mayor Semeta emphasized how much the Council supports all of the City's safety officers and appreciates their dedication. Mayor Pro Tem Hardy stated her support for a 3-day closure, including the Pier, all harbors and Sunset Beach, and reminded everyone it is not an indefinite closure as was done in May. She does not support allowing surfing and/or active recreation in early morning hours, but does support the bike path being kept open. Councilmember Brenden stated that everyone is sensitive to the plight of local business owners and removing business opportunities. He stated his support for complete beach closures, keeping only the bike path open, and suggested expanded signage on the importance of face covering and hand sanitizer stations on Main Street. Councilmember Brenden confirmed with City Manager Chi that all state and county beaches and parking lots will be closed, and staff recommends if the City beaches are closed, the parking should also be closed. Councilmember Brenden stated his support for Mayor Pro Tem Hardy's suggestion for a 3-day closure in spite of the negative impact on local businesses. He further stated he has received hundreds of emails from residents with the majority asking that the beaches be closed for the July 4th weekend. Mayor Semeta stated her support for giving the City Manager the authority to decide which days the beach should be closed based on local considerations and matching the actions taken by neighboring beach cities. Councilmember Delgleize and City Manager Chi discussed that currently the general sentiments of other Orange County coastal cities is to close their beaches on Saturday and Sunday. Mayor Pro Tem Hardy and Councilmember Brenden stated support for a 3-day beach closure, especially since Friday is a holiday for many people, as the best option for providing and enforcing public safety. A motion was made by Posey, second Semeta for beach closure on Saturday, July 4th, including Sunset and Harbor beaches, beach parking lots, beach parking meters and the Pier; granting the City Manager authority to institute the same closure parameters on Friday, July 3 and/or Sunday, July 5, based on local considerations and similar actions taken by neighboring beach cities; and, allow the bike path along the beach to remain open. The motion carried by the following vote: 34 City Council/Public Financing Authority Emergency Meeting Minutes, July 1, 2020 Page 4 of 4 AYES: Posey, Delgleize, Hardy, Semeta, Carr, and Brenden NOES: None ABSENT: Peterson Mayor Pro Tem Hardy briefly described the modified parade route being planned and announced that at 5 AM on Saturday, July 4th, the final route details would be posted at www.hb4thofjuly.org. ADJOURNMENT at 7:12 PM to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Monday, July 6, 2020, at 4:00 PM, in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov ________________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair 35 Minutes City Council/Public Financing Authority City of Huntington Beach Monday, July 6, 2020 4:00 PM - Council Chambers 6:00 PM - Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 A video recording of the 4:00 PM and 6:00 PM portion of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 4:00 PM - COUNCIL CHAMBERS CALL TO ORDER — 4:01 PM ROLL CALL Present: Posey, Delgleize, Hardy, Semeta (remotely), Peterson, Carr, and Brenden Absent: None ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications that were received by her office following distribution of the Council agenda packet. Study Session #1. (20-1731) A PowerPoint communication entitled Huntington Beach Police Department Overview submitted by Police Chief Robert Handy. PUBLIC COMMENTS PERTAINING TO STUDY SESSION / CLOSED SESSION ITEMS (3 Minute Time Limit) — 1 In-Person Speaker; No Phone-In Speakers The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Kathryn Levassiur, a resident of Huntington Beach for over 21 years, was called to speak and shared her opinions on current social events, and stated she expects this Study Session to provide a hard look at current procedures and policies. (00:02:38) STUDY SESSION 1. 20-1731 Police Chief Handy provided an update on Police Department Protocols and Procedures Police Chief Robert Hardy presented a PowerPoint communication entitled: Huntington Beach Police 36 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 2 of 18 Department Overview with slides titled Purpose of Presentation, Value Statements, Service Teamwork Integrity, Vision Statement, Serving With Honor, Hiring Process, Hiring Process for Sworn, New Hire Training, In Service Training, Supervisory/Management Development, Equipment Investments, Common Recent Questions(3), Community Outreach and Relationship Building, CBP Programs(3), Use of Force Data(3), Body Worn Cameras, Complaint Data, Employee Accountability Data, Moving Forward, and Questions. Councilmember Posey thanked Chief Handy for the detailed report which he believes describes the efficacy of the Huntington Beach Police Department. Councilmember Posey and Chief Handy discussed costs for new-hire training, the number of applicants that are tested and put through a background check before there is a job offer, Academy hires, sponsorship, and probationary period. Councilmember Carr thanked Chief Handy for the quality presentation and his service, as well as the service of each officer. Councilmember Carr and Chief Handy discussed possibly later in the year offering the Citizens Academy virtually. Councilmember Brenden thanked Chief Handy for his excellent leadership, and they discussed investment in new tools and equipment to help diffuse and resolve situations peacefully. Chief Handy explained staff is always looking at how to effectively deal with people who resist arrest, including additional officer training. Councilmember Brenden commended Chief Handy for the five-year statistic that only one hundredth of one percent (.0001%) of all calls resulted in the use of force. Councilmember Brenden stated his support for a Community Advisory Board which he believes would demonstrate a willingness to be transparent with the community, and would like to identify community issues that could possibly be handled by other departments to free up police officers to focus on crime- in-process situations. Councilmember Delgleize stated her support for offering the Citizens Academy as soon as possible. Councilmember Delgleize expressed her concern about how people perceived police during recent protests and stated her support for the formation of a Community Advisory Board, and shared her appreciation for the Police Department's "what is best for Huntington Beach" attitude. Councilmember Delgleize encouraged continued dialogue to provide healing solutions. Mayor Semeta reiterated how impressive the .0001% Use of Force statistic is, and stated support for more emphasis on the positive and compassionate actions of officers when dealing with the public. Mayor Semeta stressed the importance of advocating for more funding at all government levels to allow officers to focus on issues related to crime, and suggested that Chief Handy's presentation be disseminated more widely within the community to help the public understand the great Police Department that Huntington Beach has and the integrity of its officers. Councilmember Peterson thanked Chief Handy for his excellent report, and suggested that all Community Advisory Board members be exposed to the officers’ point of view through videos that demonstrate the options available in a rapidly escalating situation. Chief Handy responded that there will be a required training component that will incorporate the simulator, the laws that govern use of force, policies, procedures, and standard practices. Mayor Pro Tem Hardy thanked Chief Handy for patiently listening to questions and responding to community concerns especially during the last couple of months, and for his excellent presentation for the Study Session. 37 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 3 of 18 Chief Handy thanked everyone for their compliments and stated those compliments really belong to the 365 quality and dedicated employees in the Police Department. A motion was made by Brenden, second Peterson, to recess to Closed Session for Items 2 – 7. RECESSED TO CLOSED SESSION — 5:23 PM CLOSED SESSION 2. 20-1724 Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Maday (Margaret) / Solorio (Andrew) v. City of Huntington Beach/Travis Mossbrooks; OCSC Case No.: 30-2020-01133396. 3. 20-1725 Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Austin (Ronald) v. City of Huntington Beach, et al.; OCSC Case No.: 30-2020-01140605. 4. 20-1734 Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Rosier (Maliek) v. City of Huntington Beach, et al.; USDC Case No.: SACV 18-2175 DOC (DFMx). 5. 20-1735 Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Californians for Homeownership, Inc. v. City of Huntington Beach; OCSC Case No. 30-2019-01107760. 6. 20-1736 Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Cruz (Martin & Ana) and N.B.C. v. City of Huntington Beach, et al.; USDC Case No. 8:19-cv-1449-DOC (ADSx). 7. 20-1737 Pursuant to Government Code § 54956.9(d)(2), the City Council recessed into Closed Session to confer with the City Attorney regarding potential litigation. Number of cases, one (1). 6:00 PM - COUNCIL CHAMBERS RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING — 6:12 PM ROLL CALL Present: Posey, Delgleize, Hardy, Semeta (remotely), Peterson, Carr, and Brenden Absent: None PLEDGE OF ALLEGIANCE — Led by Councilmember Peterson 38 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 4 of 18 INVOCATION In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. 8. 20-1683 Patricia Mercado of the Center of Spiritual Living in Huntington Beach, and member of the Greater Huntington Beach Interfaith Council CLOSED SESSION REPORT BY CITY ATTORNEY — None AWARDS AND PRESENTATIONS 9. 20-1721 Mayor Semeta to call on John Etheridge to invite the Huntington Beach City Council to the Rededication Ceremony of the Surfing Walk of Fame on August 1. 10. 20-1698 Mayor Semeta presented the Mayor’s HB Excellence Award to Public Works Utilities Manager, Brian Ragland Mayor Semeta explained that the recipient of the Mayor's HB Excellence Award is determined through an employee nomination process which demonstrates peer acknowledgement. Mayor Semeta reviewed Manager Ragland's training and 40 years of design and management experience. He started with the City of Huntington Beach in 2001, and currently oversees 87 employees in water production, distribution, quality and wastewater divisions. Mayor Semeta described Brian as an honest, humble, and straight-forward leader who is always looking out for the best interests of the City. Mayor Pro Tem Hardy presented Manager Ragland with the Mayor's Award since Mayor Semeta was attending the meeting remotely. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications that were received by her office following distribution of the Council Agenda packet. City Manager’s Report #11 (20-1491) PowerPoint Presentation entitled Ascon Landfill Site Update submitted by Assistant City Manager, Travis Hopkins #12 (20-1723) Email communication received from Jeanine Davis related to indoor dining Consent Calendar #13 (20-1718) Interdepartmental Communication received from City Clerk, Robin Estanislau proposing a revision #15 (20-1688) Interdepartmental Communication received to provide evidence of competitive bidding from Lt. Chris Nesmith, Investigations Bureau Commander. Administrative Items #21 (20-1726) PowerPoint Communication entitled Tenant Based Rental Assistance (TBRA) Program submitted by Director of Community Development, Ursula Luna-Reynosa 39 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 5 of 18 #22 (20-1741) Email communication received from Elizabeth Hofeldt supporting closure of Second Block of Main Street PUBLIC COMMENTS (2 Minute Time Limit) — 40 In-Person Speakers; 8 Phone-In Speakers At 6:00 PM, individuals wishing to provide a comment on an agendized or non-agendized item may call (669) 900-6833 and enter Webinar ID: 986 8560 9496. Once a caller has entered the meeting, their call will be placed in a holding queue and will be answered in the order received. When invited to speak, callers are encouraged to identify themselves by name, and can speak for no more than 2 minutes. The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Jerry Raburn, a Goldenwest College student, was called to speak and shared his opinions on varied current events. (01:38:58) Bob S., an educator, coach, and four-year resident of Huntington Beach, was called to speak and expressed his appreciation to the City Council and the Huntington Beach Police Department for their phenomenal service. (01:40:43) David Wilson, a resident of Huntington Beach since the late 1960's, was called to speak and stated his opinion that fundamental structural change is needed, not defunding of police departments. (01:43:12) Ray Raines, a 55-year resident of Huntington Beach, was called to speak and expressed his appreciation, gratitude and admiration for the ways the City has kept people safe in these unprecedented times. (01:44:56) Russell Neal, a resident of Huntington Beach, was called to speak and shared his opinions on America, which he described as a land of freedoms and opportunity. (01:47:18) Sally Cohen, a 20-year resident, was called to speak and shared her appreciation for the Huntington Beach Police Department and asked everyone to share their opinions in a peaceful manner. (01:49:28) Lilli Cutler, a resident of Huntington Beach, was called to speak and thanked Mayor Semeta for her leadership, and stated her opposition to the idea of defunding police departments. (01:51:01) Sylvia Calhoun, a resident of Huntington Beach since 1982, was called to speak and stated her appreciation for the service of Mayor Semeta, the City Council, and the Huntington Beach Police Department. (01:51:48) Eva Weisz, a resident of Huntington Beach, was called to speak and expressed her opinions on current events and thanked the City Council members, Mayor Semeta, Police Chief Handy and the Huntington Beach Police Department for their outstanding work and dedication. (01:52:40) Kathryn Levassiur, a 21-year resident of Huntington Beach and ardent supporter of short-term vacation rental regulation and tax, was called to speak and shared her opinions regarding Huntington Beach Code Enforcement. (01:54:58) 40 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 6 of 18 Debbie Zuganelis, Property Manager for Robert Koury Properties, was called to speak and stated support for any action the City takes to support Main Street businesses, and shared that their staff is interested in being part of a long-term solution. (01:57:20) Gerald Chapman was called to speak and asked why the police never enforce illegal firework regulations within the City. (01:59:35) Robert McMahon was called to speak and asked that the Police Department address the issues of noise and safety created by motorcycles and cars racing through the Downtown area streets. (02:01:24) Ron McLin was called to speak and asked for Council's support for a solution to assist the Main Street businesses serve as many customers as possible until they can return to normal servicing. (02:02:44) Fady Malek, owner of four businesses in Downtown, was called to speak and stated his support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic. (02:04:47) Murat Coach, owner of Coach's Mediterranean Grill & Bar and resident of Huntington Beach for 32 years, was called to speak and shared his support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic. (02:05:12) Moe Kanoudi, owner of a business on the second block of Main Street, was called to speak and stated his support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic. (02:05:29) An anonymous speaker was called to speak and shared his opinions regarding lawful assembly. (02:06:49) John Christiana was called to speak and shared his experiences and opinions related to domestic terrorism. (02:09:04) Silvia Guzman-Cedano was called to speak and shared her experiences and opinions related to domestic terrorism. (02:10:57) Lindsey Anderson, a resident of Huntington Beach, was called to speak and shared her opinions on current events. (02:13:11) An anonymous speaker, a resident of Huntington Beach, was called to speak and shared her experiences and opinions on current events. (02:15:40) Brittany Baddon was called to speak and shared her experiences and opinions about current events. Mayor Pro Tem Hardy invited Ms. Baddon to complete a blue card, and announced again the phone number and email address for anyone to contact Council Members. (02:17:58) Oscar Rodriguez, lifelong resident and a Candidate for Huntington Beach City Council in 2020, was called to speak and stated his support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic, and encouraged the City to dialogue with the community voices that have not historically been heard. (02:20:47) 41 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 7 of 18 Emily Pruitt was called to speak and shared her opinions regarding current events. (02:23:03) Justin Frazier, a Marine veteran, was called to speak and shared his experiences and opinions related to current events. (02:24:53) Jennifer Cooper, a 22-year resident of Huntington Beach, was called to speak and shared her experiences and opinions related to current events. (02:27:11) Kira Clinton, a resident of Huntington Beach, was called to speak and thanked Police Chief Handy for his transparency during tonight's Study Session, and encouraged the City to build trust and legitimacy with the community through a diverse Community Advisory Board. (02:29:34) Grace Mortero, a resident of Garden Grove, was called to speak and shared her opinions related to current events. (02:31:52) Natasha Mangham, born and raised in Huntington Beach, was called to speak and shared her experiences and opinions related to current events. (02:34:18) Natalie Moser, a life-long resident of Huntington Beach, Chair of the Huntington Beach Human Relations Task Force, and a Candidate for Huntington Beach City Council in 2020, was called to speak and shared her experiences and opinions related to current events. (02:35:57) Scott Brewsaugh was called to speak and shared his experiences and opinions related to current events. (02:38:14) Camille Nandi, a former resident of Huntington Beach and anthropologist, was called to speak and shared her experiences and opinions related to current events. (02:39:35) An anonymous speaker was called to speak and shared his experiences and opinions regarding current events. (02:41:53) An anonymous speaker was called to speak and shared her experiences and opinions regarding current events. (02:44:09) An anonymous speaker was called to speak and shared her opinions regarding current events. (02:46:30) An anonymous speaker, a life-long resident of Huntington Beach, was called to speak and shared his opinions regarding current events. (02:47:43) Jerry Cutler, a resident of Huntington Beach, was called to speak and stated his opposition to defunding the police. (02:49:59) An anonymous speaker was called to speak and read the names of brutality victims. (02:51:36) Megan was called to speak and shared her opinions on current events. (02:53:50) 42 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 8 of 18 Caller Michael Ben-Yehuda was invited to speak and shared his opinions regarding lack of local enforcement related to pandemic social distancing directives from Governor Newsom. (02:56:51) Caller 133, Amory Hanson, a Candidate for Huntington Beach City Council in 2020 and member of the Historical Resources Board, was invited to speak and expressed appreciation for the City allowing deliberative commissions and boards to begin meeting again. (02:59:57) Caller 157, Kathy Barton, a resident of Huntington Beach, was invited to speak and shared her opinions on current events. (03:01:10) Caller 996, Dave Shenkman, Huntington Beach Downtown Business Improvement District (HBDBID) member, was invited to speak and stated support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic. (03:03:51) Caller 160, Bethany Webb with HB Huddle, was invited to speak and shared her opinions on current events, and stated support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic. (03:04:50) Caller 403, Libby Frolickman, was invited to speak and stated her support for Administrative Item #22 (20-1741) regarding a Temporary Closure of the Second Block of Main Street to vehicular traffic, and thanked the City Council for reaffirming the City's Policy on Human Dignity. (03:07:19) Anonymous caller 355 was invited to speak and thanked Police Chief Handy for his transparency in this evening's Study Session report, and shared her opinions related to that report. (03:08:50) Caller 904, Alona Jayson, was invited to speak and shared her response to Police Chief Handy's Study Session report, and stated support for a diverse Community Advisory Board. (03:11:07) COUNCIL COMMITTEE — APPOINTMENTS — LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES Councilmember Posey reported attending a meeting of the Association of California Cities — Orange County (ACC-OC) Legislative and Regulatory Committee regarding proposed housing bills (Senate Bill 1299, Senate Constitutional Amendment 1, and Assembly Bill 2345) on rezoning, affordable housing, and housing project issues which are moving through the State's legislative process. Councilmember Delgleize reported attending an Orange County Transportation Authority (OCTA) Board meeting where the vendor was selected for the synchronization of intersections on 12 miles of Edinger Avenue, from Bolsa Chica to the Auto Mall, through the cities of Huntington Beach, Fountain Valley, Santa Ana and Westminster. Councilmember Carr reported meeting with the Huntington Beach Police Management Association (HBPMA) and attending a meeting of the West Orange County Water Board. Mayor Pro Tem Hardy reported attending a meeting of the West Orange County Water Board, conducting applicant interviews for the Youth Board, and attending a Zoom meeting of the Sea Level Rise Working Group and Coastal Cities Group for the League of California Cities. 43 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 9 of 18 CITY MANAGER’S REPORT 11. 20-1491 Ascon Landfill Site Update Assistant City Manager Travis Hopkins presented a PowerPoint communication entitled Ascon Landfill Site Update with slides titled: Current Status, How To Stay Informed, and Question or Concerns. 12. 20-1723 Update of the City COVID-19 Response Plan and Actions for Review and Discussion and an update by Fire Chief and Police Chief on 4th of July Activities City Manager Oliver Chi presented a PowerPoint communication titled Huntington Beach COVID-19 Response Plan and Actions for Review and Discussion, with slides titled: Situational Update U. S. Totals (2), California, Orange County, COVID-19 Cases Accelerating Rapidly (2), Orange County (2), Local Available Hospital Resources, Orange County, Huntington Beach (2), HB EMS Response Statistics, Local Available Hospital Resources, Opening Up The California Economy — Orange County, COVID-19 Small Business Relief Program, HB 4th of July COVID-19 Response Overview, Information & Outreach Regarding COVID-19, Continue to Stay Vigilant to Flatten the Curve, and Questions. Police Chief Robert Handy provided an update of Police Department activities over the holiday weekend including the strategy to prepare for the holiday. He thanked Community Services Director Chris Slama and Community Services Manager Chris Cole, for the adapted July 4th Parade. Pre- holiday reports of fireworks were higher this year compared to last year, however July 4th calls were down this year compared to last year, and anecdotally there was increased fireworks activity throughout the City. On July 4th there were 53 fireworks confiscations including 22 citations and 20 arrests. Fire Chief Scott Haberle provided an update of the Fire Department activities over the holiday weekend, including social media campaigns before July 4th. On July 4th there were seven (7) investigations of dumpster and small debris fires; there were no structural fires, and over 300 pounds of fireworks were confiscated. One Police Officer received burns as he was attempting to extinguish neighborhood fireworks, and was commended for taking action that most likely prevented a resident from being harmed. Overall, the Fire Department had about fifty percent (50%) fewer calls compared to last year, most likely due to the beach closure. Marine Safety staff worked a 24-hour schedule this year in conjunction with the Police Department for enforcement action and education, and assisting with keeping people off the beach. There were 3 or 4 rescues due to rough water conditions. Councilmember Delgleize and Police Chief Handy discussed the citations and fines, and new techniques the department used to stop illegal fireworks. Councilmember Delgleize thanked Fire Chief Haberle for riding in the 4th of July parade. Councilmember Posey complimented both the Fire and Police Departments for their services to keep Huntington Beach safe. Councilmember Carr and Chief Handy discussed the best course of action for ongoing fireworks after 4th July is to call the Police Department directly with a specific address, or report through the website. CONSENT CALENDAR Councilmember Posey requested to pull Item 17 for further discussion. 44 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 10 of 18 13. 20-1718 Approved and Adopted Minutes A motion was made by Posey, second Delgleize to approve and adopt the City Council/Public Financing Authority regular meeting minutes dated June 15, 2020, as written and on file in the office of the City Clerk, as amended by Supplemental Communication. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None 14. 20-1722 Adopted Resolution No. 2020-31 authorizing the City to Levy the Annual Retirement Property Tax for Fiscal Year 2020/21 to pay for Pre-1978 Employee Retirement Benefit Levels A motion was made by Posey, second Delgleize to adopt Resolution No. 2020-31, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2020/2021 to Pay for Pre-1978 Employee Retirement Benefits" of $0.01500 per $100 of assessed valuation. The tax rate of $0.01500 would continue the tax rate included in the current Fiscal Year 2019/20 Adopted Budget. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Carr, and Brenden NOES: Peterson 15. 20-1688 Approved and authorized execution of a three-year contract with Waymakers in the amount of $335,405 for the management of the Juvenile Diversion Program A motion was made by Posey, second Delgleize to approve and authorize the Mayor and City Clerk to execute a "Professional Services Contract between the City of Huntington Beach and Waymakers for the Management of the Juvenile Diversion Program." The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None 16. 20-1727 Approved Termination of Rent Abatement for Certain Tenants at City-owned Facilities effective August 1, 2020 and authorized City Manager to reinstate if necessary A motion was made by Posey, second Delgleize to authorize and direct the City Manager, or his designee, to terminate Rent Abatement to concessionaire tenants of various City-owned facilities, effective August 1, 2020. A list of the tenants is outlined in Attachment No. 1; and, authorize the City Manager, or his designee, to reinstate the Rent Abatement if future COVID-19 pandemic actions severely impact the tenants ability to operate. 45 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 11 of 18 The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None 17. 20-1729 Approved the appointment of Sean Crumby to the position of Public Works Director and authorized the City Manager to execute the Employment Agreement Councilmember Posey pulled this item to invite Mr. Crumby to introduce himself. Mr. Crumby is a 25- year Civil Engineer with the last 20 years of experience in city government, and is a resident of Huntington Beach. A motion was made by Posey, second Delgleize to approve and authorize the City Manager to execute the "Employment Agreement between the City of Huntington Beach and Sean Crumby" for the position of Public Works Director. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None PUBLIC HEARING Individuals wishing to speak on matters scheduled for Public Hearing may call (669) 900-6833 and enter Webinar ID #986 8560 9496 at the time the Public Hearing is opened. Once a caller has entered the queue, their call will be held until they are invited to speak announcement of the last 3 digits of their phone number. Callers will be asked to identify the agenda number of their Public Hearing item, and are encouraged to identify themselves by name. Callers are provided 3 minutes to speak. 18. 20-1717 Approved for Introduction Ordinance Nos. 4214, 4212, 4215, 4216, and 4213, approving Zoning Text Amendment (ZTA) No. 19-005 and Municipal Code Amendment adding Chapter 5.110 (Group Homes) Senior Planner Hayden Beckman presented a PowerPoint communication entitled Zoning Text Amendment No. 19-005 with slides titled: Background (3), Amendments, Chapter 204 Use Classifications (2), Chapter 210 Residential Districts, Additional Provision L-8 (continued), Chapter 210 Residential Districts (2), Chapter 230 Site Standards, Chapter 230.28 Group Homes (continued) (2), HBMC Chapter 5.110 Group Homes, Zoning Text Amendment No. 19-005, Staff and Planning Commission Recommendation, and Questions? Director of Community Development, Ursula Luna-Reynosa, clarified that this action is not a prohibition, but a regulatory framework, for Group Homes. Councilmember Posey confirmed with staff that this is a regulatory framework which will provide a tool for permit revocation. Senior Planner Beckman confirmed that existing group or sober living homes and residential care facilities can apply for a permit. City Attorney Michael Gates confirmed that this action will not shut down any existing facilities. Councilmember Posey asked for a future update on 46 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 12 of 18 illegal sober living homes. Senior Planner Beckman explained the difference between being a patient vs owning a Sober Living Home regarding certain crime convictions. Councilmember Brenden and Chief Assistant City Attorney Vigliotta discussed that location distance limits for Sober Living Homes cannot consider what may be across a border in an adjacent city. Councilmember Brenden clarified for the record that Councilmember Peterson partnered in bringing the original request last Fall, and thanked both the City Attorney's Office and Community Development staff for putting in the time necessary to reach this point. There was further staff discussion on procedures if a Sober Living Home resident does not remain sober, as well as the time limit given for existing group homes to come into compliance with the new ordinance. Councilmember Delgleize and Senior Planner Beckman discussed that the regulatory framework details will be available for the permit process on the City's website, and clarified that operators will be required to disclose intake, management and program completion policies and procedures. Councilmember Delgleize confirmed with staff that state licensed care homes with seven (7) or more residents cannot be regulated by a city ordinance, and she expressed appreciation to Costa Mesa for their leadership in this effort. Director Luna-Reynosa clarified that historically state licensed facilities of six (6) or fewer residents are regulated by the state and a city is required to treat them as residential facilities, and if there were more than six (6) residents the city was allowed control through the Conditional Use Permit (CUP) process. The intent of the current ordinance is to provide regulation for non-state licensed facilities. Councilmember Carr confirmed with staff that state-licensed facilities are not required to also have a city permit, and discussed Referral Facilities restrictions vs. Group Homes or Sober Living Homes, the proposed 1,000 foot buffer which staff explained follows Orange County's ordinance, and the permit revocation process which is outlined in the code. Councilmember Peterson and staff discussed procedures for public outreach to educate potential and existing facility owners as well as neighborhood homeowners about the new ordinance. The current procedure for homeowners to call code enforcement regarding issues with existing facilities will not change, and letters will go to current homes and facilities that must comply with the new ordinance. Mayor Pro Tem Hardy verified with staff that operator permits are issued to a specific person at a specific address and do not continue with new owners if the facility is moved or sold. Councilmember Posey confirmed with Senior Planner Beckman that currently there are approximately 177 state licensed Sober Living Homes or residential care facilities in Huntington Beach, and the majority of complaints are related to noise, excessive cigarette smoke, pedestrian and parking issues. Director Luna-Reynosa explained that current regulations would consider these as nuisance complaints, but if the ordinance is passed these issues would become permit violations. There was discussion that the ordinance is not expected to produce increased issues, but over time may actually reduce complaints if permits are revoked. Mayor Pro Tem Hardy confirmed with Senior Planner Beckman that the intent is to list facility permits on the City's website. Mayor Pro Tem Hardy opened the Public Hearing for this item. 47 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 13 of 18 City Clerk Robin Estanislau announced receipt of the following Supplemental Communications for this item, and stated there were no public speakers. Public Hearing #18 (20-1717) 1) PowerPoint communication entitled Zoning Text Amendment No. 19-005 (Group Homes) submitted by Director of Community Development, Ursula Luna-Reynosa 2) Email communication received from #norecoveryonashworth supporting limitation and regulation of Sober Living Homes/Recovery Homes Mayor Pro Tem Hardy closed the Public Hearing for this item. Mayor Semeta thanked all of the various department staff members for their diligence in preparing and presenting this ordinance, as well as the City of Costa Mesa for leading the way to provide an effective enforcement tool. Councilmember Brenden clarified with staff that prior calls for service will be available for consideration when enforcing this ordinance. Mayor Pro Tem Hardy summarized that this will be an enforcement mechanism for non-compliant operators as the good operators will qualify for the permit and follow the regulations. Councilmember Carr also thanked Costa Mesa for generously sharing their model, and City Attorney Michael Gates and staff, as well as Community Development staff, for the hours of time it took to make that model fit the City’s needs to create this enforcement tool. Councilmember Brenden stated his support for this item because it will help ensure that residents of these homes receive quality care and hopefully result in fewer homeless individuals. A motion was made by Brenden, second Peterson to find that the project will not have any significant effect on the environment and is categorically exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendment to the HBZSO will have a significant effect on the environment (Attachment No. 1); and, approve Zoning Text Amendment No. 19-005 with findings (Attachment No. 1), approve amendment to Huntington Beach Municipal Code adding Chapter 5.110 (Group Homes), and, after the City Clerk reads by title, approve for introduction: Ordinance No. 4214, "An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 203 of the Huntington Beach Zoning and Subdivision Ordinance Titled Definitions (Zoning Text Amendment No. 19-005);" and, Ordinance No. 4212, "An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance Titled Use Classifications (Zoning Text Amendment No. 19-005);" and, Ordinance No. 4215, "An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 210 of the Huntington Beach Zoning and Subdivision Ordinance Titled R Residential Districts (Zoning Text Amendment No. 19-005);" and, Ordinance No. 4216, "An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance Titled Site Standards (Zoning Text Amendment No. 19-005);" and, Ordinance No. 4213, "An Ordinance of the City Council of the City of Huntington Beach Amending Title 5 of the Huntington Beach Municipal Code Titled Business Licenses and Regulations;" (Attachment Nos. 2 - 6). 48 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 14 of 18 The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None 19. 20-1728 Approved FY 2020/2021-2024/2025 Housing and Urban Development (HUD) Consolidated Plan, FY 2020/2021 Annual Action Plan for Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) Programs, FY 2020/2021-2024/2025 Citizen Participation Plan, and FY 2020/2021-2024/2025 Regional Analysis of Impediments to Fair Housing Director of Community Development Ursula Luna-Reynosa presented a PowerPoint communication entitled: 20/25 Consolidated Plan, 2021 Annual Action Plan, 20/25 Citizen Participation Plan, 20/25 AI with slides titled: Discussion Items, 2020/2025 Consolidated Plan, 2020/2025 Consolidated Plan Funding Categories, 2020/2025 Consolidated Plan Priorities, 2020/2021 Annual Action Plan (3), 2015- 2019 Citizen Participation Plan Amendment, 2020-2025 Citizen Participation Plan, 2020-2025 Regional Analysis of Impediment (2), and Questions? Mayor Pro Tem Hardy opened the Public Hearing for this item. City Clerk Robin Estanislau announced receipt of the following Supplemental Communications for this item, and stated there were no public speakers: #19 (20-1728) PowerPoint communication entitled 20/25 Consolidated Plan 20/21 Annual Action Plan 20/25 Citizen Participation Plan 20/25 AI submitted by Director of Community Development, Ursula Luna-Reynosa Mayor Pro Tem Hardy closed the Public Hearing for this item. A motion was made by Posey, second Brenden to approve staff recommendation that the City Council approve and authorize the following in compliance with the Consolidated Plan Procedures of 24 CFR Part 91: approve the 2020/2021-2024/2025 Housing and Urban Development (HUD) Consolidated Plan; and, approve the 2021/2021 Annual Action Plan for Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) Programs; and, approve the 2020/2021- 2024/2025 Citizen Participation Plan; and, approve the 2020/2021-2024/2025 Regional Analysis of Impediments to Fair Housing; and, authorize the City Manager to sign all necessary documents. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Carr, and Brenden NOES: Peterson 20. 20-1730 Public Hearing held and accepted Economic Development Subsidy Study for Pinnacle Petroleum Sales Tax Agreement Community Director Ursula Luna-Reynosa presented a PowerPoint communication entitled: Five Year Report Pursuant to Government Code Section 53083 with slides titled: Background, AB 562, Key Points of City/Pinnacle Agreement, Cost of Agreement, Consideration Received, and Questions 49 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 15 of 18 Councilmember Posey confirmed with Director Luna-Reynosa the agreement expires in five (5) years with two five (5) year options which both parties must agree to exercise. Councilmember Brenden and Director Luna-Reynosa discussed the amount of revenue generated is one percent (1%) of total sales tax. Mayor Pro Tem Hardy opened the Public Hearing for this item. City Clerk Robin Estanislau announced receipt of the following Supplemental Communications f or this item, and stated there were no public speakers: #20 (20-1726) PowerPoint communication entitled Five Year Report Pursuant to Government Code Section 53083 submitted by Director of Community Development, Ursula Luna- Reynosa Mayor Pro Tem Hardy closed the Public Hearing for this item. Councilmember Brenden discussed with Mayor Pro Tem Hardy when the terms changed from 70/30 in favor of city to the 65/35 current contract, who explained Huntington Beach wanted to match the competing offer to keep Pinnacle within the City. A motion was made by Delgleize, second Brenden to open the public hearing and receive written and oral testimony; and, receive and file the "Five Year Report Pursuant to California Government Code Section 53083 on an Operating Covenant Agreement By and Between the City of Huntington Beach and Pinnacle Petroleum, Inc.," in compliance with Government Code Section 53083. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None ADMINISTRATIVE ITEMS 21. 20-1726 Authorized and directed the City Manager to enter into the City’s standard Professional Services Agreement with the following service providers for the Tenant Based Rental Assistance (TBRA) Program: 1) Families Forward, 2) Interval House, and 3) Mercy House; and, approved the Operating Guidelines Community Director Ursula Luna-Reynosa presented a PowerPoint communication entitled Tenant Based Rental Assistance (TBRA) Program with slides titled: Federal HOME Investment Partnership Funds, Partnership with Service Providers: Working with Community Based Organizations, COVID-19 Housing Needs, Recommended City Council Action, and Questions? Councilmember Delgleize and Director Luna-Reynosa discussed the increased funds that were approved this year which is expected to cover current year additional costs. Councilmember Posey and Director Luna-Reynosa discussed that the City selects the Service Providers who then select the qualified recipients from those referred by the Huntington Beach Homeless Task Force and/or Police Department. 50 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 16 of 18 Councilmember Carr and Director Luna-Reynosa discussed that the City's funding allocations prevent homelessness through this rental voucher program, and the ancillary services provided such as life skill training and case management by the Service Providers. Councilmember Brenden summarized that these three service providers have basically prevented the homelessness of 353 individuals and 144 households since 2015. Councilmember Delgleize suggested arranging for representatives of these three organizations to make a Study Session appearance and provide an opportunity for them to describe the success of their programs. A motion was made by Posey, second Delgleize to authorize and direct the City Manager to execute a Professional Services Agreement with Families Forward in an amount not to exceed $313,000; and, authorize and direct the City Manager to execute a Professional Services Agreement with Interval House in an amount not to exceed $151,249; and, authorize and direct the City Manager to execute a Professional Services Agreement with Mercy House in an amount not to exceed $309,079; and, approve the Operating Guidelines (Attachment #1), which will be attached to the Professional Services Agreement as an exhibit. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None 22. 20-1741 Approved Temporary Closure of the Second Block of Main Street to vehicular traffic to allow restaurants to serve patrons in the public right-of-way City Manager Oliver Chi presented a brief overview of this issue described as a response to Governor Newsom's new COVID-19 directive that shut down inside dining for the restaurant industry again in Orange County and selected other counties within the State. This proposal is different from the parklet proposal addressed by Council a couple of weeks ago. This proposal is only for the City to facilitate a temporary program that would allow restaurants on the Second Block of Main Street to serve patrons in the public right-of-way for as long as Governor Newsom's order stands. Mayor Semeta thanked staff for the quick response to the changing situation. Councilmember Delgleize and City Manager Chi discussed some of the logistics and expectation of availability no later than this next weekend if approved. City Manager Chi added that this is a temporary solution for local restaurants on the second block of Main Street, not a mandatory program. Councilmember Posey commended City Manager Chi for quickly responding to the need as the City strives to help Main Street restaurants serve as many patrons as possible. Councilmember Carr expressed her concern of also finding ways to help other restaurants on other streets. City Manager Chi explained that the temporary emergency use for outdoor commercial permit program that was approved a couple of weeks ago is still available for businesses outside of the second block of Main Street. City Manager Chi stated that the concentration of restaurants on the 51 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 17 of 18 second block of Main Street is driving this additional measure for temporarily closing that part of Main Street to vehicular traffic to allow access to a greater area. Councilmember Posey and City Manager Chi discussed the commercial outdoor permit program and plans to streamline the process. Councilmember Brenden expressed his support for this program which is focused on specific permanent businesses downtown vs. Surf City Tuesday night vendors. Mayor Pro Tem Hardy stated her expectation that the City be prepared for very timely logistical responses if Governor Newsom announces restrictions again, not only for closing down or opening up the street for vehicular traffic, but also handing the permit process. A motion was made by Semeta, second Posey to direct the City Manager to temporarily close the second block of Main Street in response to the current State order prohibiting indoor restaurant service, and work with all related departments including the City Attorney's Office, Community Development, and the Police Department to develop a permitting system to allow restaurants to serve patrons food in the public right-of-way. The motion carried by the following vote: AYES: Posey, Delgleize, Hardy, Semeta, Peterson, Carr, and Brenden NOES: None COUNCILMEMBER COMMENTS (Not Agendized) Mayor Semeta congratulated Mr. Crumby, for his selection as Director of Public Works; congratulated the small business owners who successfully applied for the CARES Act Small Business Grants; and reminded small business owners of the City of Huntington Beach Micro-Grant Program as another funding resource. Mayor Semeta reported attending the Orange County Human Relations Task Force Student Dialogue Day; congratulated four Girl Scout Troop 2190 Gold Award winners: Stephanie Chun, Sophia Clay, Alexandra Hill and Amber Zeng; and, congratulated Huntington Beach resident WWII Veteran William "Bill" Kull and thanked American Legion Post 133 and the Huntington Beach Fire Department for their support in providing a celebration for his 100th birthday. Mayor Semeta provided special thanks to Stacey Newton and 4th of July Board members Linda Vircks, Andi Kowal, Lisa Marie Moreo, Matt Liffreing, Pat Love, Karen Pedersen, Chris Young and Carol Ann Walls, John W ellfringer for the GPS app that allowed residents to track the parade route, and Don Ramsey for putting together the VW buses. Also thanks to event sponsors Toyota of Huntington Beach and Chrysler Dodge Jeep Ram of Huntington Beach, plus Decorating Sponsors Beef Palace, Home Depot, Love N' Bloom Florist, Stone & Ceramic Surfaces, Matter of Craft Bottle Shop, Albertson's, Jack's Surfboards, 5th & PCH, Haole Boys Shave Ice, and Raising Cane's. A brief overview video of the July 4th Parades, produced by Matt Liffreing, was presented. Mayor Semeta also acknowledged the Day family for winning the People's Choice home decorating contest. Councilmember Carr thanked Director of Community Services Chris Slama, the 4th of July Board, the Huntington Beach Police and Fire Departments, plus many others who stepped up for a successful celebration. Councilmember Carr congratulated the four Girl Scout Gold Awardees, thanked Police 52 City Council/Public Financing Authority Regular Meeting Minutes July 6, 2020, Page 18 of 18 Chief Handy for participating in the Orange County Human Relations Task Force Student Dialogue Day, and thanked Fire Chief Haberle for ensuring a COVID-safe Jr. Lifeguard program. Councilmember Peterson thanked everyone who purchased Safe and Sane Fireworks from local non- profit booths, and supporting this fundraiser opportunity. Councilmember Brenden acknowledged Brian Ragland for receiving the Mayor's HB Excellence Award, congratulated Diane Dwyer, 4th of July Parade Grand Marshall, expressed appreciation to the Huntington Beach Fire, Police and Marine Safety staff members for their service and ensuring a successful and safe celebration, thanked Police Chief Handy for his excellent Study Session report, and asked everyone to accept personal responsibility and concern for each other by wearing a face mask in those situations where it is recommended to protect yourself and protect others. Councilmember Posey expressed appreciation for everyone who did their best this year to adapt to the current situation and still provide a patriotic 4th of July celebration, and stated he is looking forward to returning to the usual traditions next year. Mayor Pro Tem Hardy stated her support for Councilmember Brenden's comments on wearing masks, thanked Councilmember Carr for helping to organize the Orange County Human Relations Task Force Student Dialogue Day and Police Chief Handy for participating in the event, reported attending the Grand Opening of the new showroom for Electric Bike Co., shared her appreciation for being part of the unique 4th of July Parades, and thanked City staff, the 4th of July Board, and many others that worked to ensure a successful celebration. Councilmember Delgleize thanked everyone for their resiliency the last few months to ensure that Huntington Beach remains the special city that it is. ADJOURNMENT — 10:32 PM to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Monday, July 20, 2020, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov __________________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair 53 City of Huntington Beach File #:20-1743 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Tom Herbel, PE, Acting Director of Public Works Subject: Adopt Resolution No. 2020-47 establishing Permit Parking District “Z” affecting residents along the Heil Avenue frontage road between Goldenwest Street and Gothard Street, and Sabot Lane between Heil Avenue and Sunlight Drive Statement of Issue: Residents along the Heil Avenue frontage road between Goldenwest Street and Gothard Street, and along Sabot Lane between Heil Avenue and Sunlight Drive, have petitioned the City to establish a residential permit parking district, Permit Parking District “Z”, in Huntington Beach. Financial Impact: The regulations of Huntington Beach Municipal Code Chapter 10.42 (Permit Parking Districts) require that the residents choosing to participate in a residential permit parking district pay a proportionate share of the cost to establish or amend the district, making the district cost neutral to the City. Typical costs include, but are not limited to, fabrication and installation of signs, curb markings, which are initially funded in the General Fund Signs and Marking business unit 10085302, and staff time to issue permits, which are funded in the General Fund Transportation Management business unit 10085301. The total cost for this parking district is estimated at $1,390, or $66 per address . Recommended Action: Adopt Resolution No. 2020-47, “A Resolution of the City Council of the City of Huntington Beach Establishing Permit Parking District ‘Z’ Within the City of Huntington Beach.” Alternative Action(s): Do not adopt Resolution No. 2020-47, and direct staff accordingly. Analysis: Residents along the Heil Avenue frontage road between Goldenwest Street and Gothard Street, and adjacent to Sabot Lane between Heil Avenue and Sunlight Drive, have petitioned the City requesting a permit parking district be created due to commuter vehicle parking impacts and related issues. The neighborhood is located on the north side of Heil Avenue between Goldenwest Street and Gothard City of Huntington Beach Printed on 7/17/2020Page 1 of 3 powered by Legistar™54 File #:20-1743 MEETING DATE:7/20/2020 Street, as shown in Attachment #2. In addition to the commuter vehicle parking impacts on parking availability, residents expressed their concerns with associated issues of late-night noise, littering, parking too close to driveways, and finding curbside areas to place trash bins on the street on collection day. The requested permit parking restrictions are 6 p.m. to 6 a.m. every day, including holidays. Following procedures in Municipal Code (MC) Chapter 10.42 Permit Parking Districts, staff validated the petition, determined the concerns of the residents merit further consideration, and considered the proposed area to be reasonable. Staff prepared and sent letters to the affected properties explaining the permit parking district requirements, boundaries, and included ballots for voting on the permit parking district proposal. As stated in MC Chapter 10.42, a minimum of 75% of the property units must vote in favor of the parking district to move the request forward for further consideration. The voting results met the minimum criteria initiating the evaluation of the conditions of the requested permit parking area. Following the procedures outlined in MC Chapter 10.42, staff investigated the conditions to examine the parking conditions and related concerns. Field observations and discussions with the residents demonstrated that the street experiences recurring parking impacts from commuter vehicles, with the most significant impacts occurring on the weekend. Although noise and trash bin moving issues were not observed by staff, these concerns were mentioned by several of the residents as frequent commuter vehicle parking related issues. Due to these conditions, staff determined that the unrestricted parking creates situations where the commuter vehicle parking regularly interferes with residents and their guest parking, and creates other concerns for the residents. The City Council was originally set to consider the permit parking district request at the June 15, 2020, meeting that recommended including only the west portion of the frontage road. Notifications were sent to the surrounding area. As a result of these notifications, some residents expressed interest in being included in the permit parking district, and two residents communicated they wished to change their original vote from opposed to being in favor. The change of the two votes resulted in the entire frontage road meeting the 75% support threshold. The revised voting results showed the Heil Avenue frontage road between Goldenwest Street and Gothard Street, and Sabot Lane between Heil Avenue and Sunlight Drive, met the 75% minimum support voting requirement to request establishing permit parking on those streets. Based on the voting results, field surveys, discussions and comments received from the residents, staff believes findings can be made demonstrating that commuter vehicle parking unreasonably and regularly interferes with the use of available on-street parking for residents and guests, and causes other related disturbances. These findings are consistent with requirements of the Municipal Code as a basis for establishing permit parking. The number of affected addresses that would comprise Permit Parking District “Z” is 21 addresses and is shown in Attachment #3. Notices were sent to the affected properties, as well as properties within 500 feet of the proposed district boundaries, indicating the date and time of the City Council meeting. City of Huntington Beach Printed on 7/17/2020Page 2 of 3 powered by Legistar™55 File #:20-1743 MEETING DATE:7/20/2020 Public Works Commission Action: None required. Environmental Status: The project is categorically exempt from CEQA Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1. Resolution No. 2020-47, “A Resolution of the City Council of the City of Huntington Beach Establishing Permit Parking District ‘Z’ Within the City of Huntington Beach” 2. Vicinity Map 3. District Z Map 4. Staff Evaluation City of Huntington Beach Printed on 7/17/2020Page 3 of 3 powered by Legistar™56 57 58 59 60 1 | Page Permit Parking District Request – Heil Avenue Frontage Road between Goldenwest Street and Gothard Street, and Sabot Lane between Heil Avenue and Sunlight Drive Residents on Heil Avenue frontage road between Goldenwest Street and Gothard Street, and Sabot Lane between Heil Avenue and Sunlight Drive have petitioned the City to establish permit parking due to parking impacts and associated issues from commuter vehicle parking. The request area is located along the north side of Heil Avenue between Goldenwest Street and Gothard Street. A vicinity map of the area is presented in the diagram below. 61 2 | Page Figure 1. Petitioned Permit Parking District Area Original Permit Parking District Request: Figure 1 shows the original petitioned permit parking area along the Heil Avenue frontage road. The requested parking restrictions are 6 p.m. to 6 a.m. every day, including holidays. Including the commuter vehicle parking impacts, residents expressed their concerns with associated issues of late night noise, littering, parking too close to driveways, and finding areas for placing trash bins on the street on the collection day as the reasons for initiating the process to establish permit parking on their street. As required by Municipal Code Chapter 10.42, staff reviewed the request, determined the petition and concerns of the residents were valid, and considered the proposed area to be reasonable. Staff prepared and mailed letters to the affected properties explaining the permit parking district requirements, boundaries, and included ballots for voting on the permit parking district request. 62 3 | Page Per Municipal Code 10.42 a minimum of 75% of the property units (1 vote per unit) shall be in favor of establishing permit parking to move the request for further consideration. Of the 19 affected properties, 18 ballots were returned with 15 votes in favor of permit parking (83%) and three votes not supporting permit parking. The 75% minimum support requirement was satisfied to continue the evaluation. Table 1 summarizes the voting results of the original Heil Avenue frontage road permit parking district request. PERMIT PARKING DISTRICT REQUEST VOTING RESULTS, ORIGINAL REQUEST NUMBER PERCENT BALLOTS, TOTAL 19 - BALLOTS RETURNED 18 95% BALLOTS NOT RETURNED 1 5% YES VOTES 15 79% NO VOTES 3 16% Table 1. Voting Summary of Permit Parking District Original Request As required by code staff investigated the parking conditions and related issues on the proposed permit parking street. The code requires that facts exist that reasonably establish that unrestricted parking creates a situation in which the subject streets cannot be used for regular parking by residents or their guests, or creates a situation that commuter vehicles or their occupants produce significant sources of health, safety, or welfare concerns to continue the process for further consideration. Below summarizes the field surveys of the parking conditions in the originally requested permit parking area. Field Survey, Tuesday, 6:30 pm Street No. Parked Vehicles Parking Capacity Percent Occupancy Heil Avenue Frontage Road West Side 9 42 21% Heil Avenue Frontage Road East Side 7 21 33% 63 4 | Page Field Survey, Wednesday, 6:15 am Street No. Parked Vehicles Parking Capacity Percent Occupancy Heil Avenue Frontage Road West Side 21 42 50% Heil Avenue Frontage Road East Side 16 21 76% Field Survey, Sunday, 6:30 am Street No. Parked Vehicles Parking Capacity Percent Occupancy Heil Avenue Frontage Road West Side 31 42 74% Heil Avenue Frontage Road East Side 16 21 76% Field Survey, Thursday 6:15 am Street No. Parked Vehicles Parking Capacity Percent Occupancy Heil Avenue Frontage Road West Side 26 42 62% Heil Avenue Frontage Road East Side 14 21 67% Field Survey, Tuesday 9:30 pm Street No. Parked Vehicles Parking Capacity Percent Occupancy Heil Avenue Frontage Road West Side 27 42 64% Heil Avenue Frontage Road East Side 12 21 57% Field Survey, Monday 7:00 pm Street No. Parked Vehicles Parking Capacity Percent Occupancy Heil Avenue Frontage Road West Side 27 42 64% Heil Avenue Frontage Road East Side 11 21 52% 64 5 | Page Analysis: During the weekdays, parking impacts were observed between the evening to early morning hours. The most impacted field observation occurred on the weekend where a majority of the available on- street parking was occupied by commuter vehicles. These parking impacts could affect the availability of on-street parking for the residents and their guests. In addition to the parking impacts, the residents expressed concerns with trash left on the street and front yards, and late night noise attributed to the commuter vehicle parking. Although staff observations of the area did not witness occurrences of trash on the street or noise, these concerns were expressed by many of the residents as recurring commuter vehicle parking issues. Municipal Code 10.42 requires that specific conditions shall exist for a parking district request to move forward for consideration to the City Manager’s office. These include: unrestricted parking creates a situation where on-street parking cannot be regularly used by residents and guests; or, unrestricted parking by commuter vehicles produces significant sources of health, safety, or welfare concerns. Based on the field evaluations and discussions with the residents, staff determined that the unrestricted parking creates a situation where the commuter vehicle parking regularly interferes with residents and their guests parking, and produces significant sources of welfare concerns, and recommended establishing the permit parking district. Revised Voting Results: Prior to the original request being considered by City Council, staff mailed notifications to properties within a minimum of 500 foot radius of the proposed permit parking district area. Staff received several responses from residents in the neighborhood supporting and opposing the permit parking district request. In addition to receiving responses from residents outside the parking district area, staff was contacted by a resident within the proposed parking district who communicated the desire to change their vote from “YES” to “NO”. Due to this change, the original permit parking district area no longer met the minimum 75% support requirement, however, the west section of the Heil Avenue frontage road still qualified with a minimum of 75% voting in favor of the request. The revised voting results for the west and east section of the Heil Avenue frontage road based on the one vote change is shown on Table 2 and Figure 2. 65 6 | Page PERMIT PARKING DISTRICT REQUEST REVISED VOTING RESULTS HEIL AVE FRONTAGE ROAD SECTION NUMBER OF PROPERTIES PERCENT IN SUPPORT OF PERMIT PARKING WEST SECTION 12 75% EAST SECTION 7 71% Table 2. Heil Avenue Frontage Road Revised Voting Results Figure 2. Heil Avenue Frontage Road Sections Revised Voting Results 66 7 | Page Updated Permit Parking District Request: Due to the revised voting results and responses received by staff from residents on nearby streets after the notifications were mailed, staff’s decided to re-ballot the area to give an opportunity for residents on the adjacent streets to participate in permit parking and confirm the affected addresses support for the proposal. Staff received comments from the residents on Sabot Lane and Sunlight Drive expressing interest in joining the Heil Avenue frontage road for permit parking, prompting staff to re-ballot the area to determine if these streets would qualify to be included in a new permit parking district. The voting results showed the west section of Heil Avenue frontage road and Sabot Lane between Heil Avenue and Sunlight Drive qualified to be considered for permit parking. Voting results are shown on Table 3 and Figure 3. PERMIT PARKING DISTRICT REQUEST UPDATED VOTING RESULTS STREET NUMBER OF PROPERTIES PERCENT IN SUPPORT OF PERMIT PARKING HEIL AVE FRONTAGE WEST SECTION 12 75% HEIL AVE FRONTAGE EAST SECTION 4 57% SABOT LANE 4 75% SUNLIGHT DRIVE (CUL-DE-SAC TO SABOT LN) 21 19% SUNLIGHT DRIVE (SABOT LN MAGELLAN LN) 9 0% Table 3. Heil Avenue Frontage Road Updated Voting Results 67 8 | Page Figure 3. Updated Permit Parking Voting Results Resident Comments Requesting Entire Frontage Road for Permit Parking: Prior to the updated permit parking district being considered by City Council, staff received comments from the residents on the east section of the Heil Avenue frontage road who expressed interest in being included in the parking district. The residents on the east section of the Heil Avenue frontage road commented that the entire frontage road, not just the west section, should become permit parking due to the likely result of on-street parking impacting the east section of the Heil Frontage road if only the west section is permitted. Because of these comments the updated permit parking district area was revised to include the entire frontage road and Sabot Lane north of Heil Avenue and is shown in Figure 4. 68 9 | Page Figure 4. Requested Permit Parking District Area Staff Recommendations: Based on the updated voting results, field surveys and discussions with residents staff has determined that the provisions in Municipal Code 10.42 have been met as a basis for establishing a permit parking district. Staff recommends establishing Residential Permit Parking District “Z” consisting of Heil Avenue frontage road between Goldenwest Street and Sabot Lane, and Sabot Lane between Heil Avenue and Sunlight Drive and is shown in Figure 4. The parking district is recommended to include Sabot Lane due to the probable shift in commuter vehicle parking to that street with permit parking implemented on the Heil Avenue frontage road. 69 City of Huntington Beach File #:20-1753 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Dahle Bulosan, Chief Financial Officer Subject: Approve and authorize execution of a Professional Services Contract between the City of Huntington Beach and Hinderliter, De Llamas and Associates, for Sales and Use Tax Auditing Services Statement of Issue: City Council approval is requested to authorize a three-year professional services contract between the City and Hinderliter, De Llamas and Associates (HdL) to provide professional sales and use tax auditing services. Financial Impact: The proposed new contract includes an annual fixed fee for a total of $16,200 in fixed fees. In addition, HDL would receive 15 percent of any new sales and use tax revenue received by the City as a result of its extensive audit and sales and use tax recovery work, if the tax recovery work is approved by the State Board of Equalization (BOE). This audit fee applies to additional monies received in the first six consecutive reporting quarters beginning with the receipt of the audit revenue , and includes retroactive back-quarter adjustments obtained by the firm. Sufficient appropriation ($75,000 per year for three years) is budgeted in the Finance Department (account 10035201) for year one of the contract. Future years of the contract will be funded through out-year budgets to cover the remaining contract commitment. Payments will only be made for audit recoveries if approved by the BOE and after the revenue has been received by the City. The City received approximately $1.4 million in additional sales tax revenue from a comprehensive multi-year audit recovery project performed by HdL. This recovery was performed under the current contract with HDL that is expiring on July 31, 2020. Recommended Action: Approve and authorize the Mayor and City Clerk to execute a “Professional Services Contract Between the City of Huntington Beach and Hinderliter, De Llamas and Associates, for Sales and Use Tax Auditing Services.” Alternative Action(s): City of Huntington Beach Printed on 7/17/2020Page 1 of 4 powered by Legistar™70 File #:20-1753 MEETING DATE:7/20/2020 Do not approve the recommended action, and direct staff accordingly. Analysis: The City of Huntington Beach’s FY 2020/21 Adopted Budget reflects $42.2 million in projected sales and use tax revenue. This revenue is deposited into the City’s General Fund and helps to finance core services,such as public safety, recreation, library, public works and other community programs. Ensuring the City receives its fair share of funding is critical as each dollar helps to fund these essential services. The State Board of Equalization (BOE) determines all sales and use tax revenues remitted to local governments; however, occasionally mistakes do occur. To ensure that allocations made by the BOE are as accurate as possible, the City has utilized the services of HdL since 1988 to act on behalf of the City to pursue misallocated funds. The City’s most recent contract with HdL is a three-year contract,which ends on July 31, 2020. To ensure competitive pricing going forward, and re-evaluate the existing pool of firms providing sales tax auditing services, a Request for Proposals (RFP) was issued on April 23, 2020, to reconsider the pool of vendors that are eligible to perform this service. As a result of the RFP, proposals were received from three firms: Hinderliter, de Llamas and Associates (HdL); MuniServices, LLC; and Sotomayor & Associates. The proposals were evaluated by a committee of Finance Department and Administration Department staff on the basis of the following: 1) Ability to provide the required services; 2) Approach to accomplishing the work plan; 3) Experience in providing similar services to other jurisdictions successfully; and 4) Cost. HdL is recommended as the chosen firm based on the complete responsiveness to the RFP requirements, and their experience in providing the required services. After a competitive RFP process, the City is requesting approval to enter into a three-year professional services agreement with HdL totaling $225,000. Currently, 500 local government agencies in 11 states utilize HdL to assist in the tracking, monitoring, and auditing of sales and property tax allocations by the State. As sales and use tax information is proprietary pursuant to State Law, jurisdictions choosing to hire a specialized auditing firm to verify the tax allocations made by the State must have City Council authorization allowing the firm access to the City’s sales and use tax information. HdL extensively analyzes sales and use tax data to ensure BOE allocations are correct on their client’s behalf. The audit recovery service has a 15 percent fee for all revenue recovered, up to a maximum of six quarters, due to the extensive work and documentation it entails, as well as testifying before the BOE if needed. This specialized firm identifies and corrects various tax allocation errors including, but not limited to, the following: ·Sales reported as “use tax” transactions. ·“Point of Sale” revenues misreported to administrative offices or other locations. ·Misallocations occurring because sales from multiple retail outlets, order desk, or offices are credited to a single location. ·Misallocations due to jurisdiction miscoding. ·“Use Tax” transactions exceeding $500,000 not allocated to the host agency. ·Construction-related sales listed as “installation” rather than “over-the-counter.” ·Warehouses that function as a “point of sales” but not identified as such. City of Huntington Beach Printed on 7/17/2020Page 2 of 4 powered by Legistar™71 File #:20-1753 MEETING DATE:7/20/2020 ·Misallocations that occur due to zip code, boundary, or jurisdictional discrepancies. Below is a summary of the fixed cost and recovery fees responsive to the Request for Proposal: Consultant Annual Flat Fee Recovery Fees Other HdL Year 1: $ 0 15% contingency fee Contingency applies to 6 quarters Year 2: $ 6,000 15% contingency fee Contingency applies to 6 quarters Year 3: $10.200 15% contingency fee Contingency applies to 6 quarters Vendor #2 $5,000 Subject to annual CPI 8% contingency fee Contingency applies to 5 quarters after the Date of Correction and all eligible prior quarters back to and including the 3 quarters prior to the Date of Knowledge quarter with a maximum of 9 total quarter Staff analyzed and reviewed the proposals based on a variety of factors,including the consultant’s responsiveness to the RFP; qualifications and relevant experience; references; and resumes of key staff. Staff is recommending HdL to provide Sales and Use Tax Auditing Services as defined in Exhibit A and Exhibit B of the contract. HdL’s experience in identifying businesses whose sales and use tax remittances to the State were erroneously allocated to other jurisdictions,due to one or more of the aforementioned reasons, is exceptional. The requested contract is to compensate HdL for audit activities that result in additional revenues to the City. Under the current three-year contract, HdL recovered approximately $1.4 million in revenue from the BOE on behalf of the City of Huntington Beach. Please note that procedures are in place by the City’s Finance Department to help ensure that HdL is only paid for additional tax revenue received by the City attributable to their efforts. Staff has created an internal multi-step procedure to confirm amounts HdL submits for payment including obtaining copies of the BOE letters to HdL that confirm BOE approval of their audit findings made on behalf of the City. In addition, pursuant to the contract, payments are not made to HdL until the increased sales tax revenue is actually received by the City as a result of their audit work, which is also confirmed by the Finance Department by reviewing detailed proprietary sales and use tax reports provided by the BOE. Environmental Status: Not applicable. Strategic Plan Goal: Enhance and maintain high quality City services Enhance and maintain the infrastructure Strengthen long-term financial and economic sustainability Enhance and modernize public safety service delivery Attachment(s): 1. Professional Services Contract between the City of Huntington Beach and Hinderliter, De City of Huntington Beach Printed on 7/17/2020Page 3 of 4 powered by Legistar™72 File #:20-1753 MEETING DATE:7/20/2020 Llamas and Associates for Sales and Use Tax Auditing Services 2. Professional Services Rating Sheets City of Huntington Beach Printed on 7/17/2020Page 4 of 4 powered by Legistar™73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 PROFESSIONAL SERVICES SERVICE: Sales & Use Tax Auditing & Analysis Services SERVICE DESCRIPTION: Provide sales tax and use tax auditing, projection, recovery and other revenue audit services. VENDOR: Hinderliter, de Llamas and Associates (HdL) OVERALL RANKING: 1 SUBJECT MATTER EXPERTS/RATERS: 1. Senior Finance Analyst-Finance; 2. Senior Accountant–Finance; 3. Senior Administrative Analyst-Fire I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1,321.50 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 139 150 Technical Approach 350 375 Qualifications 325 375 Clarity 150 150 Cost 287.5 375 References 70 75 Local Vendor Preference NA NA Total 1,321.5 1,500 II. DUE DILIGENCE REVIEW • Interview Ranking: 1 HdL – Summary of Review • Leader in providing sales tax audit and analysis services to local municipalities throughout California. Servicing approximately 500 local government agencies in 11 states. • Very well qualified having served governmental entities for over 35 years providing revenue enhancement and consulting services to local governments. • Excellent staffing includes former Finance Directors and leading industry experts. • Lobbyist with State Board of Equalization; • Excellent relationship with City staff. Currently provide sales and use tax auditing services to the City. • References: Excellent references from the cities of Riverside, Costa Mesa, Santa Monica, Yorba Linda, and Glendale. HdL – Pricing • Annual service fee (Y1 $0; Y2 $6,00; Y3 $10,200. • 15% contingency fee recovered amounts. • Contingency fee applies to 6 quarters 102 PROFESSIONAL SERVICES SERVICE: Sales & Use Tax Auditing & Analysis Services SERVICE DESCRIPTION: Provide sales tax and use tax auditing, projection, recovery and other revenue audit services. VENDOR: Vendor #2 OVERALL RANKING: 2 SUBJECT MATTER EXPERTS/RATERS: 1. Senior Finance Analyst-Finance; 2. Senior Accountant–Finance; 3. Senior Administrative Analyst-Fire I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1,290 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 130 150 Technical Approach 300 375 Qualifications 317.5 375 Clarity 130 150 Cost 345 375 References 55 75 Local Vendor Preference NA NA Total 1,277.5 1,500 II. DUE DILIGENCE REVIEW • Interview Ranking: 2 Vendor #2 – Summary of Review • Active provider of audit and analysis services in local government sector throughout California. Servicing approximately 350 government municipalities throughout the State of California.. • Well qualified: served governmental entities for over 40 years. • Recipient of industry-wide recognition by being listed on GovTech100 for their role in supporting their local government clients. • Have expert Government Relations team and lobbyist in Sacramento that monitors legislative and regulatory activity. • References: Solid references from the cities of Santa Ana, Brea, and Anaheim. Vendor #2 – Pricing • $5,000 annual service fee (subject to annual CPI) • 8% contingency fee • Contingency fee applies to 5 quarters after the Date of Correction and all eligible prior quarters back to and including the 3 quarters prior to the Date of Knowledge quarter with a maximum of 9 total quarters 103 City of Huntington Beach File #:20-1754 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Stephanie Beverage, Director of Library Services Subject: Approve and authorize execution of the Professional Services Contract between the City of Huntington Beach and Noll & Tam Architects to Complete a Library Facilities Master Plan Utilizing Restricted Library Development Impact Fee Funds; and, approve appropriation of funds Statement of Issue: Staff is requesting City Council authorization to execute a contract for professional services with Noll & Tam Architects to complete a Library Facilities Master Plan. Financial Impact: The Library Development Impact Fee (Fund 229) has an existing fund balance of $1.1 M available for library facility improvements. The proposed Library Facilities Master Plan with Noll & Tam Architects will cost $289,697, and is allowable Library Development Impact Fee expenditure. Recommended Action: Approve and authorize the City Manager to execute “Professional Services Contract Between the City of Huntington Beach and Noll & Tam Architects for a Library Facilities Master Plan” and appropriate $289,697 in the Library Development Impact Fund (Business Unit 22950001). Alternative Action(s): Do not approve and award the contract, and direct staff to take alternate action. Analysis: Most major library systems conduct regular Master Planning projects to help set direction and guide the investment in and development of library services and the facilities that support those services. The master planning process involves extensive community engagement, to assess the community’s aspirations and needs, while looking at economic changes, demographics, trends within the Library field and in society as a whole, to determine the scope and direction for services and facility development. City of Huntington Beach Printed on 7/17/2020Page 1 of 2 powered by Legistar™104 File #:20-1754 MEETING DATE:7/20/2020 The Huntington Beach Public Library has not engaged in a master planning process since the 1980s, and there have been many changes and developments in libraries and library services since then. In 2019, during strategic planning, the City Council identified a Library Facilities Master Plan as a strategic objective. As we look ahead, and consider how the City changes, this is the time to engage the community and City stakeholders about the library and library system we will need moving through the 21st Century. In February 2020, the City issued an RFP for a Library Facilities Master Plan. The City received four qualified proposals from Architectural Design firms. All four proposals were from excellent, reputable firms with experience working with libraries of all sizes. A team with representatives from the Library, Public Works and Community Development Department conducted the review of proposals. The top two firms were invited to interview. This round of interviews was completed in May of 2020. After review and discussion, staff recommended selecting Noll & Tam Architects for the project. Noll & Tam has planned and designed more than 60 libraries and community centers since their founding in 1992 - from master planning, to large new buildings to small, complex renovations. Joining with Noll & Tam will be the Margaret Sullivan Studio, a national leader in working with public libraries and mission-driven institutions. Since the firm’s establishment in 2014, Margaret Sullivan Studio has worked with more than 40 public library systems to define their 21st century libraries. The project timeline is 6 months, and involves extensive community engagement through a variety of tools and methods designed to facilitate communication during these challenging times. The Library Development Impact Fund specifically supports master planning, to ensure that the City has an effective guide for investment and development of the Library in support of our changing City and community. The LDIF will easily cover the entire cost for this project, and will provide the City with a robust Library Facilities Master Plan. Environmental Status:Not applicable. Strategic Plan Goal:Enhance and maintain high quality City services Attachment(s): 1. Noll & Tam Architects Proposal 2. Professional Services Contract for Library Facilities Master Plan 3. Insurance Certificate 4. Professional Services Award Analysis City of Huntington Beach Printed on 7/17/2020Page 2 of 2 powered by Legistar™105 PROPOSAL LIBRARY FACILITIES MASTERPLAN CITY OF HUNTINGTON BEACH 28 JANUARY 2020 106 729 Heinz Avenue #7 | Berkeley CA 94710 | 510 .542 .2211 | chris.noll@nollandtam.com 28 January 2020 Cathleen Serrano, Buyer City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Re: City of Huntington Beach Library Facilities Masterplan Dear Ms. Serrano, and Members of the Selection Committee: We are pleased to present our proposal to provide architectural design services for the Library Facilities Masterplan. This project is an exciting opportunity to help the Huntington Beach Public Library system plan for the future, with an eye to providing welcoming spaces that support community interaction, expand the library’s programs, and improve efficient staff operation. Noll & Tam has planned and designed more than 60 libraries and community centers since our founding in 1992 – from master planning, to large new buildings to small, complex renovations. Our Half Moon Bay Library was recently honored with a national AIA/ALA Library Building Award, with the jury commenting that the building is “more than a learning center, but an enduring example of architectural excellence.” We believe in a collaborative approach to design. Each project we undertake develops out of an understanding of the priorities of our clients, the needs of the community, the physical requirements of the place, and the client’s strategic goals. For this project, we’ve brought together a great team of experienced people to lead a comprehensive and engaging process. I will be the Principal in Charge, actively leading our team’s efforts from our Berkeley office, joined by Elaine Kross as Project Manager and Trina Goodwin as Library Planner/Interiors Architect. Joining us will be Margaret Sullivan Studio, a national leader in working with public libraries and mission-driven institutions. Since the firm’s establishment in 2014, Margaret Sullivan Studio has worked with more than 40 public library systems to define their 21st century libraries. We will be supported by a highly qualified, local team of engineers and other consultants with whom we will work together to meet and exceed client expectations. We are excited about the prospect of working with you on this project. The fee proposal we have provided is valid for 180 days. We are confident that, together, we will develop a masterplan that will identify the best possible solutions for the Huntington Beach Public Library system to enhance services offered to the community. Our goal for this project will be to provide the City with a good, realistic roadmap that will meet your needs for the short and long term. Our team will give this project all the enthusiasm, energy and conscientious effort for which we are known. Sincerely, Chris Noll, FAIA, LEED AP Principal Noll & Tam Architects 107 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 02 1 of 2 REQUEST FOR PROPOSAL VENDOR APPLICATION FORM TYPE OF APPLICANT: NEW  CURRENT VENDOR Legal Contractual Name of Corporation: ______________________________________ Contact Person for Agreement: ____________________________________________________ Corporate Mailing Address: ________________________________________________ City, State and Zip Code: __________________________________________________ E-Mail Address: _________________________ Phone: ________________________ Fax: ________________________ Contact Person for Proposals: ______________________________________________________ Title:______________________________ E-Mail Address: ______________________ Business Telephone: _________________________ Business Fax: ________________ Is your business: (check one) NON PROFIT CORPORATION  FOR PROFIT CORPORATION Is your business: (check one) CORPORATION  LIMITED LIABILITY PARTNERSHIP  INDIVIDUAL SOLE PROPRIETORSHIP PARTNERSHIP UNINCORPORATED ASSOCIATION Noll & Tam Architects Christopher Noll 729 Heinz Avenue #7 Berkeley, CA 94710 chris.noll@nollandtam.com 510.542.2211 510.542.2201 Ellen McAmis Marketing Manager ellen.mcamis@nollandtam.com 510.542.2213 510.542.2201 108 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 03 2 of 2 Names & Titles of Corporate Board Members (Also list Names & Titles of persons with written authorization/resolution to sign contracts) Names Title Phone ___________________________________ ________________ ___________________ ___________________________________ ________________ ___________________ ___________________________________ ________________ ___________________ ___________________________________ ________________ ___________________ ___________________________________ ________________ ___________________ ___________________________________ ________________ ___________________ Federal Tax Identification Number: __________________________________________ City of Huntington Beach Business License Number: _____________________________ (If none, you must obtain a Huntington Beach Business License upon award of contract.) City of Huntington Beach Business License Expiration Date: __________________________ Christopher Noll Janet Tam Merideth Marschak Scott Salge Principal Principal Principal Principal 510.542.2211 510.542.2212 510.542.2214 510.542.2220 94-3362668 N/A N/A 109 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 02 B. BACKGROUND AND PROJECT SUMMARY PROJECT UNDERSTANDING Our goal for this project will be to create defensible 20-Year Master Plan that will clearly illustrate the need for growth and development of the facilities, their optimal geographic location and sizing, and the comprehensive financial scenarios (including both construction and library operational costs) associated with this Facilities Master Plan. This work will provide the roadmap to coordinate the growth and maintenance of Library Services as an integral part of the City. More importantly, the Master Plan will lay the foundation for the library to reach new audiences, expand existing customer use of library resources, and re-imagine your libraries. We will open the project with research into who lives and works in the City of Huntington Beach – understanding that the diverse resident and employee populations, library customers, non-customers, and core customers will inform the use of library buildings now and in the future. The lifestyles, hopes, and dreams of people shape the proposed uses of library facilities. This will help us determine the optimal location and “flavor” of library facilities to maximize their role as vibrant civic spaces. In the City of Huntington Beach, the future plans for the airport redevelopment, participation in the Bloomberg Wellbeing Initiative, long-standing partnerships with local enterprises such as the RAND Corporation and emerging opportunities with a growing group of entertainment, gaming, and technology companies is an exciting context for a new kind of library facilities planning. Our team’s work will view the library facilities as catalysts for neighborhood stability, integration, and development; as supports for existing enterprises and new wealth creation; as places for on-demand learning, education and meet-up opportunities; as inviting platforms for inclusion and prosperity for all; and as civic emergency centers in disaster or crisis incidents. This team has the expertise, experience, and vision required to understand trends and future forces. The team approach enlists the community, library leaders, and library staff to envision meaningful facilities and spaces that mobilize library assets on many civic fronts. Our work will launch from the 2015 Strategic Plan, the first since 1993, which recast the public library as a vibrant learning center, a well-being cultivator, a dynamic third place, and a community and culture connector. The Master Plan will look at ways the facilities can be nimble and flexible, adapt as new services are prototyped and perfected, and enable staff to operate efficiently, effectively and with exceptional impact. For our team, the definition of a successful Facilities Master Plan is a relevant and contemporary document that activates the Huntington Beach Public Library’s Vision, Mission, and Strategic Initiatives. It will provide a road map for the City and the Library to achieve their common goal of fostering a healthy, inclusive, and sustainable Huntington Beach. 110 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 03 C. METHODOLOGY PROJECT APPROACH The Noll & Tam Architects team, in collaboration with Margaret Sullivan Studio, is a diverse group of architects, urban planners, community engagement experts, and library service innovation and implementation experts. This team has the training, credentials and experience to complete all the phases of the Library Facilities Masterplan, helping you to answer the key questions that will guide our work: Build from the Community Up: Who are we designing facilities for and why? Who lives and works in Huntington Beach and what are their lifestyles, life stages, and life dreams? Who uses the library now and how? Who doesn’t and why not? How will we impact the lives of all in our community for the next 20 years, and how do we design our facilities to support their life goals, needs, and aspirations? Lead with your Legacy: How will we optimize the role of libraries in the 21st Century? What are the opportunities for the Huntington Beach Public Library to maximize the use of its facilities and other resources to improve the well- being of people who live and work in the City of Huntington Beach? How will we position the library facilities to extend and activate the goals of our strategic work? Support Economic Development Goals: How can we use this process of community engagement and envisioning the preferred future for all residents of the City of Huntington Beach to create a defensible “business plan” for the future of the library facilities to enable positive learning experiences for all? How can we position this work to demonstrate that this investment in the library’s most visible asset is essential for individual and community development? Our team starts with these key inquiries to define and refine the vision for maximizing the use, enjoyment and relevance of Huntington Public Library facilities in the next two decades. Our process will align these important library assets with the City of Huntington Beach’s agenda for growth and change. Our work will engage City and Library leaders, along with community residents and stakeholders to get the best possible picture of what the local opportunities are for the library. It also will draw on the team’s significant experience with other public libraries who are activating facility and service resources to effectively contribute to local community economic development goals related to economic diversity, community development, education, employment, social services, diversity and inclusion, culture, and civic life. OUR PROCESS As stated in the RFP, the Scope of Services has been identified as the following: 1. Review Related Documents; 2. Research; 3. Engagement and Public Participation; 4. Masterplan Development. The following workplan and schedule outlines an approach, incorporating the Scope of Services with the team’s methodology. Our methodology is workshop- based, highly participatory, and incorporates human- centered design techniques. It is customized and inquiry-based to address the Huntington Public Library’s specific conditions. Our process is collaborative. We believe that the City staff will be an extension of our planning team. We support the RFP’s statement that effective community engagement is critical to success. Therefore, preliminary planning is an important first step to ensure successful invitations, maximum participation, enough time for active listening, and meaningful engagement sessions. We also may want to explore planning for staff engagement, a technique that we employ that both allows the staff to be involved in research and development and to be active participants in workshopping the future vision, resulting in capacity building for successful implementation. At the beginning of the process, we will also want to identify when and how many public engagement sessions we anticipate. 111 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 04 PROPOSED WORKPLAN & SCHEDULE (KICKOFF) IDENTIFY PARTICIPANTS Before we begin, we will want to identify the key stakeholders who will be involved in this process and define their roles. As a start we suggest: Executive Leadership Group/ Steering Committee – Executive City and Library Leadership who will collaborate with the Consultant Team on the process, methodology and key decisions. Design/Consultant Team Community Stakeholders – Community leaders, experts, members and stakeholders (including current and future library customers) that will offer critical information to the process. We will work with the City to refine that list, identify when to garner their input and what the best forum and format will be to obtain the most critical information. Staff Working Group – A potential group of Huntington Public Library staff representatives who will be engaged in the Facilities Masterplanning process. This may include participating in workshops and engaging in surveys and/or data gathering and research that will enlighten the process. The following proposes a six- month schedule, with five trips. Each trip will be 2 days with schedules and agendas to align with the purpose of the trips. (MONTH 1) PRE-WORK: RESEARCH, ANALYSIS AND SYNTHESIS The Consultant Team will engage in research and information gathering to inform the project context. Research & Related Documents A. Community Needs B. The City of Huntington Beach’s community and economic plans C. Huntington Beach Public Library’s Strategic Plan D. Research other Library’s Facilities Plans E. Demographic Growth, Transformation and Market Segment Research F. The Future “Forces” that impact the Library Industry: Future of Community, Future of Learning, Future of Community, Future of Work, Future of Distribution, Future of Retail, Future of Transportation, Future of Technology G. Case Study Research: Libraries and Non-Profits, Museums and Educational Institutions creating impact through intentional facilities and community service design. (MONTH 2) TRIP #1: DEFINE THE STRATEGY, VISION AND GOALS OF THE PROJECT; INITIATE COMMUNITY ENGAGEMENT & PUBLIC PARTICIPATION The purpose of this trip will be to: • Introduce City & Library Leadership and City staff to the process • Develop the Strategic Goals of the project building on Strategic Plans • Confirm initial understanding of the Consultant Team’s Research • Conduct active facilitated Community Engagement • Conduct Existing Facilities Assessments Library Leadership & Staff Engagement Workshops A. Leadership: Consultants will kick-off the process with a Goals Workshop & “Imagine the Possibilities” Visioning Session B. Staff Working Group: Consultants facilitate a workshop to introduce the Staff Working Group to the Planning Process, their role, and training to conduct “Directed Storytelling” interviews to gather qualitative data to inform community needs, motivations, and aspirations. Staff will conduct these interviews with community members prior to Trip #2. C. Library Branch Staff complete an “About their Communities” Questionnaire D. All-Staff Kick-Off: Consultants may conduct an all-staff session, which can be live-streamed and recorded, to introduce all staff to the process and project goals Community & Stakeholder Engagement Workshops A. Community Meetings B. Focus Group Sessions with Current and Future User Groups C. One-on-One Interviews with Community Stakeholders Facilities Assessments A. Facility Assessments: The architectural and engineering members of the team will examine the existing conditions at the Main Library and the other four branches and prepare a brief report on the current deficiencies of the buildings that will need to be addressed. We have included structural, mechanical, and 112 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 05 electrical engineers on our team who will, along with us, examine and evaluate these buildings to see how they are performing and what will be necessary to bring them up to an acceptable level of performance, so that they can continue to serve the citizens of Huntington Beach well for many years to come. B. Current Use of facilities, including quantity of users at the time of day, what they are doing and how the current facilities are challenges and barriers to services, learning and ideal customer experience C. Programs and Services Analysis (MONTH 3) TRIP #2: ALIGN COMMUNITY TRENDS, NEEDS, AND ASPIRATIONS TO INFORM FACILITIES PLANNING; CONTINUE COMMUNITY ENGAGEMENT & PUBLIC PARTICIPATION The purpose of this trip will be to: • Present how the community needs and aspirations are aligning with strategic objectives • Present understanding of demographic growth and trends to inform service needs, potential gaps of service, and strategies for expansion • Continue to deepen understanding of community trends, needs, and aspirations • Identify how future City conditions and library trends will shape services and the role of the facilities for 20 years. Library Leadership & Staff Engagement A. Leadership Workshop: The Leadership Workshop will focus on the following three agenda items: 1. Consultants will present the findings and synthesis of community engagement, identify alignments and potential objectives with strategic goals, and review outputs and identify potential gaps and tactics to gather needed data. 2. Consultants will present demographic research with projections and interpretations to develop an approach to identifying service gaps in the City, and begin to develop a 20- year methodology for expanding services, programs, and facilities. 3. Consultants will begin to look at the financial context of the City and the Library with preliminary potential capital costs of the facilities masterplan to identify opportunities and constraints. B. Staff Working Group: The Staff Working Group Workshop will focus on the following three agenda items: 1. Participants will synthesize community needs based on “Directed Storytelling” interviews and community engagement findings. 2. Participants will develop a deeper understanding of the City’s and the library community’s characteristics, programs, and partnerships through a community asset mapping exercise as a contextual understanding for future growth and service needs in the City. 3. Participants will identify how “Future Forces, Trends and Case Studies” will shape the library’s future services, programs, and facilities. City Leadership Consultants will meet with City officials to deepen an understanding of community economic development objectives, verify demographic growth with City data, and confirm any additional information that will impact the Facilities Masterplan work effort. Community & Stakeholder Engagement Consultants will continue to facilitate community engagement sessions to inform the work effort. A. Community Meetings B. Focus Group Sessions with Current and Future User Groups C. One-on-One Interviews with Community Stakeholders (MONTH 4) TRIP #3: DEVELOP THE CITY-WIDE APPROACH TO SERVICES; IDENTIFY UNIQUE COMMUNITY CONDITIONS TO TAILOR APPLICATIONS The purpose of this trip will be to: • Develop the Facilities Masterplan as an extension of the Library’s Vision, Mission, and Strategic Plan • Develop a City-wide approach to services • Identify the “Role and Purpose” of the facilities to activate strategic priorities • Develop a standard recipe of space components based on activities, programs, and learning outcomes • Identify unique opportunities in the communities to tailor programs, services, and facilities • Develop a tentative plan for locating library services in the City, using existing facilities or proposing new ones • Develop conceptual plans for reorganization and renovation of the Central Library to meet the new roles and vision for the library, with alternative concepts as needed 113 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 06 • Develop conceptual renovation plans for the Main Street and Banning Branch Libraries, with alternatives if appropriate • Develop conceptual models for the renovation or relocation of the Helen Murphy and Oak View Branches • Identify future gaps in service to meet community needs • Develop a sustainable approach to adding services and programs • Develop a sustainability plan for all facilities • Develop preliminary implementation and funding strategies to result in an adaptable 20-year decision- making framework Library Leadership & Staff Engagement A. Leadership Workshop: The Leadership Workshop will focus on the following three agenda items: 1. Consultants will present the preliminary approach to the Facilities Masterplan incorporating all of the data gathered to date with a preliminary articulation of strategic priorities for the role and purpose for the facilities as an extension of the strategic plan. 2. Consultants will work with the Leadership team to develop a City-wide framework for optimal geographic distribution of library facilities and right-sizing. This will be based on activating the library’s assets and service models for optimal community utilization, ideal customer experience, and the library’s current and future operational capacities. 3. Consultants will work with the Leadership team to develop implementation, funding, and prioritization strategies to generate a 20-year adaptable framework. B. Staff Working Group Workshop: The Staff Working Group Workshop will focus on the following three agenda items: Participants will create customized library experiences for the communities the library serves, to create future use scenarios for each community. Participants will work with the consultant team to create an ideal re-alignment of space components for optimal space utilization and configuration of existing facilities. Participants will create innovative solutions to City-wide services based on a variety of future scenarios. The purpose will be to capture creative ideas for service, program, and facilities expansion. It will also inform Leadership’s 20- year expansion implementation planning. (MONTH 5) TRIP #4: PRESENT AND REFINE FACILITIES MASTERPLAN The purpose of this trip will be to: • Finalize Facilities Masterplan for all library facility locations • Present Cost Estimates and Scenarios • Refine Implementation Plan • Present Sustainability Plan • Confirm Next Steps for successful implementation with community stakeholders, staff and the community Library Leadership & Staff Engagement A. Leadership Workshop: The Leadership Workshop will focus on the following three agenda items: 1. Consultants will present the final Facilities Masterplan. 2. Consultants will work with the Leadership team to finalize the implementation, funding and prioritization plan. 3. Consultants will present comprehensive cost scenarios incorporating capital and operational costs. 4. Consultants will work with the Leadership team to identify Next Steps for successful implementation. B. Staff Working Group: The Staff Working Group Workshop will focus on the following two agenda items: Consultants will present the Facilities Masterplan for review and feedback. Participants will share their “Vision” for the community based on this process, their learnings, and their aspirations for how re-environed facilities can enable their success! To note: The team may also want to consider additional Community Engagement during this phase to garner feedback, build excitement and encourage on-going participation and ownership. (MONTH 6) TRIP #5: DELIVERY OF FINAL FACILITIES MASTERPLAN Library Leadership & Staff Engagement A. Final review of Master Plan and all associated documents prior to Council presentation City Council Presentation A. Present Final Draft Master Plan to the City Council in Workshop session, respond to feedback, Publish Final Master Plan A. Make any modifications necessary following Council meeting and publish final Master Plan. 114 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 07 D. STAFFING Our design team brings together the talents of architects and subconsultants who understand libraries. Through many years of public works experience, Noll & Tam has honed our skills in communication and decision- making. As Prime Architect, Noll & Tam will provide the overall team direction, overseeing the consultants, leading the needs assessment phase, facilitating the community engagement process, and producing the final master plan report. We intend to collaborate with the City and the library stakeholders to ensure that the project moves forward to successful completion. NOLL & TAM ARCHITECTS CHRIS NOLL, FAIA, LEED AP, PRINCIPAL IN CHARGE Christopher Noll will be the Principal in Charge. Chris brings strong skills in collaborating with clients and directing projects through all phases of design while remaining sensitive to the needs and concerns of client and users throughout the process. His role will be to lead the master planing process and keep a sharp eye on the City’s vision and budget. Chris is very familiar with the design process for community buildings and is adept at building consensus among diverse interest groups. He has led all of Noll & Tam’s public library projects and understands the important factors that create successful library spaces. Through his close relationships with public librarians throughout the state, Chris stays on top of new trends in librarianship, and brings a visionary perspective. ELAINE KROSS PROJECT MANAGER As Project Manager, Elaine will create and maintain a work plan for the project team, anticipating tasks and the time required to complete them in order to meet commitments. She will be the day- to-day client contact and will hold the responsibility for the efficient running and the delivery of the project. She will coordinate and participate in meetings with the Library staff, together with Chris, Trina, and Margaret. As the project manager on the new Capitola Library and the San Leandro Mulford Marina Library, Elaine understand the needs of modern libraries and is ready to offer her expertise to move this project forward. TRINA GOODWIN, LEED AP, LIBRARY PLANNER/INTERIORS ARCHITECT Trina offers the unique perspective of an architect and interior designer specializing in space planning and FF&E. Over the past 25 years she has developed a specialization in designing joyful and energizing library spaces. She will work side-by-side with Chris, Elaine, and Margaret on the library master plan. She will participate in presentations to City and the stakeholders, and ensure that the solutions presented are budget conscious and appropriate to the context and community. Trina has noted skill at facilitating community process and is aware of the particular issues and challenges this project may have in moving forward. Her involvement and advice will be indispensable. MARGARET SULLIVAN STUDIO MARGARET SULLIVAN PRINCIPAL Margaret Sullivan is a national thought leader in assisting public libraries envision their preferred future. She is known for her ability to lead effective community engagement, conducting meaningful dialogue to foster community goals. Margaret leads a studio of designers who skillfully collaborate with stakeholders and the design team to represent a holistic understanding of the institution’s service model. Margaret works with the design team to translate these design goals into physical spaces. LYNA VUONG, INTERIOR DESIGNER Lyna has worked with Margaret for over 14 years designing community-based projects. Lyna is a certified interior designer and is skilled at bringing ideas to life through designing and creating environments that enhance the project’s goals. She approaches each project with a keen eye for detail and craft. Whether the goals are sophisticated or playful, Lyna’s approach to interiors captures the essence of place and uses interior design to enhance the project goals and user experience. 115 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 08 A licensed architect since 1985, Chris specializes in the planning and design of libraries and has led all of Noll & Tam’s public library projects. He is currently leading new library projects for the cities of Capitola and Menlo Park as Principal in Charge. Chris is actively involved in the library community through the California Library Association (CLA) and the American Library Association (ALA). As a member of the CLA Legislative Committee, Chris led a statewide space needs assessment for California’s more than 1,100 public libraries. He engages in research about future trends in library facilities and library service delivery. With Anthony Bernier, Ph.D., of SJSU, Chris has developed the “Youth Opportunity Design Approach, a curriculum guide for how to engage youth in the design of library spaces. CHRISTOPHER NOLL, FAIA, LEED AP NOLL & TAM ARCHITECTS RELEVANT PROJECT EXPERIENCE Santa Cruz Downtown Library Study Menlo Park Library Space Needs Study San Rafael Public Libraries Study Woodland Library Master Plan Berkeley Branch Libraries Facilities Master Plan Alameda Branch Libraries Feasibility Study and Renovation American Canyon Library Renovation Berkeley Public Library Central Library Improvements Capitola Library Castro Valley Library Felton Library Interior Design Half Moon Bay Library Hayward Main Library & Community Learning Center Los Gatos Library Mission Branch Library Renovation, Santa Clara Morgan Hill Library Mountain View Library Renovation Napa County Main Library Remodel CALIFORNIA REGISTRATION Licensed Architect #C15916 EDUCATION Master of Architecture, University of California, Berkeley, 1981 Bachelor of Arts, Princeton University, 1978 CAPITOLA LIBRARY NAPA LIBRARY HALF MOON BAY LIBRARY PRINCIPAL IN CHARGE 116 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 09 Elaine joined Noll & Tam in 2017 and brings a strong background in architectural design for a wide variety of projects. Her experience has ranged from working with Silicon Valley tech companies to residential tower projects, along with smaller residences. Although new to public architecture, she has quickly taken the reigns as project manager of the new San Leandro Mulford Marina Library and the new Capitola Library, using her thoughtful design sensibility to create special moments in these neighborhood libraries. She is able to interact with stakeholders in a way that brings disparate groups to consensus and moves project forward. ELAINE KROSS NOLL & TAM ARCHITECTS RELEVANT PROJECT EXPERIENCE San Leandro Mulford Marina Library Capitola Library Half Moon Bay Library South Fremont Wellness Center Los Altos Hillview Community Center Oro Loma Sanitary District Adminstrative Offices College of Alameda New Center for Liberal Arts Apple ID Studio for Interaction Architecture* 10000 Santa Monica* Sowwah Square Hotel* 631 Folsom Tower* Brandt Berg House* Peddie Addition* Herrliberg House* EDUCATION Master of Architecture, Rice University, 2006 Bachelor of Fine Arts, Environmental Design, Otis College of Art and Design 1999 CAPITOLA LIBRARY HALF MOON BAY LIBRARY COLLEGE OF ALAMEDA NEW CENTER FOR LIBERAL ARTS PROJECT MANAGER 117 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 10 In her 38-year career as an architect, Trina Goodwin has planned, designed, and conducted feasibility studies for numerous Bay Area public libraries. At Noll & Tam since 2005 and an Associate Principal with the firm, Trina most recently designed the interior architecture for the Hayward Library, which opened in September 2019. She offers the unique perspective of an architect and interior designer specializing in space planning and FF&E. She has a particular interest in creating efficient and supportive spaces for library services that respond to the needs of library staff and patrons, focusing on highly durable finishes and materials that are attractive yet hold up to heavy use. TRINA GOODWIN, LEED AP NOLL & TAM ARCHITECTS RELEVANT PROJECT EXPERIENCE Santa Cruz Downtown Library Study Petaluma Regional Library Refresh Menlo Park Library Space Needs Study San Rafael Public Libraries Study Woodland Library Master Plan Capitola Library Half Moon Bay Library Hayward Main Library & Community Learning Center Los Gatos Library Mission Branch Library Renovation, Santa Clara American Canyon Library Renovation Berkeley Public Library Central Library Improvements Castro Valley Library Morgan Hill Library Mountain View Library Renovation North Highlands-Antelope Branch Library Renovation, Sacramento Southgate Branch Library Renovation, Sacramento Petaluma Regional Library Refresh Valley Hi North Laguna Library CALIFORNIA REGISTRATION Licensed Architect #C21806 EDUCATION Bachelor of Architecture, California Polytechnic State University, San Luis Obispo, 1980 CASTRO VALLEY LIBRARY LOS GATOS LIBRARY MISSION BRANCH LIBRARY LIBRARY PLANNER/INTERIORS ARCHITECT 118 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 11 CAREER 2014 Founded Margaret Sullivan Studio New York, NY 2009 Director of Interior Design H3 Hardy Collaboration Architecture New York, NY 2008 Acting Executive Director at OHNY New York, NY 2004 Project Architect, Interior Designer Holzman Moss Architecture New York, NY 1999 Project Designer Hardy Holzman Pfeiffer Associates New York, NY 1997 Alan Gaynor and Co. New York, NY 1996 Neal-Prince and Partners Greenville, SC EDUCATION 2001 Library Planning and Design Program Harvard Graduate School of Design Cambridge, MA 1996 Bachelor of Architecture Clemson University, Clemson, SC 1994 B.A., Art History Wake Forest University, Winston- Salem, NC 1994 National Building Museum Washington, DC 1993 Institute of European Studies Vienna, Austria ACCREDITATION LEED® 2.0 Accredited Professional MARGARET SULLIVAN PRINCIPAL Margaret Sullivan has transformed the library industry by introducing place-making and human- centered design to create dynamic public libraries catering to community conditions. Starting her practice after fifteen years as a designer at HHPA and then as Director of Interior Design at H3 Hardy Collaboration Architecture, Margaret has built the leading firm in 21st century public library design. She skillfully translates a library’s mission, design, and functional goals into physical spaces. She has been recognized by the design industry for her interior design excellence by Contract Magazine and Interior Design Magazine. Margaret inspires librarians to embrace change, community, diversity, and positive customer experiences, presenting at conferences and library staff days nationally and internationally. SELECT PROJECT EXPERIENCE Altadena Library District Altadena, CA Strategic Planning Anne Arundel County Public Library Annapolis, MD Annapolis Library, New Building Charlotte Mecklenburg Library Charlotte, NC ImaginOn, the Joe and Joan Martin Library, New Building Morrison Regional Library, Programming North County Regional Library, Programming & Renovation Contra Costa County Library Contra Costa, CA Pleasant Hill Library, New Building Readers Initiative Experience Guidelines DC Public Library, Martin Luther King Jr. Memorial Library Washington, DC Visioning and Programming for the MLK Jr. Renovation Youth Service Areas Concept & Interior Design Fresno County Public Library Fresno, CA Strategic Planning; Master Facility Plan; Visioning & Programming; Staff Day Workshop Las Vegas Clark-County Library District Las Vegas, NV Facilities Master Plan Standard Urban & Rural Program East Las Vegas Branch, New Building Mesquite Branch, New Building New York Public Library New York, NY Carnegie Design Standards Programming of 5 Carnegie Branches Richland Library Columbia, SC Library as Studio, Facilities Master Plan Methodology Main and 10 Library Renovations and Additions Salt Lake City Public Library Salt Lake City, UT Library Space & Architectural Study for 3 Branches Sprague Branch Historic Renovation Stockton-San Joaquin County Public Library Stockton, CA Northeast Stockton Library & Recreation Center, New Building 119 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 12 CAREER 2014 Margaret Sullivan Studio New York, NY 2005 Holzman Moss Bottino Architecture New York, NY EDUCATION 2018 MA Food Studies New York University New York, NY 2005 Bachelor of Fine Arts Interior Design Fashion Institute of Technology New York, NY ACCREDITATION 2009 NCIDQ #25338 PROFESSIONAL ACTIVITIES Happy Family Night Market | Experience Design Director Pratt Institute School of Interior Design | Juror IIDA Student Mentoring Program | Program Mentor IIDA We Care | Volunteer Spoons Across America | Volunteer Riverdale Neighborhood House | Teen Cooking Instructor SPEAKING ENGAGEMENTS Library Journal Design Institute: “Library As Studio, Redesigning Existing Spaces” Panelist, 2019 PLA Conference: “Designed for Experience: Re-imagining Spaces and Services” Pre-Conference Speaker, 2016 LYNA VUONG SENIOR DESIGNER Lyna Vuong is the Senior Interior Designer at Margaret Sullivan Studio, and has been designing public libraries with Margaret for over fourteen years. Lyna leads the design and implementation of all the projects in the Studio, overseeing design development and production. This includes the implementation of Richland (SC) Library’s Library as Studio methodology for the 200,000 square foot Main Library and ten branches, the implementation of the Master Facilities Plan for the Mesquite Branch and East Las Vegas Branch, and the historic interior renovation of the New Haven Free Public Library’s Cass Gilbert reading room for Ives Squared. Lyna is skilled at translating the goals of a program into beautiful and durable interior finishes and furnishings appropriate for public buildings. In particular, Lyna specializes in creating customized solutions within the client’s budget and maintenance expectations for creative, vibrant, and complex designs. Lyna works at a variety of scales, approaching each project with a keen eye for detail and craft. Whether the goals are sophisticated or playful, Lyna’s approach to interiors is to capture the essence of place, utilizing design to develop community. SELECT PROJECT EXPERIENCE Anne Arundel County Public Library Annapolis, MD Annapolis Library, New Building Charlotte Mecklenburg Library Charlotte, NC North County Regional Library, Programming & Renovation DC Public Library, Martin Luther King Jr. Memorial Library Washington, DC Youth Service Areas Concept & Interior Design DreamYard Art Center Bronx, NY Grant Avenue School Library Renovation (Pro Bono) Bronx Community Reading Garden (Pro Bono) Greenville County Library System Greenville, SC Five Forks Branch, New Building Harmony Village Business School & Conference Center Suzhou, China Jacksonville Public Library Jacksonville, FL Highlands Regional Library, Youth Services Interior Renovation Charles Webb Wesconnett Regional Library, Youth Services Interior Renovation Las Vegas-Clark County Library District Las Vegas, NV Facilities Master Plan, Phase I implementation Memphis Public Library, Benjamin L. Hooks Central Library Memphis, TN CLOUD901 Teen Learning Lab Richland Library Columbia, SC Library as Studio, Facilities Master Plan Methodology Main and 10 Library Renovations and Additions Salt Lake County Library Salt Lake County, UT Kearns Library Branch, New Building Daybreak Library Branch, New Building 120 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 13 ADDITIONAL SUBCONSULTANTS We have assembled a team of subconsultants based in the Los Angeles area, and with whom we have extensive experience working on public projects. DEGENKOLB ENGINEERING STRUCTURAL ENGINEERING Founded in 1940, Degenkolb Engineers’ practice reflects eight decades of commitment to technical expertise, exceptional client service through close collaboration, and life-long learning. Degenkolb’s award- winning structural designs have saved clients hundreds of millions of dollars due to their expertise and experience. Degenkolb’s Los Angeles office provides consulting, design, and review services throughout Southern California including directly for the Cities of Santa Monica, Los Angeles, West Hollywood, and Beverly Hills. They are committed to the seismic resilience of our communities by maximizing the value of the existing built environment and supporting quality renovation and new design. SYSKA HENNESSY GROUP MECHANICAL/ELECTRICAL/ PLUMBING ENGINEERING Syska Hennessy Group is a leading global engineering firm that specializes in full-service MEP, information and communication technology, architectural lighting, vertical transportation, and commissioning. With more than 500 professionals across 18 offices, they provide a full range of engineering services for projects of every size and budget. Since 1928, Syska has been designing smarter, safer, and more efficient buildings by integrating essential systems that respond and adapt to a changing world. Libraries are complicated venues that reflect the aspirational visions and values of their local communities, providing physical space and services to enhance the growth and education of the local community. They also represent substantial investments. Syska provides engineering expertise for these complex facilities with high-performing, top-quality, and sustainable operations, significantly reducing overhead costs for clients while meeting increasingly stringent environmental goals to reduce, reuse, and recycle in an increasingly decarbonized world. TBD CONSULTANTS COST ESTIMATING TBD Consultants is a certified small business enterprise dedicated to the provision of excellence in construction project management and cost management services to owners and their professional consultants. TBD Consultants’ experience covers virtually every building type and extends across a large geographic area. Founded in California in 2005, the company also has experience on projects throughout the United States, Europe, the Middle East and Asia. 121 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 14 E. QUALIFICATIONS NOLL & TAM EXPERIENCE Since 1992, Noll & Tam has completed a wide range of public buildings for cities and institutions. We are best known for our specialization in libraries, as we have programmed and designed more than 40 public libraries. These include the Half Moon Bay Library, which recently won an AIA/ALA Library Building Award, achieved LEED Platinum certification and is on track to be Zero Net Energy. We have also completed the Los Gatos Library, LEED Gold certified and winner of a Sustainability Merit Award from the AIA California Council; Castro Valley Library, LEED Gold certified and operating as Zero Net Energy; and Valley Hi North Laguna Library in Sacramento, LEED Gold certified and 2011 winner of an AIA San Francisco Design Award for Excellence. MARGARET SULLIVAN STUDIO EXPERIENCE Margaret Sullivan Studio uses design to empower public libraries and other mission-driven institutions to realize their fullest potential. The firm creates experiences and advances places that contribute to community improvement and individual enlightenment. They devise new methodologies and design strategies to reflect the Aspen Institute’s “People, Places and Platforms” and American Library Association’s “Libraries Transform” approach. Since the firm’s establishment in 2014, Margaret Sullivan Studio has worked with over 40 public library systems to define their 21st century libraries. These organizations include New York Public Library, Richland (SC) Library, DC Public Library, Las Vegas-Clark County Library District, New Haven Free Public Library, Salt Lake City Public Library, and Memphis Public Library. VALLEY HI NORTH LAGUNA LIBRARY 122 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 15 PROJECT INFORMATION Client: City of Berkeley Size: 7,290 - 8,600 SF Dates: Oct 2007 - Aug 2008 Key Staff: Chris Noll - Principal Contact: Suzanne Olawski Assistant Director of Library Services, Solano County Library (Former Deputy Director of Library Services for Berkeley Public Library) (707) 784-1504 SEOlawski@solanocounty.com BERKELEY PUBLIC LIBRARY MASTER PLAN In 2008, Noll & Tam conducted a facilities master plan for the Berkeley Public Library’s branch libraries. The Berkeley Public Library, established in 1893, is one of the most heavily used public library systems in California. We evaluated the four branches – Claremont, North Branch, West Branch, and South Branch – to determine how they were responding to the needs of the community and what was needed to bring them up to current standards. The branches were also measured against one another to establish a system standard and make sure deficiencies between the branches were addressed. PROJECT INFORMATION Client: City of San Rafael Size: 45,000 - 50,000 SF Dates: Feb 2018 - Aug 2019 Key Staff: Chris Noll - Principal; Trina Goodwin - Library Planner/Interiors Architect Contact: Henry Bankhead Interim Library Director (415) 485-3436 Henry.Bankhead@ cityofsanrafael.orgSAN RAFAEL LIBRARY FACILITIES STUDY Noll & Tam is working with San Rafael Public Library to study sites for new and upgraded library facilities. Previous studies had determined a pressing need for more library space, up to almost four times the size of their current facilities. We have worked with the City and the Library to identify possible options for a new downtown main library, including a renovation and expansion of their existing historic building as, a combined facility with an existing community center, or a completely new building. We also explored possible sites for a new neighborhood branch library, including a retail location within an existing mall, and the possibilities for expansion of their one small existing branch. 123 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 16 PROJECT INFORMATION Client: City of Woodland Size: 30,000 - 38,000 SF Dates: Jan - Sept 2017 Key Staff: Chris Noll - Principal; Trina Goodwin - Library Planner/Interiors Architect Contact: Greta Galindo Library Services Director (530) 661-5984 Greta.Galindo@ cityofwoodland.org PROJECT INFORMATION Client: City of Santa Cruz Size: 36,000 - 46,788 SF Dates: Jun 2017 - Jan 2018 Key Staff: Chris Noll - Principal; Trina Goodwin - Library Planner/Interiors Architect Contact: Susan Nemitz Library Director (831) 427-7706 ext. 7611 nemitzs@santacruzpl.org WOODLAND LIBRARY MASTER PLAN In 2016, Noll & Tam was engaged to develop a Facility Master Plan for the oldest operating Carnegie library in California, the Woodland Library. The last update to the library was almost 30 years ago, and the needs of the staff and community have far outpaced the capacity of the current facility to meet those needs. With the goal of securing support and funding, our Facility Master Plan identifies a range of short- to long-term renovation projects which will provide a road map for the library to implement immediate improvements, while planning for longer-term projects as funding permits. Focused on flexibility, the facility master plan will be a useful management tool into the future, guiding the library’s development as its needs change. SANTA CRUZ DOWNTOWN LIBRARY STUDY The City of Santa Cruz hired Noll & Tam to study the options for renovating, rebuilding or moving their Downtown Library, which serves the entire region. The current building is aged, deteriorated, and struggles to provide contemporary services for its community. We evaluated the existing building programmatically and structurally and assessed the cost of renovating it to meet current needs. We also developed site and design criteria which were used to evaluate a number of options for relocation of the library. PROJECT INFORMATION Client: City of Menlo Park Size: 44,000 SF Dates: Oct 2016 - Mar 2017 Key Staff: Chris Noll - Principal; Trina Goodwin - Library Planner/Interiors Architect Contact: Nick Szegda Assistant Library Services Director (650) 330-2506 NJSzegda@menlopark.org MENLO PARK LIBRARY SPACE NEEDS STUDY Noll & Tam first worked on the Menlo Park Library in 2011, when we designed a new Circulation Desk for their lobby. Returning in 2016, our team completed a space needs study for this 33,000-sqft. downtown library. To identify the needs of the library and the desires of the community, our team engaged in extensive stakeholder outreach, including meeting with the Friends, a teen advisory group, and the library steering group. We developed and cost estimated several schemes including two remodel options and two new building options, and presented these options to the City Council, which voted to move forward with a new 44,000-sqft. building on the existing site. 124 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 17 KEY FEATURES COMMUNITY FACILITY INDOOR-OUTDOOR CONNECTION LEED PLATINUM CERTIFIED ZNE SUSTAINABILITY GOAL PROJECT INFORMATION Client: City of Half Moon Bay Size: 22,000 SF Dates: Aug 2015 - Aug 2018 Contact: Anne-Marie Despain Director of Library Services (650) 312-5245 despain@smcl.org HALF MOON BAY LIBRARY Noll & Tam worked with the City of Half Moon Bay on the design of a new 22,000-square-foot library that replaced an existing 7,285-square-foot facility. The library, a regional branch of San Mateo County Libraries, is a hub of community activity that caters to all age ranges and diverse user needs. Noll & Tam’s design honors the coastal and agricultural roots of the community, while serving current and future technology needs. The library features daylit interior spaces, outdoor reading plazas, acoustically separated areas for teen activities, and a flexible maker space. The library opened to great celebration in August 2018. COMMUNITY MEETING TEEN MEETING 125 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 18 KEY FEATURES NEW LIBRARY COMMUNITY FACILITY CONNECTION TO PARK LEED PLATINUM/ ZNE SUSTAINABILITY GOALS PROJECT INFORMATION Client: City of Hayward Size: 58,000 SF Dates: Feb 2014 - Sept 2019 Contact: Kevin Briggs Senior Civil Engineer (510) 583-4760 Kevin.Briggs@hayward-ca.gov HAYWARD NEW LIBRARY & COMMUNITY LEARNING CENTER Noll & Tam Architects is the prime architect for a new three-story library located on an urban site adjacent to the City’s main downtown park, this three-story library is an innovative resource for Hayward’s diverse community. The library includes expanded classrooms and educational spaces for an adult learning center and a homework center. It will be one of the largest Zero Net Energy public libraries in the country and includes a rainwater catchment system that will save and recycle 500,000 gallons of water per year. In terms of design, sustainability, and service delivery, this is truly a 21st Century Library. COMMUNITY OUTREACH 126 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 19 307 7th Avenue, Suite 504 New York, NY 10001 P 646 687 7923 E cheers@margaretsullivanllc.com LAS VEGAS-CLARK COUNTY LIBRARY DISTRICT FACILITIES MASTER PLANNING, PROGRAMMING AND VISIONING LAS VEGAS, NV CLIENT: Las Vegas-Clark County Library District COMPLETION: 2015-2018 AREA: Varies 773,000 SF Total Scope COST: Varies $15 - $24 million FIRM RESPONSIBILITY: Strategic Planning, Facilities Master Plan, Visioning & Programming Study, Standard Urban & Rural Programs, East Las Vegas Programming & New Building, Mesquite Program- ming & New Building CONTACT: Danielle Milam Director of Development and Planning 7060 W. Windmill Lane (702) 507-6179 milamd@lvccld.org Margaret Sullivan Studio (MSS) has been working with the Las Vegas-Clark County Library District since 2015 on a series of projects to re-envision the District’s programs and services to inform current and future facilities planning, programming, and operations. MSS began as a Strategic Planning Consultant and has since been engaged with the Library to develop their 2018 Facilities Master Plan, Facilities Design Standards, two new Building Programs, the design for a new Library (Mesquite), and the facilitation of the 2017 Staff Day Workshop, and an Experience Principle Workshop to integrate Workforce Connections and the Library’s Career Services partnerships. As a result of this work, MSS, in collaboration with Danielle as the District’s strategic visionary, has engaged over 200 community leaders and experts in meaningful dialogue that has been critical to the Library’s repositioning. The work has also enabled the shift in mindset for 730 staff members. MSS has become a trusted advisor and resource to staff at every level, constantly encouraging and supporting the staff in their efforts to transform their communities. The Facilities Master Plan Decision Framework guides priorities for the District’s services, programs, and its facilities for the next twenty years. Rooted in the 21st century definition of the public library as an ecosystem of “People, Places and Platforms,” the planning process resulted in a vision for the District’s communities’ facilities, conceptual plans for the buildings, and a decision framework to prioritize funding and implementation. The first phase of the Facilities Master Plan began in the Fall of 2019. MSS created the service vision and conceptual design as an extension of the District’s Strategic Plan to enable service goals to be consistent across the District while honoring local conditions and to ensure future sustainability, growth, and adaptability for the District. 9 12 10 13 314 4 7 11 5 8 2 SPRING VALLEY W OAKLEY BLVD W SAHARA AVE E WASHINGTON AVE E BONANZA RD W LAKE MEAD BLVDN BUFFALO DRW CHEYENNE AVE H STE HARMON AVE S JONES BLVDPEACE WAYS TORREY PINES DRE CHARLESTON DRIVE S RAINBOW BLVDS LAS VEGAS BLVDE WINDMILL LN LAKE NORTH DR W SAHARA AVE ENTERPRISE WINDMILL SUMMERLIN RAINBOW SUMMERLIN SAHARA WEST WEST CHARLESTON LAS VEGAS NORTH LAS VEGAS SUNRISE MANOR PARADISE 6 1 CENTENNIAL HILLS SUNRISE WHITNEY CLARK COUNTY MEADOWS EAST LAS VEGAS WEST LAS VEGAS E TROPICAL PARKWAY E CENTENNIAL PKWY W TROPICAL PARKWAY E ALEXANDER RD W CRAIG RD N JONES BLVDN DECATUR BLVDBRUCE WOODBURY BELTWAY NURTURINGCREATIVE FRIENDLY INFORMED FRESH AND FUN COMFORTABLE IDEALISTIC ADAPTABLE FLEXIBILITY POWERFUL OPTIMISTIC INNOVATIVE WELCOMING BRANCHES WILL REFLECT THEIR NEIGHBORHOODS 127 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 20 307 7th Avenue, Suite 504 New York, NY 10001 P 646 687 7923 E cheers@margaretsullivanllc.com RICHLAND LIBRARY RENOVATION COLUMBIA, SOUTH CAROLINA CLIENT: Richland Library COMPLETION: 2018 AREA: Varies 5,000 - 200,000 sq. ft. BUDGET: $2 - $20 million FIRM RESPONSIBILITY: Library As Studio Program Methodology, 10 Library Renovations and Additions CONTACT: Melanie Huggins Executive Director 1431 Assembly Street, Richland, SC 29201 (803) 929-3422 mhuggins@richlandlibrary.com In 2014, Richland County passed a $59 million bond referendum to renovate eleven library locations including the 200,000 square foot Main Library and ten branch libraries, ranging in size from 5,000 to 30,000 square feet. MSS served as programmer and interior designer to re-imagine what it means to be a 21st century library, and worked with all four architecture and design teams on the projects associated with the bond referendum. The Studio’s work with the library began with a Master Facilities Study, named Library as Studio, to create a strategic vision for the facilities that was an extension of the Library’s strategic objectives. Working with Adaptive Path, a service design firm from San Francisco, the Studio created a new adaptable framework for both customer service and physical space design. Based on service design, human-centered design principles, and community placemaking techniques, MSS generated a revolutionary methodology to displace the standard template library programmers have been using for the past fifty years. Instead of designing for functional departments, the libraries were designed as Studio Domains. These domains administer community-centric environments for all ages and stages. To activate the strategic Studio Domains, the design team created a series of Library as Studio Components to be applied based on the functional goals of each branch. The final renovation project opened to the public in 2018 and already there is evidence to show that the Library as Studio approach to master facilities planning has enabled Richland Library to advance its strategic goals and increase facility use, program attendance, and number of cardholders. In 2017, Richland Library was the recipient of the IMLS National Medal for Museum and Library Services. LIBRARY AS STUDIO http://www.learncreateshare.vision 128 FEE PROPOSAL & HOURLY RATES 129 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 22 FEE PROPOSAL Our Fee Proposal is based on the Scope of Work as presented in the RFP, and our knowledge about what will need to be accomplished for this to be a successful project. We have tried to be comprehensive and complete in our services, to avoid needing to request additional services down the road. As always, we are open to negotiation and would be happy to discuss our scope and fees, and adjust them to best meet the City’s needs and to remain competitive. If this becomes an issue for the City, please don’t hesitate to open a discussion with us. Noll & Tam Architects 729 Heinz Avenue Berkeley, CA 94710 Huntington Beach Library FMP Hungtington Beach, CA January 22, 2020 TOTALS Basic Service Consultant Architectural Services Noll & Tam $124,540 Structural Engineering Degenkolb Engineers $25,300 MEP Engineering Syska Hennessy Group $34,650 Cost Estimating TBD Cost Estimators $21,707 Library Programming Margaret Sullivan Studio $60,500 Subtotal Basic Services $266,697 $23,000 Total Proposed Fee $289,697 Reimbursable Expense Allowance Christopher Noll, AIA, LEED AP Principal in Charge 130 NOLL & TAM ARCHITECTS HUNTINGTON BEACH LIBRARY FACILITIES MASTERPLAN 23 HOURLY RATES NOLL & TAM ARCHITECTS Principal $230 - $240 Associate Principal $175 - $190 Project Manager/ Senior Technical Architect/PM $175 - $185 Senior Technical Staff $165 - $170 Designer $135 - $155 Project Assistant $110 - $120 Reimbursable Expenses Reproduction, travel outside the Bay Area, renderings, computer models, physical models, postage, messengers, and other usual expenses will be billed at 1.15 times actual cost. MARGARET SULLIVAN STUDIO Principal $275 Senior Designer $200 Intermediate Designer $150 Junior Designer $125 Administrative Support $75 DEGENKOLB Senior Principal $285 Principal $250 Senior Associate $235 Associate Principal $225 Associate $215 Project Manager $195 Project Engineer $195 Design Engineer $180 Designer 2 $160 Designer 1 $140 Assistant Designer 2 $110 Assistant Designer 1 $80 Senior BIM/CAD Specialist $150 Project BIM/CAD Specialist $125 Project Analyst $100 Administrative Services $80 SYSKA HENNESSY GROUP Principal in Charge $305 Project Manager $250 Project Engineer/Supervising Engineer $250 Supervising Designer $220 Senior Engineer $200 Senior Designer $190 Engineer $180 Senior BIM Designer $180 Sustainability Specialist $220 Designer $160 BIM Designer $130 Project Coordinator $130 Engineering Aide or Project Administrator $100 TBD CONSULTANTS Principal $225 Project Manager $198 Senior Estimator/MEP Estimator $198 Senior Project Controller/Senior Scheduler $198 Estimator/Scheduler/Project Controller $185 Assistant Estimator/ Assistant Project Controller $155 Administrative/Technical Support $95 131 132 133 134 135 136 137 138 139 140 141 Christopher NollNorma Ochoa142 143 144 145 146 147 148 149 150 151 152 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: Library Facilities Master Plan SERVICE DESCRIPTION: Architectural and Design Services VENDOR: Noll&Tam Architects OVERALL RANKING: 1 SUBJECT MATTER EXPERTS/RATERS: (EXAMPLE: 1. Building Official 2. Assistant Fire Marshal 3. Fire Protection Analyst) I. MINIMUM QUALIFICATIONS REVIEW •Written Proposal Score: 1210 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 200 250 Technical Approach 525 625 Qualifications 575 625 Clarity 200 250 Local Vendor Preference N/A Cost 320 500 References and Background 210 250 Total 1210 2500 II.DUE DILIGENCE REVIEW •Interview Ranking: 1 VENDOR NAME – Summary of Review •Noll&Tam Architects VENDOR NAME – Pricing •$289,697.00 153 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: Library Facilities Masterplan SERVICE DESCRIPTION: Professional services for creating a Library Facilities Masterplan for the City VENDOR: Johnson Favaro OVERALL RANKING: 2 SUBJECT MATTER EXPERTS/RATERS: 1. Library Director 2. Facilities Manager 3. Planning Manager 4. Principal Librarian 5. Senior Librarian (EXAMPLE: 1. Building Official 2. Assistant Fire Marshal 3. Fire Protection Analyst) I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1230 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 180 250 Technical Approach 600 625 Qualifications 575 625 Clarity 210 250 Local Vendor Preference N/A Cost 320 500 References and Background 230 250 Total 1230 2500 II. DUE DILIGENCE REVIEW • Interview Ranking: 2 VENDOR NAME – Summary of Review • Johnson Favaro LLP VENDOR NAME – Pricing • $265,920.00 154 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: Library Facilities Masterplan SERVICE DESCRIPTION: Professional services for creating a Library Facilities Masterplan for the City VENDOR: Moore Iacofano Goltsman,Incorporated OVERALL RANKING: 3 SUBJECT MATTER EXPERTS/RATERS: 1. Library Director 2. Facilities Manager 3. Planning Manager 4. Principal Librarian 5. Senior Librarian (EXAMPLE: 1. Building Official 2. Assistant Fire Marshal 3. Fire Protection Analyst) I. MINIMUM QUALIFICATIONS REVIEW •Written Proposal Score:1130 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 200 250 Technical Approach 500 625 Qualifications 500 625 Clarity 200 250 Local Vendor Preference N/A Cost 260 500 References and Background 200 250 Total 1130 2500 II.DUE DILIGENCE REVIEW •Interview Ranking: 3 VENDOR NAME – Summary of Review •Moore Iacofano Goltsman, Incorporated VENDOR NAME – Pricing •$309,370.00 155 156 157 158 159 160 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: Library Facilities Master Plan SERVICE DESCRIPTION: Architectural and Design Services VENDOR: Noll&Tam Architects OVERALL RANKING: 1 SUBJECT MATTER EXPERTS/RATERS: (EXAMPLE: 1. Building Official 2. Assistant Fire Marshal 3. Fire Protection Analyst) I. MINIMUM QUALIFICATIONS REVIEW •Written Proposal Score: 1210 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 200 250 Technical Approach 525 625 Qualifications 575 625 Clarity 200 250 Local Vendor Preference N/A Cost 320 500 References and Background 210 250 Total 1210 2500 II.DUE DILIGENCE REVIEW •Interview Ranking: 1 VENDOR NAME – Summary of Review •Noll&Tam Architects VENDOR NAME – Pricing •$289,697.00 161 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: Library Facilities Masterplan SERVICE DESCRIPTION: Professional services for creating a Library Facilities Masterplan for the City VENDOR: Company 2 OVERALL RANKING: 2 SUBJECT MATTER EXPERTS/RATERS: 1. Library Director 2. Facilities Manager 3. Planning Manager 4. Principal Librarian 5. Senior Librarian (EXAMPLE: 1. Building Official 2. Assistant Fire Marshal 3. Fire Protection Analyst) I. MINIMUM QUALIFICATIONS REVIEW •Written Proposal Score: 1230 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 180 250 Technical Approach 600 625 Qualifications 575 625 Clarity 210 250 Local Vendor Preference N/A Cost 320 500 References and Background 230 250 Total 1230 2500 II.DUE DILIGENCE REVIEW •Interview Ranking: 2 VENDOR NAME – Summary of Review •Company 2 VENDOR NAME – Pricing •$265,920.00 162 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: Library Facilities Masterplan SERVICE DESCRIPTION: Professional services for creating a Library Facilities Masterplan for the City VENDOR: Company 3 OVERALL RANKING: 3 SUBJECT MATTER EXPERTS/RATERS: 1. Library Director 2. Facilities Manager 3. Planning Manager 4. Principal Librarian 5. Senior Librarian (EXAMPLE: 1. Building Official 2. Assistant Fire Marshal 3. Fire Protection Analyst) I. MINIMUM QUALIFICATIONS REVIEW •Written Proposal Score:1130 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 200 250 Technical Approach 500 625 Qualifications 500 625 Clarity 200 250 Local Vendor Preference N/A Cost 260 500 References and Background 200 250 Total 1130 2500 II.DUE DILIGENCE REVIEW •Interview Ranking: 3 VENDOR NAME – Summary of Review •Company 3 VENDOR NAME – Pricing •$309,370.00 163 City of Huntington Beach File #:20-1766 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Chris Slama, Director of Community Services Subject: Approve Appointments and Reappointments to the Huntington Beach Youth Board with Terms to Expire May 31, 2021 Statement of Issue: At the conclusion of each school year, the one-year term for each of the Youth Board student members concludes. There are nine total vacancies available on the board. Of the nine, four members have graduated from high school, thereby creating four vacancies, and five current representatives are seeking reappointment. Financial Impact: Not applicable. Recommended Action: A) As recommended by City Council Member liaisons Jill Hardy and Kim Carr, approve the appointment of the following students to a one-year term on the Huntington Beach Youth Board with terms to expire May 31, 2021: Vivian Bui - Huntington Beach High School, At-Large Member Luke Blankenbaker - Huntington Beach High School, At-Large Member Kenady Osborne - Marina High School, At-Large Member Emma Weston - Edison High School, At-Large Member B) As recommended by City Council Member liaisons Jill Hardy and Kim Carr, approve the reappointment of the following students to a one-year term on the Huntington Beach Youth Board with terms to expire May 31, 2021: Jenna Ali - Huntington Beach High School, Representative Bella Brannon - Ocean View High School, Representative Samuel Dater- Edison High School, Representative Kathryn Robinson - Marina High School, Representative Caitlin Sheetz - Edison High School, At-Large Member City of Huntington Beach Printed on 7/17/2020Page 1 of 2 powered by Legistar™164 File #:20-1766 MEETING DATE:7/20/2020 Alternative Action(s): Do not approve the recommendations, and direct staff accordingly. Analysis: Each school year, the City seeks to fill the full roster of nine student representatives on the Huntington Beach Youth Board. This year, four representatives have graduated from high school, thereby creating four vacancies, and five current representatives are seeking reappointment to the 2020-2021 Board term. Recruitments at each of the high schools resulted in several applications. After interviewing potential candidates, Council Member liaisons Hardy and Carr selected the following four new At-Large Members: Vivian Bui, Huntington Beach High School; Luke Blankenbaker, Huntington Beach High School; Kenady Osborne, Marina High School; and Emma Weston, Edison High School. Council Member liaisons Jill Hardy and Kim Carr are also recommending the reappointment of the following students to an additional term: Bella Brannon, Ocean View High School Representative; Samuel Dater, Edison High School Representative; Kathryn Robinson, Marina High School Representative; Caitlin Sheetz, Edison High School At-Large Member; and Jenna Ali, Huntington Beach High School, Representative. All were instrumental in fundraising and event coordination for the 2020 Youth in Government Day event, which was eventually canceled due to the COVID-19 pandemic. This board meets on the second Monday of each month in the fifth floor conference room at 3:30 p.m. The Youth Board consists of nine members (four high school representatives and five high school at-large representatives). All board members serve a one-year term, beginning June through May of the following year. Environmental Status: Not applicable. Strategic Plan Goal: Enhance and maintain high quality City services Attachment(s): 1. Huntington Beach Youth Board 2020/2021 Roster City of Huntington Beach Printed on 7/17/2020Page 2 of 2 powered by Legistar™165 HUNTINGTON BEACH YOUTH BOARD 2020/2021 ROSTER Reappointments: Ali, Jenna Huntington Beach High School Representative Brannon, Bella Ocean View High School Representative Dater, Samuel Edison High School Representative Robinson, Kathryn Marina High School Representative Sheetz, Caitlin Edison High School At-Large Member Appointments: Bui, Vivian Huntington Beach High School At-Large Member Blankenbaker, Luke Huntington Beach High School At-Large Member Osborne, Kenady Marina High School At-Large Member Weston, Emma Edison High School At-Large Member 166 City of Huntington Beach File #:20-1778 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Oliver Chi, City Manager Subject: City Council Position on Legislation Pending Before Congress and the State Legislature as Recommended by the City Council Intergovernmental Relations Committee (IRC) Statement of Issue: On July 15, 2020, the Intergovernmental Relations Committee (IRC) comprised of Mayor Lyn Semeta, Council Member Erik Peterson, and Council Member Patrick Brenden met to discuss pending Federal and State legislation. Financial Impact: There is no fiscal impact. Recommended Action: A) Approve a City position of Support on Senate Bill 1386 (Moorlach) “Local Government: Assessments, fees, and charges on water hydrants”; and, B) Approve a City position of Watch on Assembly Bill 1063 (Petrie-Norris) - “Planning and zoning law on housing elements, accessory dwelling units, and adequate site substitutes”; and , C) Approve a City position of Oppose on Senate Bill 1120 (Atkins) - “Subdivisions: tentative maps”; and, D) Approve a City position of Oppose on Senate Bill 1385 (Caballero) - “Local planning: housing, commercial zones”; and, E) Approve a City position of Watch on Senate Constitutional Amendment 1 (Allen) - “Public housing projects”; and, F) Approve a City position of Oppose on Senate Bill 1299 (Portantino) - “Housing development: incentives, rezoning of idle retail sites”; and, G) Approve a City position of Watch on Assembly Bill 2345 (Gonzalez) - “Planning and zoning: density bonuses, annual report, affordable housing”; and, H) Approve a City position of Watch on the Library Stabilization Fund Act (Reed and Levin). City of Huntington Beach Printed on 7/17/2020Page 1 of 4 powered by Legistar™167 File #:20-1778 MEETING DATE:7/20/2020 Alternative Action(s): Do not approve and direct staff accordingly. Analysis: The Intergovernmental Relations Committee (IRC) met to discuss pending Federal and State legislation on July 15, 2020 in addition to Administrative Items. The Committee reviewed the 2020 State Legislative Matrix provided by the City’s Federal and State Advocate Townsend Public Affairs. The following is an analysis of the bills that the Committee chose to take the following positions on: Ø SUPPORT - SB 1386 (Moorlach) “Local Government: Assessments, fees, and charges on water hydrants” Current law, known as the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local jurisdictions to comply with these requirements and, among other things, authorizes an agency providing water, wastewater, sewer, or refuse collection services to adopt a schedule of fees or charges authorizing automatic adjustments that pass through increases in wholesale charges for water, sewage treatment, or wastewater treatment or adjustments for inflation under certain circumstances. Current law defines, among other terms, the term “water” for these purposes to mean any system of public improvements intended to provide for the production, storage, supply, treatment, or distribution of water from any source. This bill would specify that hydrants, as defined, are part of the system of public improvements included in the definition of “water” for purposes of the Proposition 218 Omnibus Implementation Act. Ø WATCH - AB 1063 (Petrie-Norris) - “Planning and zoning law on housing elements, accessory dwelling units, and adequate site substitutes” Current law authorizes the Department of Housing and Community Development, in evaluating a proposed or adopted housing element for substantial compliance with the provisions of the Planning and Zoning Law relating to housing elements, to allow a city or county to identify adequate sites by a variety of methods, as specified. Current law authorizes the department to allow a city or county to identify sites for accessory dwelling units based on the number of accessory dwelling units developed in the prior housing element planning period whether or not the units are permitted by right, the need for these units in the community, those units in the community, the resources or incentives available for their development, and any other relevant factors, as determined by the department. This bill would, instead, require the department, in making that evaluation, to allow a city or county to identify adequate sites by a variety of methods, as specified. The bill would require the department to allow a city or county to identify sites for potential accessory dwelling units based on existing zoning standards and the demonstrated potential capacity to accommodate accessory dwelling units and junior accessory dwelling units, as determined by the city or county. Ø OPPOSE - SB 1120 (Atkins) - “Subdivisions: tentative maps” This Bill would, among other things, require a proposed housing development containing 2 residential units to be considered ministerially, without discretionary review or hearing, in zones where allowable uses are limited to single-family residential development if the proposed housing development meets certain requirements, including that the proposed housing development would not require demolition or alteration requiring evacuation or eviction of an existing housing unit that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. Ø OPPOSE - SB 1385 (Caballero) - “Local planning: housing, commercial zones” The Planning and Zoning Law requires each county and city to adopt a comprehensive, long-term general plan for its physical development, and the development of certain lands outside its boundaries, that includes, among other mandatory elements, a housing element. This bill, the Neighborhood Homes Act, would deem a housing development project, as defined, an allowable use on a City of Huntington Beach Printed on 7/17/2020Page 2 of 4 powered by Legistar™168 File #:20-1778 MEETING DATE:7/20/2020 Homes Act, would deem a housing development project, as defined, an allowable use on a neighborhood lot that is zoned for office or retail commercial use under a local agency’s zoning code or general plan. The bill would require the density for a housing development under these provisions to meet or exceed the density deemed appropriate to accommodate housing for lower income households according to the type of local jurisdiction, including a density of at least 20 units per acre for a suburban jurisdiction. Ø WATCH - Senate Constitutional Amendment 1 (Allen) - “Public housing projects” The California Constitution prohibits the development, construction, or acquisition of a low rent housing project, as defined, in any manner by any state public body until a majority of the qualified electors of the city, town, or county in which the development, construction, or acquisition of the low-rent housing project is proposed approve the project by voting in favor at an election, as specified. This measure would repeal these provisions. Ø OPPOSE - SB 1299 (Portantino) - “Housing development: incentives, rezoning of idle retail sites” Current law establishes, among other housing programs, the Workforce Housing Reward Program, which requires the Department of Housing and Community Development to make local assistance grants to cities, counties, and cities and counties that provide land use approval to housing developments that are affordable to very low and low-income households. This bill, upon appropriation by the Legislature, would require the department to administer a program to provide incentives in the form of grants allocated as provided to local governments that rezone idle sites used for a big box retailer or a commercial shopping center to instead allow the development of workforce housing. The bill would define various terms for these purposes. In order to be eligible for a grant, the bill would require a local government, among other things, to apply to the department for an allocation of grant funds and provide documentation that it has met specified requirements. Ø WATCH - AB 2345 (Gonzalez) - “Planning and zoning: density bonuses, annual report, affordable housing” The Planning and Zoning Law requires the planning agency of a city or county to provide by April 1 of each year an annual report to, among other entities, the Department of Housing and Community Development that includes, among other specified information, the number of net new units of housing that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, as provided. This bill would require that the annual report include specified information regarding density bonuses granted in accordance with specified law. Ø WATCH - Library Stabilization Fund Act (Reed and Levin) This Act would establish a $2 billion fund to address financial losses of libraries due to COVID-19 and bolster library services. The Act would prioritize funding for the hardest hit communities and would be delivered through the Institute of Museum and Library Services. A large portion of the funds would be distributed to local libraries through state library agencies based on state population, with a minimum of $10 million to each state. The Act would also provide for competitive grants. The primary objective of this Act is to minimize the disruption of library services and staff furloughs and layoffs across the country. It would also defray costs related to the safe re-opening of libraries and support a range of services to patrons. Environmental Status: Not applicable Strategic Plan Goal: Non-Applicable - Administrative Item City of Huntington Beach Printed on 7/17/2020Page 3 of 4 powered by Legistar™169 File #:20-1778 MEETING DATE:7/20/2020 Attachment(s): 1.Senate Bill 1386 (Moorlach) 2. Assembly Bill 1063 (Petrie-Norris) 3. Senate Bill 1120 (Atkins) 4. Senate Bill 1385 (Caballero) 5. Senate Constitutional Amendment 1 (Allen and Wiener) 6. Senate Bill 1299 (Portantino) 7. Assembly Bill 2345 (Gonzalez) 8. Library Stabilization Fund Act (Reed and Levin) City of Huntington Beach Printed on 7/17/2020Page 4 of 4 powered by Legistar™170 AMENDED IN ASSEMBLY JULY 27, 2020 AMENDED IN SENATE APRIL 1, 2020 SENATE BILL No. 1386 Introduced by Senator Moorlach February 21, 2020 An act to amend Section 53750 of, and to add Section 53750.5 to, to the Government Code, relating to local government finance. legislative counsel’s digest SB 1386, as amended, Moorlach. Local government: assessments, fees, and charges: water. water: hydrants. The California Constitution specifies various requirements with respect to the levying of assessments and property-related fees and charges by a local agency, including requiring that the local agency provide public notice and a majority protest procedure in the case of assessments and submit property-related fees and charges for approval by property owners subject to the fee or charge or the electorate residing in the affected area following a public hearing. Existing law, known as the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local jurisdictions to comply with these requirements and, among other things, authorizes an agency providing water, wastewater, sewer, or refuse collection services to adopt a schedule of fees or charges authorizing automatic adjustments that pass through increases in wholesale charges for water, sewage treatment, or wastewater treatment or adjustments for inflation under certain circumstances. Existing law defines, among other terms, the term “water” for these purposes to mean any system of public improvements intended to provide for the production, storage, supply, treatment, or distribution of water from any source. 97 171 This bill would specify that hydrants, as defined, are part of the system of public improvements included in the definition of “water” for purposes of the Proposition 218 Omnibus Implementation Act also includes the public fixtures, appliances, and appurtenances connected to an above-described system of public improvements intended to provide for the production, storage, supply, treatment, or distribution of water from any source. Act. The bill would specify that a property-related water service fee or charge by a local agency may include the costs to construct, maintain, repair, or replace public hydrants attached to a water system, and the cost of water dispensed through public hydrants, to the extent those fees or charges are consistent with the California Constitution. hydrants to comply with fire codes and industry standards, and may include the cost of water distributed through hydrants. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. The people of the State of California do enact as follows: line 1 SECTION 1. Section 53750 of the Government Code is line 2 amended to read: line 3 53750. For purposes of Article XIII C and Article XIII D of line 4 the California Constitution and this article, the following words line 5 have the following meanings, and shall be read and interpreted in line 6 light of the findings and declarations contained in Section 53751: line 7 (a) “Agency” means any local government as defined in line 8 subdivision (b) of Section 1 of Article XIII C of the California line 9 Constitution. line 10 (b) “Assessment” means any levy or charge by an agency upon line 11 real property that is based upon the special benefit conferred upon line 12 the real property by a public improvement or service, that is line 13 imposed to pay the capital cost of the public improvement, the line 14 maintenance and operation expenses of the public improvement, line 15 or the cost of the service being provided. “Assessment” includes, line 16 but is not limited to, “special assessment,” “benefit assessment,” line 17 “maintenance assessment,” and “special assessment tax.” line 18 (c) “District” means an area that is determined by an agency to line 19 contain all of the parcels that will receive a special benefit from a line 20 proposed public improvement or service. 97 — 2 — SB 1386 172 line 1 (d) “Drainage system” means any system of public line 2 improvements that is intended to provide for erosion control, for line 3 landslide abatement, or for other types of water drainage. line 4 (e) “Extended,” when applied to an existing tax or fee or charge, line 5 means a decision by an agency to extend the stated effective period line 6 for the tax or fee or charge, including, but not limited to, line 7 amendment or removal of a sunset provision or expiration date. line 8 (f) “Flood control” means any system of public improvements line 9 that is intended to protect property from overflow by water. line 10 (g) “Identified parcel” means a parcel of real property that an line 11 agency has identified as having a special benefit conferred upon line 12 it and upon which a proposed assessment is to be imposed, or a line 13 parcel of real property upon which a proposed property-related line 14 fee or charge is proposed to be imposed. line 15 (h) (1) “Increased,” when applied to a tax, assessment, or line 16 property-related fee or charge, means a decision by an agency that line 17 does either of the following: line 18 (A) Increases any applicable rate used to calculate the tax, line 19 assessment, fee, or charge. line 20 (B) Revises the methodology by which the tax, assessment, fee, line 21 or charge is calculated, if that revision results in an increased line 22 amount being levied on any person or parcel. line 23 (2) A tax, fee, or charge is not deemed to be “increased” by an line 24 agency action that does either or both of the following: line 25 (A) Adjusts the amount of a tax, fee, or charge in accordance line 26 with a schedule of adjustments, including a clearly defined formula line 27 for inflation adjustment that was adopted by the agency prior to line 28 November 6, 1996. line 29 (B) Implements or collects a previously approved tax, fee, or line 30 charge, so long as the rate is not increased beyond the level line 31 previously approved by the agency, and the methodology line 32 previously approved by the agency is not revised so as to result in line 33 an increase in the amount being levied on any person or parcel. line 34 (3) A tax, assessment, fee, or charge is not deemed to be line 35 “increased” in the case in which the actual payments from a person line 36 or property are higher than would have resulted when the agency line 37 approved the tax, assessment, fee, or charge, if those higher line 38 payments are attributable to events other than an increased rate or line 39 revised methodology, such as a change in the density, intensity, line 40 or nature of the use of land. 97 SB 1386 — 3 — 173 line 1 (i) “Notice by mail” means any notice required by Article XIII C line 2 or XIII D of the California Constitution that is accomplished line 3 through a mailing, postage prepaid, deposited in the United States line 4 Postal Service and is deemed given when so deposited. Notice by line 5 mail may be included in any other mailing to the record owner line 6 that otherwise complies with Article XIII C or XIII D of the line 7 California Constitution and this article, including, but not limited line 8 to, the mailing of a bill for the collection of an assessment or a line 9 property-related fee or charge. line 10 (j) “Record owner” means the owner of a parcel whose name line 11 and address appears on the last equalized secured property tax line 12 assessment roll, or in the case of any public entity, the State of line 13 California, or the United States, means the representative of that line 14 public entity at the address of that entity known to the agency. line 15 (k) “Sewer” includes systems, all real estate, fixtures, and line 16 personal property owned, controlled, operated, or managed in line 17 connection with or to facilitate sewage collection, treatment, or line 18 disposition for sanitary or drainage purposes, including lateral and line 19 connecting sewers, interceptors, trunk and outfall lines, sanitary line 20 sewage treatment or disposal plants or works, drains, conduits, line 21 outlets for surface or storm waters, and any and all other works, line 22 property, or structures necessary or convenient for the collection line 23 or disposal of sewage, industrial waste, or surface or storm waters. line 24 “Sewer system” shall not include a sewer system that merely line 25 collects sewage on the property of a single owner. line 26 (l) “Registered professional engineer” means an engineer line 27 registered pursuant to the Professional Engineers Act (Chapter 7 line 28 (commencing with Section 6700) of Division 3 of the Business line 29 and Professions Code). line 30 (m) “Vector control” means any system of public improvements line 31 or services that is intended to provide for the surveillance, line 32 prevention, abatement, and control of vectors as defined in line 33 subdivision (k) of Section 2002 of the Health and Safety Code and line 34 a pest as defined in Section 5006 of the Food and Agricultural line 35 Code. line 36 (n) “Water” means any system of public improvements, and the line 37 public fixtures, appliances, and appurtenances connected to that line 38 system, intended to provide for the production, storage, supply, line 39 treatment, or distribution of water from any source. 97 — 4 — SB 1386 174 line 1 SEC. 2. line 2 SECTION 1. Section 53750.5 is added to the Government Code, line 3 to read: line 4 53750.5. (a) The Legislature finds and declares all of the line 5 following: line 6 (1) The provision of fire Fire service is a different and distinct line 7 category of service from the water service made available by a line 8 water service provider, which aids the fire service provider in line 9 providing water service, which is one of several other services line 10 that aids in the provision of fire service. line 11 (2) Hydrants owned by water service providers are a public line 12 fixture, appliance, or appurtenance connected to a water system line 13 for the purpose of providing an immediately available water service line 14 and are often used by a water service provider for water system line 15 maintenance. line 16 (2) Hydrants are part of the system of public improvements line 17 described in subdivision (n) of Section 53750. line 18 (3) Hydrants are generally designed, installed, and used to line 19 provide an immediately available supply of water water service line 20 to aid in extinguishing fires that threaten property served by a line 21 water service provider, and are generally not designed or installed line 22 to provide water service to extinguish fires that threaten structures line 23 and other improvements on property served by the water service line 24 provider, and are not for the purpose of extinguishing wildfires or line 25 fires that threaten personal property, vacant lands, or structures line 26 without water service. property not served by a water service line 27 provider or wildfires. Hydrants are also used by a water service line 28 provider for water system operations and maintenance. line 29 (4) Hydrants are generally located in proximity to properties line 30 served by a water service provider to facilitate water service to line 31 those properties. line 32 (4) line 33 (5) Hydrants generally and the water distributed through them line 34 are not available to the public at large in substantially the same line 35 manner as they are to property owners. owners served by a water line 36 service provider because hydrants are designed, installed, and line 37 used to serve properties receiving water service, and the public line 38 at large does not generally have access to water through those line 39 hydrants. Incidental or other de minimis use of hydrants and the 97 SB 1386 — 5 — 175 line 1 water distributed through them for other purposes does not change line 2 their essential character as a property-related service. line 3 (5) The fact that water from a hydrant could be used for a line 4 purpose other than property protection in an emergency does not line 5 make either the hydrant or the water dispensed from the hydrant line 6 available to the public at large in substantially the same manner line 7 as to property owners. line 8 (6) The water dispensed through a public hydrant owned by a line 9 water service provider is a property-related water service provided line 10 to all property owners, as an incident of property ownership, line 11 because the water is immediately available to be used to extinguish line 12 a direct threat to structures and other improvements on property line 13 and concurrently benefits all parcels, which are threatened with line 14 damage or destruction by the fire not being extinguished. line 15 (7) There are water service costs associated with maintaining, line 16 repairing, and replacing hydrants and costs associated with the line 17 water dispensed through hydrants to protect real property. line 18 (6) Hydrants and the water distributed through them are part line 19 of the property-related water service provided to all property line 20 owners served by a water service provider because the water is line 21 immediately available to be used to aid in extinguishing a direct line 22 or indirect fire threat to properties and concurrently benefits all line 23 parcels connected to the water system that are threatened with line 24 damage or destruction by the fire not being extinguished. line 25 (7) Property-related water service costs may include, but are line 26 not limited to, any costs associated with constructing, maintaining, line 27 repairing, upgrading, and replacing hydrants, and costs associated line 28 with obtaining, treating, and distributing adequate volumes of line 29 water to meet the water demands of properties served by the water line 30 service provider, including water supplied for firefighting purposes. line 31 (b) To the extent consistent Consistent with the requirements line 32 of Section 6 of Article XIII D of the California Constitution, fees line 33 or charges for property-related water service may include the costs line 34 to construct, maintain, repair, or replace public hydrants attached line 35 to a water system, and the cost of water dispensed through public line 36 hydrants. hydrants to comply with fire codes and industry line 37 standards, and may include the cost of water distributed through line 38 hydrants. The fee or charge may be fixed and collected consistent line 39 with Section 53069.9 of the Government Code, or consistent with 97 — 6 — SB 1386 176 line 1 any other method consistent with Section 6 of Article XIII D of line 2 the California Constitution. line 3 (c) For the purpose of this section, “hydrants” means all line 4 hydrants and other infrastructure used to distribute water that line 5 aids in the protection of property from fire, and all related or line 6 appurtenant infrastructure and facilities owned by a water service line 7 provider necessary or convenient for distributing water that aids line 8 in the protection of property from fire, including adequately sized line 9 and pressurized lines, pumps, and all appurtenances, but does not line 10 include privately owned hydrants or other private fire response line 11 related infrastructure. line 12 (d) This section shall not be construed to prohibit a water line 13 service provider from charging an individual property owner line 14 consistent with Section 6 of Article XIII D of the California line 15 Constitution for the water services related to privately owned line 16 hydrants, fire meters, fire sprinklers, or other private fire response line 17 related infrastructure. line 18 (c) line 19 (e) This section is declaratory of existing law. O 97 SB 1386 — 7 — 177 AMENDED IN SENATE JUNE 29, 2020 AMENDED IN SENATE JUNE 10, 2019 california legislature—2019–20 regular session ASSEMBLY BILL No. 1063 Introduced by Assembly Member Petrie-Norris February 21, 2019 An act to add Section 100523 to the Government Code, relating to healthcare coverage. amend Sections 65583.1 and 65583.2 of, and to add Section 65585.5 to, the Government Code, relating to housing. legislative counsel’s digest AB 1063, as amended, Petrie-Norris. Healthcare coverage: waivers. Planning and Zoning Law: housing elements: accessory dwelling units: adequate site substitutes. (1) The Planning and Zoning Law requires that the housing element of a city’s or county’s general plan consist of an identification and analysis of existing and projected housing needs and a statement of goals, policies, quantified objectives, financial resources, and scheduled programs for the preservation, improvement, and development of housing. The law requires the Department of Housing and Community Development to determine the existing and projected need for housing for each region, as specified. The law also requires that the housing element include an inventory of land suitable for residential development and requires that inventory to be used to identify sites that can be developed for housing within the planning period and that are sufficient to provide for the city’s or county’s share of the regional housing need. Existing law requires the planning agency of a city or county to submit a draft element or draft amendment to the department prior to adoption, 97 178 as specified. Existing law requires the department to determine whether the draft element or draft amendment substantially complies with the provisions of the Planning and Zoning Law relating to housing elements. Existing law authorizes the department, in evaluating a proposed or adopted housing element for substantial compliance with the provisions of the Planning and Zoning Law relating to housing elements, to allow a city or county to identify adequate sites by a variety of methods, as specified. Existing law authorizes the department to allow a city or county to identify sites for accessory dwelling units based on the number of accessory dwelling units developed in the prior housing element planning period whether or not the units are permitted by right, the need for these units in the community, those units in the community, the resources or incentives available for their development, and any other relevant factors, as determined by the department. This bill would, instead, require the department, in making that evaluation, to allow a city or county to identify adequate sites by a variety of methods, as specified. The bill would require the department to allow a city or county to identify sites for potential accessory dwelling units based on existing zoning standards and the demonstrated potential capacity to accommodate accessory dwelling units and junior accessory dwelling units, as determined by the city or county. If the combination of potential accessory dwelling units and junior accessory dwelling units constitutes greater than 50% of the units identified to meet the city’s or county’s share of the regional need for affordable housing for lower income households, the bill would require the housing element to provide supplementary policies, programs, and actions that further encourage or incentivize the development of accessory dwelling units and junior accessory dwelling units for lower income households. The bill would require the department to determine the affordability of a potential accessory dwelling unit or a junior accessory dwelling unit by taking into account relevant factors justified by the city or county, as specified. The bill would require the department to presume that very low and low-income renter households would occupy accessory units in a proportion greater than or equal to the proportion of very low and low- income renter households to all renter households in the city or county, as specified. Existing law authorizes the department to allow a city or county to substitute the provision of units for up to 25% of the city’s or county’s obligation to identify adequate sites for any income category if the city or county includes in its housing element a program committing the 97 — 2 — AB 1063 179 city or county to provide qualifying units in that income category within the city or county that will be made available through the provision of committed assistance, as specified. Under existing law, units qualify for inclusion in the program providing committed assistance if the units, among other requirements, are located either on foreclosed property or in a multifamily rental or ownership housing complex of 3 or more units, and have long-term affordability covenants and restrictions that require the units to be affordable to persons of low- or very low income for not less than 55 years. Under existing law, units also qualify for inclusion in the program if the units, among other requirements, have long-term affordability covenants and restrictions that require the unit to be affordable to, and reserved for occupancy by, persons of the same or lower income group as the current occupants for a period of at least 40 years, and the city or county finds that the units are eligible, and are reasonably expected, to change from housing affordable to low- and very low income households to any other use during the next 5 years due to specified events. This bill, instead, would authorize the department to allow a city or county to substitute the provision of units for up to 50% of the city’s or county’s obligation to identify adequate sites for any income category if the city or county includes in its housing element a program that either commits the city or county to provide, or requires a private entity to provide, specified units in that income category within the city or county that will be made available through the provision of committed assistance, as specified. The bill would revise the qualifications for inclusion in the program for both types of units described above by reducing the minimum period of time for the affordability covenants and restrictions to 20 years unless a longer period is required by other supplementary financial assistance. The bill would also revise the qualifications for the latter type of units by extending the period of time within which the city or county is required to find the units are eligible, and are reasonably expected, to change to another use to 10 years. Existing law requires a city or county that has included in its housing element a qualified program providing units with committed assistance to provide a progress report to the legislative body and to the department in the 3rd year of the planning period, as specified. If the city or county has not entered into an enforceable agreement of committed assistance for all units specified in those programs by July 1 of the 3rd year of the planning period, existing law requires the city or county to adopt an amended housing element identifying additional 97 AB 1063 — 3 — 180 adequate sites sufficient to accommodate the number of units for which committed assistance was not provided not later than July 1 of the 4th year of the planning period. This bill would instead require the city or county to provide that report in the 5th year of the planning period. If the city or county has not entered into that agreement of committed assistance by July 1 of the 5th year of the planning period, the bill would require the city or county to adopt that amended housing element not later than July 1 of the 6th year of the planning period. Under existing law, the above-described provisions governing the substitution of adequate site identification with the provision of units do not apply to a city or county that, during the current or immediately prior planning period, has not met any of its share of the regional need for affordable housing for low- and very low income households. This bill would remove that exclusion. (2) The Planning and Zoning Law also requires the inventory of land suitable for residential development in the housing element to include, among other things, a description of the existing use of each property on nonvacant sites. Existing law requires the city or county to specify the additional development potential for each nonvacant site within the planning period and to provide an explanation of the methodology to determine that potential. If a city or county relies on nonvacant sites to accommodate 50% or more of its housing need for lower income households, existing law requires that methodology to demonstrate that the existing use does not constitute an impediment to additional development during the period covered by the housing element. Existing law requires an existing use to be presumed to impede additional residential development, absent findings based on substantial evidence that the use is likely to be discontinued during the planning period. This bill would deem certain conditions to be substantial evidence that an existing use is likely to be discontinued during the planning period. (3) The Planning and Zoning Law requires a planning agency to submit its draft housing element or amendment to the housing element and, after adoption by the legislative body, a copy of the adopted housing element or amendment to the Department of Housing and Community Development for review. If the department finds that the housing element or amendment does not substantially comply with specified law, existing law requires the department to notify the city, county, or city and county, and authorizes the department to notify the 97 — 4 — AB 1063 181 Attorney General, that the city, county, or city and county is in violation of state law. Existing law authorizes the Attorney General, in an action relating to housing element compliance pursuant to a notice or referral from the department, to request that the court issue an order or judgment directing the jurisdiction to bring its housing element in substantial compliance and authorizes the court to impose fines and order specified other remedies under certain circumstances. This bill, for the 6th and each subsequent revision of the housing element, if an affected local government has submitted the revision of its housing element to the voters for approval before the applicable due date but the voters have not yet voted on the housing element revision, would exempt that local government from the above-described fines or other penalties for failure to adopt its housing element by the applicable due date. The bill, for the 6th and each subsequent revision of the housing element, if the affected local government has submitted the applicable revision of its housing element to the voters for approval before the applicable due date and the voters have rejected the housing element, would similarly exempt the affected local government from the above-described fines or penalties for failure to adopt its housing element by the applicable due date, but would authorize the court in an action brought by the Attorney General to order specified remedies under which the agent of the court may take all governmental actions necessary to bring the jurisdiction’s housing element into substantial compliance in order to remedy identified deficiencies. The bill would define “affected local government” for these purposes to mean a local government that is subject to a requirement that the adoption or amendment of the housing element be approved by the voters of that local government and that has submitted a draft of the applicable proposed revision of its housing element to the department. Existing federal law, the Patient Protection and Affordable Care Act (PPACA), requires each state to establish an American Health Benefit Exchange to facilitate the purchase of qualified health benefit plans by qualified individuals and qualified small employers. PPACA authorizes a state to apply to the United States Department of Health and Human Services for a state innovation waiver of any or all PPACA requirements, if certain criteria are met, including that the state has enacted a law that provides for state actions under a waiver. Existing state law creates the California Health Benefit Exchange, also known as Covered California, to facilitate the enrollment of qualified individuals and qualified small employers in qualified health plans as required under PPACA. 97 AB 1063 — 5 — 182 This bill would require express statutory authority to request a state innovation waiver from the United States Department of Health and Human Services. The bill would also make related findings and declarations. Vote: majority. Appropriation: no. Fiscal committee: no yes. State-mandated local program: no. The people of the State of California do enact as follows: line 1 SECTION 1. Section 65583.1 of the Government Code is line 2 amended to read: line 3 65583.1. (a) (1) The Department of Housing and Community line 4 Development, in evaluating a proposed or adopted housing element line 5 for substantial compliance with this article, may shall allow a city line 6 or county to identify adequate sites, as required pursuant to Section line 7 65583, by a variety of methods, including, but not limited to, line 8 redesignation of property to a more intense land use category and line 9 increasing the density allowed within one or more categories. The line 10 (2) (A) The department may shall also allow a city or county line 11 to identify sites for potential accessory dwelling units based on line 12 the number of accessory dwelling units developed in the prior line 13 housing element planning period whether or not the units are line 14 permitted by right, the need for these units in the community, the line 15 resources or incentives available for their development, and any line 16 other relevant factors, as determined by the department. Nothing line 17 existing zoning standards and the demonstrated potential capacity line 18 to accommodate accessory dwelling units and junior accessory line 19 dwelling units, as determined by the city or county. If the line 20 combination of potential accessory dwelling units and junior line 21 accessory dwelling units constitutes greater than 50 percent of the line 22 units identified to meet the city’s or county’s share of the regional line 23 need for affordable housing for lower income households, the line 24 housing element shall provide supplementary policies, programs, line 25 and actions that further encourage or incentivize the development line 26 of accessory dwelling units and junior accessory dwelling units line 27 for lower income households. line 28 (B) For purposes of this paragraph, the department shall line 29 determine the affordability of a potential accessory dwelling unit line 30 or a junior accessory dwelling unit by taking into account the city’s line 31 or county’s need for accessory dwelling units and a junior 97 — 6 — AB 1063 183 line 1 accessory dwelling units in the city or county, the resources or line 2 incentives available for their development, and any other relevant line 3 factors justified by the city or county. The department shall line 4 presume that very low and low-income renter households would line 5 occupy accessory units in a proportion greater than or equal to line 6 the proportion of very low and low-income renter households to line 7 all renter households in the city or county, as determined by the line 8 most recently available data from the United States Department line 9 of Housing and Urban Development’s Comprehensive Housing line 10 Affordability Strategy database. line 11 (3) Nothing in this section subdivision reduces the responsibility line 12 of a city or county to identify, by income category, the total number line 13 of sites for residential development as required by this article. line 14 (b) (1) Sites that contain permanent housing units located on a line 15 military base undergoing closure or conversion as a result of action line 16 pursuant to the Defense Authorization Amendments and Base line 17 Closure and Realignment Act (Public Law 100-526), the Defense line 18 Base Closure and Realignment Act of 1990 (Public Law 101-510), line 19 or any subsequent act requiring the closure or conversion of a line 20 military base may be identified as an adequate site if the housing line 21 element demonstrates that the housing units will be available for line 22 occupancy by households within the planning period of the line 23 element. No sites containing housing units scheduled or planned line 24 for demolition or conversion to nonresidential uses shall qualify line 25 as an adequate site. line 26 Any line 27 (2) Any city, city and county, or county using this subdivision line 28 shall address the progress in meeting this section in the reports line 29 provided pursuant to paragraph (1) of subdivision (b) of Section line 30 65400. line 31 (c) (1) The Department of Housing and Community line 32 Development may allow a city or county to substitute the provision line 33 of units for up to 25 50 percent of the community’s city’s or line 34 county’s obligation to identify adequate sites for any income line 35 category in its housing element pursuant to paragraph (1) of line 36 subdivision (c) of Section 65583 where the community if the city line 37 or county includes in its housing element a program committing line 38 the local government to provide that either commits the city or line 39 county to provide, or requires a private entity to provide, units in line 40 that income category within the city or county that will be made 97 AB 1063 — 7 — 184 line 1 available through the provision of committed assistance during line 2 the planning period covered by the element to low- and very low line 3 income households at affordable housing costs or affordable rents, line 4 as defined in Sections 50052.5 and 50053 of the Health and Safety line 5 Code, and which meet the requirements of paragraph (2). line 6 paragraph (2), (3), or (4). Except as otherwise provided in this line 7 subdivision, the community city or county may substitute one line 8 dwelling unit for one dwelling unit site in the applicable income line 9 category. The program shall do all of the following: line 10 (A) Identify the specific, existing sources of committed line 11 assistance and dedicate a specific portion of the funds from those line 12 sources to the provision of housing pursuant to this subdivision. line 13 (B) Indicate the number of units that will be provided to both line 14 low- and very low income households and demonstrate that the line 15 amount of dedicated funds is sufficient to develop the units at line 16 affordable housing costs or affordable rents. line 17 (C) Demonstrate that the units meet the requirements of line 18 paragraph (2). (2), (3), or (4). line 19 (2) Only units that comply with subparagraph (A), (B), or (C) line 20 qualify for inclusion in the housing element program described in line 21 paragraph (1), as follows: line 22 (A) line 23 (2) Units that qualify for inclusion in the housing element line 24 program described in paragraph (1) if the units are to be line 25 substantially rehabilitated with committed assistance from the city line 26 or county and would constitute a net increase in the community’s line 27 city’s or county’s stock of housing affordable to low- and very low line 28 income households. For purposes of this subparagraph, paragraph, line 29 a unit is not eligible to be “substantially rehabilitated” unless all line 30 of the following requirements are met: line 31 (i) line 32 (A) At the time the unit is identified for substantial rehabilitation, line 33 (I) the local government has determined the city or county has line 34 done all of the following: line 35 (i) Determined that the unit is at imminent risk of loss to the line 36 housing stock, (II) the local government has committed stock. line 37 (ii) Committed to provide relocation assistance pursuant to line 38 Chapter 16 (commencing with Section 7260) of Division 7 of Title line 39 1 to any occupants temporarily or permanently displaced by the line 40 rehabilitation or code enforcement activity, or the relocation is 97 — 8 — AB 1063 185 line 1 otherwise provided prior to displacement either as a condition of line 2 receivership, or provided by the property owner or the local line 3 government pursuant to Article 2.5 (commencing with Section line 4 17975) of Chapter 5 of Part 1.5 of Division 13 of the Health and line 5 Safety Code, or as otherwise provided by local ordinance; provided line 6 the assistance includes not less than the equivalent of four months’ line 7 rent and moving expenses and comparable replacement housing line 8 consistent with the moving expenses and comparable replacement line 9 housing required pursuant to Section 7260, (III) the local line 10 government requires 7260. line 11 (iii) Required that any displaced occupants will have the right line 12 to reoccupy the rehabilitated units, and (IV) line 13 (iv) At the time the unit is identified for substantial line 14 rehabilitation, the unit has been found by the local government line 15 city or county or a court to be unfit for human habitation due to line 16 the existence of at least four violations of the conditions listed in line 17 subdivisions (a) to (g), inclusive, of Section 17995.3 of the Health line 18 and Safety Code. line 19 (ii) line 20 (B) The rehabilitated unit will have long-term affordability line 21 covenants and restrictions that require the unit to be available to, line 22 and occupied by, persons or families of low- or very low income line 23 at affordable housing costs for at least 20 years or the time period line 24 required by any applicable federal or state law or regulation. line 25 (iii) line 26 (C) Prior to initial occupancy after rehabilitation, the local code line 27 enforcement agency shall issue a certificate of occupancy indicating line 28 compliance with all applicable state and local building code and line 29 health and safety code requirements. line 30 (B) line 31 (3) Units that are qualify for inclusion in the housing element line 32 program described in paragraph (1) if the units meet all of the line 33 following requirements: line 34 (A) The units are located either on foreclosed property or in a line 35 multifamily rental or ownership housing complex of three or more line 36 units, are units. line 37 (B) The units are converted with committed assistance from the line 38 city or county from nonaffordable to affordable by acquisition of line 39 the unit or the purchase of affordability covenants and restrictions line 40 for the unit, are not acquired by eminent domain, and constitute a 97 AB 1063 — 9 — 186 line 1 net increase in the community’s stock of housing affordable to line 2 low- and very low income households. domain. For purposes of line 3 this subparagraph, a unit is not converted by acquisition or the line 4 purchase of affordability covenants unless all of the following line 5 occur: line 6 (i) The unit is made available for rent at a cost affordable to line 7 low- or very low income households. line 8 (ii) At the time the unit is identified for acquisition, the unit is line 9 not available at an affordable housing cost to either of the line 10 following: line 11 (I) Low-income households, if the unit will be made affordable line 12 to low-income households. line 13 (II) Very low income households, if the unit will be made line 14 affordable to very low income households. line 15 (iii) At the time the unit is identified for acquisition the unit is line 16 not occupied by low- or very low income households or if the line 17 acquired unit is occupied, the local government or the private line 18 entity providing the committed assistance has committed to provide line 19 relocation assistance prior to displacement, if any, pursuant to line 20 Chapter 16 (commencing with Section 7260) of Division 7 of Title line 21 1 to any occupants displaced by the conversion, or the relocation line 22 is otherwise provided prior to displacement; provided the assistance line 23 includes not less than the equivalent of four months’ rent and line 24 moving expenses and comparable replacement housing consistent line 25 with the moving expenses and comparable replacement housing line 26 required pursuant to Section 7260. line 27 (iv) The unit is in decent, safe, and sanitary condition at the line 28 time of occupancy. line 29 (v) The unit has long-term affordability covenants and line 30 restrictions that require the unit to be affordable to persons of low- line 31 or very low income for not less than 55 years. 20 years, unless a line 32 longer period is required by another supplementary financial line 33 assistance program. line 34 (vi) For units located in multifamily ownership housing line 35 complexes with three or more units, or on or after January 1, 2015, line 36 on foreclosed properties, at least an equal number of line 37 new-construction multifamily rental units affordable to lower line 38 income households have been constructed in the city or county line 39 within the same planning period as the number of ownership units line 40 to be converted. 97 — 10 — AB 1063 187 line 1 (C) The units would constitute a net increase in the city’s or line 2 county’s stock of housing affordable to low- and very low income line 3 households. line 4 (C) line 5 (4) Units that qualify for inclusion in the housing element line 6 program described in paragraph (1) if the units will be preserved line 7 at affordable housing costs to persons or families of low- or very line 8 low incomes with committed assistance from the city or county line 9 by acquisition of the unit or the purchase of affordability covenants line 10 for the unit. For purposes of this subparagraph, paragraph, a unit line 11 shall not be deemed preserved unless all of the following occur: line 12 (i) line 13 (A) The unit has long-term affordability covenants and line 14 restrictions that require the unit to be affordable to, and reserved line 15 for occupancy by, persons of the same or lower income group as line 16 the current occupants for a period of at least 40 years. 20 years, line 17 unless a longer period is required by another supplementary line 18 financial assistance program. line 19 (ii) line 20 (B) The unit is within an “assisted housing development,” as line 21 defined in paragraph (3) of subdivision (a) of Section 65863.10. line 22 (iii) line 23 (C) The city or county finds, after a public hearing, that the unit line 24 is eligible, and is reasonably expected, to change from housing line 25 affordable to low- and very low income households to any other line 26 use during the next five 10 years due to termination of subsidy line 27 contracts, mortgage prepayment, or expiration of restrictions on line 28 use. line 29 (iv) line 30 (D) The unit is in decent, safe, and sanitary condition at the time line 31 of occupancy. line 32 (v) line 33 (E) At the time the unit is identified for preservation it is line 34 available at affordable cost to persons or families of low- or very line 35 low income. line 36 (3) This subdivision does not apply to any city or county that, line 37 during the current or immediately prior planning period, as defined line 38 by Section 65588, has not met any of its share of the regional need line 39 for affordable housing, as defined in Section 65584, for low- and line 40 very low income households. A 97 AB 1063 — 11 — 188 line 1 (5) A city or county shall document for any housing unit that line 2 for which a building permit has been issued and all development line 3 and permit fees have been paid or the and any housing unit that line 4 is eligible to be lawfully occupied. line 5 (4) line 6 (6) For purposes of this subdivision, “committed the following line 7 terms have the following meanings: line 8 (A) “Committed assistance” means that assistance for which line 9 the city or county enters county, or a private entity pursuant to the line 10 city’s or county’s inclusionary housing requirement, has entered line 11 into a legally enforceable agreement during the period from the line 12 beginning of the projection period until the end of the second year line 13 of the planning period that obligates sufficient available funds to line 14 provide the assistance necessary to make the identified units line 15 affordable and that requires that the units be made available for line 16 occupancy within two years of the execution of the agreement. line 17 during the planning period. “Committed assistance” does not line 18 include tenant-based rental assistance. line 19 (5) For purposes of this subdivision, “net line 20 (B) “Net increase” includes only housing units provided line 21 committed assistance pursuant to subparagraph (A) or (B) of line 22 paragraph (2) (2), (3), or (4) in the current planning period, as line 23 defined in Section 65588, that were not provided committed line 24 assistance in the immediately prior planning period. line 25 (6) For purposes of this subdivision, “the line 26 (C) “The time the unit is identified” means the earliest time line 27 when any city or county agent, acting on behalf of a public entity, line 28 has proposed in writing or has proposed orally or in writing to the line 29 property owner, that the unit be considered for substantial line 30 rehabilitation, acquisition, or preservation. line 31 (7) In the third fifth year of the planning period, as defined by line 32 Section 65588, in the report required pursuant to Section 65400, line 33 each city or county that has included in its housing element a line 34 program to provide units pursuant to subparagraph (A), (B), or (C) line 35 of paragraph (2) (2), (3), or (4) shall report in writing to the line 36 legislative body, and to the department within 30 days of making line 37 its report to the legislative body, on its progress in providing units line 38 pursuant to this subdivision. The report shall identify the specific line 39 units for which committed assistance has been provided or which line 40 have been made available to low- and very low income households, 97 — 12 — AB 1063 189 line 1 and it shall adequately document how each unit complies with this line 2 subdivision. If, by July 1 of the third fifth year of the planning line 3 period, the city or county county, or a private entity pursuant to line 4 the city’s or county’s inclusionary housing requirement, has not line 5 entered into an enforceable agreement of committed assistance for line 6 all units specified in the programs adopted pursuant to line 7 subparagraph (A), (B), or (C) of paragraph (2), (3), or (4), the city line 8 or county shall, not later than July 1 of the fourth sixth year of the line 9 planning period, adopt an amended housing element in accordance line 10 with Section 65585, identifying additional adequate sites pursuant line 11 to paragraph (1) of subdivision (c) of Section 65583 sufficient to line 12 accommodate the number of units for which committed assistance line 13 was not provided. If a city or county does not amend its housing line 14 element to identify adequate sites to address any shortfall, or fails line 15 to complete the rehabilitation, acquisition, purchase of affordability line 16 covenants, or the preservation of any housing unit within two years line 17 after committed assistance was provided to that unit, it shall be line 18 prohibited from identifying units pursuant to subparagraph (A), line 19 (B), or (C) of paragraph (2) (2), (3), or (4) in the housing element line 20 that it adopts for the next planning period, as defined in Section line 21 65588, above the number of units actually provided or preserved line 22 due to committed assistance. line 23 (d) A city or county may reduce its share of the regional housing line 24 need by the number of units built between the start of the projection line 25 period and the deadline for adoption of the housing element. If the line 26 city or county reduces its share pursuant to this subdivision, the line 27 city or county shall include in the housing element a description line 28 of the methodology for assigning those housing units to an income line 29 category based on actual or projected sales price, rent levels, or line 30 other mechanisms establishing affordability. line 31 SEC. 2. Section 65583.2 of the Government Code, as amended line 32 by Section 15.5 of Chapter 664 of the Statutes of 2019, is amended line 33 to read: line 34 65583.2. (a) A city’s or county’s inventory of land suitable line 35 for residential development pursuant to paragraph (3) of line 36 subdivision (a) of Section 65583 shall be used to identify sites line 37 throughout the community, consistent with paragraph (9) of line 38 subdivision (c) of Section 65583, that can be developed for housing line 39 within the planning period and that are sufficient to provide for line 40 the jurisdiction’s share of the regional housing need for all income 97 AB 1063 — 13 — 190 line 1 levels pursuant to Section 65584. As used in this section, “land line 2 suitable for residential development” includes all of the sites that line 3 meet the following standards set forth in subdivisions (c) and (g): line 4 (1) Vacant sites zoned for residential use. line 5 (2) Vacant sites zoned for nonresidential use that allows line 6 residential development. line 7 (3) Residentially zoned sites that are capable of being developed line 8 at a higher density, including sites owned or leased by a city, line 9 county, or city and county. line 10 (4) Sites zoned for nonresidential use that can be redeveloped line 11 for residential use, and for which the housing element includes a line 12 program to rezone the site, as necessary, rezoned for, to permit line 13 residential use, including sites owned or leased by a city, county, line 14 or city and county. line 15 (b) The inventory of land shall include all of the following: line 16 (1) A listing of properties by assessor parcel number. line 17 (2) The size of each property listed pursuant to paragraph (1), line 18 and the general plan designation and zoning of each property. line 19 (3) For nonvacant sites, a description of the existing use of each line 20 property. If a site subject to this paragraph is owned by the city or line 21 county, the description shall also include whether there are any line 22 plans to dispose of the property during the planning period and line 23 how the city or county will comply with Article 8 (commencing line 24 with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title line 25 5. line 26 (4) A general description of any environmental constraints to line 27 the development of housing within the jurisdiction, the line 28 documentation for which has been made available to the line 29 jurisdiction. This information need not be identified on a line 30 site-specific basis. line 31 (5) (A) A description of existing or planned water, sewer, and line 32 other dry utilities supply, including the availability and access to line 33 distribution facilities. line 34 (B) Parcels included in the inventory must have sufficient water, line 35 sewer, and dry utilities supply available and accessible to support line 36 housing development or be included in an existing general plan line 37 program or other mandatory program or plan, including a program line 38 or plan of a public or private entity providing water or sewer line 39 service, to secure sufficient water, sewer, and dry utilities supply line 40 to support housing development. This paragraph does not impose 97 — 14 — AB 1063 191 line 1 any additional duty on the city or county to construct, finance, or line 2 otherwise provide water, sewer, or dry utilities to parcels included line 3 in the inventory. line 4 (6) Sites identified as available for housing for above line 5 moderate-income households in areas not served by public sewer line 6 systems. This information need not be identified on a site-specific line 7 basis. line 8 (7) A map that shows the location of the sites included in the line 9 inventory, such as the land use map from the jurisdiction’s general line 10 plan, for reference purposes only. line 11 (c) Based on the information provided in subdivision (b), a city line 12 or county shall determine whether each site in the inventory can line 13 accommodate the development of some portion of its share of the line 14 regional housing need by income level during the planning period, line 15 as determined pursuant to Section 65584. The inventory shall line 16 specify for each site the number of units that can realistically be line 17 accommodated on that site and whether the site is adequate to line 18 accommodate lower income housing, moderate-income housing, line 19 or above moderate-income housing. A nonvacant site identified line 20 pursuant to paragraph (3) or (4) of subdivision (a) in a prior housing line 21 element and a vacant site that has been included in two or more line 22 consecutive planning periods that was not approved to develop a line 23 portion of the locality’s housing need shall not be deemed adequate line 24 to accommodate a portion of the housing need for lower income line 25 households that must be accommodated in the current housing line 26 element planning period unless the site is zoned at residential line 27 densities consistent with paragraph (3) of this subdivision and the line 28 site is subject to a program in the housing element requiring line 29 rezoning within three years of the beginning of the planning period line 30 to allow residential use by right for housing developments in which line 31 at least 20 percent of the units are affordable to lower income line 32 households. An unincorporated area in a nonmetropolitan county line 33 pursuant to clause (ii) of subparagraph (B) of paragraph (3) shall line 34 not be subject to the requirements of this subdivision to allow line 35 residential use by right. The analysis shall determine whether the line 36 inventory can provide for a variety of types of housing, including line 37 multifamily rental housing, factory-built housing, mobilehomes, line 38 housing for agricultural employees, supportive housing, line 39 single-room occupancy units, emergency shelters, and transitional 97 AB 1063 — 15 — 192 line 1 housing. The city or county shall determine the number of housing line 2 units that can be accommodated on each site as follows: line 3 (1) If local law or regulations require the development of a site line 4 at a minimum density, the department shall accept the planning line 5 agency’s calculation of the total housing unit capacity on that site line 6 based on the established minimum density. If the city or county line 7 does not adopt a law or regulation requiring the development of a line 8 site at a minimum density, then it shall demonstrate how the line 9 number of units determined for that site pursuant to this subdivision line 10 will be accommodated. line 11 (2) The number of units calculated pursuant to paragraph (1) line 12 shall be adjusted as necessary, based on the land use controls and line 13 site improvements requirement identified in paragraph (5) of line 14 subdivision (a) of Section 65583, the realistic development capacity line 15 for the site, typical densities of existing or approved residential line 16 developments at a similar affordability level in that jurisdiction, line 17 and on the current or planned availability and accessibility of line 18 sufficient water, sewer, and dry utilities. line 19 (A) A site smaller than half an acre shall not be deemed adequate line 20 to accommodate lower income housing need unless the locality line 21 can demonstrate that sites of equivalent size were successfully line 22 developed during the prior planning period for an equivalent line 23 number of lower income housing units as projected for the site or line 24 unless the locality provides other evidence to the department that line 25 the site is adequate to accommodate lower income housing. line 26 (B) A site larger than 10 acres shall not be deemed adequate to line 27 accommodate lower income housing need unless the locality can line 28 demonstrate that sites of equivalent size were successfully line 29 developed during the prior planning period for an equivalent line 30 number of lower income housing units as projected for the site or line 31 unless the locality provides other evidence to the department that line 32 the site can be developed as lower income housing. For purposes line 33 of this subparagraph, “site” means that portion of a parcel or parcels line 34 designated to accommodate lower income housing needs pursuant line 35 to this subdivision. line 36 (C) A site may be presumed to be realistic for development to line 37 accommodate lower income housing need if, at the time of the line 38 adoption of the housing element, a development affordable to line 39 lower income households has been proposed and approved for line 40 development on the site. 97 — 16 — AB 1063 193 line 1 (3) For the number of units calculated to accommodate its share line 2 of the regional housing need for lower income households pursuant line 3 to paragraph (2), a city or county shall do either of the following: line 4 (A) Provide an analysis demonstrating how the adopted densities line 5 accommodate this need. The analysis shall include, but is not line 6 limited to, factors such as market demand, financial feasibility, or line 7 information based on development project experience within a line 8 zone or zones that provide housing for lower income households. line 9 (B) The following densities shall be deemed appropriate to line 10 accommodate housing for lower income households: line 11 (i) For an incorporated city within a nonmetropolitan county line 12 and for a nonmetropolitan county that has a micropolitan area: line 13 sites allowing at least 15 units per acre. line 14 (ii) For an unincorporated area in a nonmetropolitan county not line 15 included in clause (i): sites allowing at least 10 units per acre. line 16 (iii) For a suburban jurisdiction: sites allowing at least 20 units line 17 per acre. line 18 (iv) For a jurisdiction in a metropolitan county: sites allowing line 19 at least 30 units per acre. line 20 (d) For purposes of this section, a metropolitan county, line 21 nonmetropolitan county, and nonmetropolitan county with a line 22 micropolitan area shall be as determined by the United States line 23 Census Bureau. A nonmetropolitan county with a micropolitan line 24 area includes the following counties: Del Norte, Humboldt, Lake, line 25 Mendocino, Nevada, Tehama, and Tuolumne and other counties line 26 as may be determined by the United States Census Bureau to be line 27 nonmetropolitan counties with micropolitan areas in the future. line 28 (e) (1) Except as provided in paragraph (2), a jurisdiction shall line 29 be considered suburban if the jurisdiction does not meet the line 30 requirements of clauses (i) and (ii) of subparagraph (B) of line 31 paragraph (3) of subdivision (c) and is located in a Metropolitan line 32 Statistical Area (MSA) of less than 2,000,000 in population, unless line 33 that jurisdiction’s population is greater than 100,000, in which line 34 case it shall be considered metropolitan. A county, not including line 35 the City and County of San Francisco, shall be considered suburban line 36 unless the county is in an MSA of 2,000,000 or greater in line 37 population in which case the county shall be considered line 38 metropolitan. line 39 (2) (A) (i) Notwithstanding paragraph (1), if a county that is line 40 in the San Francisco-Oakland-Fremont California MSA has a 97 AB 1063 — 17 — 194 line 1 population of less than 400,000, that county shall be considered line 2 suburban. If this county includes an incorporated city that has a line 3 population of less than 100,000, this city shall also be considered line 4 suburban. This paragraph shall apply to a housing element revision line 5 cycle, as described in subparagraph (A) of paragraph (3) of line 6 subdivision (e) of Section 65588, that is in effect from July 1, line 7 2014, to December 31, 2028, inclusive. line 8 (ii) A county subject to this subparagraph shall utilize the sum line 9 existing in the county’s housing trust fund as of June 30, 2013, for line 10 the development and preservation of housing affordable to low- and line 11 very low income households. line 12 (B) A jurisdiction that is classified as suburban pursuant to this line 13 paragraph shall report to the Assembly Committee on Housing line 14 and Community Development, the Senate Committee on Housing, line 15 and the Department of Housing and Community Development line 16 regarding its progress in developing low- and very low income line 17 housing consistent with the requirements of Section 65400. The line 18 report shall be provided three times: once, on or before December line 19 31, 2019, which report shall address the initial four years of the line 20 housing element cycle, a second time, on or before December 31, line 21 2023, which report shall address the subsequent four years of the line 22 housing element cycle, and a third time, on or before December line 23 31, 2027, which report shall address the subsequent four years of line 24 the housing element cycle and the cycle as a whole. The reports line 25 shall be provided consistent with the requirements of Section 9795. line 26 (f) A jurisdiction shall be considered metropolitan if the line 27 jurisdiction does not meet the requirements for “suburban area” line 28 above and is located in an MSA of 2,000,000 or greater in line 29 population, unless that jurisdiction’s population is less than 25,000 line 30 in which case it shall be considered suburban. line 31 (g) (1) For sites described in paragraph (3) of subdivision (b), line 32 the city or county shall specify the additional development potential line 33 for each site within the planning period and shall provide an line 34 explanation of the methodology used to determine the development line 35 potential. The methodology shall consider factors including the line 36 extent to which existing uses may constitute an impediment to line 37 additional residential development, the city’s or county’s past line 38 experience with converting existing uses to higher density line 39 residential development, the current market demand for the existing line 40 use, an analysis of any existing leases or other contracts that would 97 — 18 — AB 1063 195 line 1 perpetuate the existing use or prevent redevelopment of the site line 2 for additional residential development, development trends, market line 3 conditions, and regulatory or other incentives or standards to line 4 encourage additional residential development on these sites. line 5 (2) In addition to the analysis required in paragraph (1), when line 6 a city or county is relying on nonvacant sites described in paragraph line 7 (3) of subdivision (b) to accommodate 50 percent or more of its line 8 housing need for lower income households, the methodology used line 9 to determine additional development potential shall demonstrate line 10 that the existing use identified pursuant to paragraph (3) of line 11 subdivision (b) does not constitute an impediment to additional line 12 residential development during the period covered by the housing line 13 element. An existing use shall be presumed to impede additional line 14 residential development, absent findings based on substantial line 15 evidence that the use is likely to be discontinued during the line 16 planning period. Any of the following conditions shall be deemed line 17 to be substantial evidence that an existing use is likely to be line 18 discontinued during the planning period: line 19 (A) The existing improvement-to-land-value ratio is less than line 20 1.0 for commercial and multifamily properties or less than 0.5 for line 21 single-family properties according to the most recent available line 22 property assessment roll. line 23 (B) The site is designated a Moderate Resource area, High line 24 Resource area, or Highest Resource area in the most recent Tax line 25 Credit Allocation Committee Opportunity Map. line 26 (C) Zoning for the site allows residential development by-right line 27 that meets both of the following requirements: line 28 (i) Have at least 100 percent more floor area than existing line 29 structures on the site. line 30 (ii) At least 20 percent of the units are affordable to lower line 31 income households. line 32 (D) The use of nonvacant sites are accompanied by programs line 33 and policies that encourage or incentivize the redevelopment to line 34 residential use. line 35 (3) Notwithstanding any other law, and in addition to the line 36 requirements in paragraphs (1) and (2), sites that currently have line 37 residential uses, or within the past five years have had residential line 38 uses that have been vacated or demolished, that are or were subject line 39 to a recorded covenant, ordinance, or law that restricts rents to line 40 levels affordable to persons and families of low or very low 97 AB 1063 — 19 — 196 line 1 income, subject to any other form of rent or price control through line 2 a public entity’s valid exercise of its police power, or occupied by line 3 low or very low income households, shall be subject to a policy line 4 requiring the replacement of all those units affordable to the same line 5 or lower income level as a condition of any development on the line 6 site. Replacement requirements shall be consistent with those set line 7 forth in paragraph (3) of subdivision (c) of Section 65915. line 8 (h) The program required by subparagraph (A) of paragraph (1) line 9 of subdivision (c) of Section 65583 shall accommodate 100 percent line 10 of the need for housing for very low and low-income households line 11 allocated pursuant to Section 65584 for which site capacity has line 12 not been identified in the inventory of sites pursuant to paragraph line 13 (3) of subdivision (a) on sites that shall be zoned to permit line 14 owner-occupied and rental multifamily residential use by right for line 15 developments in which at least 20 percent of the units are line 16 affordable to lower income households during the planning period. line 17 These sites shall be zoned with minimum density and development line 18 standards that permit at least 16 units per site at a density of at line 19 least 16 units per acre in jurisdictions described in clause (i) of line 20 subparagraph (B) of paragraph (3) of subdivision (c), shall be at line 21 least 20 units per acre in jurisdictions described in clauses (iii) and line 22 (iv) of subparagraph (B) of paragraph (3) of subdivision (c) and line 23 shall meet the standards set forth in subparagraph (B) of paragraph line 24 (5) of subdivision (b). At least 50 percent of the very low and line 25 low-income housing need shall be accommodated on sites line 26 designated for residential use and for which nonresidential uses line 27 or mixed uses are not permitted, except that a city or county may line 28 accommodate all of the very low and low-income housing need line 29 on sites designated for mixed uses if those sites allow 100 percent line 30 residential use and require that residential use occupy 50 percent line 31 of the total floor area of a mixed-use project. line 32 (i) For purposes of this section and Section 65583, the phrase line 33 “use by right” shall mean that the local government’s review of line 34 the owner-occupied or multifamily residential use may not require line 35 a conditional use permit, planned unit development permit, or other line 36 discretionary local government review or approval that would line 37 constitute a “project” for purposes of Division 13 (commencing line 38 with Section 21000) of the Public Resources Code. Any subdivision line 39 of the sites shall be subject to all laws, including, but not limited line 40 to, the local government ordinance implementing the Subdivision 97 — 20 — AB 1063 197 line 1 Map Act. A local ordinance may provide that “use by right” does line 2 not exempt the use from design review. However, that design line 3 review shall not constitute a “project” for purposes of Division 13 line 4 (commencing with Section 21000) of the Public Resources Code. line 5 Use by right for all rental multifamily residential housing shall be line 6 provided in accordance with subdivision (f) of Section 65589.5. line 7 (j) Notwithstanding any other provision of this section, within line 8 one-half mile of a Sonoma-Marin Area Rail Transit station, housing line 9 density requirements in place on June 30, 2014, shall apply. line 10 (k) For purposes of subdivisions (a) and (b), the department line 11 shall provide guidance to local governments to properly survey, line 12 detail, and account for sites listed pursuant to Section 65585. line 13 (l) This section shall remain in effect only until December 31, line 14 2028, and as of that date is repealed. line 15 SEC. 3. Section 65583.2 of the Government Code, as amended line 16 by Section 16.5 of Chapter 664 of the Statutes of 2019, is amended line 17 to read: line 18 65583.2. (a) A city’s or county’s inventory of land suitable line 19 for residential development pursuant to paragraph (3) of line 20 subdivision (a) of Section 65583 shall be used to identify sites line 21 throughout the community, consistent with paragraph (9) of line 22 subdivision (c) of Section 65583, that can be developed for housing line 23 within the planning period and that are sufficient to provide for line 24 the jurisdiction’s share of the regional housing need for all income line 25 levels pursuant to Section 65584. As used in this section, “land line 26 suitable for residential development” includes all of the following line 27 sites that meet the standards set forth in subdivisions (c) and (g): line 28 (1) Vacant sites zoned for residential use. line 29 (2) Vacant sites zoned for nonresidential use that allows line 30 residential development. line 31 (3) Residentially zoned sites that are capable of being developed line 32 at a higher density, and sites owned or leased by a city, county, or line 33 city and county. line 34 (4) Sites zoned for nonresidential use that can be redeveloped line 35 for residential use, and for which the housing element includes a line 36 program to rezone the site, as necessary, to permit residential use, line 37 including sites owned or leased by a city, county, or city and line 38 county. line 39 (b) The inventory of land shall include all of the following: line 40 (1) A listing of properties by assessor parcel number. 97 AB 1063 — 21 — 198 line 1 (2) The size of each property listed pursuant to paragraph (1), line 2 and the general plan designation and zoning of each property. line 3 (3) For nonvacant sites, a description of the existing use of each line 4 property. If a site subject to this paragraph is owned by the city or line 5 county, the description shall also include whether there are any line 6 plans to dispose of the property during the planning period and line 7 how the city or county will comply with Article 8 (commencing line 8 with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title line 9 5. line 10 (4) A general description of any environmental constraints to line 11 the development of housing within the jurisdiction, the line 12 documentation for which has been made available to the line 13 jurisdiction. This information need not be identified on a line 14 site-specific basis. line 15 (5) (A) A description of existing or planned water, sewer, and line 16 other dry utilities supply, including the availability and access to line 17 distribution facilities. line 18 (B) Parcels included in the inventory must have sufficient water, line 19 sewer, and dry utilities supply available and accessible to support line 20 housing development or be included in an existing general plan line 21 program or other mandatory program or plan, including a program line 22 or plan of a public or private entity providing water or sewer line 23 service, to secure sufficient water, sewer, and dry utilities supply line 24 to support housing development. This paragraph does not impose line 25 any additional duty on the city or county to construct, finance, or line 26 otherwise provide water, sewer, or dry utilities to parcels included line 27 in the inventory. line 28 (6) Sites identified as available for housing for above line 29 moderate-income households in areas not served by public sewer line 30 systems. This information need not be identified on a site-specific line 31 basis. line 32 (7) A map that shows the location of the sites included in the line 33 inventory, such as the land use map from the jurisdiction’s general line 34 plan for reference purposes only. line 35 (c) Based on the information provided in subdivision (b), a city line 36 or county shall determine whether each site in the inventory can line 37 accommodate the development of some portion of its share of the line 38 regional housing need by income level during the planning period, line 39 as determined pursuant to Section 65584. The inventory shall line 40 specify for each site the number of units that can realistically be 97 — 22 — AB 1063 199 line 1 accommodated on that site and whether the site is adequate to line 2 accommodate lower income housing, moderate-income housing, line 3 or above moderate-income housing. A nonvacant site identified line 4 pursuant to paragraph (3) or (4) of subdivision (a) in a prior housing line 5 element and a vacant site that has been included in two or more line 6 consecutive planning periods that was not approved to develop a line 7 portion of the locality’s housing need shall not be deemed adequate line 8 to accommodate a portion of the housing need for lower income line 9 households that must be accommodated in the current housing line 10 element planning period unless the site is zoned at residential line 11 densities consistent with paragraph (3) of this subdivision and the line 12 site is subject to a program in the housing element requiring line 13 rezoning within three years of the beginning of the planning period line 14 to allow residential use by right for housing developments in which line 15 at least 20 percent of the units are affordable to lower income line 16 households. A city that is an unincorporated area in a line 17 nonmetropolitan county pursuant to clause (ii) of subparagraph line 18 (B) of paragraph (3) shall not be subject to the requirements of line 19 this subdivision to allow residential use by right. The analysis shall line 20 determine whether the inventory can provide for a variety of types line 21 of housing, including multifamily rental housing, factory-built line 22 housing, mobilehomes, housing for agricultural employees, line 23 supportive housing, single-room occupancy units, emergency line 24 shelters, and transitional housing. The city or county shall line 25 determine the number of housing units that can be accommodated line 26 on each site as follows: line 27 (1) If local law or regulations require the development of a site line 28 at a minimum density, the department shall accept the planning line 29 agency’s calculation of the total housing unit capacity on that site line 30 based on the established minimum density. If the city or county line 31 does not adopt a law or regulation requiring the development of a line 32 site at a minimum density, then it shall demonstrate how the line 33 number of units determined for that site pursuant to this subdivision line 34 will be accommodated. line 35 (2) The number of units calculated pursuant to paragraph (1) line 36 shall be adjusted as necessary, based on the land use controls and line 37 site improvements requirement identified in paragraph (5) of line 38 subdivision (a) of Section 65583, the realistic development capacity line 39 for the site, typical densities of existing or approved residential line 40 developments at a similar affordability level in that jurisdiction, 97 AB 1063 — 23 — 200 line 1 and on the current or planned availability and accessibility of line 2 sufficient water, sewer, and dry utilities. line 3 (A) A site smaller than half an acre shall not be deemed adequate line 4 to accommodate lower income housing need unless the locality line 5 can demonstrate that sites of equivalent size were successfully line 6 developed during the prior planning period for an equivalent line 7 number of lower income housing units as projected for the site or line 8 unless the locality provides other evidence to the department that line 9 the site is adequate to accommodate lower income housing. line 10 (B) A site larger than 10 acres shall not be deemed adequate to line 11 accommodate lower income housing need unless the locality can line 12 demonstrate that sites of equivalent size were successfully line 13 developed during the prior planning period for an equivalent line 14 number of lower income housing units as projected for the site or line 15 unless the locality provides other evidence to the department that line 16 the site can be developed as lower income housing. For purposes line 17 of this subparagraph, “site” means that portion of a parcel or parcels line 18 designated to accommodate lower income housing needs pursuant line 19 to this subdivision. line 20 (C) A site may be presumed to be realistic for development to line 21 accommodate lower income housing need if, at the time of the line 22 adoption of the housing element, a development affordable to line 23 lower income households has been proposed and approved for line 24 development on the site. line 25 (3) For the number of units calculated to accommodate its share line 26 of the regional housing need for lower income households pursuant line 27 to paragraph (2), a city or county shall do either of the following: line 28 (A) Provide an analysis demonstrating how the adopted densities line 29 accommodate this need. The analysis shall include, but is not line 30 limited to, factors such as market demand, financial feasibility, or line 31 information based on development project experience within a line 32 zone or zones that provide housing for lower income households. line 33 (B) The following densities shall be deemed appropriate to line 34 accommodate housing for lower income households: line 35 (i) For an incorporated city within a nonmetropolitan county line 36 and for a nonmetropolitan county that has a micropolitan area: line 37 sites allowing at least 15 units per acre. line 38 (ii) For an unincorporated area in a nonmetropolitan county not line 39 included in clause (i): sites allowing at least 10 units per acre. 97 — 24 — AB 1063 201 line 1 (iii) For a suburban jurisdiction: sites allowing at least 20 units line 2 per acre. line 3 (iv) For a jurisdiction in a metropolitan county: sites allowing line 4 at least 30 units per acre. line 5 (d) For purposes of this section, a metropolitan county, line 6 nonmetropolitan county, and nonmetropolitan county with a line 7 micropolitan area shall be as determined by the United States line 8 Census Bureau. A nonmetropolitan county with a micropolitan line 9 area includes the following counties: Del Norte, Humboldt, Lake, line 10 Mendocino, Nevada, Tehama, and Tuolumne and other counties line 11 as may be determined by the United States Census Bureau to be line 12 nonmetropolitan counties with micropolitan areas in the future. line 13 (e) A jurisdiction shall be considered suburban if the jurisdiction line 14 does not meet the requirements of clauses (i) and (ii) of line 15 subparagraph (B) of paragraph (3) of subdivision (c) and is located line 16 in a Metropolitan Statistical Area (MSA) of less than 2,000,000 line 17 in population, unless that jurisdiction’s population is greater than line 18 100,000, in which case it shall be considered metropolitan. A line 19 county, not including the City and County of San Francisco, shall line 20 be considered suburban unless the county is in an MSA of line 21 2,000,000 or greater in population in which case the county shall line 22 be considered metropolitan. line 23 (f) A jurisdiction shall be considered metropolitan if the line 24 jurisdiction does not meet the requirements for “suburban area” line 25 above and is located in an MSA of 2,000,000 or greater in line 26 population, unless that jurisdiction’s population is less than 25,000 line 27 in which case it shall be considered suburban. line 28 (g) (1) For sites described in paragraph (3) of subdivision (b), line 29 the city or county shall specify the additional development potential line 30 for each site within the planning period and shall provide an line 31 explanation of the methodology used to determine the development line 32 potential. The methodology shall consider factors including the line 33 extent to which existing uses may constitute an impediment to line 34 additional residential development, the city’s or county’s past line 35 experience with converting existing uses to higher density line 36 residential development, the current market demand for the existing line 37 use, an analysis of any existing leases or other contracts that would line 38 perpetuate the existing use or prevent redevelopment of the site line 39 for additional residential development, development trends, market 97 AB 1063 — 25 — 202 line 1 conditions, and regulatory or other incentives or standards to line 2 encourage additional residential development on these sites. line 3 (2) In addition to the analysis required in paragraph (1), when line 4 a city or county is relying on nonvacant sites described in paragraph line 5 (3) of subdivision (b) to accommodate 50 percent or more of its line 6 housing need for lower income households, the methodology used line 7 to determine additional development potential shall demonstrate line 8 that the existing use identified pursuant to paragraph (3) of line 9 subdivision (b) does not constitute an impediment to additional line 10 residential development during the period covered by the housing line 11 element. An existing use shall be presumed to impede additional line 12 residential development, absent findings based on substantial line 13 evidence that the use is likely to be discontinued during the line 14 planning period. Any of the following conditions shall be deemed line 15 to be substantial evidence that an existing use is likely to be line 16 discontinued during the planning period: line 17 (A) The existing improvement-to-land-value ratio is less than line 18 1.0 for commercial and multifamily properties or less than 0.5 for line 19 single-family properties according to the most recent available line 20 property assessment roll. line 21 (B) The site is designated a Moderate Resource area, High line 22 Resource area, or Highest Resource area in the most recent Tax line 23 Credit Allocation Committee Opportunity Map. line 24 (C) Zoning for the site allows residential development by-right line 25 that meets both of the following requirements: line 26 (i) Have at least 100 percent more floor area than existing line 27 structures on the site. line 28 (ii) At least 20 percent of the units are affordable to lower line 29 income households. line 30 (D) The use of nonvacant sites are accompanied by programs line 31 and policies that encourage or incentivize the redevelopment to line 32 residential use. line 33 (3) Notwithstanding any other law, and in addition to the line 34 requirements in paragraphs (1) and (2), sites that currently have line 35 residential uses, or within the past five years have had residential line 36 uses that have been vacated or demolished, that are or were subject line 37 to a recorded covenant, ordinance, or law that restricts rents to line 38 levels affordable to persons and families of low or very low line 39 income, subject to any other form of rent or price control through line 40 a public entity’s valid exercise of its police power, or occupied by 97 — 26 — AB 1063 203 line 1 low or very low income households, shall be subject to a policy line 2 requiring the replacement of all those units affordable to the same line 3 or lower income level as a condition of any development on the line 4 site. Replacement requirements shall be consistent with those set line 5 forth in paragraph (3) of subdivision (c) of Section 65915. line 6 (h) The program required by subparagraph (A) of paragraph (1) line 7 of subdivision (c) of Section 65583 shall accommodate 100 percent line 8 of the need for housing for very low and low-income households line 9 allocated pursuant to Section 65584 for which site capacity has line 10 not been identified in the inventory of sites pursuant to paragraph line 11 (3) of subdivision (a) on sites that shall be zoned to permit line 12 owner-occupied and rental multifamily residential use by right for line 13 developments in which at least 20 percent of the units are line 14 affordable to lower income households during the planning period. line 15 These sites shall be zoned with minimum density and development line 16 standards that permit at least 16 units per site at a density of at line 17 least 16 units per acre in jurisdictions described in clause (i) of line 18 subparagraph (B) of paragraph (3) of subdivision (c), shall be at line 19 least 20 units per acre in jurisdictions described in clauses (iii) and line 20 (iv) of subparagraph (B) of paragraph (3) of subdivision (c), and line 21 shall meet the standards set forth in subparagraph (B) of paragraph line 22 (5) of subdivision (b). At least 50 percent of the very low and line 23 low-income housing need shall be accommodated on sites line 24 designated for residential use and for which nonresidential uses line 25 or mixed uses are not permitted, except that a city or county may line 26 accommodate all of the very low and low-income housing need line 27 on sites designated for mixed uses if those sites allow 100 percent line 28 residential use and require that residential use occupy 50 percent line 29 of the total floor area of a mixed-use project. line 30 (i) For purposes of this section and Section 65583, the phrase line 31 “use by right” shall mean that the local government’s review of line 32 the owner-occupied or multifamily residential use may not require line 33 a conditional use permit, planned unit development permit, or other line 34 discretionary local government review or approval that would line 35 constitute a “project” for purposes of Division 13 (commencing line 36 with Section 21000) of the Public Resources Code. Any subdivision line 37 of the sites shall be subject to all laws, including, but not limited line 38 to, the local government ordinance implementing the Subdivision line 39 Map Act. A local ordinance may provide that “use by right” does line 40 not exempt the use from design review. However, that design 97 AB 1063 — 27 — 204 line 1 review shall not constitute a “project” for purposes of Division 13 line 2 (commencing with Section 21000) of the Public Resources Code. line 3 Use by right for all rental multifamily residential housing shall be line 4 provided in accordance with subdivision (f) of Section 65589.5. line 5 (j) For purposes of subdivisions (a) and (b), the department shall line 6 provide guidance to local governments to properly survey, detail, line 7 and account for sites listed pursuant to Section 65585. line 8 (k) This section shall become operative on December 31, 2028. line 9 SEC. 4. Section 65585.5 is added to the Government Code, to line 10 read: line 11 65585.5. (a) For purposes of this section, “affected local line 12 government” means a local government for which both of the line 13 following apply: line 14 (1) The local government is subject to a requirement that the line 15 adoption or amendment of its housing element be approved by the line 16 voters of the local government, including, but not limited to, a line 17 requirement imposed by a charter adopted pursuant to Section 3 line 18 of Article XI of the California Constitution. line 19 (2) The planning agency of the local government has submitted line 20 a draft of the proposed revision of its housing element for the line 21 applicable planning period to the department pursuant to Section line 22 65585. line 23 (b) Notwithstanding any other law, for the sixth and each line 24 subsequent revision of the housing element, both of the following line 25 shall apply: line 26 (1) If an affected local government has submitted the applicable line 27 revision of its housing element to the voters for approval before line 28 the due date for its housing element pursuant to Section 65588, line 29 but the voters have not yet voted on the housing element revision, line 30 the affected local government shall not be subject to any fines or line 31 other penalties pursuant to Section 65585 for failure to adopt its line 32 housing element by the applicable due date pursuant to Section line 33 65588. This paragraph shall only apply to an affected local line 34 government until the date of the election at which the housing line 35 element is submitted to the voters of the affected local government. line 36 (2) If an affected local government has submitted the applicable line 37 revision of its housing element to the voters for approval before line 38 the due date for its housing element pursuant to Section 65588 line 39 and the voters have rejected the housing element, the affected local line 40 government shall not be subject to any fines or other penalties 97 — 28 — AB 1063 205 line 1 pursuant to Section 65585 for failure to adopt its housing element line 2 by the applicable date pursuant to Section 65588. However, in an line 3 action brought by the Attorney General pursuant to Section 65585 line 4 against an affected local government described in this paragraph, line 5 the court may order remedies available pursuant to Section 564 line 6 of the Code of Civil Procedure, under which the agent of the court line 7 may take all governmental actions necessary to bring the line 8 jurisdiction’s housing element into substantial compliance pursuant line 9 to this article in order to remedy identified deficiencies. line 10 SECTION 1. Section 100523 is added to the Government Code, line 11 to read: line 12 100523. (a) The Legislature finds and declares that the goal line 13 of the state innovation waiver of Section 1332 of the federal act line 14 is to enable states to pursue alternative coverage approaches in the line 15 individual and small group markets that are consistent with the line 16 federal act. line 17 (b) The Legislature also finds and declares that if the state line 18 proposes an innovative strategy to offer coverage in the individual line 19 and small group markets, that strategy shall provide coverage that line 20 would be as accessible, comprehensive, and affordable as coverage line 21 available pursuant to the federal act, that would cover a number line 22 of state residents comparable to the number who would have been line 23 covered under the federal act with coverage that is equally or more line 24 comprehensive and equally or more affordable, and that would line 25 not increase the federal deficit. line 26 (c) A waiver shall not be requested from the United States line 27 Department of Health and Human Services pursuant to Section line 28 1332 of the federal act without express statutory authority. O 97 AB 1063 — 29 — 206 AMENDED IN SENATE JUNE 18, 2020 AMENDED IN SENATE MAY 20, 2020 SENATE BILL No. 1120 Introduced by Senators Atkins, Caballero, Rubio, and Wiener (Principal coauthor: Senator McGuire) (Coauthors: Senators Lena Gonzalez, Hill, Roth, and Rubio and Roth) February 19, 2020 An act to amend Section 66452.6 of, and to add Sections 65852.21 and 66411.7 to, the Government Code, relating to land use. legislative counsel’s digest SB 1120, as amended, Atkins. Subdivisions: tentative maps. The Planning and Zoning Law provides for the creation of accessory dwelling units by local ordinance, or, if a local agency has not adopted an ordinance, by ministerial approval, in accordance with specified standards and conditions. This bill would would, among other things, require a proposed housing development containing 2 residential units to be considered ministerially, without discretionary review or hearing, in zones where allowable uses are limited to single-family residential development if the proposed housing development meets certain requirements, including that the proposed housing development would not require demolition or alteration requiring evacuation or eviction of an existing housing unit that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. The Subdivision Map Act vests the authority to regulate and control the design and improvement of subdivisions in the legislative body of 97 207 a local agency and sets forth procedures governing the local agency’s processing, approval, conditional approval or disapproval, and filing of tentative, final, and parcel maps, and the modification of those maps. Under the Subdivision Map Act, an approved or conditionally approved tentative map expires 24 months after its approval or conditional approval, approval or after any additional period of time as prescribed by local ordinance, not to exceed an additional 12 months, except as provided. This bill would would, among other things, require a city or county to ministerially approve a parcel map for an urban lot split that meets certain requirements, including that the parcel does not contain housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. The bill would also extend the limit on the additional period that may be provided by ordinance, as described above, from 12 months to 24 months, months and would make other conforming or nonsubstantive changes. The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment. CEQA does not apply to the approval of ministerial projects. This bill, by establishing the ministerial review processes described above, would thereby exempt the approval of projects subject to those processes from CEQA. By increasing the duties of local agencies with respect to land use regulations, the bill would impose a state-mandated local program. The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. 97 — 2 — SB 1120 208 The people of the State of California do enact as follows: line 1 SECTION 1. Section 65852.21 is added to the Government line 2 Code, to read: line 3 65852.21. (a) A proposed housing development containing line 4 two residential units shall be considered ministerially, without line 5 discretionary review or a hearing, in zones where allowable uses line 6 are limited to single-family residential development, if the proposed line 7 housing development meets all of the following requirements: line 8 (1) The parcel subject to the proposed housing development is line 9 located within a city the boundaries of which include some portion line 10 of either an urbanized area or urban cluster, as designated by the line 11 United States Census Bureau, or, for unincorporated areas, a legal line 12 parcel wholly within the boundaries of an urbanized area or urban line 13 cluster, as designated by the United States Census Bureau. line 14 (2) The parcel satisfies the requirements specified in line 15 subparagraphs (B) to (K), inclusive, of paragraph (6) of subdivision line 16 (a) of Section 65913.4. line 17 (3) The proposed housing development would not require line 18 demolition or alteration requiring evacuation or eviction of an line 19 existing housing unit of any of the following types of housing: line 20 (A) Housing that is subject to a recorded covenant, ordinance, line 21 or law that restricts rents to levels affordable to persons and line 22 families of moderate, low, or very low income. line 23 (B) Housing that is subject to any form of rent or price control line 24 through a public entity’s valid exercise of its police power. line 25 (C) A parcel on which an owner of residential real property has line 26 exercised the owner’s rights under Chapter 12.75 (commencing line 27 with Section 7060) of Division 7 of Title 1 to withdraw line 28 accommodations from rent or lease within 15 years before the date line 29 that the development proponent submits an application pursuant line 30 to Section 65913.4. line 31 (D) Housing that has been occupied by a tenant in the last three line 32 years. line 33 (4) The development is not located on a site that has been placed line 34 on a national, state, or local historic register. within a historic line 35 district, as defined in Section 5020.1 of the Public Resources Code, line 36 that is designated or listed as a city or county landmark or historic line 37 property or district pursuant to a city or county ordinance. 97 SB 1120 — 3 — 209 line 1 (b) (1) Notwithstanding any local law and except as provided line 2 in paragraph (2), a city or county may impose objective zoning line 3 and design standards that do not conflict with this section. line 4 (2) The city or county shall not require the development project line 5 to comply with an objective design standard that would prohibit line 6 the development from including up to two units. line 7 (c) (1) Except as provided in paragraph (2), subject to a local line 8 ordinance that provides for a lower standard of parking, the line 9 proposed development shall provide offstreet parking of up to one line 10 space per unit. line 11 (2) A local agency shall not impose parking requirements if any line 12 either of the following is true: line 13 (A) The parcel is located within one-half mile walking distance line 14 of public transit. either a high-quality transit corridor, as defined line 15 in subdivision (b) of Section 21155 of the Public Resources Code, line 16 or a major transit stop, as defined in Section 21064.3 of the Public line 17 Resources Code. line 18 (B) The parcel is located within an architecturally and line 19 historically significant historic district. line 20 (C) line 21 (B) There is a car share vehicle located within one block of the line 22 parcel. line 23 (d) (1) Except as provided in paragraphs (2) and (3), the line 24 proposed housing development described in subdivision (a) shall line 25 not require the demolition of more than one existing exterior wall. line 26 25 percent of the existing exterior structural walls. line 27 (2) A proposed housing development may require the demolition line 28 of more than one existing exterior wall 25 percent of the existing line 29 exterior structural walls if a local ordinance so allows. line 30 (3) A proposed housing development may require the demolition line 31 of more than one existing exterior wall 25 percent of the existing line 32 exterior structural walls if the site has not been occupied by a line 33 tenant in the last three years. line 34 (e) A local agency may require, as part of the application for line 35 a permit to create, pursuant to this section, a duplex connected to line 36 an onsite water treatment system, a percolation test completed line 37 within the last 5 years, or, if the percolation test has been line 38 recertified, within the last 10 years. line 39 (f) A local agency shall require that a rental of any unit created line 40 pursuant to this section be for a term longer than 30 days. 97 — 4 — SB 1120 210 line 1 (e) line 2 (g) Notwithstanding Section 65852.2, a local agency shall not line 3 be required to permit an accessory dwelling unit on parcels that line 4 use both the authority contained within this section and the line 5 authority contained in Section 66411.7. line 6 (f) line 7 (h) A local agency may adopt an ordinance to implement the line 8 provisions of this section. An ordinance adopted to implement this line 9 section shall not be considered a project under Division 13 line 10 (commencing with Section 21000) of the Public Resources Code. line 11 SEC. 2. Section 66411.7 is added to the Government Code, to line 12 read: line 13 66411.7. (a) Notwithstanding any other provision of this line 14 division and any local law, a city or county shall ministerially line 15 approve a parcel map for an urban lot split that meets all the line 16 following requirements: line 17 (1) The parcel map subdivides an existing parcel to create two line 18 new parcels of equal size. line 19 (2) (A) Except as provided in subparagraph (B), both newly line 20 created parcels are no smaller than 1,200 square feet. line 21 (B) A local agency may by ordinance adopt a smaller minimum line 22 lot size to approve ministerially under this subdivision. line 23 (3) The parcel being subdivided meets all the following line 24 requirements: line 25 (A) The parcel is zoned for residential use. line 26 (B) The parcel is located within an urbanized area or urban line 27 cluster. line 28 (C) The parcel satisfies the requirements specified in line 29 subparagraphs (B) to (K), inclusive, of paragraph (6) of subdivision line 30 (a) of Section 65913.4. line 31 (D) The parcel does not contain any of the following types of line 32 housing: line 33 (i) Housing that is subject to a recorded covenant, ordinance, line 34 or law that restricts rents to levels affordable to persons and line 35 families of moderate, low, or very low income. line 36 (ii) Housing that is subject to any form of rent or price control line 37 through a public entity’s valid exercise of its police power. line 38 (iii) A parcel or parcels on which an owner of residential real line 39 property has exercised the owner’s rights under Chapter 12.75 line 40 (commencing with Section 7060) of Division 7 of Title 1 to 97 SB 1120 — 5 — 211 line 1 withdraw accommodations from rent or lease within 15 years line 2 before the date that the development proponent submits an line 3 application pursuant to Section 65913.4. line 4 (iv) Housing that has been occupied by a tenant in the last three line 5 years. line 6 (E) The parcel is not located on a site that has been placed on line 7 a national, state, or local historic register. within a historic district, line 8 as defined in Section 5020.1 of the Public Resources Code, that line 9 is designated or listed as a city or county landmark or historic line 10 property or district pursuant to a city or county ordinance. line 11 (F) The parcel has not been established through prior exercise line 12 of an urban lot split as provided for in this section. line 13 (G) The Neither the owner of the parcel being subdivided nor line 14 any person acting in concert with the owner has not previously line 15 subdivided an adjoining adjacent parcel using an urban lot split line 16 as provided for in this section. line 17 (b) An application for an urban lot split shall be approved in line 18 accordance with the following requirements: line 19 (1) A local agency shall approve or deny an application for an line 20 urban lot split ministerially without discretionary review. line 21 (2) Notwithstanding Section 66411.1, a local agency shall not line 22 impose regulations that require dedications of rights-of-way or the line 23 construction of reasonable offsite and onsite improvements for the line 24 parcels being created as a condition of issuing a parcel map for an line 25 urban lot split. line 26 (c) A local agency may require any of the following conditions line 27 when receiving a request for an urban lot split: line 28 (1) Easements. line 29 (2) A requirement that the parcels have access to, provide access line 30 to, or adjoin the public right-of-way. line 31 (3) Offstreet parking of up to one space per unit, except that a line 32 local agency shall not impose parking requirements in any either line 33 of the following instances: line 34 (A) The parcel is located within one-half mile walking distance line 35 of public transit. either a high-quality transit corridor as defined line 36 in subdivision (b) of Section 21155 of the Public Resources Code, line 37 or a major transit stop as defined in Section 21064.3 of the Public line 38 Resources Code. line 39 (B) The parcel is located within an architecturally and line 40 historically significant historic district. 97 — 6 — SB 1120 212 line 1 (C) line 2 (B) There is a car share vehicle located within one block of the line 3 parcel. line 4 (d) (1) Except as provided in paragraph (2), notwithstanding line 5 any local law, a city or county may impose objective zoning and line 6 objective design standards applicable to a parcel created by an line 7 urban lot split that do not conflict with this section. line 8 (2) (A) A local agency shall not impose objective zoning or line 9 objective design standards that reduce the buildable area on each line 10 newly created parcel to less than 50 percent of the buildable area line 11 on the parcel being subdivided. line 12 (B) For the purposes of this paragraph, “buildable area” means line 13 the area on the lot that remains after the application of zoning and line 14 design standards and regulations that require dedications of line 15 rights-of-way, easements, and the construction of reasonable offsite line 16 and onsite improvements for the parcels being created. line 17 (e) A local agency shall require that a rental of any unit created line 18 pursuant to this section be for a term longer than 30 days. line 19 (e) line 20 (f) Notwithstanding Section 65852.2, a local agency shall not line 21 be required to permit an accessory dwelling unit on parcels that line 22 use both the authority contained within this section and the line 23 authority contained in Section 65852.21. line 24 (f) line 25 (g) A local agency may adopt an ordinance to implement the line 26 provisions of this section. An ordinance adopted to implement this line 27 section shall not be considered a project under Division 13 line 28 (commencing with Section 21000) of the Public Resources Code. line 29 SEC. 3. Section 66452.6 of the Government Code is amended line 30 to read: line 31 66452.6. (a) (1) An approved or conditionally approved line 32 tentative map shall expire 24 months after its approval or line 33 conditional approval, or after any additional period of time as may line 34 be prescribed by local ordinance, not to exceed an additional 24 line 35 months. However, if the subdivider is required to expend two line 36 hundred thirty-six thousand seven hundred ninety dollars line 37 ($236,790) or more to construct, improve, or finance the line 38 construction or improvement of public improvements outside the line 39 property boundaries of the tentative map, excluding improvements line 40 of public rights-of-way which abut the boundary of the property 97 SB 1120 — 7 — 213 line 1 to be subdivided and which are reasonably related to the line 2 development of that property, each filing of a final map authorized line 3 by Section 66456.1 shall extend the expiration of the approved or line 4 conditionally approved tentative map by 48 months from the date line 5 of its expiration, as provided in this section, or the date of the line 6 previously filed final map, whichever is later. The extensions shall line 7 not extend the tentative map more than 10 years from its approval line 8 or conditional approval. However, a tentative map on property line 9 subject to a development agreement authorized by Article 2.5 line 10 (commencing with Section 65864) of Chapter 4 of Division 1 may line 11 be extended for the period of time provided for in the agreement, line 12 but not beyond the duration of the agreement. The number of line 13 phased final maps that may be filed shall be determined by the line 14 advisory agency at the time of the approval or conditional approval line 15 of the tentative map. line 16 (2) Commencing January 1, 2012, and each calendar year line 17 thereafter, the amount of two hundred thirty-six thousand seven line 18 hundred ninety dollars ($236,790) shall be annually increased by line 19 operation of law according to the adjustment for inflation set forth line 20 in the statewide cost index for class B construction, as determined line 21 by the State Allocation Board at its January meeting. The effective line 22 date of each annual adjustment shall be March 1. The adjusted line 23 amount shall apply to tentative and vesting tentative maps whose line 24 applications were received after the effective date of the line 25 adjustment. line 26 (3) “Public improvements,” as used in this subdivision, include line 27 traffic controls, streets, roads, highways, freeways, bridges, line 28 overcrossings, street interchanges, flood control or storm drain line 29 facilities, sewer facilities, water facilities, and lighting facilities. line 30 (b) (1) The period of time specified in subdivision (a), including line 31 any extension thereof granted pursuant to subdivision (e), shall line 32 not include any period of time during which a development line 33 moratorium, imposed after approval of the tentative map, is in line 34 existence. However, the length of the moratorium shall not exceed line 35 five years. line 36 (2) The length of time specified in paragraph (1) shall be line 37 extended for up to three years, but in no event beyond January 1, line 38 1992, during the pendency of any lawsuit in which the subdivider line 39 asserts, and the local agency which approved or conditionally 97 — 8 — SB 1120 214 line 1 approved the tentative map denies, the existence or application of line 2 a development moratorium to the tentative map. line 3 (3) Once a development moratorium is terminated, the map line 4 shall be valid for the same period of time as was left to run on the line 5 map at the time that the moratorium was imposed. However, if the line 6 remaining time is less than 120 days, the map shall be valid for line 7 120 days following the termination of the moratorium. line 8 (c) The period of time specified in subdivision (a), including line 9 any extension thereof granted pursuant to subdivision (e), shall line 10 not include the period of time during which a lawsuit involving line 11 the approval or conditional approval of the tentative map is or was line 12 pending in a court of competent jurisdiction, if the stay of the time line 13 period is approved by the local agency pursuant to this section. line 14 After service of the initial petition or complaint in the lawsuit upon line 15 the local agency, the subdivider may apply to the local agency for line 16 a stay pursuant to the local agency’s adopted procedures. Within line 17 40 days after receiving the application, the local agency shall either line 18 stay the time period for up to five years or deny the requested stay. line 19 The local agency may, by ordinance, establish procedures for line 20 reviewing the requests, including, but not limited to, notice and line 21 hearing requirements, appeal procedures, and other administrative line 22 requirements. line 23 (d) The expiration of the approved or conditionally approved line 24 tentative map shall terminate all proceedings and no final map or line 25 parcel map of all or any portion of the real property included within line 26 the tentative map shall be filed with the legislative body without line 27 first processing a new tentative map. Once a timely filing is made, line 28 subsequent actions of the local agency, including, but not limited line 29 to, processing, approving, and recording, may lawfully occur after line 30 the date of expiration of the tentative map. Delivery to the county line 31 surveyor or city engineer shall be deemed a timely filing for line 32 purposes of this section. line 33 (e) Upon application of the subdivider filed before the expiration line 34 of the approved or conditionally approved tentative map, the time line 35 at which the map expires pursuant to subdivision (a) may be line 36 extended by the legislative body or by an advisory agency line 37 authorized to approve or conditionally approve tentative maps for line 38 a period or periods not exceeding a total of six years. The period line 39 of extension specified in this subdivision shall be in addition to line 40 the period of time provided by subdivision (a). Before the 97 SB 1120 — 9 — 215 line 1 expiration of an approved or conditionally approved tentative map, line 2 upon an application by the subdivider to extend that map, the map line 3 shall automatically be extended for 60 days or until the application line 4 for the extension is approved, conditionally approved, or denied, line 5 whichever occurs first. If the advisory agency denies a subdivider’s line 6 application for an extension, the subdivider may appeal to the line 7 legislative body within 15 days after the advisory agency has line 8 denied the extension. line 9 (f) For purposes of this section, a development moratorium line 10 includes a water or sewer moratorium, or a water and sewer line 11 moratorium, as well as other actions of public agencies which line 12 regulate land use, development, or the provision of services to the line 13 land, including the public agency with the authority to approve or line 14 conditionally approve the tentative map, which thereafter prevents, line 15 prohibits, or delays the approval of a final or parcel map. A line 16 development moratorium shall also be deemed to exist for purposes line 17 of this section for any period of time during which a condition line 18 imposed by the city or county could not be satisfied because of line 19 either of the following: line 20 (1) The condition was one that, by its nature, necessitated action line 21 by the city or county, and the city or county either did not take the line 22 necessary action or by its own action or inaction was prevented or line 23 delayed in taking the necessary action before expiration of the line 24 tentative map. line 25 (2) The condition necessitates acquisition of real property or line 26 any interest in real property from a public agency, other than the line 27 city or county that approved or conditionally approved the tentative line 28 map, and that other public agency fails or refuses to convey the line 29 property interest necessary to satisfy the condition. However, line 30 nothing in this subdivision shall be construed to require any public line 31 agency to convey any interest in real property owned by it. A line 32 development moratorium specified in this paragraph shall be line 33 deemed to have been imposed either on the date of approval or line 34 conditional approval of the tentative map, if evidence was included line 35 in the public record that the public agency which owns or controls line 36 the real property or any interest therein may refuse to convey that line 37 property or interest, or on the date that the public agency which line 38 owns or controls the real property or any interest therein receives line 39 an offer by the subdivider to purchase that property or interest for line 40 fair market value, whichever is later. A development moratorium 97 — 10 — SB 1120 216 line 1 specified in this paragraph shall extend the tentative map up to the line 2 maximum period as set forth in subdivision (b), but not later than line 3 January 1, 1992, so long as the public agency which owns or line 4 controls the real property or any interest therein fails or refuses to line 5 convey the necessary property interest, regardless of the reason line 6 for the failure or refusal, except that the development moratorium line 7 shall be deemed to terminate 60 days after the public agency has line 8 officially made, and communicated to the subdivider, a written line 9 offer or commitment binding on the agency to convey the necessary line 10 property interest for a fair market value, paid in a reasonable time line 11 and manner. line 12 SEC. 4. The Legislature finds and declares that ensuring access line 13 to affordable housing is a matter of statewide concern and not a line 14 municipal affair as that term is used in Section 5 of Article XI of line 15 the California Constitution. Therefore, Sections 1 and 2 of this act line 16 adding Sections 65852.21 and 66411.7 to the Government Code line 17 and Section 3 of this act amending Section 66452.6 of the line 18 Government Code apply to all cities, including charter cities. line 19 SEC. 5. No reimbursement is required by this act pursuant to line 20 Section 6 of Article XIIIB of the California Constitution because line 21 a local agency or school district has the authority to levy service line 22 charges, fees, or assessments sufficient to pay for the program or line 23 level of service mandated by this act, within the meaning of Section line 24 17556 of the Government Code. O 97 SB 1120 — 11 — 217 AMENDED IN SENATE JUNE 18, 2020 AMENDED IN SENATE MAY 20, 2020 AMENDED IN SENATE MAY 6, 2020 SENATE BILL No. 1385 Introduced by Senators Caballero and Rubio (Principal coauthors: Senators Atkins, Lena Gonzalez, Hertzberg, McGuire, and Wiener) (Coauthors: Senators Hill Durazo, Galgiani, Hill, Hueso, and Roth) February 21, 2020 An act to amend Sections 53339.6 and 65913.4 of, and to add Section 65852.23 to, the Government Code, relating to land use. legislative counsel’s digest SB 1385, as amended, Caballero. Local planning: housing: commercial zones. The Planning and Zoning Law requires each county and city to adopt a comprehensive, long-term general plan for its physical development, and the development of certain lands outside its boundaries, that includes, among other mandatory elements, a housing element. Existing law requires that the housing element include, among other things, an inventory of land suitable and available for residential development. If the inventory of sites does not identify adequate sites to accommodate the need for groups of all households pursuant to specified law, existing law requires the local government to rezone sites within specified time periods and that this rezoning accommodate 100% of the need for housing for very low and low-income households on sites that will be zoned to permit owner-occupied and rental multifamily residential use by right for specified developments. 96 218 This bill, the Neighborhood Homes Act, would deem a housing development project, as defined, an authorized allowable use on a neighborhood lot that is zoned for office or retail commercial use under a local agency’s zoning code or general plan. The bill would require the density for a housing development under these provisions to meet or exceed the density deemed appropriate to accommodate housing for lower income households according to the type of local jurisdiction, including a density of at least 20 units per acre for a suburban jurisdiction. The bill would require the housing development to meet all other local requirements for a neighborhood lot zoned for office or retail commercial use, other than those that prohibit residential use, or allow residential use at a lower density than that required by the bill. The bill would provide that a housing development under these provisions is subject to the local zoning, parking, and design ordinances, and any design review or other public notice, comment, hearing, or procedure applicable to a housing development in a zone with the applicable density. The bill would provide that the local zoning designation applies if the existing zoning designation for the parcel allows residential use at a density greater than that required by these provisions. The bill would require a local agency to require that a rental of any unit created pursuant to the bill’s provisions be for a term longer than 30 days. The bill would authorize a local agency that met its share of the regional housing need, as specified, to exempt a neighborhood lot from these provisions if the local agency concurrently reallocates the lost residential density to other lots so that there is no net loss in residential production capacity in the jurisdiction. The bill would specify that it does not alter or affect the application of any housing, environmental, or labor law applicable to a housing development authorized by these provisions, including, but not limited to, the California Coastal Act, the California Environmental Quality Act, the Housing Accountability Act, obligations to affirmatively further fair housing, and any state or local affordability laws or tenant protection laws. The bill would require an applicant of a housing development under these provisions to provide notice of a pending application to each commercial tenant of the neighborhood lot. The Housing Accountability Act, which is part of the Planning and Zoning Law, prohibits a local agency from disapproving, or conditioning approval in a manner that renders infeasible, a housing development project, as defined for purposes of the act, for very low, low-, or moderate-income households or an emergency shelter unless the local 96 — 2 — SB 1385 219 agency makes specified written findings based on a preponderance of the evidence in the record. That act states that it shall not be construed to prohibit a local agency from requiring a housing development project to comply with objective, quantifiable, written development standards, conditions, and policies appropriate to, and consistent with, meeting the jurisdiction’s share of the regional housing need, except as provided. That act further provides that a housing development project or emergency shelter shall be deemed consistent, compliant, and in conformity with an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision if there is substantial evidence that would allow a reasonable person to conclude that the housing development project or emergency shelter is consistent, compliant, or in conformity. The bill would provide that for purposes of the Housing Accountability Act, a proposed housing development project is consistent, compliant, and in conformity with an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision if the housing development project is consistent with the standards applied to the parcel pursuant to specified provisions of the Neighborhood Homes Act. Act and if none of the square footage in the project is designated for hotel, motel, bed and breakfast inn, or other transient lodging use, except for a residential hotel, as defined. The Planning and Zoning Law, until January 1, 2026, also authorizes a development proponent to submit an application for a multifamily housing development that is subject to a streamlined, ministerial approval process, as provided, and not subject to a conditional use permit, if the development satisfies specified objective planning standards, including a requirement that the site on which the development is proposed is zoned for residential use or residential mixed-use development, or has a general plan designation that allows residential use or a mix of residential and nonresidential uses, with at least 2⁄3 of the square footage of the development designated for residential use. Under that law, the proposed development is also required to be consistent with objective zoning standards, objective subdivision standards, and objective design review standards in effect at the time the development is submitted to the local government. This bill would permit the development to be proposed for a site zoned for office or retail commercial use if the site has no existing commercial or residential tenants on 50% or more of its total square footage for a period of at least 3 years prior to the submission of the 96 SB 1385 — 3 — 220 application. The bill would also provide that a project located on a neighborhood lot, as defined, shall be deemed consistent with objective zoning standards, objective design standards, and objective subdivision standards if the project meets the standards applied to the parcel pursuant to the Neighborhood Homes Act. The Mello-Roos Community Facilities Act of 1982 authorizes a local agency to establish a community facilities district to finance various services, including police protection, fire protection, recreation programs, and library services, and provides for the annexation of territory to an existing community facilities district. This bill would authorize an applicant seeking to develop a housing project on a neighborhood lot to request that a local agency establish a Mello-Roos Community Facilities District, or to request that the neighborhood lot be annexed to an existing community facilities district, as specified, to finance improvements and services to the units proposed to be developed. The bill would prohibit any further proceedings to be taken to annex the territory, or to authorize that annexation in the future, for a period of one year from the decision of the legislative body at the hearing on the annexation if a specified number or groups of persons, including 50% or more of the registered voters or 6 registered voters, whichever is more, residing within the territory proposed for annexation or proposed to be annexed in the future, file written protests with the legislative body. The bill would prohibit a local agency from imposing any development, impact, or mitigation fee, charge, or exaction in connection with the approval of a development project to the extent that those facilities and services are funded by a community facilities district established pursuant to these provisions. By imposing new duties on local agencies with regard to local planning and zoning, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. 96 — 4 — SB 1385 221 The people of the State of California do enact as follows: line 1 SECTION 1. Section 53339.6 of the Government Code is line 2 amended to read: line 3 53339.6. (a) If 50 percent or more of the registered voters, or line 4 six registered voters, whichever is more, residing within the line 5 existing community facilities district, or if 50 percent or more of line 6 the registered voters or six registered voters, whichever is more, line 7 residing within the territory proposed for annexation or proposed line 8 to be annexed in the future, or if the owners of one-half or more line 9 of the area of land in the territory included in the existing district line 10 and not exempt from special tax, or if the owners of one-half or line 11 more of the area of land in the territory proposed to be annexed or line 12 proposed to be annexed in the future and not exempt from the line 13 special tax, file written protests against the proposed annexation line 14 of territory to the existing community facilities district or the line 15 proposed addition of territory to the existing community facilities line 16 district in the future, and protests are not withdrawn so as to reduce line 17 the protests to less than a majority, no further proceedings to annex line 18 the same territory, or to authorize the same territory to be annexed line 19 in the future, shall be undertaken for a period of one year from the line 20 date of decision of the legislative body on the issues discussed at line 21 the hearing. line 22 (b) (1) This subdivision shall only apply to a proceeding to line 23 annex or add territory that is zoned to allow residential use on a line 24 neighborhood lot as provided in Section 65852.23. line 25 (2) Notwithstanding subdivision (a), if 50 percent or more of line 26 the registered voters or six registered voters, whichever is more, line 27 residing within the territory proposed for annexation or proposed line 28 to be annexed in the future, or if the owners of one-half or more line 29 of the area of land in the territory proposed to be annexed or line 30 proposed to be annexed in the future and not exempt from the line 31 special tax, file written protests against the proposed annexation line 32 of territory to the existing community facilities district or the line 33 proposed addition of territory to the existing community facilities line 34 district in the future, and protests are not withdrawn so as to reduce line 35 the protests to less than a majority, no further proceedings to annex line 36 the same territory, or to authorize the same territory to be annexed line 37 in the future, shall be undertaken for a period of one year from the 96 SB 1385 — 5 — 222 line 1 date of decision of the legislative body on the issues discussed at line 2 the hearing. line 3 SEC. 2. Section 65852.23 is added to the Government Code, line 4 to read: line 5 65852.23. (a) (1) This section shall be known, and may be line 6 cited, as the Neighborhood Homes Act. line 7 (2) The Legislature finds and declares that creating more line 8 affordable housing is critical to the achievement of regional line 9 housing needs assessment goals, and that housing units developed line 10 at higher densities are affordable by design for California residents, line 11 without the necessity of public subsidies, income eligibility, line 12 occupancy restrictions, lottery procedures, or other legal line 13 requirements applicable to deed restricted affordable housing to line 14 serve very low and low-income residents and special needs line 15 residents. line 16 (b) A housing development project shall be deemed an line 17 authorized allowable use on a neighborhood lot that is zoned for line 18 office or retail commercial use under a local agency’s zoning code line 19 or general plan. A housing development on a neighborhood lot line 20 authorized under this section shall be subject to all of the following: line 21 (1) (A) The density for the housing development shall meet or line 22 exceed the applicable density deemed appropriate to accommodate line 23 housing for lower income households identified in subparagraph line 24 (B) of paragraph (3) of subdivision (c) of Section 65583.2. as line 25 follows: line 26 (i) For an incorporated city within a nonmetropolitan county line 27 and for a nonmetropolitan county that has a micropolitan area, line 28 sites allowing at least 15 units per acre. line 29 (ii) For an unincorporated area in a nonmetropolitan county line 30 not included in subparagraph (A), sites allowing at least 10 units line 31 per acre. line 32 (iii) For a suburban jurisdiction, sites allowing at least 20 units line 33 per acre. line 34 (iv) For a jurisdiction in a metropolitan county, sites allowing line 35 at least 30 units per acre. line 36 (B) “Metropolitan county,” “nonmetropolitan county,” line 37 “nonmetropolitan county with a micropolitan area,” and line 38 “suburban,” shall have the same meanings as defined in line 39 subdivisions (d), (e), and (f) of Section 65583.2. 96 — 6 — SB 1385 223 line 1 (2) (A) The housing development shall be subject to local line 2 zoning, parking, design, and other ordinances applicable to a line 3 housing development in a zone that meets the requirements of line 4 paragraph (1). line 5 (B) If more than one zoning designation of the local agency line 6 meets the requirements of paragraph (1), the zoning standards line 7 applicable to a parcel that allows residential use pursuant to this line 8 section shall be the zoning standards that apply to the closest parcel line 9 that allows residential use at a density that meets the requirements line 10 of paragraph (1). line 11 (C) If the existing zoning designation for the parcel, as adopted line 12 by the local government, allows residential use at a density greater line 13 than that required in paragraph (1), the local zoning designation line 14 shall apply. line 15 (3) The housing development shall comply with any design line 16 review or other public notice, comment, hearing, or procedure line 17 imposed by the local agency on a housing development in the line 18 applicable zoning designation identified in paragraph (2). line 19 (4) All other local requirements for a neighborhood lot zoned line 20 for office or retail commercial use, other than those that prohibit line 21 residential use, or allow residential use at a lower density than line 22 provided in paragraph (1). line 23 (c) A local agency shall require that a rental of any unit created line 24 pursuant to this section be for a term longer than 30 days. line 25 (c) line 26 (d) (1) A local agency may exempt a neighborhood lot from line 27 this section in its housing element if the local agency concurrently line 28 reallocates the lost residential density to other lots so that there is line 29 no net loss in residential production capacity in the jurisdiction. line 30 (2) A local agency may reallocate the residential density from line 31 an exempt neighborhood lot pursuant to this subdivision only upon line 32 a finding by the local agency that the construction cost of the line 33 reallocated housing units will not be greater than the construction line 34 cost of housing units built under the applicable zoning standards line 35 in paragraph (2) of subdivision (b). line 36 (d) line 37 (e) (1) This section does not alter or lessen the applicability of line 38 any housing, environmental, or labor law applicable to a housing line 39 development authorized by this section, including, but not limited line 40 to, the following: 96 SB 1385 — 7 — 224 line 1 (A) The California Coastal Act of 1976 (Division 20 line 2 (commencing with Section 30000) of the Public Resources Code) line 3 (B) The California Environmental Quality Act (Division 13 line 4 (commencing with Section 21000) of the Public Resources Code). line 5 (C) The Housing Accountability Act (Section 65589.5). line 6 (D) The Density Bonus Law (Section 65915). line 7 (E) Obligations to affirmatively further fair housing, pursuant line 8 to Section 8899.50. line 9 (F) State or local affordable housing laws. line 10 (G) State or local tenant protection laws. line 11 (2) All local demolition ordinances shall apply to a project line 12 developed on a neighborhood lot. line 13 (3) For purposes of the Housing Accountability Act (Section line 14 65589.5), a proposed housing development project that is consistent line 15 with the standards applied to the parcel pursuant to paragraph (2) line 16 of subdivision (b) shall be deemed consistent, compliant, and in line 17 conformity with an applicable plan, program, policy, ordinance, line 18 standard, requirement, or other similar provision. line 19 (e) line 20 (f) An applicant for a housing development under this section line 21 shall provide written notice of the pending application to each line 22 commercial tenant on the neighborhood lot when the application line 23 is submitted. line 24 (f) line 25 (g) (1) An applicant seeking to develop a housing project on a line 26 neighborhood lot may request that a local agency establish a line 27 Mello-Roos Community Facilities District, or may request that line 28 the neighborhood lot be annexed to an existing community facilities line 29 district, as authorized in Chapter 2.5 (commencing with Section line 30 53311) of Part 1 of Division 2 of Title 5 to finance improvements line 31 and services to the units proposed to be developed. line 32 (2) An annexation to a community facilities district for a line 33 neighborhood lot shall be subject to a protest proceeding as line 34 provided in subdivision (b) of Section 53339.6. line 35 (3) An applicant who voluntarily enrolls in the district shall not line 36 be required to pay a development, impact, or mitigation fee, charge, line 37 or exaction in connection with the approval of a development line 38 project to the extent that those facilities and services are funded line 39 by a community facilities district established pursuant to this line 40 subdivision. This paragraph shall not prohibit a local agency from 96 — 8 — SB 1385 225 line 1 imposing any application, development, mitigation, building, or line 2 other fee to fund the construction cost of public infrastructure line 3 facilities or services that are not funded by a community facilities line 4 district to support a housing development project. line 5 (g) line 6 (h) For purposes of this section: line 7 (1) “Housing development project” means a use consisting of line 8 any of the following: line 9 (A) Residential units only. line 10 (B) Mixed-use developments consisting of residential and line 11 nonresidential commercial retail or office uses. None of the square line 12 footage of any such development shall be designated for hotel, line 13 motel, bed and breakfast inn, or other transient lodging use, except line 14 for a residential hotel. line 15 (2) “Local agency” means a city, including a charter city, county, line 16 or a city and county. line 17 (3) “Neighborhood lot” means a lot zoned for office or retail line 18 commercial uses and an eligible site for a housing development line 19 project pursuant to subdivision (b). line 20 (4) “Residential hotel” has the same meaning as defined in line 21 Section 50519 of the Health and Safety Code. line 22 SEC. 3. Section 65913.4 of the Government Code is amended line 23 to read: line 24 65913.4. (a) A development proponent may submit an line 25 application for a development that is subject to the streamlined, line 26 ministerial approval process provided by subdivision (b) and is line 27 not subject to a conditional use permit if the development satisfies line 28 all of the following objective planning standards: line 29 (1) The development is a multifamily housing development that line 30 contains two or more residential units. line 31 (2) The development is located on a site that satisfies all of the line 32 following: line 33 (A) A site that is a legal parcel or parcels located in a city if, line 34 and only if, the city boundaries include some portion of either an line 35 urbanized area or urban cluster, as designated by the United States line 36 Census Bureau, or, for unincorporated areas, a legal parcel or line 37 parcels wholly within the boundaries of an urbanized area or urban line 38 cluster, as designated by the United States Census Bureau. line 39 (B) A site in which at least 75 percent of the perimeter of the line 40 site adjoins parcels that are developed with urban uses. For the 96 SB 1385 — 9 — 226 line 1 purposes of this section, parcels that are only separated by a street line 2 or highway shall be considered to be adjoined. line 3 (C) (i) A site that meets the requirements of clause (ii) and line 4 satisfies any of the following: line 5 (I) The site is zoned for residential use or residential mixed-use line 6 development. line 7 (II) The site has a general plan designation that allows residential line 8 use or a mix of residential and nonresidential uses. line 9 (III) The site is zoned for office or retail commercial use and line 10 has no existing commercial or residential tenants on 50 percent or line 11 more of its total square footage for a period of at least three years line 12 prior to the submission of the application. line 13 (ii) A development on a site described in clause (i) shall have line 14 at least two-thirds of the square footage of the development line 15 designated for residential use. Additional density, floor area, and line 16 units, and any other concession, incentive, or waiver of line 17 development standards granted pursuant to the Density Bonus Law line 18 in Section 65915 shall be included in the square footage line 19 calculation. The square footage of the development shall not line 20 include underground space, such as basements or underground line 21 parking garages. line 22 (3) (A) The development proponent has committed to record, line 23 prior to the issuance of the first building permit, a land use line 24 restriction or covenant providing that any lower or moderate line 25 income housing units required pursuant to subparagraph (B) of line 26 paragraph (4) shall remain available at affordable housing costs line 27 or rent to persons and families of lower or moderate income for line 28 no less than the following periods of time: line 29 (i) Fifty-five years for units that are rented. line 30 (ii) Forty-five years for units that are owned. line 31 (B) The city or county shall require the recording of covenants line 32 or restrictions implementing this paragraph for each parcel or unit line 33 of real property included in the development. line 34 (4) The development satisfies subparagraphs (A) and (B) below: line 35 (A) Is located in a locality that the department has determined line 36 is subject to this subparagraph on the basis that the number of units line 37 that have been issued building permits, as shown on the most recent line 38 production report received by the department, is less than the line 39 locality’s share of the regional housing needs, by income category, line 40 for that reporting period. A locality shall remain eligible under 96 — 10 — SB 1385 227 line 1 this subparagraph until the department’s determination for the next line 2 reporting period. line 3 (B) The development is subject to a requirement mandating a line 4 minimum percentage of below market rate housing based on one line 5 of the following: line 6 (i) The locality did not submit its latest production report to the line 7 department by the time period required by Section 65400, or that line 8 production report reflects that there were fewer units of above line 9 moderate-income housing issued building permits than were line 10 required for the regional housing needs assessment cycle for that line 11 reporting period. In addition, if the project contains more than 10 line 12 units of housing, the project does either of the following: line 13 (I) The project dedicates a minimum of 10 percent of the total line 14 number of units to housing affordable to households making at or line 15 below 80 percent of the area median income. However, if the line 16 locality has adopted a local ordinance that requires that greater line 17 than 10 percent of the units be dedicated to housing affordable to line 18 households making below 80 percent of the area median income, line 19 that local ordinance applies. line 20 (II) (ia) If the project is located within the San Francisco Bay line 21 area, the project, in lieu of complying with subclause (I), dedicates line 22 20 percent of the total number of units to housing affordable to line 23 households making below 120 percent of the area median income line 24 with the average income of the units at or below 100 percent of line 25 the area median income. However, a local ordinance adopted by line 26 the locality applies if it requires greater than 20 percent of the units line 27 be dedicated to housing affordable to households making at or line 28 below 120 percent of the area median income, or requires that any line 29 of the units be dedicated at a level deeper than 120 percent. In line 30 order to comply with this subclause, the rent or sale price charged line 31 for units that are dedicated to housing affordable to households line 32 between 80 percent and 120 percent of the area median income line 33 shall not exceed 30 percent of the gross income of the household. line 34 (ib) For purposes of this subclause, “San Francisco Bay area” line 35 means the entire area within the territorial boundaries of the line 36 Counties of Alameda, Contra Costa, Marin, Napa, San Mateo, line 37 Santa Clara, Solano, and Sonoma, and the City and County of San line 38 Francisco. line 39 (ii) The locality’s latest production report reflects that there line 40 were fewer units of housing issued building permits affordable to 96 SB 1385 — 11 — 228 line 1 either very low income or low-income households by income line 2 category than were required for the regional housing needs line 3 assessment cycle for that reporting period, and the project seeking line 4 approval dedicates 50 percent of the total number of units to line 5 housing affordable to households making at or below 80 percent line 6 of the area median income. However, if the locality has adopted line 7 a local ordinance that requires that greater than 50 percent of the line 8 units be dedicated to housing affordable to households making at line 9 or below 80 percent of the area median income, that local ordinance line 10 applies. line 11 (iii) The locality did not submit its latest production report to line 12 the department by the time period required by Section 65400, or line 13 if the production report reflects that there were fewer units of line 14 housing affordable to both income levels described in clauses (i) line 15 and (ii) that were issued building permits than were required for line 16 the regional housing needs assessment cycle for that reporting line 17 period, the project seeking approval may choose between utilizing line 18 clause (i) or (ii). line 19 (C) (i) A development proponent that uses a unit of affordable line 20 housing to satisfy the requirements of subparagraph (B) may also line 21 satisfy any other local or state requirement for affordable housing, line 22 including local ordinances or the Density Bonus Law in Section line 23 65915, provided that the development proponent complies with line 24 the applicable requirements in the state or local law. line 25 (ii) A development proponent that uses a unit of affordable line 26 housing to satisfy any other state or local affordability requirement line 27 may also satisfy the requirements of subparagraph (B), provided line 28 that the development proponent complies with applicable line 29 requirements of subparagraph (B). line 30 (iii) A development proponent may satisfy the affordability line 31 requirements of subparagraph (B) with a unit that is restricted to line 32 households with incomes lower than the applicable income limits line 33 required in subparagraph (B). line 34 (5) The development, excluding any additional density or any line 35 other concessions, incentives, or waivers of development standards line 36 granted pursuant to the Density Bonus Law in Section 65915, is line 37 consistent with objective zoning standards, objective subdivision line 38 standards, and objective design review standards in effect at the line 39 time that the development is submitted to the local government line 40 pursuant to this section. For purposes of this paragraph, “objective 96 — 12 — SB 1385 229 line 1 zoning standards,” “objective subdivision standards,” and line 2 “objective design review standards” mean standards that involve line 3 no personal or subjective judgment by a public official and are line 4 uniformly verifiable by reference to an external and uniform line 5 benchmark or criterion available and knowable by both the line 6 development applicant or proponent and the public official before line 7 submittal. These standards may be embodied in alternative line 8 objective land use specifications adopted by a city or county, and line 9 may include, but are not limited to, housing overlay zones, specific line 10 plans, inclusionary zoning ordinances, and density bonus line 11 ordinances, subject to the following: line 12 (A) A development shall be deemed consistent with the objective line 13 zoning standards related to housing density, as applicable, if the line 14 density proposed is compliant with the maximum density allowed line 15 within that land use designation, notwithstanding any specified line 16 maximum unit allocation that may result in fewer units of housing line 17 being permitted. line 18 (B) In the event that objective zoning, general plan, subdivision, line 19 or design review standards are mutually inconsistent, a line 20 development shall be deemed consistent with the objective zoning line 21 and subdivision standards pursuant to this subdivision if the line 22 development is consistent with the standards set forth in the general line 23 plan. line 24 (C) The amendments to this subdivision made by the act adding line 25 this subparagraph do not constitute a change in, but are declaratory line 26 of, existing law. line 27 (D) A project located on a neighborhood lot, as defined in line 28 Section 65852.23, shall be deemed consistent with objective zoning line 29 standards, objective design standards, and objective subdivision line 30 standards if the project meets the standards applied to the parcel line 31 pursuant to subdivision (b) of Section 65852.23. 65852.23 and if line 32 none of the square footage in the project is designated for hotel, line 33 motel, bed and breakfast inn, or other transient lodging use, except line 34 for a residential hotel. For purposes of this subdivision, line 35 “residential hotel” shall have the same meaning as defined in line 36 Section 50519 of the Health and Safety Code. line 37 (6) The development is not located on a site that is any of the line 38 following: line 39 (A) A coastal zone, as defined in Division 20 (commencing line 40 with Section 30000) of the Public Resources Code. 96 SB 1385 — 13 — 230 line 1 (B) Either prime farmland or farmland of statewide importance, line 2 as defined pursuant to United States Department of Agriculture line 3 land inventory and monitoring criteria, as modified for California, line 4 and designated on the maps prepared by the Farmland Mapping line 5 and Monitoring Program of the Department of Conservation, or line 6 land zoned or designated for agricultural protection or preservation line 7 by a local ballot measure that was approved by the voters of that line 8 jurisdiction. line 9 (C) Wetlands, as defined in the United States Fish and Wildlife line 10 Service Manual, Part 660 FW 2 (June 21, 1993). line 11 (D) Within a very high fire hazard severity zone, as determined line 12 by the Department of Forestry and Fire Protection pursuant to line 13 Section 51178, or within a high or very high fire hazard severity line 14 zone as indicated on maps adopted by the Department of Forestry line 15 and Fire Protection pursuant to Section 4202 of the Public line 16 Resources Code. This subparagraph does not apply to sites line 17 excluded from the specified hazard zones by a local agency, line 18 pursuant to subdivision (b) of Section 51179, or sites that have line 19 adopted fire hazard mitigation measures pursuant to existing line 20 building standards or state fire mitigation measures applicable to line 21 the development. line 22 (E) A hazardous waste site that is listed pursuant to Section line 23 65962.5 or a hazardous waste site designated by the Department line 24 of Toxic Substances Control pursuant to Section 25356 of the line 25 Health and Safety Code, unless the State Department of Public line 26 Health, State Water Resources Control Board, or Department of line 27 Toxic Substances Control has cleared the site for residential use line 28 or residential mixed uses. line 29 (F) Within a delineated earthquake fault zone as determined by line 30 the State Geologist in any official maps published by the State line 31 Geologist, unless the development complies with applicable seismic line 32 protection building code standards adopted by the California line 33 Building Standards Commission under the California Building line 34 Standards Law (Part 2.5 (commencing with Section 18901) of line 35 Division 13 of the Health and Safety Code), and by any local line 36 building department under Chapter 12.2 (commencing with Section line 37 8875) of Division 1 of Title 2. line 38 (G) Within a special flood hazard area subject to inundation by line 39 the 1 percent annual chance flood (100-year flood) as determined line 40 by the Federal Emergency Management Agency in any official 96 — 14 — SB 1385 231 line 1 maps published by the Federal Emergency Management Agency. line 2 If a development proponent is able to satisfy all applicable federal line 3 qualifying criteria in order to provide that the site satisfies this line 4 subparagraph and is otherwise eligible for streamlined approval line 5 under this section, a local government shall not deny the application line 6 on the basis that the development proponent did not comply with line 7 any additional permit requirement, standard, or action adopted by line 8 that local government that is applicable to that site. A development line 9 may be located on a site described in this subparagraph if either line 10 of the following are met: line 11 (i) The site has been subject to a Letter of Map Revision line 12 prepared by the Federal Emergency Management Agency and line 13 issued to the local jurisdiction. line 14 (ii) The site meets Federal Emergency Management Agency line 15 requirements necessary to meet minimum flood plain management line 16 criteria of the National Flood Insurance Program pursuant to Part line 17 59 (commencing with Section 59.1) and Part 60 (commencing line 18 with Section 60.1) of Subchapter B of Chapter I of Title 44 of the line 19 Code of Federal Regulations. line 20 (H) Within a regulatory floodway as determined by the Federal line 21 Emergency Management Agency in any official maps published line 22 by the Federal Emergency Management Agency, unless the line 23 development has received a no-rise certification in accordance line 24 with Section 60.3(d)(3) of Title 44 of the Code of Federal line 25 Regulations. If a development proponent is able to satisfy all line 26 applicable federal qualifying criteria in order to provide that the line 27 site satisfies this subparagraph and is otherwise eligible for line 28 streamlined approval under this section, a local government shall line 29 not deny the application on the basis that the development line 30 proponent did not comply with any additional permit requirement, line 31 standard, or action adopted by that local government that is line 32 applicable to that site. line 33 (I) Lands identified for conservation in an adopted natural line 34 community conservation plan pursuant to the Natural Community line 35 Conservation Planning Act (Chapter 10 (commencing with Section line 36 2800) of Division 3 of the Fish and Game Code), habitat line 37 conservation plan pursuant to the federal Endangered Species Act line 38 of 1973 (16 U.S.C. Sec. 1531 et seq.), or other adopted natural line 39 resource protection plan. 96 SB 1385 — 15 — 232 line 1 (J) Habitat for protected species identified as candidate, line 2 sensitive, or species of special status by state or federal agencies, line 3 fully protected species, or species protected by the federal line 4 Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), line 5 the California Endangered Species Act (Chapter 1.5 (commencing line 6 with Section 2050) of Division 3 of the Fish and Game Code), or line 7 the Native Plant Protection Act (Chapter 10 (commencing with line 8 Section 1900) of Division 2 of the Fish and Game Code). line 9 (K) Lands under conservation easement. line 10 (7) The development is not located on a site where any of the line 11 following apply: line 12 (A) The development would require the demolition of the line 13 following types of housing: line 14 (i) Housing that is subject to a recorded covenant, ordinance, line 15 or law that restricts rents to levels affordable to persons and line 16 families of moderate, low, or very low income. line 17 (ii) Housing that is subject to any form of rent or price control line 18 through a public entity’s valid exercise of its police power. line 19 (iii) Housing that has been occupied by tenants within the past line 20 10 years. line 21 (B) The site was previously used for housing that was occupied line 22 by tenants that was demolished within 10 years before the line 23 development proponent submits an application under this section. line 24 (C) The development would require the demolition of a historic line 25 structure that was placed on a national, state, or local historic line 26 register. line 27 (D) The property contains housing units that are occupied by line 28 tenants, and units at the property are, or were, subsequently offered line 29 for sale to the general public by the subdivider or subsequent owner line 30 of the property. line 31 (8) The development proponent has done both of the following, line 32 as applicable: line 33 (A) Certified to the locality that either of the following is true, line 34 as applicable: line 35 (i) The entirety of the development is a public work for purposes line 36 of Chapter 1 (commencing with Section 1720) of Part 7 of Division line 37 2 of the Labor Code. line 38 (ii) If the development is not in its entirety a public work, that line 39 all construction workers employed in the execution of the line 40 development will be paid at least the general prevailing rate of per 96 — 16 — SB 1385 233 line 1 diem wages for the type of work and geographic area, as line 2 determined by the Director of Industrial Relations pursuant to line 3 Sections 1773 and 1773.9 of the Labor Code, except that line 4 apprentices registered in programs approved by the Chief of the line 5 Division of Apprenticeship Standards may be paid at least the line 6 applicable apprentice prevailing rate. If the development is subject line 7 to this subparagraph, then for those portions of the development line 8 that are not a public work all of the following shall apply: line 9 (I) The development proponent shall ensure that the prevailing line 10 wage requirement is included in all contracts for the performance line 11 of the work. line 12 (II) All contractors and subcontractors shall pay to all line 13 construction workers employed in the execution of the work at line 14 least the general prevailing rate of per diem wages, except that line 15 apprentices registered in programs approved by the Chief of the line 16 Division of Apprenticeship Standards may be paid at least the line 17 applicable apprentice prevailing rate. line 18 (III) Except as provided in subclause (V), all contractors and line 19 subcontractors shall maintain and verify payroll records pursuant line 20 to Section 1776 of the Labor Code and make those records line 21 available for inspection and copying as provided therein. line 22 (IV) Except as provided in subclause (V), the obligation of the line 23 contractors and subcontractors to pay prevailing wages may be line 24 enforced by the Labor Commissioner through the issuance of a line 25 civil wage and penalty assessment pursuant to Section 1741 of the line 26 Labor Code, which may be reviewed pursuant to Section 1742 of line 27 the Labor Code, within 18 months after the completion of the line 28 development, by an underpaid worker through an administrative line 29 complaint or civil action, or by a joint labor-management line 30 committee through a civil action under Section 1771.2 of the Labor line 31 Code. If a civil wage and penalty assessment is issued, the line 32 contractor, subcontractor, and surety on a bond or bonds issued to line 33 secure the payment of wages covered by the assessment shall be line 34 liable for liquidated damages pursuant to Section 1742.1 of the line 35 Labor Code. line 36 (V) Subclauses (III) and (IV) shall not apply if all contractors line 37 and subcontractors performing work on the development are subject line 38 to a project labor agreement that requires the payment of prevailing line 39 wages to all construction workers employed in the execution of line 40 the development and provides for enforcement of that obligation 96 SB 1385 — 17 — 234 line 1 through an arbitration procedure. For purposes of this clause, line 2 “project labor agreement” has the same meaning as set forth in line 3 paragraph (1) of subdivision (b) of Section 2500 of the Public line 4 Contract Code. line 5 (VI) Notwithstanding subdivision (c) of Section 1773.1 of the line 6 Labor Code, the requirement that employer payments not reduce line 7 the obligation to pay the hourly straight time or overtime wages line 8 found to be prevailing shall not apply if otherwise provided in a line 9 bona fide collective bargaining agreement covering the worker. line 10 The requirement to pay at least the general prevailing rate of per line 11 diem wages does not preclude use of an alternative workweek line 12 schedule adopted pursuant to Section 511 or 514 of the Labor line 13 Code. line 14 (B) (i) For developments for which any of the following line 15 conditions apply, certified that a skilled and trained workforce line 16 shall be used to complete the development if the application is line 17 approved: line 18 (I) On and after January 1, 2018, until December 31, 2021, the line 19 development consists of 75 or more units with a residential line 20 component that is not 100 percent subsidized affordable housing line 21 and will be located within a jurisdiction located in a coastal or bay line 22 county with a population of 225,000 or more. line 23 (II) On and after January 1, 2022, until December 31, 2025, the line 24 development consists of 50 or more units with a residential line 25 component that is not 100 percent subsidized affordable housing line 26 and will be located within a jurisdiction located in a coastal or bay line 27 county with a population of 225,000 or more. line 28 (III) On and after January 1, 2018, until December 31, 2019, line 29 the development consists of 75 or more units with a residential line 30 component that is not 100 percent subsidized affordable housing line 31 and will be located within a jurisdiction with a population of fewer line 32 than 550,000 and that is not located in a coastal or bay county. line 33 (IV) On and after January 1, 2020, until December 31, 2021, line 34 the development consists of more than 50 units with a residential line 35 component that is not 100 percent subsidized affordable housing line 36 and will be located within a jurisdiction with a population of fewer line 37 than 550,000 and that is not located in a coastal or bay county. line 38 (V) On and after January 1, 2022, until December 31, 2025, the line 39 development consists of more than 25 units with a residential line 40 component that is not 100 percent subsidized affordable housing 96 — 18 — SB 1385 235 line 1 and will be located within a jurisdiction with a population of fewer line 2 than 550,000 and that is not located in a coastal or bay county. line 3 (ii) For purposes of this section, “skilled and trained workforce” line 4 has the same meaning as provided in Chapter 2.9 (commencing line 5 with Section 2600) of Part 1 of Division 2 of the Public Contract line 6 Code. line 7 (iii) If the development proponent has certified that a skilled line 8 and trained workforce will be used to complete the development line 9 and the application is approved, the following shall apply: line 10 (I) The applicant shall require in all contracts for the line 11 performance of work that every contractor and subcontractor at line 12 every tier will individually use a skilled and trained workforce to line 13 complete the development. line 14 (II) Every contractor and subcontractor shall use a skilled and line 15 trained workforce to complete the development. line 16 (III) Except as provided in subclause (IV), the applicant shall line 17 provide to the locality, on a monthly basis while the development line 18 or contract is being performed, a report demonstrating compliance line 19 with Chapter 2.9 (commencing with Section 2600) of Part 1 of line 20 Division 2 of the Public Contract Code. A monthly report provided line 21 to the locality pursuant to this subclause shall be a public record line 22 under the California Public Records Act (Chapter 3.5 (commencing line 23 with Section 6250) of Division 7 of Title 1) and shall be open to line 24 public inspection. An applicant that fails to provide a monthly line 25 report demonstrating compliance with Chapter 2.9 (commencing line 26 with Section 2600) of Part 1 of Division 2 of the Public Contract line 27 Code shall be subject to a civil penalty of ten thousand dollars line 28 ($10,000) per month for each month for which the report has not line 29 been provided. Any contractor or subcontractor that fails to use a line 30 skilled and trained workforce shall be subject to a civil penalty of line 31 two hundred dollars ($200) per day for each worker employed in line 32 contravention of the skilled and trained workforce requirement. line 33 Penalties may be assessed by the Labor Commissioner within 18 line 34 months of completion of the development using the same line 35 procedures for issuance of civil wage and penalty assessments line 36 pursuant to Section 1741 of the Labor Code, and may be reviewed line 37 pursuant to the same procedures in Section 1742 of the Labor line 38 Code. Penalties shall be paid to the State Public Works line 39 Enforcement Fund. 96 SB 1385 — 19 — 236 line 1 (IV) Subclause (III) shall not apply if all contractors and line 2 subcontractors performing work on the development are subject line 3 to a project labor agreement that requires compliance with the line 4 skilled and trained workforce requirement and provides for line 5 enforcement of that obligation through an arbitration procedure. line 6 For purposes of this subparagraph, “project labor agreement” has line 7 the same meaning as set forth in paragraph (1) of subdivision (b) line 8 of Section 2500 of the Public Contract Code. line 9 (C) Notwithstanding subparagraphs (A) and (B), a development line 10 that is subject to approval pursuant to this section is exempt from line 11 any requirement to pay prevailing wages or use a skilled and line 12 trained workforce if it meets both of the following: line 13 (i) The project includes 10 or fewer units. line 14 (ii) The project is not a public work for purposes of Chapter 1 line 15 (commencing with Section 1720) of Part 7 of Division 2 of the line 16 Labor Code. line 17 (9) The development did not or does not involve a subdivision line 18 of a parcel that is, or, notwithstanding this section, would otherwise line 19 be, subject to the Subdivision Map Act (Division 2 (commencing line 20 with Section 66410)) or any other applicable law authorizing the line 21 subdivision of land, unless the development is consistent with all line 22 objective subdivision standards in the local subdivision ordinance, line 23 and either of the following apply: line 24 (A) The development has received or will receive financing or line 25 funding by means of a low-income housing tax credit and is subject line 26 to the requirement that prevailing wages be paid pursuant to line 27 subparagraph (A) of paragraph (8). line 28 (B) The development is subject to the requirement that line 29 prevailing wages be paid, and a skilled and trained workforce used, line 30 pursuant to paragraph (8). line 31 (10) The development shall not be upon an existing parcel of line 32 land or site that is governed under the Mobilehome Residency Law line 33 (Chapter 2.5 (commencing with Section 798) of Title 2 of Part 2 line 34 of Division 2 of the Civil Code), the Recreational Vehicle Park line 35 Occupancy Law (Chapter 2.6 (commencing with Section 799.20) line 36 of Title 2 of Part 2 of Division 2 of the Civil Code), the line 37 Mobilehome Parks Act (Part 2.1 (commencing with Section 18200) line 38 of Division 13 of the Health and Safety Code), or the Special line 39 Occupancy Parks Act (Part 2.3 (commencing with Section 18860) line 40 of Division 13 of the Health and Safety Code). 96 — 20 — SB 1385 237 line 1 (b) (1) If a local government determines that a development line 2 submitted pursuant to this section is in conflict with any of the line 3 objective planning standards specified in subdivision (a), it shall line 4 provide the development proponent written documentation of line 5 which standard or standards the development conflicts with, and line 6 an explanation for the reason or reasons the development conflicts line 7 with that standard or standards, as follows: line 8 (A) Within 60 days of submittal of the development to the local line 9 government pursuant to this section if the development contains line 10 150 or fewer housing units. line 11 (B) Within 90 days of submittal of the development to the local line 12 government pursuant to this section if the development contains line 13 more than 150 housing units. line 14 (2) If the local government fails to provide the required line 15 documentation pursuant to paragraph (1), the development shall line 16 be deemed to satisfy the objective planning standards specified in line 17 subdivision (a). line 18 (3) For purposes of this section, a development is consistent line 19 with the objective planning standards specified in subdivision (a) line 20 if there is substantial evidence that would allow a reasonable person line 21 to conclude that the development is consistent with the objective line 22 planning standards. line 23 (c) (1) Any design review or public oversight of the line 24 development may be conducted by the local government’s planning line 25 commission or any equivalent board or commission responsible line 26 for review and approval of development projects, or the city council line 27 or board of supervisors, as appropriate. That design review or line 28 public oversight shall be objective and be strictly focused on line 29 assessing compliance with criteria required for streamlined projects, line 30 as well as any reasonable objective design standards published line 31 and adopted by ordinance or resolution by a local jurisdiction line 32 before submission of a development application, and shall be line 33 broadly applicable to development within the jurisdiction. That line 34 design review or public oversight shall be completed as follows line 35 and shall not in any way inhibit, chill, or preclude the ministerial line 36 approval provided by this section or its effect, as applicable: line 37 (A) Within 90 days of submittal of the development to the local line 38 government pursuant to this section if the development contains line 39 150 or fewer housing units. 96 SB 1385 — 21 — 238 line 1 (B) Within 180 days of submittal of the development to the line 2 local government pursuant to this section if the development line 3 contains more than 150 housing units. line 4 (2) If the development is consistent with the requirements of line 5 subparagraph (A) or (B) of paragraph (9) of subdivision (a) and line 6 is consistent with all objective subdivision standards in the local line 7 subdivision ordinance, an application for a subdivision pursuant line 8 to the Subdivision Map Act (Division 2 (commencing with Section line 9 66410)) shall be exempt from the requirements of the California line 10 Environmental Quality Act (Division 13 (commencing with Section line 11 21000) of the Public Resources Code) and shall be subject to the line 12 public oversight timelines set forth in paragraph (1). line 13 (d) (1) Notwithstanding any other law, a local government, line 14 whether or not it has adopted an ordinance governing automobile line 15 parking requirements in multifamily developments, shall not line 16 impose automobile parking standards for a streamlined line 17 development that was approved pursuant to this section in any of line 18 the following instances: line 19 (A) The development is located within one-half mile of public line 20 transit. line 21 (B) The development is located within an architecturally and line 22 historically significant historic district. line 23 (C) When on-street parking permits are required but not offered line 24 to the occupants of the development. line 25 (D) When there is a car share vehicle located within one block line 26 of the development. line 27 (2) If the development does not fall within any of the categories line 28 described in paragraph (1), the local government shall not impose line 29 automobile parking requirements for streamlined developments line 30 approved pursuant to this section that exceed one parking space line 31 per unit. line 32 (e) (1) If a local government approves a development pursuant line 33 to this section, then, notwithstanding any other law, that approval line 34 shall not expire if the project includes public investment in housing line 35 affordability, beyond tax credits, where 50 percent of the units are line 36 affordable to households making at or below 80 percent of the area line 37 median income. line 38 (2) (A) If a local government approves a development pursuant line 39 to this section and the project does not include 50 percent of the line 40 units affordable to households making at or below 80 percent of 96 — 22 — SB 1385 239 line 1 the area median income, that approval shall remain valid for three line 2 years from the date of the final action establishing that approval, line 3 or if litigation is filed challenging that approval, from the date of line 4 the final judgment upholding that approval. Approval shall remain line 5 valid for a project provided that vertical construction of the line 6 development has begun and is in progress. For purposes of this line 7 subdivision, “in progress” means one of the following: line 8 (i) The construction has begun and has not ceased for more than line 9 180 days. line 10 (ii) If the development requires multiple building permits, an line 11 initial phase has been completed, and the project proponent has line 12 applied for and is diligently pursuing a building permit for a line 13 subsequent phase, provided that once it has been issued, the line 14 building permit for the subsequent phase does not lapse. line 15 (B) Notwithstanding subparagraph (A), a local government may line 16 grant a project a one-time, one-year extension if the project line 17 proponent can provide documentation that there has been line 18 significant progress toward getting the development construction line 19 ready, such as filing a building permit application. line 20 (3) If a local government approves a development pursuant to line 21 this section, that approval shall remain valid for three years from line 22 the date of the final action establishing that approval and shall line 23 remain valid thereafter for a project so long as vertical construction line 24 of the development has begun and is in progress. Additionally, the line 25 development proponent may request, and the local government line 26 shall have discretion to grant, an additional one-year extension to line 27 the original three-year period. The local government’s action and line 28 discretion in determining whether to grant the foregoing extension line 29 shall be limited to considerations and processes set forth in this line 30 section. line 31 (f) (1) A local government shall not adopt or impose any line 32 requirement, including, but not limited to, increased fees or line 33 inclusionary housing requirements, that applies to a project solely line 34 or partially on the basis that the project is eligible to receive line 35 ministerial or streamlined approval pursuant to this section. line 36 (2) A local government shall issue a subsequent permit required line 37 for a development approved under this section if the application line 38 substantially complies with the development as it was approved line 39 pursuant to subdivision (b). Upon receipt of an application for a line 40 subsequent permit, the local government shall process the permit 96 SB 1385 — 23 — 240 line 1 without unreasonable delay and shall not impose any procedure line 2 or requirement that is not imposed on projects that are not approved line 3 pursuant to this section. Issuance of subsequent permits shall line 4 implement the approved development, and review of the permit line 5 application shall not inhibit, chill, or preclude the development. line 6 For purposes of this paragraph, a “subsequent permit” means a line 7 permit required subsequent to receiving approval under subdivision line 8 (b), and includes, but is not limited to, demolition, grading, and line 9 building permits and final maps, if necessary. line 10 (g) (1) This section shall not affect a development proponent’s line 11 ability to use any alternative streamlined by right permit processing line 12 adopted by a local government, including the provisions of line 13 subdivision (i) of Section 65583.2. line 14 (2) This section shall not prevent a development from also line 15 qualifying as a housing development project entitled to the line 16 protections of Section 65589.5. This paragraph does not constitute line 17 a change in, but is declaratory of, existing law. line 18 (h) The California Environmental Quality Act (Division 13 line 19 (commencing with Section 21000) of the Public Resources Code) line 20 does not apply to actions taken by a state agency, local government, line 21 or the San Francisco Bay Area Rapid Transit District to: line 22 (1) Lease, convey, or encumber land owned by the local line 23 government or the San Francisco Bay Area Rapid Transit District line 24 or to facilitate the lease, conveyance, or encumbrance of land line 25 owned by the local government, or for the lease of land owned by line 26 the San Francisco Bay Area Rapid Transit District in association line 27 with an eligible TOD project, as defined pursuant to Section line 28 29010.1 of the Public Utilities Code, nor to any decisions line 29 associated with that lease, or to provide financial assistance to a line 30 development that receives streamlined approval pursuant to this line 31 section that is to be used for housing for persons and families of line 32 very low, low, or moderate income, as defined in Section 50093 line 33 of the Health and Safety Code. line 34 (2) Approve improvements located on land owned by the local line 35 government or the San Francisco Bay Area Rapid Transit District line 36 that are necessary to implement a development that receives line 37 streamlined approval pursuant to this section that is to be used for line 38 housing for persons and families of very low, low, or moderate line 39 income, as defined in Section 50093 of the Health and Safety Code. 96 — 24 — SB 1385 241 line 1 (i) For purposes of this section, the following terms have the line 2 following meanings: line 3 (1) “Affordable housing cost” has the same meaning as set forth line 4 in Section 50052.5 of the Health and Safety Code. line 5 (2) “Affordable rent” has the same meaning as set forth in line 6 Section 50053 of the Health and Safety Code. line 7 (3) “Department” means the Department of Housing and line 8 Community Development. line 9 (4) “Development proponent” means the developer who submits line 10 an application for streamlined approval pursuant to this section. line 11 (5) “Completed entitlements” means a housing development line 12 that has received all the required land use approvals or entitlements line 13 necessary for the issuance of a building permit. line 14 (6) “Locality” or “local government” means a city, including a line 15 charter city, a county, including a charter county, or a city and line 16 county, including a charter city and county. line 17 (7) “Moderate income housing units” means housing units with line 18 an affordable housing cost or affordable rent for persons and line 19 families of moderate income, as that term is defined in Section line 20 50093 of the Health and Safety Code. line 21 (8) “Production report” means the information reported pursuant line 22 to subparagraph (H) of paragraph (2) of subdivision (a) of Section line 23 65400. line 24 (9) “State agency” includes every state office, officer, line 25 department, division, bureau, board, and commission, but does not line 26 include the California State University or the University of line 27 California. line 28 (10) “Subsidized” means units that are price or rent restricted line 29 such that the units are affordable to households meeting the line 30 definitions of very low and lower income, as defined in Sections line 31 50079.5 and 50105 of the Health and Safety Code. line 32 (11) “Reporting period” means either of the following: line 33 (A) The first half of the regional housing needs assessment line 34 cycle. line 35 (B) The last half of the regional housing needs assessment cycle. line 36 (12) “Urban uses” means any current or former residential, line 37 commercial, public institutional, transit or transportation passenger line 38 facility, or retail use, or any combination of those uses. line 39 (j) The department may review, adopt, amend, and repeal line 40 guidelines to implement uniform standards or criteria that 96 SB 1385 — 25 — 242 line 1 supplement or clarify the terms, references, or standards set forth line 2 in this section. Any guidelines or terms adopted pursuant to this line 3 subdivision shall not be subject to Chapter 3.5 (commencing with line 4 Section 11340) of Part 1 of Division 3 of Title 2 of the Government line 5 Code. line 6 (k) The determination of whether an application for a line 7 development is subject to the streamlined ministerial approval line 8 process provided by subdivision (b) is not a “project” as defined line 9 in Section 21065 of the Public Resources Code. line 10 (l) It is the policy of the state that this section be interpreted and line 11 implemented in a manner to afford the fullest possible weight to line 12 the interest of, and the approval and provision of, increased housing line 13 supply. line 14 (m) This section shall remain in effect only until January 1, line 15 2026, and as of that date is repealed. line 16 SEC. 4. No reimbursement is required by this act pursuant to line 17 Section 6 of Article XIIIB of the California Constitution because line 18 a local agency or school district has the authority to levy service line 19 charges, fees, or assessments sufficient to pay for the program or line 20 level of service mandated by this act, within the meaning of Section line 21 17556 of the Government Code. O 96 — 26 — SB 1385 243 Senate Constitutional Amendment No. 1 Introduced by Senators Allen and Wiener (Coauthor: Senator Lara) December 3, 2018 Senate Constitutional Amendment No. 1—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by repealing Article XXXIV thereof, relating to public housing projects. legislative counsel’s digest SCA 1, as introduced, Allen. Public housing projects. The California Constitution prohibits the development, construction, or acquisition of a low-rent housing project, as defined, in any manner by any state public body until a majority of the qualified electors of the city, town, or county in which the development, construction, or acquisition of the low-rent housing project is proposed approve the project by voting in favor at an election, as specified. This measure would repeal these provisions. Vote: 2⁄3. Appropriation: no. Fiscal committee: no. State-mandated local program: no. line 1 Resolved by the Senate, the Assembly concurring, That the line 2 Legislature of the State of California at its 2018–19 Regular line 3 Session commencing on the third day of December 2018, line 4 two-thirds of the membership of each house concurring, hereby line 5 proposes to the people of the State of California, that the line 6 Constitution of the State be amended as follows: line 7 That Article XXXIV thereof is repealed. O 99 244 AMENDED IN SENATE JUNE 18, 2020 AMENDED IN SENATE APRIL 1, 2020 SENATE BILL No. 1299 Introduced by Senator Portantino (Coauthors: Senators Beall and Galgiani) February 21, 2020 An act to add Chapter 2.9 (commencing with Section 50495) to Part 2 of Division 31 of the Health and Safety Code, relating to housing. legislative counsel’s digest SB 1299, as amended, Portantino. Housing development: incentives: rezoning of idle retail sites. Existing law establishes, among other housing programs, the Workforce Housing Reward Program, which requires the Department of Housing and Community Development to make local assistance grants to cities, counties, and cities and counties that provide land use approval to housing developments that are affordable to very low and low-income households. This bill, upon appropriation by the Legislature, would require the department to administer a program to provide incentives in the form of grants allocated as provided to local governments that rezone idle sites used for a big box retailer or a commercial shopping center to instead allow the development of workforce housing. The bill would define various terms for these purposes. In order to be eligible for a grant, the bill would require a local government, among other things, to apply to the department for an allocation of grant funds and provide documentation that it has met specified requirements. The bill would make the allocation of these grants subject to appropriation by the Legislature. The bill would require the department to issue a Notice of 97 245 Funding Availability for each calendar year in which funds are made available for these purposes. The bill would require that the amount of grant awarded to each eligible local government be equal to the average amount of annual sales and use tax revenue generated by each idle site identified in the local government’s application over the 7 years immediately preceding the date of the local government’s application, subject to certain modifications, and that the local government receive this amount for each of the 7 years following the date of the local government’s application. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows: line 1 SECTION 1. Chapter 2.9 (commencing with Section 50495) line 2 is added to Part 2 of Division 31 of the Health and Safety Code, line 3 to read: line 4 line 5 Chapter 2.9. Retail Site Rezoning Incentives line 6 line 7 50495. For purposes of this chapter: line 8 (a) “Big box retailer” means a store of greater than 75,000 square line 9 feet of gross buildable area that generates or previously generated line 10 sales or use tax pursuant to the Bradley-Burns Uniform Local Sales line 11 and Use Tax Law (Part 1.5 (commencing with Section 7200) of line 12 Division 2 of the Revenue and Taxation Code). line 13 (b) “Commercial shopping center” means a group of two or line 14 more stores that maintain a common parking lot for patrons of line 15 those stores. line 16 (c) “Idle” means that at least 80 percent of the leased or rentable line 17 square footage of the big box retailer or commercial shopping line 18 center site is not occupied for at least a 12-month calendar period. line 19 (d) “Local government” means a city, county, or city and county. line 20 (e) “NOFA” means Notice of Funding Availability. line 21 (f) “Sales and use tax revenue” means the cumulative amount line 22 of revenue generated by taxes imposed by a local government in line 23 accordance with both of the following laws: line 24 (1) The Bradley-Burns Uniform Local Sales and Use Tax Law line 25 (Part 1.5 (commencing with Section 7200) of Division 2 of the line 26 Revenue and Taxation Code). 97 — 2 — SB 1299 246 line 1 (2) The Transactions and Use Tax Law (Part 1.6 (commencing line 2 with Section 7251) of Division 2 of the Revenue and Taxation line 3 Code). line 4 (g) (1) “Use by right” means that the local government’s review line 5 of a workforce housing does not require a conditional use permit, line 6 planned unit development permit, or other discretionary local line 7 government review or approval that would constitute a “project” line 8 for purposes of Division 13 (commencing with Section 21000) of line 9 the Public Resources Code. Any subdivision of the sites shall be line 10 subject to all laws, including, but not limited to, the local line 11 government ordinance implementing the Subdivision Map Act line 12 (Division 2 (commencing with Section 66410) of Title 7 of the line 13 Government Code). line 14 (2) A local ordinance may provide that “use by right” does not line 15 exempt the use from design review. However, that design review line 16 shall not constitute a “project” for purposes of Division 13 line 17 (commencing with Section 21000) of the Public Resources Code. line 18 (h) “Workforce housing” means an owner-occupied or rental line 19 housing development with an affordable housing cost or affordable line 20 rent to households with a household income greater than or equal line 21 to 80 percent of the area median income, but no more than 120 line 22 percent of the area median income, for the area in which the big line 23 box retailer or commercial shopping center site is located, as line 24 determined pursuant to Section 50093. line 25 50495.2. Upon appropriation by the Legislature, the department line 26 shall administer a program to provide incentives in the form of line 27 grants allocated in accordance with this chapter to local line 28 governments that rezone idle sites used for a big box retailer or a line 29 commercial shopping center to instead allow the development of line 30 workforce housing. line 31 50495.4. In order to be eligible for a grant under this chapter, line 32 a local government shall do all of the following: line 33 (a) Rezone one or more idle sites used for a big box retailer or line 34 commercial shopping center to allow workforce housing as a use line 35 by right. line 36 (b) Approve and issue a certificate of occupancy for a workforce line 37 housing development on each site rezoned pursuant to subdivision line 38 (a) for which the local government seeks an incentive pursuant to line 39 this chapter. 97 SB 1299 — 3 — 247 line 1 (c) Apply to the department for an allocation of grant funds and line 2 provide documentation that it has complied with the requirements line 3 of this section. line 4 50495.6. (a) Upon appropriation by the Legislature for line 5 purposes of this chapter, the department shall allocate a grant to line 6 each local government that meets the criteria specified in Section line 7 50495.4 in an amount determined pursuant to subdivision (b). For line 8 each calendar year in which funds are made available for purposes line 9 of this chapter, the department shall issue a NOFA for the line 10 distribution of funds to a local government during the 12-month line 11 period subsequent to the NOFA. The department shall accept line 12 applications from applicants at the end of the 12-month period. line 13 (b) The amount of grant provided to each eligible local line 14 government, in each year for which the local government may line 15 receive an allocation pursuant to subdivision (c), shall be as line 16 follows: line 17 (1) Subject to paragraphs (2) and (3), the annual amount of grant line 18 shall be equal to the average amount of annual sales and use tax line 19 revenue generated by each idle site identified in the local line 20 government’s application that meets the criteria specified in line 21 subdivisions (a) and (b) of Section 50495.4 over the seven years line 22 immediately preceding the date of the local government’s line 23 application. line 24 (2) For any idle big box retailer or commercial shopping center line 25 site rezoned by a local government in accordance with subdivision line 26 (a) of Section 50495.4 to allow mixed uses, the amount of grant line 27 pursuant to paragraph (1) shall be reduced in proportion to the line 28 percentage of the square footage of the development that is used line 29 for a use other than workforce housing. line 30 (3) If for any NOFA the amount of funds made available for line 31 purposes of this chapter is insufficient to provide each eligible line 32 local government with the full amount specified in paragraphs (1) line 33 and (2), based on the number of applications received, the line 34 department shall reduce the amount of grant funds awarded to each line 35 eligible local government proportionally. line 36 (c) The department shall allocate the amount determined line 37 pursuant to subdivision (b) to each eligible local government line 38 annually for each of the seven years following the date of the local line 39 government’s application. 97 — 4 — SB 1299 248 line 1 50495.8. The department may adopt guidelines for purposes line 2 of this chapter in accordance with Chapter 3.5 (commencing with line 3 Section 11340) of Part 1 of Division 3 of Title 2 of the Government line 4 Code. line 5 50495.8. The department may review, adopt, amend, and repeal line 6 guidelines to implement uniform standards or criteria that line 7 supplement or clarify the terms, references, or standards set forth line 8 in this chapter. Any guidelines or terms adopted pursuant to this line 9 chapter shall not be subject to Chapter 3.5 (commencing with line 10 Section 11340) of Part 1 of Division 3 of Title 2 of the Government line 11 Code. O 97 SB 1299 — 5 — 249 AMENDED IN ASSEMBLY MAY 22, 2020 AMENDED IN ASSEMBLY MAY 11, 2020 california legislature—2019–20 regular session ASSEMBLY BILL No. 2345 Introduced by Assembly Members Gonzalez and Chiu February 18, 2020 An act to amend Section Sections 65400 and 65915 of the Government Code, relating to housing. legislative counsel’s digest AB 2345, as amended, Gonzalez. Planning and zoning: density bonuses: annual report: affordable housing. Existing (1) The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. That law requires the planning agency of a city or county to provide by April 1 of each year an annual report to, among other entities, the Department of Housing and Community Development that includes, among other specified information, the number of net new units of housing that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, as provided. This bill would require that the annual report include specified information regarding density bonuses granted in accordance with specified law. (2) Existing law, known as the Density Bonus Law, requires a city or county city, county, or city and county to provide a developer that proposes a housing development within the jurisdictional boundaries 97 250 of that city or county city, county, or city and county with a density bonus and other incentives or concessions for the production of lower income housing units, or for the donation of land within the development, if the developer agrees to construct a specified percentage of units for very low income, low-income, or moderate-income households or qualifying residents and meets other requirements. Existing law provides for the calculation of the amount of density bonus for each type of housing development that qualifies under these provisions. Existing law specifies the number of incentives or concessions that an applicant can receive. Existing law specifies requires that an applicant shall receive 3 incentives or concessions for projects that include at least 30% of the total units for lower income households, at least 15% for very low income households, or at least 30% for persons or families of moderate income in a common interest development. Existing law specifies requires that an applicant shall receive 4 incentives or concessions for projects in which 100% of the total units are for lower income households, as specified. This bill, instead, would authorize an applicant to receive 3 incentives or concessions for projects that include at least 30% of the total units for lower income households, at least 12% of the total units for very low income households, or at least 30% for persons or families of moderate income in a common interest development. The bill would also authorize an applicant to receive 4 and 5 incentives or concessions, as applicable, for projects in which greater percentages of the total units are for lower income households, very low income households, or for persons or families of moderate income in a common interest development, as specified. The bill would also authorize an applicant to receive 6 incentives or concessions for projects in which 100% of the total units are for lower income households, as specified. Existing law provides that a housing development that receives a waiver from any maximum controls on density, as specified, shall not be is not eligible for, and shall not receive, prohibits such a development from receiving, a waiver or reduction of development standards. This bill, instead, would provide that a housing development that receives a waiver from any maximum controls on density, shall only be is only eligible for a specified waiver or reduction of development standards, unless the city, county, or city and county agrees to additional waivers or reductions of development standards. Existing law specifies that the density bonus, or the amount of the density increase over the otherwise allowable gross residential density, 97 — 2 — AB 2345 251 to which an applicant is entitled varies according to the amount by which the percentage of affordable housing units in a development exceeds a specified base percentage for units for lower income households, very low income households, senior citizens, persons and families of moderate income, transitional foster youth, or lower income students, as specified. Existing law authorizes a maximum density bonus of 35% for a housing development in which 20% or more of the total units are for lower income households. Existing law authorizes a maximum density bonus of 35% for a housing development in which 11% or more of the total units are for very low income households. Existing law authorizes a maximum density bonus of 35% for housing developments in which 40% or more of the total units are for persons and families of moderate income. This bill would include a maximum density bonus for a housing development in which 16% of the total units are for lower income households and would increase the maximum density bonus, to up to 50%, for construction of a housing development in which a greater percentage than that described above of total units are for lower income households, very low income households, and persons and families of moderate income, as specified. By adding to the duties of local planning officials with respect to the award of density bonuses, this bill would impose a state-mandated local program. Existing law specifies that, (3) Existing law prohibits, except as provided, upon the request of a developer, a city, county, or city and county shall not require from requiring a vehicular parking ratio for a development that qualifies for a density bonus that exceeds specified amounts of onsite parking per bedroom. Existing law also specifies the parking ratios applicable to a development that include a maximum percentage of low-income or very low income units, that is located within 1⁄2 mile of a transit stop, and that provides unobstructed access to the transit stop from the development. This bill would decrease the maximum ratio of vehicular parking for developments with 2 to 3 bedrooms, as specified. This bill would define the term “natural or constructed impediments” for purposes of determining whether a development has unobstructed access to a transit stop. The bill would specify require that the measurement of the distance of a development from a transit stop shall be measured from any point on the property of the proposed development to any point on the property 97 AB 2345 — 3 — 252 where the transit stop is located. The bill would authorize a developer to request that a city, county, or city and county not impose vehicular parking standards if the development meets specified requirements, affordability requirements and either (A) provides unobstructed access to a major transit stop, as defined, or (B) is a for-rent housing development for individuals who are 62 years of age or older, and older that will have either paratransit service or unobstructed access to a fixed bus route, as specified. (4) Existing law requires a city, county, or city and county to adopt an ordinance that specifies how it will implement the Density Bonus Law, but provides that failure to adopt an ordinance does not relieve a city, county, or city and county from complying with that law. Existing law also authorizes a city, county, or city and county, if permitted by local ordinance, to grant a density bonus greater than what is described in the Density Bonus Law or to grant a proportionately lower density bonus than what is required by the Density Bonus Law for developments that do not meet the requirements of that law. This bill, notwithstanding any other law, would provide that a city, county, or city and county that has adopted an ordinance pursuant to the Density Bonus Law that, as of the date immediately prior to the effective date of bill, provides for density bonuses that exceed the density bonuses required by the Density Bonus Law is not required to amend or otherwise update its ordinance to comply with the amendments made by this bill. (5) By adding to the duties of local planning officials with respect to preparing and submitting the above-described annual report to the Department of Housing and Community Development and awarding density bonuses, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. The people of the State of California do enact as follows: line 1 SECTION 1. Section 65400 of the Government Code is line 2 amended to read: 97 — 4 — AB 2345 253 line 1 65400. (a) After the legislative body has adopted all or part line 2 of a general plan, the planning agency shall do both of the line 3 following: line 4 (1) Investigate and make recommendations to the legislative line 5 body regarding reasonable and practical means for implementing line 6 the general plan or element of the general plan, so that it will serve line 7 as an effective guide for orderly growth and development, line 8 preservation and conservation of open-space land and natural line 9 resources, and the efficient expenditure of public funds relating to line 10 the subjects addressed in the general plan. line 11 (2) Provide by April 1 of each year an annual report to the line 12 legislative body, the Office of Planning and Research, and the line 13 Department of Housing and Community Development that includes line 14 all of the following: line 15 (A) The status of the plan and progress in its implementation. line 16 (B) The progress in meeting its share of regional housing needs line 17 determined pursuant to Section 65584 and local efforts to remove line 18 governmental constraints to the maintenance, improvement, and line 19 development of housing pursuant to paragraph (3) of subdivision line 20 (c) of Section 65583. line 21 The housing element portion of the annual report, as required line 22 by this paragraph, shall be prepared through the use of standards, line 23 forms, and definitions adopted by the Department of Housing and line 24 Community Development. The department may review, adopt, line 25 amend, and repeal the standards, forms, or definitions, to line 26 implement this article. Any standards, forms, or definitions adopted line 27 to implement this article shall not be subject to Chapter 3.5 line 28 (commencing with Section 11340) of Part 1 of Division 3 of Title line 29 2. Before and after adoption of the forms, the housing element line 30 portion of the annual report shall include a section that describes line 31 the actions taken by the local government towards completion of line 32 the programs and status of the local government’s compliance with line 33 the deadlines in its housing element. That report shall be considered line 34 at an annual public meeting before the legislative body where line 35 members of the public shall be allowed to provide oral testimony line 36 and written comments. line 37 The report may include the number of units that have been line 38 substantially rehabilitated, converted from nonaffordable to line 39 affordable by acquisition, and preserved consistent with the line 40 standards set forth in paragraph (2) of subdivision (c) of Section 97 AB 2345 — 5 — 254 line 1 65583.1. The report shall document how the units meet the line 2 standards set forth in that subdivision. line 3 (C) The number of housing development applications received line 4 in the prior year. line 5 (D) The number of units included in all development line 6 applications in the prior year. line 7 (E) The number of units approved and disapproved in the prior line 8 year. line 9 (F) The degree to which its approved general plan complies line 10 with the guidelines developed and adopted pursuant to Section line 11 65040.2 and the date of the last revision to the general plan. line 12 (G) A listing of sites rezoned to accommodate that portion of line 13 the city’s or county’s share of the regional housing need for each line 14 income level that could not be accommodated on sites identified line 15 in the inventory required by paragraph (1) of subdivision (c) of line 16 Section 65583 and Section 65584.09. The listing of sites shall also line 17 include any additional sites that may have been required to be line 18 identified by Section 65863. line 19 (H) The number of net new units of housing, including both line 20 rental housing and for-sale housing and any units that the County line 21 of Napa or the City of Napa may report pursuant to an agreement line 22 entered into pursuant to Section 65584.08, that have been issued line 23 a completed entitlement, a building permit, or a certificate of line 24 occupancy, thus far in the housing element cycle, and the income line 25 category, by area median income category, that each unit of line 26 housing satisfies. That production report shall, for each income line 27 category described in this subparagraph, distinguish between the line 28 number of rental housing units and the number of for-sale units line 29 that satisfy each income category. The production report shall line 30 include, for each entitlement, building permit, or certificate of line 31 occupancy, a unique site identifier that must include the assessor’s line 32 parcel number, but may include street address, or other identifiers. line 33 (I) The number of applications submitted pursuant to subdivision line 34 (a) of Section 65913.4, the location and the total number of line 35 developments approved pursuant to subdivision (b) of Section line 36 65913.4, the total number of building permits issued pursuant to line 37 subdivision (b) of Section 65913.4, the total number of units line 38 including both rental housing and for-sale housing by area median line 39 income category constructed using the process provided for in line 40 subdivision (b) of Section 65913.4. 97 — 6 — AB 2345 255 line 1 (J) If the city or county has received funding pursuant to the line 2 Local Government Planning Support Grants Program (Chapter 3.1 line 3 (commencing with Section 50515) of Part 2 of Division 31 of the line 4 Health and Safety Code), the information required pursuant to line 5 subdivision (a) of Section 50515.04 of the Health and Safety Code. line 6 (K) The following information with respect to density bonuses line 7 granted in accordance with Section 65915: line 8 (i) The number of density bonus applications received by the line 9 city or county. line 10 (ii) The number of density bonus applications approved by the line 11 city or county. line 12 (iii) Data from a sample of projects, selected by the planning line 13 agency, approved to receive a density bonus from the city or line 14 county, including, but not limited to, the percentage of density line 15 bonus received, the percentage of affordable units in the project, line 16 the number of other incentives or concessions granted to the line 17 project, and any waiver or reduction of parking standards for the line 18 project. line 19 (K) line 20 (L) The Department of Housing and Community Development line 21 shall post a report submitted pursuant to this paragraph on its line 22 internet website within a reasonable time of receiving the report. line 23 (b) If a court finds, upon a motion to that effect, that a city, line 24 county, or city and county failed to submit, within 60 days of the line 25 deadline established in this section, the housing element portion line 26 of the report required pursuant to subparagraph (B) of paragraph line 27 (2) of subdivision (a) that substantially complies with the line 28 requirements of this section, the court shall issue an order or line 29 judgment compelling compliance with this section within 60 days. line 30 If the city, county, or city and county fails to comply with the line 31 court’s order within 60 days, the plaintiff or petitioner may move line 32 for sanctions, and the court may, upon that motion, grant line 33 appropriate sanctions. The court shall retain jurisdiction to ensure line 34 that its order or judgment is carried out. If the court determines line 35 that its order or judgment is not carried out within 60 days, the line 36 court may issue further orders as provided by law to ensure that line 37 the purposes and policies of this section are fulfilled. This line 38 subdivision applies to proceedings initiated on or after the first line 39 day of October following the adoption of forms and definitions by line 40 the Department of Housing and Community Development pursuant 97 AB 2345 — 7 — 256 line 1 to paragraph (2) of subdivision (a), but no sooner than six months line 2 following that adoption. line 3 SECTION 1. line 4 SEC. 2. Section 65915 of the Government Code is amended line 5 to read: line 6 65915. (a) (1) When an applicant seeks a density bonus for line 7 a housing development within, or for the donation of land for line 8 housing within, the jurisdiction of a city, county, or city and county, line 9 that local government shall comply with this section. A city, line 10 county, or city and county shall adopt an ordinance that specifies line 11 how compliance with this section will be implemented. Failure line 12 Except as otherwise provided in subdivision (s), failure to adopt line 13 an ordinance shall not relieve a city, county, or city and county line 14 from complying with this section. line 15 (2) A local government shall not condition the submission, line 16 review, or approval of an application pursuant to this chapter on line 17 the preparation of an additional report or study that is not otherwise line 18 required by state law, including this section. This subdivision does line 19 not prohibit a local government from requiring an applicant to line 20 provide reasonable documentation to establish eligibility for a line 21 requested density bonus, incentives or concessions, as described line 22 in subdivision (d), waivers or reductions of development standards, line 23 as described in subdivision (e), and parking ratios, as described in line 24 subdivision (p). line 25 (3) In order to provide for the expeditious processing of a density line 26 bonus application, the local government shall do all of the line 27 following: line 28 (A) Adopt procedures and timelines for processing a density line 29 bonus application. line 30 (B) Provide a list of all documents and information required to line 31 be submitted with the density bonus application in order for the line 32 density bonus application to be deemed complete. This list shall line 33 be consistent with this chapter. line 34 (C) Notify the applicant for a density bonus whether the line 35 application is complete in a manner consistent with the timelines line 36 specified in Section 65943. line 37 (D) (i) If the local government notifies the applicant that the line 38 application is deemed complete pursuant to subparagraph (C), line 39 provide the applicant with a determination as to the following line 40 matters: 97 — 8 — AB 2345 257 line 1 (I) The amount of density bonus, calculated pursuant to line 2 subdivision (f), for which the applicant is eligible. line 3 (II) If the applicant requests a parking ratio pursuant to line 4 subdivision (p), the parking ratio for which the applicant is eligible. line 5 (III) If the applicant requests incentives or concessions pursuant line 6 to subdivision (d) or waivers or reductions of development line 7 standards pursuant to subdivision (e), whether the applicant has line 8 provided adequate information for the local government to make line 9 a determination as to those incentives, concessions, or waivers or line 10 reductions of development standards. line 11 (ii) Any determination required by this subparagraph shall be line 12 based on the development project at the time the application is line 13 deemed complete. The local government shall adjust the amount line 14 of density bonus and parking ratios awarded pursuant to this section line 15 based on any changes to the project during the course of line 16 development. line 17 (b) (1) A city, county, or city and county shall grant one density line 18 bonus, the amount of which shall be as specified in subdivision line 19 (f), and, if requested by the applicant and consistent with the line 20 applicable requirements of this section, incentives or concessions, line 21 as described in subdivision (d), waivers or reductions of line 22 development standards, as described in subdivision (e), and parking line 23 ratios, as described in subdivision (p), when an applicant for a line 24 housing development seeks and agrees to construct a housing line 25 development, excluding any units permitted by the density bonus line 26 awarded pursuant to this section, that will contain at least any one line 27 of the following: line 28 (A) Ten percent of the total units of a housing development for line 29 lower income households, as defined in Section 50079.5 of the line 30 Health and Safety Code. line 31 (B) Five percent of the total units of a housing development for line 32 very low income households, as defined in Section 50105 of the line 33 Health and Safety Code. line 34 (C) A senior citizen housing development, as defined in Sections line 35 51.3 and 51.12 of the Civil Code, or a mobilehome park that limits line 36 residency based on age requirements for housing for older persons line 37 pursuant to Section 798.76 or 799.5 of the Civil Code. line 38 (D) Ten percent of the total dwelling units in a common interest line 39 development, as defined in Section 4100 of the Civil Code, for line 40 persons and families of moderate income, as defined in Section 97 AB 2345 — 9 — 258 line 1 50093 of the Health and Safety Code, provided that all units in the line 2 development are offered to the public for purchase. line 3 (E) Ten percent of the total units of a housing development for line 4 transitional foster youth, as defined in Section 66025.9 of the line 5 Education Code, disabled veterans, as defined in Section 18541, line 6 or homeless persons, as defined in the federal McKinney-Vento line 7 Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). The units line 8 described in this subparagraph shall be subject to a recorded line 9 affordability restriction of 55 years and shall be provided at the line 10 same affordability level as very low income units. line 11 (F) (i) Twenty percent of the total units for lower income line 12 students in a student housing development that meets the following line 13 requirements: line 14 (I) All units in the student housing development will be used line 15 exclusively for undergraduate, graduate, or professional students line 16 enrolled full time at an institution of higher education accredited line 17 by the Western Association of Schools and Colleges or the line 18 Accrediting Commission for Community and Junior Colleges. In line 19 order to be eligible under this subclause, the developer shall, as a line 20 condition of receiving a certificate of occupancy, provide evidence line 21 to the city, county, or city and county that the developer has entered line 22 into an operating agreement or master lease with one or more line 23 institutions of higher education for the institution or institutions line 24 to occupy all units of the student housing development with line 25 students from that institution or institutions. An operating line 26 agreement or master lease entered into pursuant to this subclause line 27 is not violated or breached if, in any subsequent year, there are not line 28 sufficient students enrolled in an institution of higher education line 29 to fill all units in the student housing development. line 30 (II) The applicable 20-percent units will be used for lower line 31 income students. For purposes of this clause, “lower income line 32 students” means students who have a household income and asset line 33 level that does not exceed the level for Cal Grant A or Cal Grant line 34 B award recipients as set forth in paragraph (1) of subdivision (k) line 35 of Section 69432.7 of the Education Code. The eligibility of a line 36 student under this clause shall be verified by an affidavit, award line 37 letter, or letter of eligibility provided by the institution of higher line 38 education that the student is enrolled in, as described in subclause line 39 (I), or by the California Student Aid Commission that the student line 40 receives or is eligible for financial aid, including an institutional 97 — 10 — AB 2345 259 line 1 grant or fee waiver, from the college or university, the California line 2 Student Aid Commission, or the federal government shall be line 3 sufficient to satisfy this subclause. line 4 (III) The rent provided in the applicable units of the development line 5 for lower income students shall be calculated at 30 percent of 65 line 6 percent of the area median income for a single-room occupancy line 7 unit type. line 8 (IV) The development will provide priority for the applicable line 9 affordable units for lower income students experiencing line 10 homelessness. A homeless service provider, as defined in paragraph line 11 (3) of subdivision (e) of Section 103577 of the Health and Safety line 12 Code, or institution of higher education that has knowledge of a line 13 person’s homeless status may verify a person’s status as homeless line 14 for purposes of this subclause. line 15 (ii) For purposes of calculating a density bonus granted pursuant line 16 to this subparagraph, the term “unit” as used in this section means line 17 one rental bed and its pro rata share of associated common area line 18 facilities. The units described in this subparagraph shall be subject line 19 to a recorded affordability restriction of 55 years. line 20 (G) One hundred percent of the total units, exclusive of a line 21 manager’s unit or units, are for lower income households, as line 22 defined by Section 50079.5 of the Health and Safety Code, except line 23 that up to 20 percent of the total units in the development may be line 24 for moderate-income households, as defined in Section 50053 of line 25 the Health and Safety Code. line 26 (2) For purposes of calculating the amount of the density bonus line 27 pursuant to subdivision (f), an applicant who requests a density line 28 bonus pursuant to this subdivision shall elect whether the bonus line 29 shall be awarded on the basis of subparagraph (A), (B), (C), (D), line 30 (E), (F), or (G) of paragraph (1). line 31 (3) For the purposes of this section, “total units,” “total dwelling line 32 units,” or “total rental beds” does not include units added by a line 33 density bonus awarded pursuant to this section or any local law line 34 granting a greater density bonus. line 35 (c) (1) (A) An applicant shall agree to, and the city, county, line 36 or city and county shall ensure, the continued affordability of all line 37 very low and low-income rental units that qualified the applicant line 38 for the award of the density bonus for 55 years or a longer period line 39 of time if required by the construction or mortgage financing 97 AB 2345 — 11 — 260 line 1 assistance program, mortgage insurance program, or rental subsidy line 2 program. line 3 (B) (i) Except as otherwise provided in clause (ii), rents for the line 4 lower income density bonus units shall be set at an affordable rent, line 5 as defined in Section 50053 of the Health and Safety Code. line 6 (ii) For housing developments meeting the criteria of line 7 subparagraph (G) of paragraph (1) of subdivision (b), rents for all line 8 units in the development, including both base density and density line 9 bonus units, shall be as follows: line 10 (I) The rent for at least 20 percent of the units in the line 11 development shall be set at an affordable rent, as defined in Section line 12 50053 of the Health and Safety Code. line 13 (II) The rent for the remaining units in the development shall line 14 be set at an amount consistent with the maximum rent levels for line 15 a housing development that receives an allocation of state or federal line 16 low-income housing tax credits from the California Tax Credit line 17 Allocation Committee. line 18 (2) An applicant shall agree to, and the city, county, or city and line 19 county shall ensure that, the initial occupant of all for-sale units line 20 that qualified the applicant for the award of the density bonus are line 21 persons and families of very low, low, or moderate income, as line 22 required, and that the units are offered at an affordable housing line 23 cost, as that cost is defined in Section 50052.5 of the Health and line 24 Safety Code. The local government shall enforce an equity sharing line 25 agreement, unless it is in conflict with the requirements of another line 26 public funding source or law. The following apply to the equity line 27 sharing agreement: line 28 (A) Upon resale, the seller of the unit shall retain the value of line 29 any improvements, the downpayment, and the seller’s proportionate line 30 share of appreciation. The local government shall recapture any line 31 initial subsidy, as defined in subparagraph (B), and its proportionate line 32 share of appreciation, as defined in subparagraph (C), which line 33 amount shall be used within five years for any of the purposes line 34 described in subdivision (e) of Section 33334.2 of the Health and line 35 Safety Code that promote home ownership. line 36 (B) For purposes of this subdivision, the local government’s line 37 initial subsidy shall be equal to the fair market value of the home line 38 at the time of initial sale minus the initial sale price to the line 39 moderate-income household, plus the amount of any downpayment line 40 assistance or mortgage assistance. If upon resale the market value 97 — 12 — AB 2345 261 line 1 is lower than the initial market value, then the value at the time of line 2 the resale shall be used as the initial market value. line 3 (C) For purposes of this subdivision, the local government’s line 4 proportionate share of appreciation shall be equal to the ratio of line 5 the local government’s initial subsidy to the fair market value of line 6 the home at the time of initial sale. line 7 (3) (A) An applicant shall be ineligible for a density bonus or line 8 any other incentives or concessions under this section if the housing line 9 development is proposed on any property that includes a parcel or line 10 parcels on which rental dwelling units are or, if the dwelling units line 11 have been vacated or demolished in the five-year period preceding line 12 the application, have been subject to a recorded covenant, line 13 ordinance, or law that restricts rents to levels affordable to persons line 14 and families of lower or very low income; subject to any other line 15 form of rent or price control through a public entity’s valid exercise line 16 of its police power; or occupied by lower or very low income line 17 households, unless the proposed housing development replaces line 18 those units, and either of the following applies: line 19 (i) The proposed housing development, inclusive of the units line 20 replaced pursuant to this paragraph, contains affordable units at line 21 the percentages set forth in subdivision (b). line 22 (ii) Each unit in the development, exclusive of a manager’s unit line 23 or units, is affordable to, and occupied by, either a lower or very line 24 low income household. line 25 (B) For the purposes of this paragraph, “replace” shall mean line 26 either of the following: line 27 (i) If any dwelling units described in subparagraph (A) are line 28 occupied on the date of application, the proposed housing line 29 development shall provide at least the same number of units of line 30 equivalent size to be made available at affordable rent or affordable line 31 housing cost to, and occupied by, persons and families in the same line 32 or lower income category as those households in occupancy. If line 33 the income category of the household in occupancy is not known, line 34 it shall be rebuttably presumed that lower income renter households line 35 occupied these units in the same proportion of lower income renter line 36 households to all renter households within the jurisdiction, as line 37 determined by the most recently available data from the United line 38 States Department of Housing and Urban Development’s line 39 Comprehensive Housing Affordability Strategy database. For line 40 unoccupied dwelling units described in subparagraph (A) in a 97 AB 2345 — 13 — 262 line 1 development with occupied units, the proposed housing line 2 development shall provide units of equivalent size to be made line 3 available at affordable rent or affordable housing cost to, and line 4 occupied by, persons and families in the same or lower income line 5 category as the last household in occupancy. If the income category line 6 of the last household in occupancy is not known, it shall be line 7 rebuttably presumed that lower income renter households occupied line 8 these units in the same proportion of lower income renter line 9 households to all renter households within the jurisdiction, as line 10 determined by the most recently available data from the United line 11 States Department of Housing and Urban Development’s line 12 Comprehensive Housing Affordability Strategy database. All line 13 replacement calculations resulting in fractional units shall be line 14 rounded up to the next whole number. If the replacement units will line 15 be rental dwelling units, these units shall be subject to a recorded line 16 affordability restriction for at least 55 years. If the proposed line 17 development is for-sale units, the units replaced shall be subject line 18 to paragraph (2). line 19 (ii) If all dwelling units described in subparagraph (A) have line 20 been vacated or demolished within the five-year period preceding line 21 the application, the proposed housing development shall provide line 22 at least the same number of units of equivalent size as existed at line 23 the highpoint of those units in the five-year period preceding the line 24 application to be made available at affordable rent or affordable line 25 housing cost to, and occupied by, persons and families in the same line 26 or lower income category as those persons and families in line 27 occupancy at that time, if known. If the incomes of the persons line 28 and families in occupancy at the highpoint is not known, it shall line 29 be rebuttably presumed that low-income and very low income line 30 renter households occupied these units in the same proportion of line 31 low-income and very low income renter households to all renter line 32 households within the jurisdiction, as determined by the most line 33 recently available data from the United States Department of line 34 Housing and Urban Development’s Comprehensive Housing line 35 Affordability Strategy database. All replacement calculations line 36 resulting in fractional units shall be rounded up to the next whole line 37 number. If the replacement units will be rental dwelling units, line 38 these units shall be subject to a recorded affordability restriction line 39 for at least 55 years. If the proposed development is for-sale units, line 40 the units replaced shall be subject to paragraph (2). 97 — 14 — AB 2345 263 line 1 (C) Notwithstanding subparagraph (B), for any dwelling unit line 2 described in subparagraph (A) that is or was, within the five-year line 3 period preceding the application, subject to a form of rent or price line 4 control through a local government’s valid exercise of its police line 5 power and that is or was occupied by persons or families above line 6 lower income, the city, county, or city and county may do either line 7 of the following: line 8 (i) Require that the replacement units be made available at line 9 affordable rent or affordable housing cost to, and occupied by, line 10 low-income persons or families. If the replacement units will be line 11 rental dwelling units, these units shall be subject to a recorded line 12 affordability restriction for at least 55 years. If the proposed line 13 development is for-sale units, the units replaced shall be subject line 14 to paragraph (2). line 15 (ii) Require that the units be replaced in compliance with the line 16 jurisdiction’s rent or price control ordinance, provided that each line 17 unit described in subparagraph (A) is replaced. Unless otherwise line 18 required by the jurisdiction’s rent or price control ordinance, these line 19 units shall not be subject to a recorded affordability restriction. line 20 (D) For purposes of this paragraph, “equivalent size” means line 21 that the replacement units contain at least the same total number line 22 of bedrooms as the units being replaced. line 23 (E) Subparagraph (A) does not apply to an applicant seeking a line 24 density bonus for a proposed housing development if the line 25 applicant’s application was submitted to, or processed by, a city, line 26 county, or city and county before January 1, 2015. line 27 (d) (1) An applicant for a density bonus pursuant to subdivision line 28 (b) may submit to a city, county, or city and county a proposal for line 29 the specific incentives or concessions that the applicant requests line 30 pursuant to this section, and may request a meeting with the city, line 31 county, or city and county. The city, county, or city and county line 32 shall grant the concession or incentive requested by the applicant line 33 unless the city, county, or city and county makes a written finding, line 34 based upon substantial evidence, of any of the following: line 35 (A) The concession or incentive does not result in identifiable line 36 and actual cost reductions, consistent with subdivision (k), to line 37 provide for affordable housing costs, as defined in Section 50052.5 line 38 of the Health and Safety Code, or for rents for the targeted units line 39 to be set as specified in subdivision (c). 97 AB 2345 — 15 — 264 line 1 (B) The concession or incentive would have a specific, adverse line 2 impact, as defined in paragraph (2) of subdivision (d) of Section line 3 65589.5, upon public health and safety or the physical environment line 4 or on any real property that is listed in the California Register of line 5 Historical Resources and for which there is no feasible method to line 6 satisfactorily mitigate or avoid the specific, adverse impact without line 7 rendering the development unaffordable to low-income and line 8 moderate-income households. line 9 (C) The concession or incentive would be contrary to state or line 10 federal law. line 11 (2) The applicant shall receive the following number of line 12 incentives or concessions: line 13 (A) One incentive or concession for projects that include at least line 14 10 percent of the total units for lower income households, at least line 15 5 percent for very low income households, or at least 10 percent line 16 for persons and families of moderate income in a common interest line 17 development. line 18 (B) Two incentives or concessions for projects that include at line 19 least 20 percent of the total units for lower income households, at line 20 least 10 percent for very low income households, or at least 20 line 21 percent for persons and families of moderate income in a common line 22 interest development. line 23 (C) Three incentives or concessions for projects that include at line 24 least 30 percent of the total units for lower income households, at line 25 least 12 percent for very low income households, or at least 30 line 26 percent for persons and families of moderate income in a common line 27 interest development. line 28 (D) Four incentives or concessions for projects that include at line 29 least 31 percent of the total units for lower income households, at line 30 least 13 percent for very low income households, or at least 31 line 31 percent for persons and families of moderate income in a common line 32 interest development. line 33 (E) Five incentives or concessions for projects that include at line 34 least 33 percent of the total units for lower income households, at line 35 least 15 percent for very low income households, or at least 33 line 36 percent for persons and families of moderate income in a common line 37 interest development. line 38 (F) Six incentives or concessions for projects meeting the criteria line 39 of subparagraph (G) of paragraph (1) of subdivision (b). If the line 40 project is located within one-half mile of a major transit stop, as 97 — 16 — AB 2345 265 line 1 defined in subdivision (b) of Section 21155 of the Public Resources line 2 Code, the applicant shall also receive a height increase of up to line 3 three additional stories, or 33 feet. line 4 (3) The applicant may initiate judicial proceedings if the city, line 5 county, or city and county refuses to grant a requested density line 6 bonus, incentive, or concession. If a court finds that the refusal to line 7 grant a requested density bonus, incentive, or concession is in line 8 violation of this section, the court shall award the plaintiff line 9 reasonable attorney’s fees and costs of suit. Nothing in this line 10 subdivision shall be interpreted to require a local government to line 11 grant an incentive or concession that has a specific, adverse impact, line 12 as defined in paragraph (2) of subdivision (d) of Section 65589.5, line 13 upon health, safety, or the physical environment, and for which line 14 there is no feasible method to satisfactorily mitigate or avoid the line 15 specific adverse impact. Nothing in this subdivision shall be line 16 interpreted to require a local government to grant an incentive or line 17 concession that would have an adverse impact on any real property line 18 that is listed in the California Register of Historical Resources. line 19 The city, county, or city and county shall establish procedures for line 20 carrying out this section that shall include legislative body approval line 21 of the means of compliance with this section. line 22 (4) The city, county, or city and county shall bear the burden line 23 of proof for the denial of a requested concession or incentive. line 24 (e) (1) In no case may a city, county, or city and county apply line 25 any development standard that will have the effect of physically line 26 precluding the construction of a development meeting the criteria line 27 of subdivision (b) at the densities or with the concessions or line 28 incentives permitted by this section. Subject to paragraph (3), an line 29 applicant may submit to a city, county, or city and county a line 30 proposal for the waiver or reduction of development standards that line 31 will have the effect of physically precluding the construction of a line 32 development meeting the criteria of subdivision (b) at the densities line 33 or with the concessions or incentives permitted under this section, line 34 and may request a meeting with the city, county, or city and county. line 35 If a court finds that the refusal to grant a waiver or reduction of line 36 development standards is in violation of this section, the court line 37 shall award the plaintiff reasonable attorney’s fees and costs of line 38 suit. Nothing in this subdivision shall be interpreted to require a line 39 local government to waive or reduce development standards if the line 40 waiver or reduction would have a specific, adverse impact, as 97 AB 2345 — 17 — 266 line 1 defined in paragraph (2) of subdivision (d) of Section 65589.5, line 2 upon health, safety, or the physical environment, and for which line 3 there is no feasible method to satisfactorily mitigate or avoid the line 4 specific adverse impact. Nothing in this subdivision shall be line 5 interpreted to require a local government to waive or reduce line 6 development standards that would have an adverse impact on any line 7 real property that is listed in the California Register of Historical line 8 Resources, or to grant any waiver or reduction that would be line 9 contrary to state or federal law. line 10 (2) A proposal for the waiver or reduction of development line 11 standards pursuant to this subdivision shall neither reduce nor line 12 increase the number of incentives or concessions to which the line 13 applicant is entitled pursuant to subdivision (d). line 14 (3) A housing development that receives a waiver from any line 15 maximum controls on density pursuant to clause (ii) of line 16 subparagraph (D) of paragraph (3) of subdivision (f) shall only be line 17 eligible for a waiver or reduction of development standards as line 18 provided in subparagraph (F) of paragraph (2) of subdivision (d) line 19 and clause (ii) of subparagraph (D) of paragraph (3) of subdivision line 20 (f), unless the city, county, or city and county agrees to additional line 21 waivers or reductions of development standards. line 22 (f) For the purposes of this chapter, “density bonus” means a line 23 density increase over the otherwise maximum allowable gross line 24 residential density as of the date of application by the applicant to line 25 the city, county, or city and county, or, if elected by the applicant, line 26 a lesser percentage of density increase, including, but not limited line 27 to, no increase in density. The amount of density increase to which line 28 the applicant is entitled shall vary according to the amount by line 29 which the percentage of affordable housing units exceeds the line 30 percentage established in subdivision (b). line 31 (1) For housing developments meeting the criteria of line 32 subparagraph (A) of paragraph (1) of subdivision (b), the density line 33 bonus shall be calculated as follows: line 34 line 35 Percentage Density line 36 Bonus Percentage Low-Income Units line 37 20 10 line 38 21.5 11 line 39 23 12 line 40 24.5 13 97 — 18 — AB 2345 267 line 1 26 14 line 2 27.5 15 line 3 29 16 line 4 30.5 17 line 5 32 18 line 6 33.5 19 line 7 35 20 line 8 38.75 21 line 9 42.5 22 line 10 46.25 23 line 11 50 24 line 12 50 25 line 13 50 26 line 14 50 27 line 15 50 28 line 16 50 29 line 17 50 30 line 18 50 31 line 19 50 32 line 20 50 33 line 21 line 22 (2) For housing developments meeting the criteria of line 23 subparagraph (B) of paragraph (1) of subdivision (b), the density line 24 bonus shall be calculated as follows: line 25 line 26 Percentage Density Bonus Percentage Very Low Income Units line 27 20 5 line 28 22.5 6 line 29 25 7 line 30 27.5 8 line 31 30 9 line 32 32.5 10 line 33 35 11 line 34 38.75 12 line 35 42.5 13 line 36 46.25 14 line 37 50 15 line 38 line 39 line 40 97 AB 2345 — 19 — 268 line 1 line 2 line 3 line 4 line 5 line 6 line 7 line 8 line 9 line 10 line 11 (3) (A) For housing developments meeting the criteria of line 12 subparagraph (C) of paragraph (1) of subdivision (b), the density line 13 bonus shall be 20 percent of the number of senior housing units. line 14 (B) For housing developments meeting the criteria of line 15 subparagraph (E) of paragraph (1) of subdivision (b), the density line 16 bonus shall be 20 percent of the number of the type of units giving line 17 rise to a density bonus under that subparagraph. line 18 (C) For housing developments meeting the criteria of line 19 subparagraph (F) of paragraph (1) of subdivision (b), the density line 20 bonus shall be 35 percent of the student housing units. line 21 (D) For housing developments meeting the criteria of line 22 subparagraph (G) of paragraph (1) of subdivision (b), the following line 23 shall apply: line 24 (i) Except as otherwise provided in clause (ii), the density bonus line 25 shall be 80 percent of the number of units for lower income line 26 households. line 27 (ii) If the housing development is located within one-half mile line 28 of a major transit stop, as defined in subdivision (b) of Section line 29 21155 of the Public Resources Code, the city, county, or city and line 30 county shall not impose any maximum controls on density. line 31 (4) For housing developments meeting the criteria of line 32 subparagraph (D) of paragraph (1) of subdivision (b), the density line 33 bonus shall be calculated as follows: line 34 line 35 Percentage Density Bonus Percentage Moderate-Income Units line 36 5 10 line 37 6 11 line 38 7 12 line 39 8 13 line 40 9 14 97 — 20 — AB 2345 269 line 1 10 15 line 2 11 16 line 3 12 17 line 4 13 18 line 5 14 19 line 6 15 20 line 7 16 21 line 8 17 22 line 9 18 23 line 10 19 24 line 11 20 25 line 12 21 26 line 13 22 27 line 14 23 28 line 15 24 29 line 16 25 30 line 17 26 31 line 18 27 32 line 19 28 33 line 20 29 34 line 21 30 35 line 22 31 36 line 23 32 37 line 24 33 38 line 25 34 39 line 26 35 40 line 27 38.75 41 line 28 42.5 42 line 29 46.25 43 line 30 50 44 line 31 line 32 (5) All density calculations resulting in fractional units shall be line 33 rounded up to the next whole number. The granting of a density line 34 bonus shall not require, or be interpreted, in and of itself, to require line 35 a general plan amendment, local coastal plan amendment, zoning line 36 change, or other discretionary approval. line 37 (g) (1) When an applicant for a tentative subdivision map, line 38 parcel map, or other residential development approval donates line 39 land to a city, county, or city and county in accordance with this line 40 subdivision, the applicant shall be entitled to a 15-percent increase 97 AB 2345 — 21 — 270 line 1 above the otherwise maximum allowable residential density for line 2 the entire development, as follows: line 3 line 4 Percentage Density Bonus Percentage Very Low Income line 5 15 10 line 6 16 11 line 7 17 12 line 8 18 13 line 9 19 14 line 10 20 15 line 11 21 16 line 12 22 17 line 13 23 18 line 14 24 19 line 15 25 20 line 16 26 21 line 17 27 22 line 18 28 23 line 19 29 24 line 20 30 25 line 21 31 26 line 22 32 27 line 23 33 28 line 24 34 29 line 25 35 30 line 26 line 27 (2) This increase shall be in addition to any increase in density line 28 mandated by subdivision (b), up to a maximum combined mandated line 29 density increase of 35 percent if an applicant seeks an increase line 30 pursuant to both this subdivision and subdivision (b). All density line 31 calculations resulting in fractional units shall be rounded up to the line 32 next whole number. Nothing in this subdivision shall be construed line 33 to enlarge or diminish the authority of a city, county, or city and line 34 county to require a developer to donate land as a condition of line 35 development. An applicant shall be eligible for the increased line 36 density bonus described in this subdivision if all of the following line 37 conditions are met: line 38 (A) The applicant donates and transfers the land no later than line 39 the date of approval of the final subdivision map, parcel map, or line 40 residential development application. 97 — 22 — AB 2345 271 line 1 (B) The developable acreage and zoning classification of the line 2 land being transferred are sufficient to permit construction of units line 3 affordable to very low income households in an amount not less line 4 than 10 percent of the number of residential units of the proposed line 5 development. line 6 (C) The transferred land is at least one acre in size or of line 7 sufficient size to permit development of at least 40 units, has the line 8 appropriate general plan designation, is appropriately zoned with line 9 appropriate development standards for development at the density line 10 described in paragraph (3) of subdivision (c) of Section 65583.2, line 11 and is or will be served by adequate public facilities and line 12 infrastructure. line 13 (D) The transferred land shall have all of the permits and line 14 approvals, other than building permits, necessary for the line 15 development of the very low income housing units on the line 16 transferred land, not later than the date of approval of the final line 17 subdivision map, parcel map, or residential development line 18 application, except that the local government may subject the line 19 proposed development to subsequent design review to the extent line 20 authorized by subdivision (i) of Section 65583.2 if the design is line 21 not reviewed by the local government before the time of transfer. line 22 (E) The transferred land and the affordable units shall be subject line 23 to a deed restriction ensuring continued affordability of the units line 24 consistent with paragraphs (1) and (2) of subdivision (c), which line 25 shall be recorded on the property at the time of the transfer. line 26 (F) The land is transferred to the local agency or to a housing line 27 developer approved by the local agency. The local agency may line 28 require the applicant to identify and transfer the land to the line 29 developer. line 30 (G) The transferred land shall be within the boundary of the line 31 proposed development or, if the local agency agrees, within line 32 one-quarter mile of the boundary of the proposed development. line 33 (H) A proposed source of funding for the very low income units line 34 shall be identified not later than the date of approval of the final line 35 subdivision map, parcel map, or residential development line 36 application. line 37 (h) (1) When an applicant proposes to construct a housing line 38 development that conforms to the requirements of subdivision (b) line 39 and includes a childcare facility that will be located on the premises 97 AB 2345 — 23 — 272 line 1 of, as part of, or adjacent to, the project, the city, county, or city line 2 and county shall grant either of the following: line 3 (A) An additional density bonus that is an amount of square line 4 feet of residential space that is equal to or greater than the amount line 5 of square feet in the childcare facility. line 6 (B) An additional concession or incentive that contributes line 7 significantly to the economic feasibility of the construction of the line 8 childcare facility. line 9 (2) The city, county, or city and county shall require, as a line 10 condition of approving the housing development, that the following line 11 occur: line 12 (A) The childcare facility shall remain in operation for a period line 13 of time that is as long as or longer than the period of time during line 14 which the density bonus units are required to remain affordable line 15 pursuant to subdivision (c). line 16 (B) Of the children who attend the childcare facility, the children line 17 of very low income households, lower income households, or line 18 families of moderate income shall equal a percentage that is equal line 19 to or greater than the percentage of dwelling units that are required line 20 for very low income households, lower income households, or line 21 families of moderate income pursuant to subdivision (b). line 22 (3) Notwithstanding any requirement of this subdivision, a city, line 23 county, or city and county shall not be required to provide a density line 24 bonus or concession for a childcare facility if it finds, based upon line 25 substantial evidence, that the community has adequate childcare line 26 facilities. line 27 (4) “Childcare facility,” as used in this section, means a child line 28 daycare facility other than a family daycare home, including, but line 29 not limited to, infant centers, preschools, extended daycare line 30 facilities, and schoolage childcare centers. line 31 (i) “Housing development,” as used in this section, means a line 32 development project for five or more residential units, including line 33 mixed-use developments. For the purposes of this section, “housing line 34 development” also includes a subdivision or common interest line 35 development, as defined in Section 4100 of the Civil Code, line 36 approved by a city, county, or city and county and consists of line 37 residential units or unimproved residential lots and either a project line 38 to substantially rehabilitate and convert an existing commercial line 39 building to residential use or the substantial rehabilitation of an line 40 existing multifamily dwelling, as defined in subdivision (d) of 97 — 24 — AB 2345 273 line 1 Section 65863.4, where the result of the rehabilitation would be a line 2 net increase in available residential units. For the purpose of line 3 calculating a density bonus, the residential units shall be on line 4 contiguous sites that are the subject of one development line 5 application, but do not have to be based upon individual line 6 subdivision maps or parcels. The density bonus shall be permitted line 7 in geographic areas of the housing development other than the line 8 areas where the units for the lower income households are located. line 9 (j) (1) The granting of a concession or incentive shall not require line 10 or be interpreted, in and of itself, to require a general plan line 11 amendment, local coastal plan amendment, zoning change, study, line 12 or other discretionary approval. For purposes of this subdivision, line 13 “study” does not include reasonable documentation to establish line 14 eligibility for the concession or incentive or to demonstrate that line 15 the incentive or concession meets the definition set forth in line 16 subdivision (k). This provision is declaratory of existing law. line 17 (2) Except as provided in subdivisions (d) and (e), the granting line 18 of a density bonus shall not require or be interpreted to require the line 19 waiver of a local ordinance or provisions of a local ordinance line 20 unrelated to development standards. line 21 (k) For the purposes of this chapter, concession or incentive line 22 means any of the following: line 23 (1) A reduction in site development standards or a modification line 24 of zoning code requirements or architectural design requirements line 25 that exceed the minimum building standards approved by the line 26 California Building Standards Commission as provided in Part 2.5 line 27 (commencing with Section 18901) of Division 13 of the Health line 28 and Safety Code, including, but not limited to, a reduction in line 29 setback and square footage requirements and in the ratio of line 30 vehicular parking spaces that would otherwise be required that line 31 results in identifiable and actual cost reductions, to provide for line 32 affordable housing costs, as defined in Section 50052.5 of the line 33 Health and Safety Code, or for rents for the targeted units to be line 34 set as specified in subdivision (c). line 35 (2) Approval of mixed-use zoning in conjunction with the line 36 housing project if commercial, office, industrial, or other land uses line 37 will reduce the cost of the housing development and if the line 38 commercial, office, industrial, or other land uses are compatible line 39 with the housing project and the existing or planned development line 40 in the area where the proposed housing project will be located. 97 AB 2345 — 25 — 274 line 1 (3) Other regulatory incentives or concessions proposed by the line 2 developer or the city, county, or city and county that result in line 3 identifiable and actual cost reductions to provide for affordable line 4 housing costs, as defined in Section 50052.5 of the Health and line 5 Safety Code, or for rents for the targeted units to be set as specified line 6 in subdivision (c). line 7 (l) Subdivision (k) does not limit or require the provision of line 8 direct financial incentives for the housing development, including line 9 the provision of publicly owned land, by the city, county, or city line 10 and county, or the waiver of fees or dedication requirements. line 11 (m) This section does not supersede or in any way alter or lessen line 12 the effect or application of the California Coastal Act of 1976 line 13 (Division 20 (commencing with Section 30000) of the Public line 14 Resources Code). Any density bonus, concessions, incentives, line 15 waivers or reductions of development standards, and parking ratios line 16 to which the applicant is entitled under this section shall be line 17 permitted in a manner that is consistent with this section and line 18 Division 20 (commencing with Section 30000) of the Public line 19 Resources Code. line 20 (n) If permitted by local ordinance, nothing in this section shall line 21 be construed to prohibit a city, county, or city and county from line 22 granting a density bonus greater than what is described in this line 23 section for a development that meets the requirements of this line 24 section or from granting a proportionately lower density bonus line 25 than what is required by this section for developments that do not line 26 meet the requirements of this section. line 27 (o) For purposes of this section, the following definitions shall line 28 apply: line 29 (1) “Development standard” includes a site or construction line 30 condition, including, but not limited to, a height limitation, a line 31 setback requirement, a floor area ratio, an onsite open-space line 32 requirement, or a parking ratio that applies to a residential line 33 development pursuant to any ordinance, general plan element, line 34 specific plan, charter, or other local condition, law, policy, line 35 resolution, or regulation. line 36 (2) “Maximum allowable residential density” means the density line 37 allowed under the zoning ordinance and land use element of the line 38 general plan, or, if a range of density is permitted, means the line 39 maximum allowable density for the specific zoning range and land line 40 use element of the general plan applicable to the project. If the 97 — 26 — AB 2345 275 line 1 density allowed under the zoning ordinance is inconsistent with line 2 the density allowed under the land use element of the general plan, line 3 the general plan density shall prevail. line 4 (p) (1) Except as provided in paragraphs (2), (3), and (4), upon line 5 the request of the developer, a city, county, or city and county shall line 6 not require a vehicular parking ratio, inclusive of handicapped and line 7 guest parking, of a development meeting the criteria of subdivisions line 8 (b) and (c), that exceeds the following ratios: line 9 (A) Zero to one bedroom: one onsite parking space. line 10 (B) Two to three bedrooms: one and one-half onsite parking line 11 spaces. line 12 (C) Four and more bedrooms: two and one-half parking spaces. line 13 (2) (A) Notwithstanding paragraph (1), if a development line 14 includes the maximum percentage of low-income or very low line 15 income units provided for in paragraphs (1) and (2) of subdivision line 16 (f) and at least 20 percent low income units for housing line 17 developments meeting the criteria of subparagraph (A) of line 18 paragraph (1) of subdivision (b) or at least 11 percent very low line 19 income units for housing developments meeting the criteria of line 20 subparagraph (B) of paragraph (1) of subdivision (b), is located line 21 within one-half mile of a major transit stop, as defined in line 22 subdivision (b) of Section 21155 of the Public Resources Code, line 23 and there is unobstructed access to the major transit stop from the line 24 development, then, upon the request of the developer, a city, line 25 county, or city and county shall not impose a vehicular parking line 26 ratio, inclusive of handicapped and guest parking, that exceeds 0.5 line 27 spaces per unit. line 28 (B) For purposes of this subdivision, a development shall have line 29 unobstructed access to a major transit stop if a resident is able to line 30 access the major transit stop without encountering natural or line 31 constructed impediments. For purposes of this subparagraph, line 32 “natural or constructed impediments” includes, but is not limited line 33 to, freeways, rivers, mountains, and bodies of water, but does not line 34 include residential structures, shopping centers, parking lots, or line 35 rails used for transit. line 36 (C) The distance of a development described in subparagraph line 37 (A) from a major transit stop shall be measured from any point line 38 located on the property of the proposed development to any point line 39 on the property on which the major transit stop is located, including 97 AB 2345 — 27 — 276 line 1 any parking lot owned by the transit authority or other local agency line 2 operating the major transit stop. line 3 (3) Notwithstanding paragraph (1), if a development consists line 4 solely of rental units, exclusive of a manager’s unit or units, with line 5 an affordable housing cost to lower income families, as provided line 6 in Section 50052.5 of the Health and Safety Code, then, upon the line 7 request of the developer, a city, county, or city and county shall line 8 not impose vehicular parking standards if the development is meets line 9 either of the following criteria: line 10 (A) The development is located within one-half mile of a major line 11 transit stop, as defined in subdivision (b) of Section 21155 of the line 12 Public Resources Code, and there is unobstructed access to the line 13 major transit stop from the development. If the line 14 (B) The development is a for-rent housing development for line 15 individuals who are 62 years of age or older that complies with line 16 Sections 51.2 and 51.3 of the Civil Code, Code and the line 17 development shall have has either paratransit service or line 18 unobstructed access, within one-half mile, to fixed bus route service line 19 that operates at least eight times per day. line 20 (4) Notwithstanding paragraphs (1) and (8), if a development line 21 consists solely of rental units, exclusive of a manager’s unit or line 22 units, with an affordable housing cost to lower income families, line 23 as provided in Section 50052.5 of the Health and Safety Code, and line 24 the development is either a special needs housing development, line 25 as defined in Section 51312 of the Health and Safety Code, or a line 26 supportive housing development, as defined in Section 50675.14 line 27 of the Health and Safety Code, then, upon the request of the line 28 developer, a city, county, or city and county shall not impose any line 29 minimum vehicular parking requirement. A development that is line 30 a special needs housing development shall have either paratransit line 31 service or unobstructed access, within one-half mile, to fixed bus line 32 route service that operates at least eight times per day. line 33 (5) If the total number of parking spaces required for a line 34 development is other than a whole number, the number shall be line 35 rounded up to the next whole number. For purposes of this line 36 subdivision, a development may provide onsite parking through line 37 tandem parking or uncovered parking, but not through onstreet line 38 parking. line 39 (6) This subdivision shall apply to a development that meets line 40 the requirements of subdivisions (b) and (c), but only at the request 97 — 28 — AB 2345 277 line 1 of the applicant. An applicant may request parking incentives or line 2 concessions beyond those provided in this subdivision pursuant line 3 to subdivision (d). line 4 (7) This subdivision does not preclude a city, county, or city line 5 and county from reducing or eliminating a parking requirement line 6 for development projects of any type in any location. line 7 (8) Notwithstanding paragraphs (2) and (3), if a city, county, line 8 city and county, or an independent consultant has conducted an line 9 areawide or jurisdictionwide parking study in the last seven years, line 10 then the city, county, or city and county may impose a higher line 11 vehicular parking ratio not to exceed the ratio described in line 12 paragraph (1), based upon substantial evidence found in the parking line 13 study, that includes, but is not limited to, an analysis of parking line 14 availability, differing levels of transit access, walkability access line 15 to transit services, the potential for shared parking, the effect of line 16 parking requirements on the cost of market-rate and subsidized line 17 developments, and the lower rates of car ownership for low-income line 18 and very low income individuals, including seniors and special line 19 needs individuals. The city, county, or city and county shall pay line 20 the costs of any new study. The city, county, or city and county line 21 shall make findings, based on a parking study completed in line 22 conformity with this paragraph, supporting the need for the higher line 23 parking ratio. line 24 (9) A request pursuant to this subdivision shall neither reduce line 25 nor increase the number of incentives or concessions to which the line 26 applicant is entitled pursuant to subdivision (d). line 27 (q) Each component of any density calculation, including base line 28 density and bonus density, resulting in fractional units shall be line 29 separately rounded up to the next whole number. The Legislature line 30 finds and declares that this provision is declaratory of existing law. line 31 (r) This chapter shall be interpreted liberally in favor of line 32 producing the maximum number of total housing units. line 33 (s) Notwithstanding any other law, if a city, county, or city and line 34 county has adopted an ordinance pursuant to this section that, as line 35 of the date immediately prior to the effective date of the act adding line 36 this subdivision, provides for density bonuses that exceed the line 37 density bonuses required by this section, that city, county, or city line 38 and county is not required to amend or otherwise update its line 39 ordinance to comply with the amendments made to this section by line 40 the act adding this subdivision. 97 AB 2345 — 29 — 278 line 1 SEC. 2. line 2 SEC. 3. No reimbursement is required by this act pursuant to line 3 Section 6 of Article XIIIB of the California Constitution because line 4 a local agency or school district has the authority to levy service line 5 charges, fees, or assessments sufficient to pay for the program or line 6 level of service mandated by this act, within the meaning of Section line 7 17556 of the Government Code. O 97 — 30 — AB 2345 279 The Library Stabilization Fund Act COVID-19 is causing significant financial losses for libraries, resulting in disruption to core library services, thousands of staff furloughs and layoffs across the country. Fiscal stabilization is needed to preserve crucial library services for students, jobseekers, rural and Tribal residents, and small businesses—now and in the recovery to come. The Library Stabilization Fund Act would establish a $2 billion fund to address financial losses and bolster library services, with priority to the hardest-hit communities. Delivered through the Institute of Museum and Library Services (IMLS), the funding would provide: Q $1.7 billion to be distributed to local libraries through state library agencies based on state population, with a minimum of $10 million to each state Q $45 million in formula grants to Tribal libraries Q $200 million in competitive grants to strengthen library services to communities affected by COVID-19 Q $40 million for IMLS to administer grants and conduct research and data collection related to the impacts of COVID-19 Funds would keep nearly 370,000 library workers on the job, defray costs related to safe re-opening, and support a range of library services to millions of patrons, including: Q High-speed internet access and digital literacy training Q Resources to facilitate remote learning for educators and students of all ages Q Tools and guidance for entrepreneurs to research emerging markets, design business plans and launch startups Q Employment assistance, from resume writing to job search to GED certification Q Support in applying for veteran’s benefits, unemployment assistance, medical coverage and other government services Q Programs that foster early literacy, entrepreneurship and lifelong learning The legislation was introduced on July 2 by Sen. Jack Reed (RI) and Rep. Andy Levin (MI-9). Veterans connect to the VA telehealth portal at Pottsboro (Texas) Area Library. Librarians distribute unemployment forms curbside at branches of the Miami-Dade Public Library System. Librarians manufacture PPE in Los Angeles Public Library’s Octavia Lab. For more information: Kevin Maher: kmaher@alawash.org / Gavin Baker: gbaker@alawash.org280 City of Huntington Beach File #:20-1744 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Adopt Ordinance Nos. 4214, 4212, 4215, 4216, and 4213, approving Zoning Text Amendment (ZTA) No. 19-005 and Municipal Code Amendment adding Chapter 5.110 (Group Homes) Approved for introduction July 7, 2020, Vote: 7-0 Statement of Issue: Zoning Text Amendment No. 19-005 would modify four chapters of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO), and create a new chapter of the Huntington Beach Municipal Code (HBMC) that,in combination, would establish a set of regulations for Group Homes, Sober Living Homes, and Residential Care Facilities affecting Residential Districts Citywide. The four chapters of the HBZSO to be amended are Chapter 203 (Definitions), Chapter 204 (Use Classifications), Chapter 210 (Residential Districts), and Chapter 230 (Site Standards) - Section 230.28 Group Homes. The chapter of the HBMC to be added is Chapter 5.110 Group Homes. The Planning Commission and staff recommend approval of the request. Financial Impact: Should the City Council vote to adopt ZTA No. 19-005 and amendment to the Huntington Beach Municipal Code adding Chapter 5.110 (Group Homes), the proposed regulations will require the development of application forms and review and approval processes to accommodate the dispensation of Special Use Permits by the Community Development Department and Operator’s Permits by the Finance Department. Recommended Action: A) Find that the project will not have any significant effect on the environment and is categorically exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendment to the HBZSO will have a significant effect on the environment (Attachment No. 1); and , B) Approve Zoning Text Amendment No. 19-005 with findings (Attachment No. 1), approve amendment to Huntington Beach Municipal Code adding Chapter 5.110 (Group Homes), and adopt: City of Huntington Beach Printed on 7/17/2020Page 1 of 10 powered by Legistar™281 File #:20-1744 MEETING DATE:7/20/2020 Ordinance No. 4214, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 203 of the Huntington Beach Zoning and Subdivision Ordinance Titled Definitions (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4212, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance Titled Use Classifications (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4215, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 210 of the Huntington Beach Zoning and Subdivision Ordinance Titled R Residential Districts (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4216, “An Ordinance of the City Council of the City of Huntington Beach Amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance Titled Site Standards (Zoning Text Amendment No. 19-005);” and, Ordinance No. 4213, “An Ordinance of the City Council of the City of Huntington Beach Amending Title 5 of the Huntington Beach Municipal Code Titled Business Licenses and Regulations;” (Attachment Nos. 2 - 6). Alternative Action(s): The City Council may make the following alternative motion(s): A) Deny Zoning Text Amendment No. 19-005 and Municipal Code Amendment (Chapter 5.110 - Group Homes); or B) Continue Zoning Text Amendment No. 19-005 and Municipal Code Amendment (Chapter 5.110 - Group Homes), and direct staff accordingly. Analysis: A.PROJECT PROPOSAL Applicant: City of Huntington Beach Property Owner: Multiple Various Residential Property Owners Location: Residential Zoning Districts Citywide The Zoning Text Amendment (ZTA) proposes to amend four chapters of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO), and create a new chapter of the Huntington Beach Municipal Code (HBMC) that, in combination, establish a set of regulations for Group Homes, Sober Living City of Huntington Beach Printed on 7/17/2020Page 2 of 10 powered by Legistar™282 File #:20-1744 MEETING DATE:7/20/2020 Code (HBMC) that, in combination, establish a set of regulations for Group Homes, Sober Living Homes, and Residential Care Facilities affecting Residential Districts Citywide. The four chapters of the HBZSO to be amended are Chapter 203 (Definitions), Chapter 204 (Use Classifications), Chapter 210 (Residential Districts), and Chapter 230 (Site Standards) - Section 230.28 Group Homes. The chapter of the HBMC to be added is Chapter 5.110 Group Homes. Background: At the September 16, 2019, City Council meeting by a vote of 7-0, the City Council directed the City Attorney to return to Council with one or more Ordinance(s) that regulate “Group Homes and Sober Living Homes,” with an appropriate balance between the interests of the City and its residents to preserve residential neighborhood character and the need to provide reasonable accommodation for the disabled, including those recovering from chemical addiction, to reside in normalized residential environments. Like many California cities, the City of Huntington Beach has experienced a rise in the number of Group Homes within single-family residential neighborhoods. A type of Group Home, commonly referred to as Sober Living Homes, are single-family homes where many occupants reside while recovering from alcohol and drug addiction. These Sober Living Homes provide a place to live in “a residential setting” between detox and the resident’s future housing. These homes are not required to be licensed by the State, and are not allowed to provide services that State licensed alcoholism or drug abuse recovery or treatment facilities provide. The proliferation of Sober Living Homes in Huntington Beach has resulted in a substantial increase in complaints generated by neighbors and community members regarding the operation of these uses. Reported impacts of sober living homes include excessive amounts of noise, loitering, second-hand smoke, trash and debris, and increased parking demands within residential neighborhoods. Of particular concern are complaints regarding the over-concentration of sober living homes, and when in close proximity to one another, these uses may change the character of a residential neighborhood to a more institutional environment. The proposed amendments are intended to preserve the residential character of single-family residential neighborhoods and to further the purposes of State law, by, among other things: (1) ensuring that Group Homes are actually entitled to the special accommodation and/or additional accommodation provided under the Huntington Beach Municipal Code and not simply skirting the City’s land use regulations; (2) limiting the secondary impacts of Group Homes by reducing noise and traffic, preserving safety and providing adequate on- street parking; (3) providing an accommodation for the disabled that is reasonable and actually bears some resemblance to the opportunities afforded non-disabled individuals to use and enjoy a dwelling unit in a single- family neighborhood; and (4) to provide comfortable living environments that will enhance the opportunity for the disabled and for recovering addicts to be successful in their programs. The proposed regulations will require Group Homes, including Sober Living Homes, to obtain a ministerial permit to operate in a manner consistent with the nature of the single-family residential neighborhoods in which they are located. The Federal Fair Housing Act (FHA) and California Fair Employment Housing Act (FEHA), prohibits cities from enforcing zoning laws that have the effect of discriminating against the disabled with regard to housing opportunities. A disabled person is defined by The Americans with Disabilities Act (ADA) as one that has: 1) A physical or mental impairment that affects one or more major life activities; 2) A history of recovery from alcoholism or illegal use of drugs; or 3) Has been regarded as having such impairment. The ADA protects persons in recovery from chemical addiction, even if they are no longer engaged in the illegal use of drugs and otherwise meet the definitions in the statute. Additionally, pursuant to the California Government and Welfare and Institutions Codes, and the Lanterman City of Huntington Beach Printed on 7/17/2020Page 3 of 10 powered by Legistar™283 File #:20-1744 MEETING DATE:7/20/2020 Additionally, pursuant to the California Government and Welfare and Institutions Codes, and the Lanterman Developmental Disabilities and Services Act (Lanterman Act), people with developmental disabilities have the right to obtain the services and support they need to live like people without disabilities. A core purpose of this State law is to provide a broader range of housing options to the disabled, and to free the disabled to the extent possible from institutional style living. As such, a disabled person is afforded an equal opportunity to use and enjoy a residential dwelling. Likewise, pursuant to the California FEHA, individuals with physical and mental disabilities have the right under State law to rent, lease, or buy housing accommodations free from discrimination due to a disability. State law requires cities to treat certain state-licensed residential care facilities that provide care, services, and/or treatment serving six or fewer disabled tenants as a single-family residential use. (As such, and consistent with State law, the existing HBZSO provides that both “Residential Alcohol Recovery, Limited” and “Residential Care, Limited” uses that house six (6) or fewer individuals are permitted by right in the City’s Residential districts.) The Health and Safety Code does not regulate supportive living facilities that provide no treatment, and the HBZSO does not currently classify such a use specifically, which has encumbered the City’s ability to effectively mitigate impacts from such uses. Finally, the California Constitution and Huntington Beach Charter grants broad police powers to Huntington Beach to preserve the residential characteristics or its various types of residential zones. It is the intent of the City Council to develop an Ordinance that strikes an appropriate balance between the interests of the City and its residents to preserve residential neighborhood character, and the need to provide housing accommodations to disabled persons, including those in recovery from chemical addiction to reside in normalized residential environments that promote effective recovery. State and Federal laws require the City to make reasonable accommodations in its zoning laws when such accommodation is reasonably necessary to afford the disabled the opportunity to use and enjoy a dwelling. The proposed Ordinance will apply to all districts Citywide, but affect only residential districts. B.PLANNING COMMISSION MEETING The Planning Commission held a public hearing on ZTA No. 19-005 on June 9, 2020. There were five public comments received regarding the proposed ZSO and HBMC amendments. The Planning Commission asked some questions for clarification regarding the definitions of Boarding House and Single Housekeeping Unit, current group home enforcement, permit transferability, and the proposed buffer requirements.Staff also provided an update regarding the status of the City of Costa Mesa’s Group Homes Ordinance. Planning Commission Action on June 9, 2020: The motion was made by Kalmick, seconded by Scandura, to find and determine that the project is exempt from the California Environmental Quality Act, recommend approval of ZTA No. 19-005, and forward to the City Council for consideration carried by the following vote: AYES: Ray, Garcia, Kalmick, Mandic, Perkins, Scandura City of Huntington Beach Printed on 7/17/2020Page 4 of 10 powered by Legistar™284 File #:20-1744 MEETING DATE:7/20/2020 NOES: None ABSENT: Grant ABSTAIN: None C.STAFF ANALYSIS AND RECOMMENDATION Zoning Compliance: The following provides a review of the proposed amendments organized by each Chapter. 1.CHAPTER 203 DEFINITIONS To provide context to the scope of changes in this ZTA, several new definitions must be established in Chapter 203 Definitions, identified below. -Modify existing definition of Boarding House -Add Disabled -Add Fair Housing Laws -Add Household -Add Integral Facilities -Add Integral Uses -Add Operator -Add Single Housekeeping Unit These definitions work in concert with the other elements of the proposed ZTA to more clearly define specific uses as they pertain to the regulation of Group Homes in Huntington Beach. 2.CHAPTER 204 USE CLASSIFICATIONS To provide for the regulation of Group Homes, including Sober Living Homes, this ZTA will establish four new use classifications in Chapter 204 Use Classifications. Staff is summarizing them below in order to introduce and differentiate each classification. Group Home A residential unit utilized as a supportive living environment for people meeting the legal definition of disabled. ·Provides housing only for a classified group of people. No medical care, services, or treatment can take place in a Group Home o Only State licensed facilities can provide care, services, or treatment under State law (see Residential Care Facilities) Sober Living Home Sober Living Homes are also Group Homes, but specifically for people recovering from a chemical addiction that meet the legal definition of disabled. ·Provides housing only that is primarily meant for people who have just come out of rehab and need a place to live that is structured and supportive for those in recovery. ·For the purposes of the Ordinance, a Sober Living Home is not state licensed. ·No medical care, services, or treatment can occur in a Sober Living Home o Only State licensed facilities can provide care, services, or treatment under State law (see City of Huntington Beach Printed on 7/17/2020Page 5 of 10 powered by Legistar™285 File #:20-1744 MEETING DATE:7/20/2020 o Only State licensed facilities can provide care, services, or treatment under State law (see Residential Care Facilities) Residential Care Facilities (RCF) A State Licensed residential facility where care, services, or treatment are provided to persons living in a community residential setting. ·Provide housing and care/treatment for the elderly, developmentally disabled, chronically ill, and chemical addiction treatment facilities, among others. ·RCFs that specifically provide drug and or alcohol abuse treatment are licensed by the Department of Health Care Services (DHCS) and are known as alcoholism or drug abuse recovery or treatment facilities. o Homes are required to be licensed by the DHCS when at least one of the following services is provided: detoxification, group counseling sessions, individual counseling sessions, educational sessions, or alcoholism or drug abuse recovery or treatment planning. Referral Facility Either a Residential Care Facility, Group Home, or Sober Living Home where one or more person’s residency is per a court order or similar directive. Referral facilities must follow the permit procedure according to the base use classification, and are not permitted in the RL zone. 3.CHAPTER 210 RESIDENTIAL DISTRICTS In addition to establishing the new Definitions and Use Classifications identified above, this ZTA will also amend Chapter 210 Residential Districts to provide reference to land use controls and new requirements for Group Homes in Residential Districts (Legislative Drafts attached for reference). These changes are summarized below. a.Add “Group Homes Including Sober Living Homes” to Land Use Controls matrix and create Additional Provision L-8: o A Group Home (GH) or Sober Living Home (SLH) with six (6) or fewer residents §In all Residential districts, requires a ministerial Special Use Permit (SUP) from the Community Development Director; and §Any SLH shall be one thousand (1000) feet from any other property that contains a GH, SLH, or RCF pursuant to Chapter 230.28 o A GH or SLH with seven (7) or more residents §Not permitted in the RL zone §In all other Residential Districts, requires a CUP from the Planning Commission; and ·An Operator’s Permit that complies with Huntington Beach Municipal Code (HBMC) Section 5.110; and ·The GH or SLH (with 7 or more residents) shall be one thousand (1000) feet from any other property that contains a GH or SLH. o An applicant for a GH or SLH may seek relief from strict application of the requirements of Additional Provision L-8 by applying for reasonable accommodation pursuant to HBMC 17.77. City of Huntington Beach Printed on 7/17/2020Page 6 of 10 powered by Legistar™286 File #:20-1744 MEETING DATE:7/20/2020 b. Add “Referral Facility” to the Land Use Controls matrix and create Additional Provision L-9: o Referral Facilities are not permitted in the RL zone; and §No Referral Facility may be located: ·Within five hundred (500) feet of property that is zoned either RL or Specific Plan Residential Low Density, or ·Within five hundred (500) feet of a school, park, place of worship, or licensed day care facility. o Referral Facilities must have an on-site manager 24/7 o Referral Facilities may not admit a resident convicted of specific crimes c.Add “Residential Care Facility” to the Land Use Controls Matrix and create Additional Provision (T). o Certain Residential Care Facilities are Permitted (P), and certain Residential Care Facilities require a CUP from the Planning Commission. The “P/PC” listing refers to this differentiation. o Additional Provision (T) §Identify that unlicensed Residential Care Facilities are not permitted in any R district §State licensed Residential Care Facilities serving six (6) or fewer residents are permitted in all R districts §State licensed Residential Care Facilities serving seven (7) or more residents in all R districts require a CUP from the Planning Commission 4.CHAPTER 230.28 GROUP HOMES This ZTA will also add a new section to Chapter 230 Site Standards, Article I. Residential Districts. Titled Chapter 230.28 Group Homes, the appropriate placement for new regulations that will be applicable to Group Homes in Residential Districts. Special Use Permit (SUP) Chapter 230.28 will identify that a Group Home that may otherwise be considered an unpermitted use may locate in a Residential District subject to the approval of a Special Use Permit (SUP) by the Community Development Director, provided that the Group Home is in compliance with applicable regulations. Should the Ordinance be adopted, all existing Group Homes as well as any new proposed Group Home will be required to obtain a SUP. The SUP is ministerial and may be granted when a complete application is submitted to the Community Development Director that provides the following: a.The name, address, phone number, and driver’s license number of the owner, operator, and house manager; b.A copy of the Group Home rules and regulations; c.Written intake procedures; d.The relapse policy (if applicable, depending on the type of Group Home); e.An affirmation by the owner/operator that only residents (other than the house manager) who are disabled as defined by State and Federal law shall reside at the Group Home; f.Blank copies of all forms that residents and potential residents are required to complete; and g.A fee for the cost of processing the application as set by resolution by the City Council. City of Huntington Beach Printed on 7/17/2020Page 7 of 10 powered by Legistar™287 File #:20-1744 MEETING DATE:7/20/2020 Only basic information will be required to submit an application for a SUP, and the internal procedures and forms will be provided to applicants. Compliance with the application requirements should not present any significant hardship, since the requirements are in line with the routine capabilities expected from a professionally operated Group Home. In general, the operational requirements to maintain a SUP include the following: no more than seven (7) tenants may reside in a Group Home, one of which must be a house manager. If the dwelling unit has a secondary accessory unit, occupants of both units will be combined to determine whether or not the limit of six (6) occupants has been exceeded. A Group Home shall not be located in an accessory secondary unit unless the primary dwelling unit is used for the same purpose. The SUP also requires garage and driveway spaces to be available and used for parking of vehicles and limits each tenant to one vehicle, which must be operable and used as a primary form of transportation. In addition to the requirements for Group Homes outlined above, Chapter 230.28 will also identify that the following shall specifically apply to Sober Living Homes: a.Sober Living Homes are prohibited from locating within one thousand (1000) feet of each other. b.All occupants, other than the house manager, must be actively participating in legitimate recovery programs with supporting documentation required. c.The Sober Living Home’s rules and regulations must prohibit the use of any alcohol or non- prescribed drugs at the Sober Living Home or by any recovering addict either on or off site. Violation of the no drug policies are grounds for eviction for 90 days for the first offense. Any second violation of this rule shall result in permanent eviction. d.The number of sex offenders in any group home shall be no more than one, pursuant to the applicable provisions of the Penal Code. e.Each Sober Living Home shall have a written visitation policy that precludes any visitors who are under the influence of any drug or alcohol. f.The Sober Living Home shall have a good neighbor policy that shall direct the occupants to be considerate of neighbors, including refraining from engaging in excessively loud, profane, or obnoxious behavior that would unduly interfere with a neighbor’s use and enjoyment of their dwelling unit. The good neighbor policy shall establish a written protocol for the house manager/operator to follow when a neighbor complaint is received. g.The Sober Living Home shall not provide any of the following services as they are defined by the California Code of Regulations: detoxification; educational counseling; individual or group counseling sessions; and treatment or recovery planning. Chapter 230.28 will also provide provisions for requests for reasonable accommodation, cause for denial or revocation of a Special Use Permit, and compliance with the proposed regulations. If the Zoning Text Amendment is adopted by Ordinance, existing Group Homes, including Sober Living Homes, will have 90 days to apply for a Special Use Permit. Group Homes will have one year from the effective date of the Ordinance to comply with its provisions, provided that any existing group home, which is serving more than six (6) residents, must first comply with the six (6) resident maximum. Conditional Use Permit Finally, Chapter 230.28 will require a Conditional Use Permit to permit the operation of a Group Home, City of Huntington Beach Printed on 7/17/2020Page 8 of 10 powered by Legistar™288 File #:20-1744 MEETING DATE:7/20/2020 including Sober Living Homes, or Residential Care Facility with seven (7) or more occupants in the RM, RMH, RH, RMP, Specific Plan Residential and Specific Plan Mixed Use zones. This CUP requirement will be processed to the Planning Commission. A Group Home or Residential Care Facility will be prohibited in the RL zone and these stipulations are reflected in the Land Use Controls matrix of Chapter 210. In addition to the Conditional Use Permit requirement, Group Homes or Residential Care Facilities with seven (7) or more occupants are subject to the following requirements: a.The Group Home or Sober Living Home shall be at least one thousand (1000) feet from any other property that contains a Group Home, Sober Living Home, or State-licensed Residential Care Facility; and b.An application for an Operator’s Permit that complies with Chapter 5.110 of the Huntington Beach Municipal Code (HBMC). OPERATOR’S PERMIT This ZTA will amend the Huntington Beach Municipal Code Chapter 5.110 Group Homes to add a requirement that a Group Home obtain an Operator’s Permit. Since Group Homes with more than seven (7) residents will be expressly prohibited in the RL zone, the Operator’s Permit requirement applies to Group Homes with seven (7) or more residents in the RM, RMH, RH, RMP, Specific Plan Residential or Specific Plan Mixed Use zones. The Operator’s Permit requirement does not apply to: a.A Group Home that has six (6) or fewer occupants, not counting a house manager, that is in compliance with Chapter 230.28 of the HBZSO; b.A state-licensed alcoholism or drug abuse recovery or treatment facility; or c.A state-licensed residential care facility. An application for an Operator’s Permit will be submitted to the Chief Financial Officer and must include similar information to that of a Special Use Permit. A Group Home subject to the provisions of Chapter 5.110 that is in existence as of the effective date of the Ordinance will have 120 days to comply with the provisions. D.SUMMARY Staff recommends that the City Council approve Zoning Text Amendment No. 19-005 with findings and Municipal Code Amendment adding Chapter 5.110 (Group Homes) based on the following: ·Codifies new use classifications that modernize the HBZSO ·Provides appropriate regulations and permit processes to reduce operational impacts of existing and future group homes, sober living homes, and residential care facilities ·Provides housing accommodations to disabled persons to reside in normalized residential environments ·Promotes effective recovery for persons suffering from the effects of alcoholism or illegal use of drugs ·Preserves residential neighborhood character ·Consistent with General Plan goals and policies City of Huntington Beach Printed on 7/17/2020Page 9 of 10 powered by Legistar™289 File #:20-1744 MEETING DATE:7/20/2020 Environmental Status: ZTA No. 19-005 is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendments to the HBZSO and HBMC will have a significant effect on the environment. Strategic Plan Goal: Enhance and maintain high quality City services Attachment(s): 1. Suggested Findings of Approval - Zoning Text Amendment No. 19-005 2. Draft Ordinance 4214 and Legislative Draft - Chapter 203 3. Draft Ordinance 4212 and Legislative Draft - Chapter 204 4. Draft Ordinance 4215 and Legislative Draft - Chapter 210 5. Draft Ordinance 4216 and Legislative Draft - Chapter 230 6. Draft Ordinance 4213 and Legislative Draft - HBMC Chapter 5.110 7. Planning Commission Staff Report dated June 9, 2020 City of Huntington Beach Printed on 7/17/2020Page 10 of 10 powered by Legistar™290 Attachment No. 1.1 ATTACHMENT NO. 1 FINDINGS OF APPROVAL ZONING TEXT AMENDMENT NO. 19-005 FINDINGS FOR PROJECTS EXEMPT FROM CEQA: The Planning Commission finds that the project is categorically exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendment to the HBZSO will have a significant effect on the environment. FINDINGS FOR APPROVAL - ZONING TEXT AMENDMENT NO. 19-005: 1. Zoning Text Amendment (ZTA) No. 19-005 to amend Chapter 203 (Definitions), Chapter 204 (Use Classifications), Chapter 210 (Residential Districts), and Chapter 230 (Site Standards) – Section 230.28 Group Homes of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO), and create Chapter 5.110 Group Homes of the Huntington Beach Municipal Code (HBMC) that together establish a set of regulations for Group Homes, Sober Living Homes, and Residential Care Facilities in Residential Districts Citywide, is consistent with the objectives, policies, general land uses and programs specified in the General Plan including: Land Use Element Policy LU-2 (D): Maintain and protect residential neighborhoods by avoiding encroachment of incompatible land uses. Goal LU-4: A range of housing types is available to meet the diverse economic, physical, and social needs of future and existing residents, while neighborhood character and residences are well maintained and protected. Policy LU-4 (A): Encourage a mix of residential types to accommodate peopl e with diverse housing needs. Housing Element Goal H-1: Maintain and enhance the quality and affordability of existing housing in Huntington Beach. Policy H-1.1: Preserve the character, scale, and quality of established residential neighborhoods. Policy H-5.1: Continue to enforce fair housing laws prohibiting arbitrary discrimination in the building, financing, sales, or rental of housing on the basis of race, religion, family status, national origin, physically (sic) disability or other factors. 291 Attachment No. 1.2 Policy H-5.3: Support the provision of permanent, affordable, and accessible housing that allows persons with disabilities to live independent lives. Provide assistance to residents making accessibility improvements to their homes. The ZTA will provide the City appropriate regulations to reduce impacts of existing and future group homes, sober living homes, and residential care facilities thereby preserving the residential neighborhood character of the communities in which they operate. Further, the ZTA promotes effective recovery for disabled persons, including those suffering from the effects of alcoholism or illegal use of drugs, by providing housing accommodations in normalized residential environments. 2. In the case of a general land use provision, ZTA No. 19-005 is compatible with the uses authorized in, and the standards prescribed for the zoning district for which it is propose d because the proposed amendment will provide the regulatory framework to limit the number of people in a group home and to prevent the overconcentration of sober living homes in single- family residential neighborhoods. The regulation establishes a Special Use Permit application for group homes operating in single-family neighborhoods, and establishes reasonable operating standards on these uses to ensure tha t they do not generate the type of secondary impact that would be out of character for the neighborhood, while still furthering the purpose of the Fair Employment and House Act, Fair Housing Act, and Lanterman Act. 3. A community need is demonstrated for the changes proposed in that the City of Huntington Beach has experienced a rise in the number of Group Homes within single family residential neighborhoods and a rate of increase in the number of Sober Living Homes far greater when compared to other types of Group Homes. The proliferation of Sober Living Homes in the City has resulted in a substantial increase in complaints received by neighbors and community members regarding the operation of these uses. The proposed ZTA No. 19-005 seeks to strike an appropriate balance between the interests of the City and its residents to preserve residential neighborhood character, and the need to provide housing accommodations to disabled persons, including those in recovery, to reside in normalized residential environments that promote effective recovery. 4. Its adoption will be in conformity with public convenience, general welfare and good zoning practice because ZTA No. 19-005 ensures the HBZSO is clear, current, consistently adapting to the City’s obligation to make reasonable accommodation in its zoning laws when such accommodation is reasonably necessary to afford the disabled the opportunity to use and enjoy a dwelling. The ZTA is also reflective of the City’s ongoing effort to preserve the quality of its residential neighborhoods. 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 Chapter 204 USE CLASSIFICATIONS 204.02 Applicability Use classifications describe one or more uses having similar characteristics, but do not list every use or activity that may appropriately be within the classification. The director shall determine whether a specific use shall be deemed to be within one or more use classifications or not within any classification in this title. The director may determine that a specific use shall not be deemed to be within a classification, if its characteristics are substantially different than those typical of uses named within the classification. The director’s decision may be appealed to the Planning Commission. (3334-6/97, 4175- 3/19, 4183-10/19) 204.04 Uses Not Classified Any new use, or any use that cannot be clearly determined to be in an existing use classification, may be incorporated into the zoning provisions by a Zoning and Subdivision Ordinance text amendment, as provided in Chapter 247. Such an incorporation shall not be effective unless certified by the Coastal Commission as a Local Coastal Program amendment. (3334-6/97, 4175-3/19, 4183-10/19) 204.06 Residential Use Classifications A. Day Care, Limited (or Small-Family). Non-medical care and supervision of six or fewer persons, or eight or fewer persons if two of the persons are six years of age or older, on a less than 24-hour basis. Children under the age of 10 years who reside in the home shall be counted for purposes of these limits. This classification includes nursery schools, preschools, and day-care centers for children and adults. B. Group Home. A facility that is being used as a supportive living environment for persons who are considered disabled under State or Federal law. A Group Home operated by a single operator or service provider (whether licensed or unlicensed) constitutes a single facility, whether the facility occupies one (1) or more dwelling units. Group homes shall not include the following: (1) residential care facilities; (2) any unit operating as a single housekeeping unit. C. Group Residential. Shared living quarters without separate kitchen or bathroom facilities for each room or unit. This classification includes boarding houses, but excludes residential hotels or motels, and Group Homes. D. Multifamily Residential. Two or more dwelling units on a site. This classification includes manufactured homes. E. Referral Facility. A Residential Care Facility, Group Home, or Sober Living Home where one or more person’s residency in the facility is pursuant to a court order or directive from an agency in the criminal justice system. F. Residential Care Facility. A residential facility licensed by the State where care, services, or treatment is provided to persons living in a supportive community residential setting. Residential care facilities include, but may not be limited to, the following: intermediate care facilities for the developmentally disabled (Health & Safety Code §§ 1267.8, 1267.9); community care facilities (Health & Safety Code § 1500 et seq.); residential care facilities for the elderly (Health & Safety Code § 1569 et seq.); residential care facilities for the chronically ill (22 C.C.R. § 318 87801(a)(5); Health & Safety Code § 1568.02); alcoholism and drug abuse facilities (Health & Safety Code §§ 11834.02—11834.30); pediatric day health and respite care facilities (Health & Safety Code § 1760 et seq.); residential health care facilities, including congregate living health facilities (Health & Safety Code §§ 1265—1271.1, 1250(i), 1250(e), (h)); family care home, foster home, group home for the mentally disordered or otherwise disabled persons or dependent and neglected children (Wel. & Inst. Code §§ 5115—5120). Residential Alcohol Recovery, Limited. Twenty four hour care for no more than six persons suffering from alcohol problems in needs of personal services, supervision, protection or assistance. This classification includes only those facilities licensed by the State of California. Residential Care, Limited. Twenty four hour non-medical care for six or fewer persons in need of personal services, supervision, protection, or assistance essential for sustaining the activities of daily living. This classification includes only those services and facilities licensed by the State of California. G. Single-Family Residential. Buildings containing one dwelling unit located on a single lot. This classification includes manufactured homes. H. Sober Living Home. A Group Home for persons who are recovering from a drug and/or alcohol addiction and who are considered disabled under State or Federal law. Sober Living Homes shall not include the following: (1) residential care facilities; (2) any unit operating as a single housekeeping unit. I. Supportive Housing. Housing with no limit on length of stay that is occupied by the target population and is linked to on-site or off-site services that assist residents to retain the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community. On-site and off-site services may include, but are not limited to, after- school tutoring, child care, and career counseling. Supportive housing uses are subject only to those restrictions and processing requirements that apply to other residential dwellings of the same type in the same zone. J. Transitional Housing. Temporary housing (generally six months to two years) for a homeless individual or family who is transitioning to permanent housing. This type of housing includes multi - family unit developments and often includes a supportive services component to allow individuals to gain necessary life skills in support of independent living. Transitional housing uses are subject only to those restrictions and processing requirements that apply to other residential dwellings of the same type in the same zone. (3334-6/97, 3669-12/04, 3857-2/10, 4175-3/19, 4183-10/19) 204.08 Public and Semipublic Use Classifications A. Cemetery. Land used or intended to be used for the burial of human remains and dedicated for cemetery purposes. Cemetery purposes include columbariums, crematoriums, mausoleums, and mortuaries operated in conjunction with the cemetery, business and administrative offices, chapels, flower shops, and necessary maintenance facilities. B. Clubs and Lodges. Meeting, recreational, or social facilities of a private or nonprofit organization primarily for use by members or guests. This classification includes union halls, social clubs and youth centers. 319 C. Community and Human Service Facilities. 1. Drug Abuse Centers. Facilities offering drop-in services for persons suffering from drug abuse, including treatment and counseling without provision for on-site residence or confinement. 2. Primary Health Care. Medical services, including clinics, counseling and referral services, to persons afflicted with bodily or mental disease or injury without provision for on-site residence or confinement. 3. Emergency Kitchens. Establishments offering food for the “homeless” and others in need. 4. Emergency Shelters. Establishments offering food and shelter programs for “homeless” people and others in need. This classification does not include facilities licensed for residential care, as defined by the State of California, which provide supervision of daily activities. 5. Residential Alcohol Recovery, General. Facilities providing 24 hour care for more than six persons suffering from alcohol problems, in need of personal services, supervision, protection or assistance. These facilities may include an inebriate reception center as well as facilities for treatment, training, research, and administrative services for program participants and employees. This classification includes only those facilities licensed by the State of California. 6. Residential Care, General. Twenty-four-hour non-medical care for seven or more persons, including wards of the juvenile court, in need of personal services, supervision, protect ion, or assistance essential for sustaining the activities of daily living. This classification includes only those facilities licensed by the State of California. NO FURTHER CHANGES TO HBZSO CHAPTER 204 PROPOSED REMAINDER OMITTED FROM LEGISLATIVE DRAFT 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 City of Huntington Beach File #:20-1677 MEETING DATE:6/9/2020 PLANNING COMMISSION STAFF REPORT TO:Planning Commission FROM:Ursula Luna-Reynosa, Community Development Director BY:Hayden Beckman, Senior Planner SUBJECT: ZONING TEXT AMENDMENT NO. 19-005 (GROUP HOMES) REQUEST: To amend four chapters of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO), and create a new chapter of the Huntington Beach Municipal Code (HBMC) that together establish a set of regulations for Group Homes, Sober Living Homes, and Residential Care Facilities affecting Residential Districts Citywide. The four chapters of the HBZSO to be amended are Chapter 203 (Definitions), Chapter 204 (Use Classifications), Chapter 210 (Residential Districts), and Chapter 230 (Site Standards) - Section 230.28 Group Homes. The chapter of the HBMC to be added is Chapter 5.110 Group Homes. LOCATION: Residential Zoning Districts Citywide APPLICANT: City of Huntington Beach PROPERTY OWNER: Multiple Various Residential Property Owners BUSINESS OWNER: Multiple Various Business Owners STATEMENT OF ISSUE: Currently, the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) does not adequately identify or regulate group homes in all areas of the City. It is the intent of the City Council to develop an Ordinance that strikes an appropriate balance between the interests of the City and its residents to preserve residential neighborhood character, and the need to provide housing accommodations to disabled persons, including those in recovery from chemical addiction to reside in normalized City of Huntington Beach Printed on 6/9/2020Page 1 of 11 powered by Legistar™351 File #:20-1677 MEETING DATE:6/9/2020 residential environments. The Planning Commission shall consider the following: 1. Does the project satisfy all the findings required for approving a Zoning Text Amendment? 2. Has the appropriate level of environmental analysis been determined? RECOMMENDATION: That the Planning Commission take the following actions: A) Finds and determines that the project will not have any significant effect on the environment and is categorically exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendment to the HBZSO will have a significant effect on the environment (Attachment No. 1). B) Forward Zoning Text Amendment No. 19-005 to City Council for consideration with a recommendation of approval (Attachment No. 1). ALTERNATIVE ACTION(S): A) Do not recommend approval of Zoning Text Amendment No. 19-005 to the City Council. PROJECT PROPOSAL: Background: At the September 16, 2019 City Council meeting by a vote of 7-0, the City Council directed the City Attorney to return to Council with one or more Ordinance(s) that regulates “Group Homes and Sober Living Homes” with an appropriate balance between the interests of the City and its residents to preserve residential neighborhood character and the need to provide reasonable accommodation for the disabled, including those recovering from chemical addiction, to reside in normalized residential environments. Like many California cities, the City of Huntington Beach has experienced a rise in the number of Group Homes within single family residential neighborhoods. A type of Group Home, commonly referred to as Sober Living Homes, are single family homes where many occupants reside while recovering from alcohol and drug addiction. These Sober Living Homes provide a place to live in “a residential setting” between detox and the resident’s future housing. These homes are not required to be licensed by the State and are not allowed to provide services that State licensed alcoholism or drug abuse recovery or treatment facilities provide. The proliferation of Sober Living Homes in Huntington Beach has resulted in a substantial increase in complaints generated by neighbors and community members regarding the operation of these uses. Reported impacts of sober living homes include excessive amounts of noise, loitering, second-hand smoke, trash and debris, and increased parking demands within residential neighborhoods. Of particular concern are complaints regarding the over-concentration of sober living homes, and when in close proximity to one another, these uses may change the character of a residential neighborhood City of Huntington Beach Printed on 6/9/2020Page 2 of 11 powered by Legistar™352 File #:20-1677 MEETING DATE:6/9/2020 in close proximity to one another, these uses may change the character of a residential neighborhood to a more institutional environment. The proposed amendments are intended to preserve the residential character of single-family residential neighborhoods and to further the purposes of State law, by, among other things: (1) ensuring that Group Homes are actually entitled to the special accommodation and/or additional accommodation provided under the Huntington Beach Municipal Code and not simply skirting the City’s land use regulations; (2) limiting the secondary impacts of Group Homes by reducing noise and traffic, preserving safety and providing adequate on street parking; (3) providing an accommodation for the disabled that is reasonable and actually bears some resemblance to the opportunities afforded non-disabled individuals to use and enjoy a dwelling unit in a single-family neighborhood; and (4) to provide comfortable living environments that will enhance the opportunity for the disabled and for recovering addicts to be successful in their programs. The proposed regulations will require Group Homes, including Sober Living Homes, to obtain a ministerial permit to operate in a manner consistent with the nature of the single-family residential neighborhoods in which they are located. The Federal Fair Housing Act (FHA) and California Fair Employment Housing Act (FEHA), prohibits cities from enforcing zoning laws that have the effect of discriminating against the disabled with regard to housing opportunities. A disabled person is defined by The Americans with Disabilities Act (ADA) as one that has: 1. A physical or mental impairment that affects one or more major life activities; 2. A history of recovery from alcoholism or illegal use of drugs; or 3. Has been regarded as having such impairment. The ADA protects persons in recovery from chemical addiction, even if they are no longer engaged in the illegal use of drugs and otherwise meet the definitions in the statute. Additionally, pursuant to the California Government and Welfare and Institutions Codes, and The Lanterman Developmental Disabilities and Services Act (Lanterman Act), people with developmental disabilities have the right to obtain the services and support they need to live like people without disabilities. A core purpose of this State law is to provide a broader range of housing options to the disabled, and to free the disabled to the extent possible from institutional style living. As such, a disabled person is afforded an equal opportunity to use and enjoy a residential dwelling. Likewise, pursuant to the California FEHA, individuals with physical and mental disabilities have the right under State law to rent, lease, or buy housing accommodations free from discrimination due to a disability. State law requires cities to treat certain state-licensed residential care facilities that provide care, services, and/or treatment serving six or fewer disabled tenants as a single family residential use. (As such, and consistent with State law, the existing HBZSO provides that both “Residential Alcohol Recovery, Limited” and “Residential Care, Limited” uses that house six (6) or fewer individuals are permitted by right in the City’s Residential districts.) The Health and Safety Code does not regulate supportive living facilities that provide no treatment, and the HBZSO does not currently classify such a use specifically, which has encumbered the City’s ability to effectively mitigate impacts from such uses. Finally, the California Constitution and Huntington Beach Charter grants broad police powers to Huntington Beach to preserve the residential characteristics or its various types of residential zones. It is the intent of the City Council to develop an Ordinance that strikes an appropriate balance between the interests of the City and its residents to preserve residential neighborhood character, and the need to provide housing accommodations to disabled persons, including those in recoveryCity of Huntington Beach Printed on 6/9/2020Page 3 of 11 powered by Legistar™353 File #:20-1677 MEETING DATE:6/9/2020 and the need to provide housing accommodations to disabled persons, including those in recovery from chemical addiction to reside in normalized residential environments that promote effective recovery. State and Federal laws require the City to make reasonable accommodations in its zoning laws when such accommodation is reasonably necessary to afford the disabled the opportunity to use and enjoy a dwelling. The proposed Ordinance will apply to all districts Citywide, but affect only residential districts. Study Session: The Planning Commission held a study session for ZTA No. 19-005 on May 26, 2020. In addition to minor text adjustments, the Commission asked staff to return with information regarding the following items: ·HBZSO Chapter 230.28 (B)(1)(k)(ii) - What is the final option for an operator who is in the process of evicting a tenant if that operator cannot find a facility or agency willing to accept them? Staff added “If the operator cannot find accommodation, the occupant must continue to house on premises until such accommodation can be found for the occupant” to Chapter 230.28 (B) (1)(k)(ii). ·Clarify definition of Boarding House. Can we add language to Use Classification to Group Residential to exclude Single Housekeeping Units? Upon further consideration, the proposed definition of Boarding House was revised. However, the distinctions of the proposed definitions of both Boarding House and Group Residential are of legal significance and staff does not recommend further modification. ·Can the requirements include a blanket buffer for GH/SLH to also be minimum 1000 feet from any City boundary to avoid cross-jurisdictional overconcentration? A buffer requirement from City boundaries has not been legally tested by the Courts and is therefore not recommended. The proposed 1000’ buffer is in excess of the 650’ buffer that has been tested and any additional deviations could be a future issue. ·How does a Referral Facility become a Referral Facility? Does an applicant have to declare that upon application to the City? The operator of any existing or future Group Home, Sober Living Home, or Residential Care Facility may choose to accept residents as ordered from a court or similar directive, thus classifying their operation as a Referral Facility. As such, the operator is responsible for identifying this element of operation to the City and staff will build into the applications for a Special Use Permit or Conditional Use Permit a statement requiring that the operator identify whether they intend to operate as a Referral Facility. ·Can the City tie the revocation of an Operator’s Permit to a corresponding Conditional Use Permit for the same property and operator? City of Huntington Beach Printed on 6/9/2020Page 4 of 11 powered by Legistar™354 File #:20-1677 MEETING DATE:6/9/2020 A recommended condition of approval will be included with the Planning Commission’s review of any Group Home Conditional Use Permit Home that will require a valid Operator’s Permit for the duration of the operation of said Group Home. The condition will identify that should an Operator’s Permit be revoked by the Finance Director, a hearing shall be held to formally revoke the corresponding Conditional Use Permit by the Planning Commission. ·Are there any recent relevant legislative updates? The City of Costa Mesa is in various stages of litigation concerning their Group Home Ordinance. The litigation spans from the earliest which is an administrative appeal of a denial of a SUP to a pending case before a trial court to a case appealed to the Ninth Circuit Court of Appeal. ISSUES AND ANALYSIS: General Plan Conformance: The proposed ZTA is consistent with the goals and policies of the City’s General Plan including: Land Use Element Policy LU-2 (D): Maintain and protect residential neighborhoods by avoiding encroachment of incompatible land uses. Goal LU-4: A range of housing types is available to meet the diverse economic, physical, and social needs of future and existing residents, while neighborhood character and residences are well maintained and protected. Policy LU-4 (A): Encourage a mix of residential types to accommodate people with diverse housing needs. Housing Element Goal H-1: Maintain and enhance the quality and affordability of existing housing in Huntington Beach. Policy H-1.1: Preserve the character, scale, and quality of established residential neighborhoods. Policy H-5.1: Continue to enforce fair housing laws prohibiting arbitrary discrimination in the building, financing, sales, or rental of housing on the basis of race, religion, family status, national origin, physically (sic) disability or other factors. Policy H-5.3: Support the provision of permanent, affordable, and accessible housing that allows persons with disabilities to live independent lives. Provide assistance to residents making accessibility improvements to their homes. The ZTA will provide the City appropriate regulations to reduce impacts of existing and future group homes, sober living homes, and residential care facilities thereby preserving the residential City of Huntington Beach Printed on 6/9/2020Page 5 of 11 powered by Legistar™355 File #:20-1677 MEETING DATE:6/9/2020 homes, sober living homes, and residential care facilities thereby preserving the residential neighborhood character of the communities in which they operate. Further, the ZTA promotes effective recovery for disabled persons, including those suffering from the effects of alcoholism or illegal use of drugs, by providing housing accommodations in normalized residential environments. Zoning Compliance: The following provides a review of the proposed amendments organized by each Chapter. A. CHAPTER 203 DEFINITIONS To provide context to the scope of changes in this ZTA, several new definitions must be established in Chapter 203 Definitions, identified below. - Modify existing definition of Boarding House - Add Disabled - Add Fair Housing Laws - Add Household - Add Integral Facilities - Add Integral Uses - Add Operator - Add Single Housekeeping Unit These definitions work in concert with the other elements of the proposed ZTA to more clearly define specific uses as they pertain to the regulation of Group Homes in Huntington Beach. B.CHAPTER 204 USE CLASSIFICATIONS To provide for the regulation of Group Homes, including Sober Living Homes, this ZTA will establish four new use classifications in Chapter 204 Use Classifications. Staff is summarizing them below in order to introduce and differentiate each classification. Group Home A residential unit utilized as a supportive living environment for people meeting the legal definition of disabled. ·Provides housing only for a classified group of people. No medical care, services, or treatment can take place in a Group Home o Only State licensed facilities can provide care, services, or treatment under State law (see Residential Care Facilities) Sober Living Home Sober Living Homes are also Group Homes, but specifically for people recovering from a chemical addiction that meet the legal definition of disabled. ·Provides housing only that is primarily meant for people who have just come out of rehab and need a place to live that is structured and supportive for those in recovery. ·For the purposes of the Ordinance, a Sober Living Home is not state licensed. ·No medical care, services, or treatment can occur in a Sober Living Home o Only State licensed facilities can provide care, services, or treatment under State law (see Residential Care Facilities) City of Huntington Beach Printed on 6/9/2020Page 6 of 11 powered by Legistar™356 File #:20-1677 MEETING DATE:6/9/2020 Residential Care Facilities (RCF) A State Licensed residential facility where care, services, or treatment are provided to persons living in a community residential setting. ·Provide housing and care/treatment for the elderly, developmentally disabled, chronically ill, and chemical addiction treatment facilities, among others. ·RCFs that specifically provide drug and or alcohol abuse treatment are licensed by the Department of Health Care Services (DHCS) and are known as alcoholism or drug abuse recovery or treatment facilities. o Homes are required to be licensed by the DHCS when at least one of the following services is provided: detoxification, group counseling sessions, individual counseling sessions, educational sessions, or alcoholism or drug abuse recovery or treatment planning. Referral Facility Either a Residential Care Facility, Group Home, or Sober Living Home where one or more person’s residency is per a court order or similar directive. Referral facilities must follow the permit procedure according to the base use classification, and are not permitted in the RL zone. C.CHAPTER 210 RESIDENTIAL DISTRICTS In addition to establishing the new Definitions and Use Classifications identified above, this ZTA will also amend Chapter 210 Residential Districts to provide reference to land use controls and new requirements for Group Homes in Residential Districts (Legislative Drafts attached for reference). These changes are summarized below. 1. Add “Group Homes Including Sober Living Homes” to Land Use Controls matrix and create Additional Provision L-8: o A Group Home (GH) or Sober Living Home (SLH) with six (6) or fewer residents §In all Residential districts, requires a ministerial Special Use Permit (SUP) from the Community Development Director; and §Any SLH shall be one thousand (1000) feet from any other property that contains a GH, SLH, or RCF pursuant to Chapter 230.28 o A GH or SLH with seven (7) or more residents §Not permitted in the RL zone §In all other Residential Districts, requires a CUP from the Planning Commission; and ·An Operator’s Permit that complies with Huntington Beach Municipal Code (HBMC) Section 5.110; and ·The GH or SLH (with 7 or more residents) shall be one thousand (1000) feet from any other property that contains a GH or SLH. o An applicant for a GH or SLH may seek relief from strict application of the requirements of Additional Provision L-8 by applying for reasonable accommodation pursuant to HBMC 17.77. City of Huntington Beach Printed on 6/9/2020Page 7 of 11 powered by Legistar™357 File #:20-1677 MEETING DATE:6/9/2020 2. Add “Referral Facility” to the Land Use Controls matrix and create Additional Provision L-9: o Referral Facilities are not permitted in the RL zone; and §No Referral Facility may be located: ·Within five hundred (500) feet of property that is zoned either RL or Specific Plan Residential Low Density, or ·Within five hundred (500) feet of a school, park, place of worship, or licensed day care facility. o Referral Facilities must have an on-site manager 24/7 o Referral Facilities may not admit a resident convicted of specific crimes 3. Add “Residential Care Facility” to the Land Use Controls Matrix and create Additional Provision (T). o Certain Residential Care Facilities are Permitted (P), and certain Residential Care Facilities require a CUP from the Planning Commission. The “P/PC” listing refers to this differentiation. o Additional Provision (T) §Identify that unlicensed Residential Care Facilities are not permitted in any R district §State licensed Residential Care Facilities serving six (6) or fewer residents are permitted in all R districts §State licensed Residential Care Facilities serving seven (7) or more residents in all R districts require a CUP from the Planning Commission D.CHAPTER 230.28 GROUP HOMES Finally, this ZTA will add a new section to Chapter 230 Site Standards, Article I. Residential Districts. Titled Chapter 230.28 Group Homes, this section represents the appropriate placement for new regulations that will be applicable to Group Homes in Residential Districts. Special Use Permit (SUP) Chapter 230.28 will identify that a Group Home that may otherwise be considered an unpermitted use may locate in a Residential District subject to the approval of a Special Use Permit (SUP) by the Community Development Director, provided that the Group Home is in compliance with applicable regulations. Should the Ordinance be adopted, all existing Group Homes as well as any new proposed Group Home will be required to obtain a SUP. The SUP is ministerial and may be granted when a complete application is submitted to the Community Development Director that provides the following: 1. The name, address, phone number, and driver’s license number of the owner, operator, and house manager; 2. A copy of the Group Home rules and regulations; 3. Written intake procedures; 4. The relapse policy (if applicable, depending on the type of Group Home); 5. An affirmation by the owner/operator that only residents (other than the house manager) who City of Huntington Beach Printed on 6/9/2020Page 8 of 11 powered by Legistar™358 File #:20-1677 MEETING DATE:6/9/2020 5. An affirmation by the owner/operator that only residents (other than the house manager) who are disabled as defined by State and Federal law shall reside at the Group Home; 6. Blank copies of all forms that residents and potential residents are required to complete; and 7. A fee for the cost of processing the application as set by resolution by the City Council. Only basic information will be required to submit an application for a SUP, and the internal procedures and forms will be provided to applicants. Compliance with the application requirements should not present any significant hardship, since the requirements are in line with the routine capabilities expected from a professionally operated Group Home. In general, the operational requirements to maintain a SUP include the following: no more than seven (7) tenants may reside in a Group Home, one of which must be a house manager. If the dwelling unit has a secondary accessory unit, occupants of both units will be combined to determine whether or not the limit of six (6) occupants has been exceeded. A Group Home shall not be located in an accessory secondary unit unless the primary dwelling unit is used for the same purpose. The SUP also requires garage and driveway spaces to be available and used for parking of vehicles and limits each tenant to one vehicle, which must be operable and used as a primary form of transportation. In addition to the requirements for Group Homes outlined above, Chapter 230.28 will also identify that the following shall specifically apply to Sober Living Homes: 1. Sober Living Homes are prohibited from locating within one thousand (1000) feet of each other. 2. All occupants, other than the house manager, must be actively participating in legitimate recovery programs with supporting documentation required. 3. The Sober Living Home’s rules and regulations must prohibit the use of any alcohol or non- prescribed drugs at the Sober Living Home or by any recovering addict either on or off site. Violation of the no drug policies are grounds for eviction for 90 days for the first offense. Any second violation of this rule shall result in permanent eviction. 4. The number of sex offenders in any group home shall be no more than one, pursuant to the applicable provisions of the Penal Code. 5. Each Sober Living Home shall have a written visitation policy that precludes any visitors who are under the influence of any drug or alcohol. 6. The Sober Living Home shall have a good neighbor policy that shall direct the occupants to be considerate of neighbors, including refraining from engaging in excessively loud, profane, or obnoxious behavior that would unduly interfere with a neighbor’s use and enjoyment of their dwelling unit. The good neighbor policy shall establish a written protocol for the house manager/operator to follow when a neighbor complaint is received. 7. The Sober Living Home shall not provide any of the following services as they are defined by the California Code of Regulations: detoxification; educational counseling; individual or group counseling sessions; and treatment or recovery planning. Chapter 230.28 will also provide provisions for requests for reasonable accommodation, cause for denial or revocation of a Special Use Permit, and compliance with the proposed regulations. If the Zoning Text Amendment is adopted by Ordinance, existing Group Homes, including Sober Living Homes, will have 90 days to apply for a Special Use Permit. Group Homes will have one year from the effective date of the Ordinance to comply with its provisions, provided that any existing group home, which is serving more than six (6) residents, must first comply with the six (6) resident City of Huntington Beach Printed on 6/9/2020Page 9 of 11 powered by Legistar™359 File #:20-1677 MEETING DATE:6/9/2020 maximum. Conditional Use Permit Finally, Chapter 230.28 will require a Conditional Use Permit to permit the operation of a Group Home, including Sober Living Homes, or Residential Care Facility with seven (7) or more occupants in the RM, RMH, RH, RMP, Specific Plan Residential and Specific Plan Mixed Use zones. This CUP requirement will be processed to the Planning Commission. A Group Home or Residential Care Facility will be prohibited in the RL zone and these stipulations are reflected in the Land Use Controls matrix of Chapter 210. In addition to the Conditional Use Permit requirement, Group Homes or Residential Care Facilities with seven (7) or more occupants are subject to the following requirements: 1. The Group Home or Sober Living Home shall be at least one thousand (1000) feet from any other property that contains a Group Home, Sober Living Home, or State-licensed Residential Care Facility; and 2. An application for an Operator’s Permit that complies with Chapter 5.110 of the Huntington Beach Municipal Code (HBMC). OPERATOR’S PERMIT In addition to the ZTA, the Huntington Beach Municipal Code Chapter 5.110 Group Homes will be amended to add a requirement that a Group Home obtain an Operator’s Permit. Since Group Homes with more than seven (7) residents will be expressly prohibited in the RL zone, the Operator’s Permit requirement applies to Group Homes with seven (7) or more residents in the RM, RMH, RH, RMP, Specific Plan Residential or Specific Plan Mixed Use zones. The Operator’s Permit requirement does not apply to: 1. A Group Home that has six (6) or fewer occupants, not counting a house manager, that is in compliance with Chapter 230.28 of the HBZSO; 2. A state-licensed alcoholism or drug abuse recovery or treatment facility; or 3. A state-licensed residential care facility. An application for an Operator’s Permit will be submitted to the Finance Director and must include similar information to that of a Special Use Permit. A Group Home subject to the provisions of Chapter 5.110 that is in existence as of the effective date of the Ordinance will have 120 days to comply with the provisions. Urban Design Guidelines Conformance: Not Applicable. Environmental Status: ZTA No. 19-005 is categorically exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) (General Rule) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the amendment to the HBZSO will have a significant effect on the environment. City of Huntington Beach Printed on 6/9/2020Page 10 of 11 powered by Legistar™360 File #:20-1677 MEETING DATE:6/9/2020 Coastal Status: The proposed amendment will be forwarded to the California Coastal Commission as a minor Local Coastal Program Amendment for certification. Design Review Board: Not Applicable. Subdivision Committee: Not Applicable. Other Departments Concerns and Requirements: Should ZTA 19-005 be adopted by the City Council, the proposed regulations will require the development of application forms and review and approval processes to accommodate the dispensation of Special Use Permits by the Community Development and Operator’s Permits by the Finance Department. Public Notification: Legal notice was published in the Orange County Register on May 28, 2020 and notices were sent to individuals/organizations requesting notification (Planning Division’s Notification Matrix). As of June 3, no communications regarding the request have been received Application Processing Dates: DATE OF COMPLETE APPLICATION:MANDATORY PROCESSING DATE(S): Not applicable Legislative Action - Not applicable SUMMARY: Staff recommends that the Planning Commission recommend approval of Zoning Text Amendment No. 19-005 with findings and forward to the City Council based on the following: ·Codifies new use classifications that modernize the HBZSO ·Provides appropriate regulations and permit processes to reduce operational impacts of existing and future group homes, sober living homes, and residential care facilities ·Provides housing accommodations to disabled persons to reside in normalized residential environments ·Promotes effective recovery for persons suffering from the effects of alcoholism or illegal use of drugs ·Preserves residential neighborhood character ·Consistent with General Plan goals and policies ATTACHMENTS: 1.Suggested Findings of Approval - ZTA No. 19-005 2. Section 203 Definitions Legislative Draft 3. Section 204 Use Classifications Legislative Draft 4. Section 210 Residential Districts Legislative Draft 5. Section 230.28 Group Homes Legislative Draft 6. Huntington Beach Municipal Code Chapter 5.110 Group Homes Legislative Draft (Reference Only) City of Huntington Beach Printed on 6/9/2020Page 11 of 11 powered by Legistar™361 ZONING TEXT AMENDMENT NO. 19-005 (GROUP HOMES) City of Huntington Beach City Council July 6, 2020 362 ZONING TEXT AMENDMENT NO. 19-005 Background •City Council direction September 16, 2019 •Provide reasonable accommodation for the disabled •Preserve residential neighborhood character 363 ZONING TEXT AMENDMENT NO. 19-005 Background •Federal Fair Housing Act (FHA) and California Fair Employment Housing Act (FEHA) •Americans with Disabilities Act (ADA) •CA Government Code, Welfare and Institutions Code, and Lanterman Act 364 ZONING TEXT AMENDMENT NO. 19-005 Background •Laws intend to free disabled from institutional style living •Certain State-licensed ‘residential care facilities’ considered a single family residential use •Provide care, services, and/or treatment •6 or fewer disabled tenants •Unregulated supportive living facilities •No care, services, and/or treatment •HBZSO does not currently classify these uses 365 ZONING TEXT AMENDMENT NO. 19-005 Amendments 1. Chapter 203 Definitions •Add 8 new definitions 2. Chapter 204 Use Classifications •Establish 4 new Use Classifications: •Group Home •Sober Living Home •Residential Care Facility •Referral Facility 366 ZONING TEXT AMENDMENT NO. 19-005 Chapter 204 Use Classifications •Group Home •A residential unit used as a supportive living environm ent for the disabled •Provide housing only •No medical care, services, or treatment •Sober Living Home •A Group Home specifically for disabled people recovering from a drug and/or alcohol addiction •Not State licensed •Provide housing only •No medical care, services, or treatment 367 ZONING TEXT AMENDMENT NO. 19-005 Chapter 204 Use Classifications •Residential Care Facility (RCF) •Must be State-licensed •Provide housing and medical care, services, or treatment •Supportive living environment for elderly, developmental ly disabled, chronically ill, among others •Referral Facility •Either a RCF, Group Home, or Sober Living Home •1 or more person’s residency is per a court order or similar directiv e 368 ZONING TEXT AMENDMENT NO. 19-005 3. Chapter 210 Residential Districts Add “Group Homes Including Sober Living Homes” and create Additional Provision L-8: o A Group Home (GH) or Sober Living Home (SLH) with 6 or fewer residents •Requires Special Use Permit (SUP) from the Community Development Director •Any SLH shall be one thousand (1000) feet from any other property that contains a GH, SLH, or RCF 369 ZONING TEXT AMENDMENT NO. 19-005 Additional Provision L-8 (continued): o A GH or SLH with 7 or more residents •Not permitted in the RL zone •Otherwise CUP from the Planning Commission; and •An Operator’s Permit •The GH or SLH (with 7 or more residents) shall be one thousand (1000) feet from any other property that contains a GH or SLH 370 ZONING TEXT AMENDMENT NO. 19-005 Chapter 210 Residential Districts Add “Referral Facility” to the Land Use Controls matrix and create Additional Provision L-9: o Not permitted in the RL zone o May not be located: •Within five hundred (500) feet of property that is zoned either RL or Specific Plan Residential Low D ensity, or •Within five hundred (500) feet of a school, park, place of worship, or licensed day care facilit y. 371 ZONING TEXT AMENDMENT NO. 19-005 Chapter 210 Residential Districts Add “Residential Care Facility” and create Additional Provision (T): •Unlicensed RCFs not permitted •State licensed Residential Care Facilities (RCF)serving 6 or fewer residents are Permitt ed (P) •State licensed RCFs serving 7 or more residents require a CUP from the Plannin g Commission (PC). 372 ZONING TEXT AMENDMENT NO. 19-005 Chapter 230 Site Standards Add Chapter 230.28 Group Homes •Group Home subject to approval of a Special Use Permit (SUP) •Applies to existing and future Group Homes •Ministerial approval •Director’s decision appealable to the Planning Commission •Additional requirements 373 ZONING TEXT AMENDMENT NO. 19-005 Chapter 230.28 Group Homes (continued) •Sober Living Homes also subject to a SUP •Prohibited from locating within 1000 feet of each other •Group Homes and Sober Living Homes will have 90 days to apply for SUP •One year from effective date of Ordinance to comply with proposed provisions 374 ZONING TEXT AMENDMENT NO. 19-005 Chapter 230.28 Group Homes (continued) •Group Home, Sober Living Home, or Residential Care Facility with 7 or more occupants •Prohibited in RL zone •All other R Districts require a CUP from the Planning Commissio n •Minimum 1000 feet from any other property that contains a Group Home, Sober L iving Home, or RCF •Operators Permit pursuant to HBMC Chapter 5.110 375 ZONING TEXT AMENDMENT NO. 19-005 HBMC Chapter 5.110 Group Homes •Operator’s Permit •Group Home, Sober Living Home, or Residential Care Facility with 7 or more occupants located outside RL Zone •Similar to a Special Use Permit •120 days to comply 376 ZONING TEXT AMENDMENT NO. 19-005 •Ministerial approval to operate a Group Home •Reasonable accommodation for the disabled •Preserve the residential character of single-family neighborhoods •Limit secondary impacts •Enhance opportunity for disabled and recovering addicts to be successful 377 Staff and Planning Commission Recommendation Approve for Introduction Ordinance Nos. 4214, 4212, 4215, 4216, and 4213, approving Zoning Text Amendment (ZTA) No. 19-005 and Municipal Code Amendment adding Chapter 5.110 378 Questions? 379 From:Undisclosed To:supplementalcomm@surfcity-hb.org Subject:Meeting 7/6 Agenda item #18 20-1717 Date:Sunday, July 5, 2020 9:50:55 PM Hello, I wanted to encourage the City Council to please approve item #18 20-1717 that includes the Zoning Text Amendment No. 19-005. These new items are desperately needed in order to begin the process of limiting and regulating the Sober Living Homes/Recovery Homes that are starting to crop up in our neighborhoods. We live on Ashworth Circle and it had been 12 men at 19622 Ashworth Circle- but guess what? ANOTHER man moved in on 4th of July, with his 3 dogs!! Where does it end?? We only want to have our neighborhood be just that, a family neighborhood. Thank you for all your work-we appreciate you! #norecoveryonashworth (you may read my email at the meeting if you chose to do so) 380 City of Huntington Beach File #:20-1746 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Chris Slama, Director of Community Services Subject: Approve the Revised Master Plan for the Redevelopment of the Rodgers Seniors’ Center Site and direct staff to complete the design process and issue a bid package for construction Statement of Issue: There is a need for City Council to approve the revised Master Plan for redevelopment of the Rodgers Seniors’ Center site. Financial Impact: Funding in the amount of $925,000 is included in the Fiscal Year (FY) 2020/21 Capital Improvement Program (CIP) budget with an additional $875,000 scheduled for FY 2021/22. The FY 2020/21 amount is budgeted in the Park Development Impact Fund 228, account 22845018. Recommended Action: Approve the revised Rodgers Seniors’ Center Site Master Plan, as included in Attachment 3, and direct staff to complete the design process and issue a bid package for construction. Alternative Action(s): Do not approve the recommended action, and direct staff accordingly. Analysis: City Council previously directed staff to work through the Community Services Commission (CSC) to seek public input and make recommendations to City Council on re-use of the Rodgers Seniors’ Center site (RSC). As part of City Council action, staff was also directed to consider utilizing a charrette format to enable the highest level of public input. The two-acre RSC is located at 1706 Orange Avenue. For many years, it served as a public park and as home of the Michael Rodgers Seniors’ Center and Senior Outreach Building. On Saturday, September 28, 2019, RJM Design Group (RJM) conducted the charrette-style workshop at the RSC. The goal of the charrette workshop was to gather input from the community City of Huntington Beach Printed on 7/17/2020Page 1 of 3 powered by Legistar™381 File #:20-1746 MEETING DATE:7/20/2020 for the future use of the site. The meeting was well attended with approximately 100 local residents participating. The workshop included activities where attendees were broken out into groups. Tools were provided for each group to assist with communicating their ideas for the future use of the site. The groups provided input on likes, dislikes, issues, concerns, and park and facility amenities. Most groups created a concept plan for the site, from which RJM created a composite plan that included the former Senior Outreach building, tot lot, parking area, and green space, which ultimately led to the development of a draft conceptual plan for recommendation. On November 13, 2019, staff presented RJM’s design proposal and conceptual diagram (Attachment 1) to the CSC for recommendation to City Council for their consideration. A slightly modified version of the proposed diagram was approved by the CSC at that meeting, with the playground equipment removed from the plan, in response to several public comments requesting more open green space. At the City Council study session on February 18, 2020, staff presented the revised conceptual plan approved by the CSC (Attachment 2), seeking City Council feedback in order to complete the draft Master Plan for the Rodgers Seniors’ Center site. Further discussion ensued regarding parking needs, requirements, and possible options for the location of parking spaces - on and/or off-site. Based on the variety of feedback from the City Council at the February 18, 2020, study session, staff worked with RJM to devise a revised draft Master Plan. The newly-proposed plan features a parking lot located adjacent to Orange Avenue, placing it closer to the building for accessibility (Attachment 3). The proposed lot would include 13 parking spaces, which in combination with on-street parking, would support assemblies of 30-40 people in the building, as well as provide park access. Per City Council direction and public input process, the smaller, former Senior Outreach building, would remain and be utilized by the American Legion Post 133 for certain storage and meeting space needs, while also serving as a reservation facility for the general public according to the City’s Master Fee and Charges Schedule. The total budget for the redevelopment of the RSC is estimated at $1,800,000. Of this amount, $925,000 is included in the FY 2020/21 CIP budget with the balance scheduled for FY 2021/22 using Park Development Impact fees. Should the City Council approve the recommended action, staff will immediately continue the design process in order to produce a package for a competitive bidding process to construct the park. Environmental Status: The project will go through appropriate CEQA clearances as identified in the entitlement process. Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1) RJM original conceptual design presented to Community Services Commission (November 13, 2019) 2) Modified conceptual design proposal presented to City Council (February 18, 2020) 3) Revised conceptual design proposal following City Council Study Session City of Huntington Beach Printed on 7/17/2020Page 2 of 3 powered by Legistar™382 File #:20-1746 MEETING DATE:7/20/2020 City of Huntington Beach Printed on 7/17/2020Page 3 of 3 powered by Legistar™383 384 Refined Conceptual Diagram (Per Community Services Commission Meeting on 11/13/2019) 385 OPEN TURF AREAOPEN TURF AREALANDSCAPE AREALANDSCAPE AREAEXISTING TREE (TYP.)EXISTING TREE (TYP.)ASSEMBLY HALL ASSEMBLY HALL ENTRY PLAZAENTRY PLAZAPARKING AREA (13 STALLS)PARKING AREA (13 STALLS)SEATING AREA(TYP.)SEATING AREA(TYP.)8’ WIDE WALKING PATH8’ WIDE WALKING PATHPICNIC PAD (TYP.)PICNIC PAD (TYP.)PARK MONUMENT SIGNPARK MONUMENT SIGNEXISTING SIDEWALK (TYP.)EXISTING SIDEWALK (TYP.)386 Rodgers Seniors’ Center Site Redevelopment Master Plan City Council Administrative Item July 20, 2020 387 1.Project Background 2.Rodgers Site Draft Master Plan 3.Parks and Recreation Master Plan Update Presentation Overview 388 Rodgers Seniors’ Center Site Background Rodgers Seniors’ Center Site City Council City of HB RJM Design Group Public •City Council Study Session held 2/18/20 to review park design concept for the Rodgers Senior Center site –Community input process –Community Services Commission 389 Evolution of Park Design •The initial proposed park design that came out of the public planning process featured a playground, preserving Outreach building for an assembly hall, open turf area, and a parking lot •That concept was modified by the Community Services Commission, which recommended the removal of the playground •Finally, based on City Council feedback at the 2/18/20 Study Session, the parking lot has been redesigned with fewer spaces, with access off of Orange Ave. 390 Initial Bubble Diagram Design (RSC) 391 Modified Conceptual Diagram (RSC) (Per Community Services Commission Meeting on 11/13/2019) 392 Final Draft Master Plan (RSC) 393 Importance of Park Planning •Recent park improvements in the City have been guided by our HB Park & Recreation Master Plan –The document was approved by the City Council in February 2016, with direction to update the document in 5 years •The Master Plan includes a 6-year list of park priorities –Costs for general park maintenance / renovation, park specific improvements, and park acquisition in the Master Plan were estimated at $35M 394 Prioritized Projects -Update Project Est.Completion Funded Worthy Park Complete Yes –Project Complete Murdy Park/Community Center Complete Yes –Project Complete LeBard Property Acquisition Complete Yes –Project Complete LeBard Park Improvements June 2021 Yes Bartlett Park June 2021 Yes Central Park June 2021 Yes Harbour View Park/Clubhouse June 2022 Yes (multi-phase) Blufftop Park June 2022 Yes (multi-phase) Lake Park June 2021 Partial Edison Park/Community Center Pending Partial Marina Park Pending (ADA access completed)No 395 Highlights Central Park 396 Highlights Murdy Park/Community Center 397 Highlights Worthy Park 398 Highlights Eader Park 399 Highlights Blufftop Park Design 400 Master Plan Update •We have been able to fund nearly all of the prioritized park improvements identified in the 2016 Master Plan –Improvements have been made possible mainly through Park Development Impact Fees (DIF) –Based on current park improvement plans, the City’s Park DIF fund balance is expected to be ~$3.8M by the end of the current FY 2020/21 •To ensure relevant future park investments for our community, funding was approved by the City Council to develop an updated Park Master Plan –That process will begin this year, and the completed document will guide our future park development efforts 401 Recommended Action Approve the revised Rodgers Seniors’ Center Site Master Plan as included in Attachment 3, and direct staff to complete the design process and issue a bid package for construction. Questions? 402 From:Fikes, Cathy To:Agenda Alerts Subject:FW: Rodgers center Date:Thursday, July 16, 2020 11:36:14 AM From: denniskbauer@gmail.com <denniskbauer@gmail.com> Sent: Thursday, July 16, 2020 11:25 AM To: Semeta, Lyn <Lyn.Semeta@surfcity-hb.org> Cc: Fikes, Cathy <CFikes@surfcity-hb.org> Subject: Rodgers center Please remember that when they tor down Memorial Hall which was Post 133’s home, the city gave us a contract to provide us with a building. The city let us use the Rodgers Center in leu of a building. So please remember us concerning the develop of the Rodgers Center. Dennis Bauer 403 City of Huntington Beach File #:20-1763 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Dahle Bulosan, Chief Financial Officer Subject: Adopt Resolution No. 2020-52 authorizing the execution and delivery by the City of a Master Site Lease, Master Lease Agreement, Master Indenture, Bond Purchase Agreement, Continuing Disclosure Certificate, Second Amendment to Site Lease and a Second Amendment to Lease Agreement in connection with the issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in one or more series, approving the issuance of such bonds in an aggregate principal amount of not to exceed $21,000,000, authorizing the distribution of an official statement and authorizing the execution of necessary documents and certificates and related actions in connection therewith Statement of Issue: City Council authorization is requested to approve the refunding of the Huntington Beach Public Financing Authority’s outstanding 2010 Lease Revenue Refunding Bonds, Series A ($7,410,000) and 2011 Lease Revenue Refunding Bonds, Series A ($15,725,000) in an amount not to exceed $21,000,000. Financial Impact: General Fund debt service expenditures will be reduced by over $900,000 in the first two years of refunding, followed by an average annual savings of $390,000 thereafter through 2032. All costs of the bond refunding will be paid from bond proceeds. The maturity dates of the new bonds coincide on a fiscal year basis with the maturity dates of the bonds that are being refunded. Recommended Action: A) Adopt Resolution No. 2020-52, “A Resolution of the City Council of the City of Huntington Beach Authorizing the Execution and Delivery by the City of a Master Site Lease, A Master Lease Agreement, A Master Indenture, A Bond Purchase Agreement, A Continuing Disclosure Certificate, A Second Amendment to Site Lease and a Second Amendment to Lease Agreement in Connection with the Issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in One or More Series, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $21,000,000, Authorizing the Distribution of an Official Statement and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith;” City of Huntington Beach Printed on 7/17/2020Page 1 of 4 powered by Legistar™404 File #:20-1763 MEETING DATE:7/20/2020 and, B) Authorize the City Manager and City Clerk to take all administrative and budgetary actions necessary to perform the bond refunding. Alternative Action(s): Do not approve the recommended action and the refinancing of the bonds, and direct staff accordingly. Analysis: The Huntington Beach Public Financing Authority (PFA) was formed in 1988 to issue debt to finance public improvements and other capital projects for the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach. The PFA’s governing body is the City Council, which also adopts the PFA annual budget. The PFA is financially dependent on the City for all its operations. Currently, the PFA has three separate debt issues outstanding (2010 Series A, 2011 Series A, and 2014 Series A) totaling $35,665,000. Staff regularly monitors the market for municipal securities. Recently, the municipal bond market has improved to the point where refunding the bonds will be economically beneficial. The 2010 Series A Bonds are callable on September 1, 2020 and can be refunded on a tax-exempt basis. The 2011 Series A Bonds are callable on September 1, 2021 and will be advance refunded on a taxable basis. The Tax Cuts and Jobs Act of 2017, which went into effect on January 1, 2018, prohibits the use of tax-exempt bonds for advance refundings. Below is a summary of the proposed transaction: Bond Issue Original Issuance Amount Amount Currently Outstanding Economic Benefit of Refinancing Current Average Coupon Rate Refunding Coupon Rate 2010 Lease Revenue Bonds, Series A 14,745,000 7,410,000 2,085,300 5.0%4.0% 2011 Lease Revenue Bonds, Series A 36,275,000 15,725,000 3,637,700 4.1%2.4% Total $ 51,020,000 $ 23,135,000 $ 5,723,000 The City’s economic benefit is the difference between the cash flows for the new debt compared to the old debt, or $5,723,000, which takes into account all of the expenditures of the new debt. The proposed refunding will be structured to provide over $900,000 in annual savings for the first two years of the refunding, and an average of $390,000 in annual debt service savings through 2032. The maturity dates of the new bonds coincide on a fiscal year basis with the maturity dates of the bonds that are being refunded. Staff is recommending that the existing debt be refunded by the issuance of new debt, not to exceed $21,000,000. The recommended “not to exceed” amount is determined by the City’s financial advisors, and is a conservative estimate based on issuing bonds at par, without the additional proceeds generated from bond “premium.” Upon issuance of the new debt, the City will have no further obligation to fund debt service on the original debt. Staff is recommending that the bonds be sold through its selected underwriter, Stifel, through a negotiated sale. Stifel was selected through a competitive Request for Proposals process where seven different firms submitted City of Huntington Beach Printed on 7/17/2020Page 2 of 4 powered by Legistar™405 File #:20-1763 MEETING DATE:7/20/2020 Stifel was selected through a competitive Request for Proposals process where seven different firms submitted proposals. Stifel provided the most competitive qualified proposal and will market the bonds to investors. The bonds are payable from rental payments received by the Huntington Beach Public Financing Authority from General Fund lease payments made on City-owned properties. The 2010 Series A and 2011 Series B bonds have been payable from General Fund lease payments made on the following properties: ·Donald W. Kiser Corporate Yard ·Civic Center Given current valuations, the City will only use the Donald W. Kiser Corporate Yard as a leased property for the new debt and will release the Civic Center from the remaining lease obligation of the 2014 bonds. The leased asset securing the 2014 bonds will now be the Central Library. Consistent with financial industry standards, in order for staff to proceed with the transaction, the net present value savings to the City must be at least 3% of the refunded principal amount. The minimum savings amount is calculated as follows: Principal Amount of Debt to be Redeemed $ 23,135,000 Multiplied by 3%3% Minimum Necessary Present Value Savings $ 694,050 If the savings is less than $694,050, then the transaction will not be completed. Currently, the City is anticipating Net Present Value Savings of ~8.4%. Staff will continue to monitor interest rate trends to determine when and if additional debt refunding or defeasances will create a financial benefit. If such a situation occurs, staff will present the proposal to the City Council for approval. Environmental Status: Not applicable. Strategic Plan Goal: Strengthen long-term financial and economic sustainability Attachment(s): 1. Resolution No. 2020-52 “A Resolution of the City Council of the City of Huntington Beach Authorizing the Execution and Delivery by the City of a Master Site Lease, A Master Lease Agreement, A Master Indenture, A Bond Purchase Agreement, A Continuing Disclosure Certificate, A Second Amendment to Site Lease and a Second Amendment to Lease Agreement in Connection with the Issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in One or More Series, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $21,000,000, Authorizing the Distribution of an Official Statement and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith.” 2. Master Site Lease 3. Master Lease Agreement City of Huntington Beach Printed on 7/17/2020Page 3 of 4 powered by Legistar™406 File #:20-1763 MEETING DATE:7/20/2020 4. Master Indenture 5. Bond Purchase Agreement 6. Continuing Disclosure Certificate 7. Second Amendment to Site Lease 8. Second Amendment to Lease Agreement 9. Preliminary Official Statement City of Huntington Beach Printed on 7/17/2020Page 4 of 4 powered by Legistar™407 408 409 410 411 412 413 414 415 416 4162-0786-5380.3 TO BE RECORDED AND WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine, California 92614-8255 Attention: Donald S. Field, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. MASTER SITE LEASE by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [__________] 1, 2020 417 4162-0786-5380.3 MASTER SITE LEASE THIS MASTER SITE LEASE (this “Site Lease”), executed and entered into as of [__________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH (the “City”), a municipal corporation and chartered city organized and existing under the laws of the State of California, as lessor, and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (the “Authority”), a joint powers authority organized and existing under the laws of the State of California, as lessee. RECITALS WHEREAS, in order to refinance certain capital improvements, including certain improvements to public facilities to be installed as a part of the City’s Pier Plaza project and a portion of the City’s share of the costs of a countywide 800 MHz coordinated communications system (the “1997 Project”) and other capital projects, including South Beach Phase I and II Improvements, a Beach Maintenance Facility, energy retrofitting of various facilities, design costs of the City’s Sports Complex, water system improvements and the City’s Emerald Cove Senior Housing project (the “2000 Project”), the Authority issued its Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior 2010A Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the “1993 Project”) and the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the “2001 Project” and together with the Prior 1993 Project, the 1997 Project and the 2000 Project, the “Projects”), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior 2011A Bonds” and, together with the Prior 2010A Bonds, the “Prior Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refund the Prior Bonds and, therefore, refinance the Projects; and WHEREAS, in order to refund the Prior Bonds and, therefore, refinance the Projects, the City will lease certain real property, and the improvements thereto, consisting of the Donald W. Kiser Corporation Yard (the “Property”), to the Authority pursuant to this Site Lease, and the City will sublease the Property back from the Authority pursuant to a Master Lease Agreement, dated the date hereof (the “Lease Agreement”); and WHEREAS, the Property is more particularly described in Exhibit A hereto; and WHEREAS, in order to provide the funds necessary to refund the Prior Bonds and, therefore, refinance the Projects, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”), and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable) (the “Series 2020B Bonds” and, together with the Series 2020A 418 2 4162-0786-5380.3 Bonds, the “Series 2020 Bonds”), in the respective aggregate principal amounts of $[__________] and $[__________], pursuant to a Master Indenture (the “Indenture”), by and among the Authority, the City and U.S. Bank National Association, as trustee (the “Trustee”), payable from the base rental payments to be made by the City pursuant to the Lease Agreement and the other assets pledged therefor under the Indenture; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Site Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Site Lease; NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases defined in Article I of the Lease Agreement shall have the same meanings in this Site Lease. ARTICLE II LEASE OF THE PROPERTY; RENTAL Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Site Lease. Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the sum of not to exceed $[___________] (the “Site Lease Payment”). The Site Lease Payment shall be paid from the proceeds of the Series 2020 Bonds; provided, however, that in the event the available proceeds of the Series 2020 Bonds are not sufficient to enable the Authority to pay such amount in full, the remaining amount of the Site Lease Payment shall be reduced to an amount equal to the amount of such available proceeds. The City shall deposit the Site Lease Payment in one or more separate funds or accounts to be held and administered for the purpose of refinancing the Projects. The Authority and the City hereby find and determine that the amount of the Site Lease Payment does not exceed the fair market value of the leasehold interest in the Property which is conveyed hereunder by the City to the Authority. No other amounts of rental shall be due and payable by the Authority for the use and occupancy of the Property under this Site Lease. ARTICLE III QUIET ENJOYMENT 419 3 4162-0786-5380.3 The parties intend that the Property will be leased back to the City pursuant to the Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in the Lease Agreement, if an event of default occurs under the Lease Agreement, the Authority, or its assignee, will have the right, for the then remaining term of this Site Lease to (a) take possession of the Property, (b) if it deems it appropriate, cause an appraisal of the Property and a study of the then reasonable use thereof to be undertaken, and (c) relet the Property. Subject to any rights the City may have under the Lease Agreement (in the absence of an event of default) to possession and enjoyment of the Property, the City hereby covenants and agrees that it will not take any action to prevent the Authority from having quiet and peaceable possession and enjoyment of the Property during the term hereof and will, at the request of the Authority and at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the Authority asserts its right to such possession and enjoyment. ARTICLE IV SPECIAL COVENANTS AND PROVISIONS Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and that it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act. Section 4.02 Further Assurances and Corrective Instruments. The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Site Lease, the Indenture and the Lease Agreement. Section 4.03 Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority shall be solely liabilities of the Authority as a joint powers authority, and the City hereby releases each and every director, officer and employee of the Authority of and from any personal or individual liability under this Site Lease. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Site Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder. All liabilities under this Site Lease on the part of the City shall be solely liabilities of the City as a governmental entity, and the Authority hereby releases each and every council member, officer and employee of the City of and from any personal or individual liability under this Site Lease. No council member, officer or employee of the City shall at any time or under any circumstances be individually or personally liable under this Site Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder. Section 4.04 Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property. 420 4 4162-0786-5380.3 Section 4.05 Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same. Section 4.06 Representations of the City. The City represents and warrants to the Authority and the Trustee as follows: (a) the City has the full power and authority to enter into, to execute and to deliver this Site Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Site Lease; (b) except for Permitted Encumbrances, the Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for governmental purposes as contemplated by the City; (c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full; and (d) the Property is necessary to the City in order for the City to perform its governmental functions. Section 4.07 Representations of the Authority. The Authority represents and warrants to the City and the Trustee that the Authority has the full power and authority to enter into, to execute and to deliver this Site Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Site Lease. ARTICLE V ASSIGNMENT, SELLING AND SUBLEASING Section 5.01 Assignment, Selling and Subleasing. This Site Lease may be assigned or sold, and the Property may be subleased, as a whole or in part, by the Authority, without the necessity of obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sublease or sale, as the case may be. The Authority shall assign all of its rights hereunder to the Trustee appointed pursuant to the Indenture. Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Site Lease. ARTICLE VI IMPROVEMENTS 421 5 4162-0786-5380.3 Title to all improvements made on the Property during the term hereof shall vest in the City. ARTICLE VII TERM; TERMINATION Section 7.01 Term. The term of this Site Lease shall commence as of the date of commencement of the term of the Lease Agreement and shall remain in full force and effect from such date to and including [May 1, 20__], unless such term is extended or sooner terminated as hereinafter provided. Section 7.02 Extension; Early Termination. If, on [May 1, 20__], the Bonds shall not be fully paid, or provision therefor made in accordance with Article IX of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments payable under the Lease Agreement shall have been abated at any time, then the term of this Site Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article IX of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Site Lease shall in no event be extended more than ten years. If, prior to [May 1, 20__], all Bonds shall be fully paid, or provisions therefor made in accordance with Article IX of the Indenture, and the Indenture shall be discharged by its terms, the term of this Site Lease shall end simultaneously therewith. Section 7.03 Action on Default. In each and every case upon the occurrence and during the continuance of a default by the Authority hereunder, the City shall have all the rights and remedies permitted by law, except the City, to the extent permitted by law, waives any and all rights to terminate this Site Lease. ARTICLE VIII MISCELLANEOUS Section 8.01 Binding Effect. This Site Lease shall inure to the benefit of and shall be binding upon the City, the Authority and their respective successors and assigns. Section 8.02 Severability. In the event any provision of this Site Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 8.03 Amendments; Substitution and Release. This Site Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement. The City shall have the right to substitute alternate real property for the Property or to release portions of the Property as provided in the Lease Agreement. Section 8.04 Assignment. The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Site Lease to the Trustee pursuant to the Indenture. The City consents to such assignment. The City consents to the Indenture and acknowledges and agrees to the rights of the Trustee as set forth therein. 422 6 4162-0786-5380.3 Section 8.05 Execution in Counterparts. This Site Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 8.06 Applicable Law. This Site Lease shall be governed by and construed in accordance with the laws of the State of California. Section 8.07 Captions. The captions or headings in this Site Lease are for convenience only and in no way define or limit the scope or intent of any provision of this Site Lease. IN WITNESS WHEREOF, the parties hereto have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. CITY OF HUNTINGTON BEACH By: HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Attest: Robin Estanislau, Secretary 423 A-1 EXHIBIT A DESCRIPTION OF THE PROPERTY All that certain real property situated in the County of Orange, State of California, and any improvements thereto, described as follows: 424 4162-0786-5380.3 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On ______________________ before me, ____________________, Notary Public, personally appeared ______________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ____________________________ [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 425 4162-0786-5380.3 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On ______________________ before me, ____________________, Notary Public, personally appeared ______________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ____________________________ [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 426 4162-0786-5380.3 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Master Site Lease, dated as of [__________] 1, 2020, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under of the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), from the City to the Authority, is hereby accepted by the undersigned on behalf of the Authority pursuant to authority conferred by resolution of the Board of Directors of the Authority adopted on [________], 2020, and the Authority consents to recordation thereof by its duly authorized officer. Dated: [__________], 2020 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ______________________________ 427 4149-0022-5572.4 MASTER LEASE AGREEMENT by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [_________] 1, 2020 428 TABLE OF CONTENTS Page i 4149-0022-5572.4 ARTICLE I DEFINITIONS ................................................................................................. 3 Section 1.01. Definitions............................................................................................ 3 ARTICLE II LEASE OF PROPERTY; TERM .................................................................... 5 Section 2.01. Lease of Property ................................................................................. 5 Section 2.02. Term; Occupancy ................................................................................. 5 ARTICLE III RENTAL PAYMENTS ................................................................................... 6 Section 3.01. Base Rental Payments .......................................................................... 6 Section 3.02. Additional Rental Payments ................................................................ 6 Section 3.03. Fair Rental Value ................................................................................. 7 Section 3.04. Payment Provisions .............................................................................. 7 Section 3.05. Appropriations Covenant ..................................................................... 7 Section 3.06. Rental Abatement................................................................................. 7 ARTICLE IV REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS ............................................................................................... 9 Section 4.01. Power and Authority of the City .......................................................... 9 Section 4.02. Power and Authority of the Authority ................................................. 9 Section 4.03. Net-Net-Net Lease ............................................................................... 9 Section 4.04. Disclaimer of Warranties ..................................................................... 9 Section 4.05. Quiet Enjoyment .................................................................................. 9 Section 4.06. Right of Entry ...................................................................................... 9 Section 4.07. Use of the Property .............................................................................. 9 Section 4.08. Maintenance and Utilities .................................................................. 10 Section 4.09. Additions to Property ......................................................................... 10 Section 4.10. Installation of City’s Equipment ........................................................ 10 Section 4.11. Taxes .................................................................................................. 10 Section 4.12. Liens ................................................................................................... 11 Section 4.13. Compliance with Law, Regulations, Etc ............................................ 11 Section 4.14. No Condemnation .............................................................................. 11 Section 4.15. Authority’s Purpose ........................................................................... 11 ARTICLE V INSURANCE ................................................................................................. 12 Section 5.01. Public Liability and Property Damage Insurance .............................. 12 Section 5.02. Additional Insurance Provision; Form of Policies ............................. 12 429 TABLE OF CONTENTS (continued) Page ii 4149-0022-5572.4 Section 5.03. Self-Insurance .................................................................................... 12 Section 5.04. Title Insurance ................................................................................... 13 ARTICLE VI EMINENT DOMAIN; RIGHT TO REDEEM .............................................. 14 Section 6.01. Eminent Domain ................................................................................ 14 Section 6.02. Right to Redeem Bonds ..................................................................... 14 ARTICLE VII ASSIGNMENT AND SUBLETTING; SUBSTITUTION OR RELEASE; TITLE ......................................................................................... 15 Section 7.01. Assignment and Subleasing ............................................................... 15 Section 7.02. Substitution or Release of the Property ............................................. 15 Section 7.03. Title to Property ................................................................................. 16 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ................................................ 17 Section 8.01. Events of Default ............................................................................... 17 Section 8.02. Action on Default ............................................................................... 17 Section 8.03. Other Remedies .................................................................................. 19 Section 8.04. No Acceleration ................................................................................. 19 Section 8.05. Remedies Not Exclusive .................................................................... 19 Section 8.06. Waiver ................................................................................................ 20 Section 8.07. Attorney’s Fees .................................................................................. 20 Section 8.08. Authority Event of Default; Action on Authority Event of Default................................................................................................ 20 ARTICLE IX AMENDMENTS ........................................................................................... 21 Section 9.01. Amendments ...................................................................................... 21 ARTICLE X MISCELLANEOUS ...................................................................................... 22 Section 10.01. Authority Not Liable .......................................................................... 22 Section 10.02. Assignment to Trustee; Effect ........................................................... 22 Section 10.03. Gender and References; Article and Section Headings ..................... 22 Section 10.04. Validity and Severability ................................................................... 22 Section 10.05. California Law ................................................................................... 23 Section 10.06. Notices ............................................................................................... 23 Section 10.07. Execution in Counterparts .................................................................. 23 430 4149-0022-5572.4 LEASE AGREEMENT THIS MASTER LEASE AGREEMENT (this “Lease Agreement”), dated as of [_________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under the laws of the State of California (the “City”), as lessee, and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), as lessor. RECITALS WHEREAS, in order to refinance certain capital improvements, including certain improvements to public facilities to be installed as a part of the City’s Pier Plaza project and a portion of the City’s share of the costs of a countywide 800 MHz coordinated communications system (the “1997 Project”) and other capital projects, including South Beach Phase I and II Improvements, a Beach Maintenance Facility, energy retrofitting of various facilities, design costs of the City’s Sports Complex, water system improvements and the City’s Emerald Cove Senior Housing project (the “2000 Project”), the Authority issued its Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior 2010A Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the “1993 Project”) and the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the “2001 Project” and together with the Prior 1993 Project, the 1997 Project and the 2000 Project, the “Projects”), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior 2011A Bonds” and, together with the Prior 2010A Bonds, the “Prior Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refund the Prior Bonds and, therefore, refinance the Projects; and WHEREAS, in order to refund the Prior Bonds and, therefore, refinance the Projects, the City is leasing certain real property, and the improvements thereto, consisting of Donald W. Kiser Corporation Yard (the “Property”), to the Authority pursuant to a Master Site Lease, dated as of the date hereof (the “Site Lease”), and the City is subleasing the Property back from the Authority pursuant to this Lease Agreement; and WHEREAS, the Property is more particularly described in Exhibit A hereto; and WHEREAS, in order to provide the funds necessary to refund the Prior Bonds and, therefore, refinance the Projects, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”), and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 431 2 4149-0022-5572.4 2020 Series B (Federally Taxable) (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Series 2020 Bonds”), in the respective aggregate principal amounts of $[__________] and $[__________], pursuant to the Master Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and U.S. Bank National Association, as trustee (the “Trustee”), which bonds are payable from the base rental payments to be made by the City pursuant to this Lease Agreement; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement; NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows: 432 3 4149-0022-5572.4 ARTICLE I DEFINITIONS Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Lease Agreement and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Indenture. “Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 hereof. “Authority” means the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California. “Authority Event of Default” means an event described as such in Section 8.08. “Base Rental Deposit Date” means the fifth Business Day next preceding each Interest Payment Date. “Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 hereof. “City” means the City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California. “Closing Date” means [__________], 2020. “Event of Default” means an event described as such in Section 8.01. “Indenture” means the Master Indenture, dated as of the date hereof, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. “Independent Insurance Consultant” means a nationally recognized independent actuary, insurance company or broker that has actuarial personnel experienced in the area of insurance for which the City is to be self-insured, as may from time to time be designated by the City. “Laws and Regulations” means, with respect to the Property, any applicable law, regulation, code, order, rule, judgment or consent agreement, including, without limitation, those relating to zoning, building, use and occupancy, fire safety, health, sanitation, air pollution, ecological matters, environmental protection, hazardous or toxic materials, substances or wastes, conservation, parking, architectural barriers to the handicapped, or restrictive covenants or other agreements affecting title to the Property. “Lease Agreement” means this Master Lease Agreement, as originally executed and as it may from time to time be amended in accordance with the provisions hereof. 433 4 4149-0022-5572.4 “Net Proceeds” means any insurance proceeds or condemnation award paid with respect to any of the Property, which proceeds or award, after payment therefrom of all reasonable expenses incurred in the collection thereof, are in an amount greater than $50,000. “Permitted Encumbrances” means, with respect to the Property (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Section 4.11 hereof, permit to remain unpaid, (b) this Lease Agreement, (c) the Site Lease, (d) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law, (e) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Closing Date, and (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Closing Date which the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and to which the Authority consents in writing. “Property” means the real property described in Exhibit A hereto, and any improvements thereto. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments. “Rental Period” means the period from the Closing Date through [June 30, 20__] and, thereafter, the twelve-month period commencing on July 1 of each year during the term of this Lease Agreement. “Scheduled Termination Date” means [May 1, 20__]. “Site Lease” means the Master Site Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and hereof. “Trustee” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee under the Indenture substituted in its place as provided therein. 434 5 4149-0022-5572.4 ARTICLE II LEASE OF PROPERTY; TERM Section 2.01. Lease of Property. (a) The Authority hereby leases to the City and the City hereby leases from the Authority the Property, on the terms and conditions hereinafter set forth, subject to all Permitted Encumbrances. (b) The leasing of the Property by the City to the Authority pursuant to the Site Lease shall not effect or result in a merger of the City’s leasehold estate in the Property as lessee under this Lease Agreement and its fee estate in the Property as lessor under the Site Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Site Lease throughout the term thereof and hereof. This Lease Agreement shall constitute a sublease with respect to the Property. The leasehold interest in the Property granted by the City to the Authority pursuant to the Site Lease is and shall be independent of this Lease Agreement and this Lease Agreement shall not be an assignment or surrender of the leasehold interest in the Property granted to the Authority under the Site Lease. Section 2.02. Term; Occupancy. (a) The term of this Lease Agreement shall commence on the Closing Date and shall end on the Scheduled Termination Date, unless such term is extended or sooner terminated as hereinafter provided. If, on the Scheduled Termination Date, all of the Bonds shall not be fully paid or deemed to have been paid in accordance with Article IX of the Indenture, or any Rental Payments shall remain due and payable or shall have been abated at any time, then the term of this Lease Agreement shall be extended until the date upon which all of the Bonds shall be fully paid or deemed to have been paid in accordance with Article IX of the Indenture, and all Rental Payments due and payable shall have been paid in full; provided, however, that the term of this Lease Agreement shall in no event be extended more than ten years beyond the Scheduled Termination Date. If, prior to the Scheduled Termination Date, all of the Bonds shall be fully paid or deemed to have been paid in accordance with Article IX of the Indenture, and all Rental Payments due and payable shall have been paid in full, the term of this Lease Agreement shall end simultaneously therewith. (b) The City shall take possession of the Property on the Closing Date. 435 6 4149-0022-5572.4 ARTICLE III RENTAL PAYMENTS Section 3.01. Base Rental Payments. (a) General. The Rental Payments, including Base Rental Payments, for each Rental Period shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during such Rental Period. The obligation of the City to pay the Base Rental Payments does not constitute a debt of the City or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. (b) Base Rental Payments. Subject to the provisions of Section 3.06 hereof, the City shall, on each Base Rental Deposit Date, pay to the Authority a Base Rental Payment in an amount equal to the principal of, and interest on, the Bonds due and payable on the next succeeding Principal Payment Date or Interest Payment Date, as applicable, including any such principal due and payable by reason of mandatory sinking fund redemption of the Bonds; provided, however, that the amount of such Base Rental Payment shall be reduced by the amount, if any, available in the Payment Fund, the Principal Account or the Interest Account on such Base Rental Deposit Date to pay such principal of, or interest on, the Bonds. (c) Payments other than Regularly Scheduled Payments. If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date of termination of this Lease Agreement (as so extended pursuant to Section 2.02 hereof). Upon such extension, the Base Rental Payments payable during such extended term shall be established so that such Base Rental Payments will in the aggregate be sufficient to pay the unpaid principal of, and interest accrued and to accrue on, the Bonds; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property. Section 3.02. Additional Rental Payments. The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following: (a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein; (b) all reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or this Lease Agreement or to defend the Authority and its members, officers, agents and employees; (c) insurance premiums for all insurance required pursuant to Article V hereof; 436 7 4149-0022-5572.4 (d) any amounts with respect to the Bonds required to be rebated to the federal government in accordance with section 148(f) of the Code; and (e) all other payments required to be paid by the City under the provisions of this Lease Agreement or the Indenture. Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof. Section 3.03. Fair Rental Value. The parties hereto have agreed and determined that the Rental Payments are not in excess of the fair rental value of the Property. In making such determination of fair rental value, consideration has been given to the uses and purposes which may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period. Section 3.04. Payment Provisions. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the Principal Office of the Trustee, or such other place or entity as the Authority shall designate. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent Rental Payments due hereunder or refunded at the time of such determination. Section 3.05. Appropriations Covenant. The City covenants to take such action as may be necessary to include all Rental Payments due hereunder in its annual budgets and to make necessary annual appropriations for all such Rental Payments. The covenants on the part of the City contained in this Section shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform such covenants. Section 3.06. Rental Abatement. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated, proportionately, and the City waives the benefits of California Civil Code Sections 1932(2) and 1933(4) and any and all other rights to terminate this Lease Agreement by virtue of any such interference, and this Lease Agreement shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Authority. The City and the Authority shall provide the Trustee with a certificate setting forth the amount of such abatement and the basis therefor. Such abatement shall continue for the period commencing with the date of interference 437 8 4149-0022-5572.4 resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed, and the term of this Lease Agreement shall be extended as provided in Section 2.02 hereof; provided, however, that such term shall in no event be extended more than ten years beyond the Scheduled Termination Date. Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds and accounts. 438 9 4149-0022-5572.4 ARTICLE IV REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS Section 4.01. Power and Authority of the City. The City represents and warrants to the Authority that (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Site Lease and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Site Lease and the Indenture, and (b) the Property is zoned for use for governmental related facilities. Section 4.02. Power and Authority of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Site Lease and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Site Lease and the Indenture. Section 4.03. Net-Net-Net Lease. This Lease Agreement shall be, and shall be deemed and construed to be, a “net-net-net lease” and the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and notwithstanding any dispute between the City and the Authority. Section 4.04. Disclaimer of Warranties. THE AUTHORITY MAKES NO AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT THE AUTHORITY IS NOT A MANUFACTURER OF ANY PORTION OF THE PROPERTY OR A DEALER THEREIN, THAT THE CITY LEASES THE PROPERTY AS IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. Section 4.05. Quiet Enjoyment. So long as no Event of Default shall have occurred and be continuing, the City shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority. Section 4.06. Right of Entry. The Authority shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes. Section 4.07. Use of the Property. The City shall not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule 439 10 4149-0022-5572.4 in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement. Section 4.08. Maintenance and Utilities. As part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City. In exchange for the Rental Payments, the Authority agrees to provide only the Property. Section 4.09. Additions to Property. Subject to Section 4.12 hereof, the City and any sublessee shall, at its own expense, have the right to make additions, modifications and improvements to the Property. To the extent that the removal of such additions, modifications or improvements would not cause material damage to the Property, such additions, modifications and improvements shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. Such additions, modifications and improvements shall not in any way damage the Property or cause it to be used for purposes other than those authorized under the provisions of state and federal law, and the Property, upon completion of any addition, modification or improvement made pursuant to this Section, shall be of a value which is at least equal to the value of the Property immediately prior to the making of such addition, modification or improvement. Section 4.10. Installation of City’s Equipment. The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items, and the Property, upon completion of any installation, modification or removal made pursuant to this Section, shall be of a value which is at least equal to the value of the Property immediately prior to the making of such installation, modification or removal. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property. Section 4.11. Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as and when the same become due. 440 11 4149-0022-5572.4 Upon notice to the Authority and the Trustee, the City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority and the Trustee. Section 4.12. Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and shall cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contest is in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment. Section 4.13. Compliance with Law, Regulations, Etc. The City represents and warrants that, after due inquiry, it has no knowledge and has not given or received any written notice indicating that the Property or the use thereof or any practice, procedure or policy employed by it in the conduct of its business with respect to the Property materially violates any Laws and Regulations. Section 4.14. No Condemnation. The City shall not exercise the power of condemnation with respect to the Property. If for any reason the foregoing covenant shall be held by a court of competent jurisdiction to be unenforceable and the City condemns the Property or if the City breaches such covenant, the City agrees that the value of the City’s leasehold estate hereunder in the Property shall be not less than the greater of (a) the amount sufficient to redeem the Bonds pursuant to the Indenture if the Bonds are then subject to redemption, or (b) the amount sufficient to defease the Bonds to the first available redemption date in accordance with the Indenture if the Bonds are not then subject to redemption. Section 4.15. Authority’s Purpose. So long as any Bonds are Outstanding, the Authority shall not engage in any activities inconsistent with the purposes for which the Authority is organized, as set forth in the agreement pursuant to which the Authority was created. 441 12 4149-0022-5572.4 ARTICLE V INSURANCE Section 5.01. Public Liability and Property Damage Insurance. (a) The City shall maintain reasonable and customary liability insurance. The insurance required under this subsection may be maintained in whole or in part in the form of self-insurance, provided that such self-insurance complies with the provisions of Section 5.03 hereof. (b) The City shall maintain or cause to be maintained insurance insuring the Property against fire, lightning and all other risks covered by an extended coverage endorsement (all risk basis excluding earthquake) to be written at full replacement cost of the Property structures, subject to a minimum $25,000 loss deductible provision. Full replacement cost shall not be less than the aggregate principal amount of the Outstanding Bonds. The insurance required under this subsection may be maintained in whole or in part in the form of self-insurance, provided that such self-insurance complies with the provisions of Section 5.03 hereof. (c) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to subsection (b) of this Section in an amount not less than an amount equal to two times Maximum Annual Debt Service. The insurance required under this subsection may not be maintained in whole or in part in the form of self-insurance. (d) The insurance required by this Section shall be provided by insurers rated “A” or better by Fitch, A.M. Best Company or S&P. Section 5.02. Additional Insurance Provision; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 5.01 hereof. All such policies shall provide that the Trustee shall be given 30 days notice of the expiration thereof, any intended cancellation thereof or any reduction in the coverage provided thereby. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee. The City shall, following receipt of a written request of the Trustee, cause to be delivered to the Trustee on or before August 15 of each year, commencing [August 15, 20__], a schedule of the insurance policies being maintained in accordance herewith and a Written Certificate of the City stating that such policies are in full force and effect and that the City is in full compliance with the requirements of this Article. The Trustee shall be entitled to rely upon said Written Certificate of the City as to the City’s compliance with this Article. The Trustee shall not be responsible for the sufficiency of the coverage or the amounts of such policies. Section 5.03. Self-Insurance. Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance shall be deemed to be self-insurance for purposes hereof. Any self-insurance maintained by the City pursuant to this Article shall be approved in writing by an Independent Insurance Consultant or the City’s Risk Manager. 442 13 4149-0022-5572.4 Section 5.04. Title Insurance. The City shall provide, at its own expense, one or more CLTA title insurance policies for the Property, in the aggregate amount of not less than the aggregate principal amount of the Bonds. Said policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Site Lease, and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances; provided, however, that one or more of said estates may be insured through an endorsement to such policy or policies. All Net Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in Section 5.02 of the Indenture. So long as any of the Bonds remain Outstanding, each policy of title insurance obtained pursuant hereto or required hereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Owners. 443 14 4149-0022-5572.4 ARTICLE VI EMINENT DOMAIN; RIGHT TO REDEEM Section 6.01. Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less than all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then this Lease Agreement shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06 hereof. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in Sections 3.01 and 5.01 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the City. Section 6.02. Right to Redeem Bonds. (a) [The City shall have the right to cause the Bonds to be redeemed pursuant to, and in accordance with the provisions of, Section 3.02 of the Indenture by providing the Trustee with funds sufficient for such purpose (which funds may be derived by the City from any source) and giving notice of the City’s exercise of such right as provided in subsection (b) of this Section.] (b) [In order to exercise its right to cause Bonds to be redeemed pursuant to subsection (a) of this Section, the City shall give written notice to the Trustee of its intention to exercise such right, specifying the date on which such redemption shall be made, which date shall be not less than 35 days from the date such notice is given (unless otherwise agreed by the Trustee), and specifying the Series, maturities and amounts of Bonds to be redeemed.] (c) The City shall have the right to cause Bonds to be deemed to have been paid pursuant to, and in accordance with the provisions of, Section 9.02 of the Indenture by providing the Trustee with funds sufficient for such purpose (which funds may be derived by the City from any source) and providing and delivering, or causing to be provided and delivered the other items required pursuant to said Section 9.02 to be provided or delivered in connection with such deemed payment. 444 15 4149-0022-5572.4 ARTICLE VII ASSIGNMENT AND SUBLETTING; SUBSTITUTION OR RELEASE; TITLE Section 7.01. Assignment and Subleasing. Neither this Lease Agreement nor any interest of the City hereunder shall be sold, mortgaged, pledged, assigned, or transferred by the City by voluntary act or by operation of law or otherwise; provided, however, that the Property may be subleased in whole or in part by the City, but only subject to the following conditions, which are hereby made conditions precedent to any such sublease: (a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) no such sublease by the City shall cause the Property to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State of California; (d) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under this Lease Agreement, including, the right to re-enter and re-let the Property or terminate this Lease Agreement upon a default by the City; and (e) the City shall have filed or caused to be filed with the Authority and the Trustee an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on Tax-Exempt Bonds to be included in gross income for federal income tax purposes. Section 7.02. Substitution or Release of the Property. Subject to the provisions of this Section, the City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with any such substitution or release shall be borne by the City. Notwithstanding any substitution or release pursuant to this Section, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following conditions, which are hereby made conditions precedent to such substitution or release: (a) a qualified employee of the City or an independent certified real estate appraiser selected by the City shall have found (and shall have delivered a certificate to the Trustee setting forth its findings) that (i) the sum of Base Rental Payments plus Additional Rental Payments due under the Lease Agreement in any Rental Period is not in excess of the annual fair rental value of the Property, as constituted after such substitution or release, and (ii) the Property, as constituted after such substitution or release, has a useful life equal to or greater than the maximum remaining term of this Lease Agreement (including extensions thereof under Section 2.02 hereof); (b) the City shall have obtained or caused to be obtained an CLTA title insurance policy or policies with respect to any substituted property in the amount of the fair market value of such 445 16 4149-0022-5572.4 substituted property (which fair market value shall have been determined by a qualified employee of the City or an independent certified real estate appraiser), of the type and with the endorsements described in Section 5.04 hereof; (c) the City shall have filed or caused to be filed with the Trustee an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on Tax- Exempt Bonds to be included in gross income for federal income tax purposes; (d) the City shall have given, or shall have made arrangements for the giving of, any notice of the occurrence of such substitution or release required to be given pursuant to paragraph [(__) of subsection (__) of Section 5 of the Continuing Disclosure Certificate]; (e) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the county recorder of the county in which the Property is located, any document necessary to reconvey to the City the portion of the Property being substituted or released and to include any substituted real property in the description of the Property contained herein and in the Site Lease; and (f) the City shall have certified to the Trustee that the substituted real property is essential for performing the City’s governmental functions. Section 7.03. Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Section 8.02 hereof), and the first date upon which no Bonds are any longer Outstanding, all right, title and interest in and to the Property shall vest in the City. Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record. 446 17 4149-0022-5572.4 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.01. Events of Default. The occurrence, from time to time, of any one or more of the following events shall constitute an Event of Default under this Lease Agreement: (a) the failure of the City to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this Lease Agreement; (b) the failure by the City to observe and perform any of the other covenants, agreements or conditions on its part in this Lease Agreement contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the City by the Trustee, the Authority or the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if, in the reasonable opinion of the City, the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the City within such 30 day period and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time, provided, further, however, that the period of time for such cure shall not exceed 90 days without the prior written consent of the Authority; (c) except as otherwise expressly permitted by this Lease Agreement, the assignment or transfer, either voluntarily or by operation of law or otherwise, of the City’s interest in this Lease Agreement or any part thereof without the written consent of the Authority; (d) the abandonment of the Property by the City; or (e) the commencement by the City of a voluntary case under Title 11 of the United States Code or any substitute or successor statute. Section 8.02. Action on Default. (a) In each and every case during the continuance of an Event of Default hereunder, the Authority, in addition to all other rights and remedies it may have at law, shall have the option either to exercise the rights provided for in subsection (b) of this Section or to exercise the rights provided for in subsection (c) of this Section. (b) In each and every case during the continuance of an Event of Default hereunder, the Authority shall have the right to terminate this Lease Agreement in the manner hereinafter provided, notwithstanding any re-entry or re-letting of the Property as provided in subsection (c) of this Section, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon the Property and removal and storage of such property by the Authority or its duly authorized 447 18 4149-0022-5572.4 agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the Authority by such written notice. (c) In each and every case during the continuance of an Event of Default hereunder, the Authority shall have the right, without terminating this Lease Agreement (i) to collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property, or (ii) to exercise any and all rights of entry and re-entry upon the Property. In the event the Authority does not elect to terminate this Lease Agreement in the manner provided for in subsection (b) of this Section, the City shall remain liable and agrees to keep or perform all covenants and conditions herein contained to be kept or performed by the City and, if the Property is not re-let, to pay the full amount of the Rental Payments to the end of the term of this Lease Agreement or, in the event that the Property is re-let, to pay any deficiency in Rental Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re- enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subsection (b) of this 448 19 4149-0022-5572.4 Section. The City further agrees to pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations. The term “re-let” or “re- letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the Property. (d) The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property. (e) Notwithstanding anything herein to the contrary, the termination of this Lease Agreement by the Authority on account of an Event of Default hereunder shall not effect or result in a termination of the lease of the Property by the City to the Authority pursuant to the Ground Lease. Section 8.03. Other Remedies. In addition to the other remedies provided for in Section 8.02 hereof, during the continuance of an Event of Default hereunder, the Authority shall be entitled to proceed to protect and enforce the rights vested in the Authority by this Lease Agreement or by law. The provisions of this Lease Agreement and the duties of the City and of its board, officers or employees shall be enforceable by the Authority by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority shall have the right to bring the following actions: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any board member, officer or employee thereof, and to compel the City or any such board member, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Authority; or (c) by suit, action or proceeding in any court of competent jurisdiction, to require the City and its board, officers and employees to account as if it or they were the trustee or trustees of an express trust. Section 8.04. No Acceleration. Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right to accelerate Rental Payments upon the occurrence or continuance of a default or an Event of Default hereunder. Section 8.05. Remedies Not Exclusive. Subject to the provisions of Section 8.02 hereof, no remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. If any statute or rule of law validly shall limit the remedies given to the Authority 449 20 4149-0022-5572.4 hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law. Section 8.06. Waiver. No delay or omission of the Authority to exercise any right or power arising from the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, and every power and remedy given by this Lease Agreement to the Authority may be exercised from time to time and as often as may be deemed expedient. A waiver of a particular default or Event of Default shall not be deemed to be a waiver of any other default or Event of Default or of the same default or Event of Default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement. Section 8.07. Attorney’s Fees. In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder. Section 8.08. Authority Event of Default; Action on Authority Event of Default. The failure by the Authority to observe and perform any covenants, agreements or conditions on its part in this Lease Agreement contained, including under Section 4.05 and Section 4.15, if such failure shall have continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Authority and the Trustee, by the City, shall constitute an Authority Event of Default under this Lease Agreement; provided, however, that if, in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not within such 60 day period, such failure shall not constitute an Authority Event of Default if corrective action is instituted by the Authority within such 60 day period and the Authority shall thereafter diligently and in good faith cure such failure in a reasonable period of time. In each and every case upon the occurrence and during the continuance of an Authority Event of Default by the Authority hereunder, the City shall have all the rights and remedies permitted by law. 450 21 4149-0022-5572.4 ARTICLE IX AMENDMENTS Section 9.01. Amendments. (a) This Lease Agreement and the Site Lease, and the rights and obligations of the City and the Authority hereunder and thereunder, may be amended at any time by an amendment hereto or thereto, which shall become binding upon execution by the City and the Authority, but only with the prior written consent of the Owners of a majority of the aggregate principal amount of Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 10.06 of the Indenture. No such amendment shall (i) extend the payment date of any Base Rental Payment or reduce the amount of any Base Rental Payment without the prior written consent of the Owner of each Bond so affected, (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required for any amendment of this Lease Agreement or the Site Lease to become binding without the prior written consent of the Owners of all the Bonds then Outstanding, or (iii) amend this Section without the prior written consent of the Owners of all the Bonds then Outstanding. (b) This Lease Agreement and the Site Lease, and the rights and obligations of the City and the Authority hereunder and thereunder, may also be amended at any time by an amendment hereto or thereto, which shall become binding upon execution by the City and the Authority, without the written consents of any Owners, for any one or more of the following purposes: (i) to add to the covenants and agreements of the City or the Authority herein or therein contained other covenants and agreements thereafter to be observed, or to surrender any right or power herein or therein reserved to or conferred upon the City or the Authority; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in herein or therein or in regard to questions arising hereunder or thereunder which the City or the Authority may deem desirable or necessary and not inconsistent herewith; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Section 2.04 and Section 2.05 of the Indenture; (iv) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 7.02 hereof; (v) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on Tax-Exempt Bonds or maintain any federal interest subsidies expected to be received with respect to any Bonds; or (vi) to make such other changes herein or therein as the City or the Authority may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners. 451 22 4149-0022-5572.4 ARTICLE X MISCELLANEOUS Section 10.01. Authority Not Liable. The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and its directors, officers, agents and employees harmless against and from any and all claims by or on behalf of any Person arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. In no event shall the Authority be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property. Section 10.02. Assignment to Trustee; Effect. The parties hereto understand and agree that, upon the execution and delivery of the Indenture (which is occurring simultaneously with the execution and delivery hereof), all right, title and interest of the Authority in and to this Lease Agreement will be sold, assigned and transferred to the Trustee for the benefit of the Owners of the Bonds. The City hereby consents to such sale, assignment and transfer. Upon the execution and delivery of the Indenture, references in the operative provisions hereof to the Authority shall be deemed to be references to the Trustee, as assignee of the Authority. Section 10.03. Gender and References; Article and Section Headings. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. Unless the context otherwise clearly requires, all references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Lease Agreement as a whole and not to any particular Article, Section, subsection or clause hereof. Section 10.04. Validity and Severability. If for any reason any one or more of the agreements, covenants or terms of this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the City or by the Authority, all of the remaining agreements, covenants and terms hereof shall nonetheless continue in full force and effect. If for any reason it is held by such a court that any agreement, covenant or term of this Lease Agreement required to be observed or performed by the City, including the covenant to pay Rental Payments, is unenforceable for the full term hereof, then and in such event this Lease Agreement is and shall be deemed to be a lease from year to year under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and 452 23 4149-0022-5572.4 use the Property, and all of the other agreements, covenants and terms of this Lease Agreement, except to the extent that such agreements, covenants and terms are contrary to or inconsistent with such holding, shall remain in full force and effect. Section 10.05. California Law. THIS LEASE AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Section 10.06. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Authority: Huntington Beach Public Financing Authority c/o City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section. Section 10.07. Execution in Counterparts. This Lease Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 453 24 4149-0022-5572.4 IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. CITY OF HUNTINGTON BEACH By: HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: Robin Estanislau, Secretary 454 4149-0022-5572.4 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, 2020, before me, , Notary Public, personally appeared _________________, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 455 4149-0022-5572.4 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, 2020, before me, , Notary Public, personally appeared _________________, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 456 A-1 4149-0022-5572.4 EXHIBIT A DESCRIPTION OF THE PROPERTY All that certain real property situated in the County of Orange, State of California, and any improvements thereto, described as follows: 457 4149-0022-5572.4 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Master Lease Agreement, dated as of [_________] 1, 2020, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), from the Authority to the City, is hereby accepted by the undersigned on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on [_________], 2020, and the City consents to recordation thereof by its duly authorized officer. Dated: __________, 2020 CITY OF HUNTINGTON BEACH By: ________________________________ 458 4127-3236-0228.4 MASTER INDENTURE by and among HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY and CITY OF HUNTINGTON BEACH and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE Dated as of [__________] 1, 2020 Relating to Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds 459 TABLE OF CONTENTS Page i 4127-3236-0228.4 ARTICLE I DEFINITIONS; EQUAL SECURITY ............................................................ 3 Section 1.01. Definitions............................................................................................ 3 Section 1.02. Equal Security .................................................................................... 10 ARTICLE II THE BONDS ................................................................................................. 11 Section 2.01. Authorization of Bonds ...................................................................... 11 Section 2.02. Terms of Series 2020 Bonds .............................................................. 11 Section 2.03. Issuance of Series 2020 Bonds; Application of Proceeds .................. 13 Section 2.04. Conditions for the Issuance of Additional Bonds .............................. 13 Section 2.05. Procedure for the Issuance of Additional Bonds ............................... 15 Section 2.06. Execution of Bonds ............................................................................ 16 Section 2.07. Authentication of Bonds .................................................................... 16 Section 2.08. Registration Books ............................................................................. 16 Section 2.09. Transfer and Exchange of Bonds ....................................................... 16 Section 2.10. Book-Entry System ............................................................................ 17 Section 2.11. Bonds Mutilated, Lost, Destroyed or Stolen ...................................... 19 Section 2.12. Temporary Bonds ............................................................................... 20 ARTICLE III REDEMPTION OF BONDS ......................................................................... 21 Section 3.01. Extraordinary Redemption ................................................................. 21 Section 3.02. Optional Redemption ......................................................................... 21 Section 3.03. Mandatory Sinking Fund Redemption ............................................... 21 Section 3.04. Selection of Bonds for Redemption ................................................... 22 Section 3.05. Notice of Redemption ........................................................................ 23 Section 3.06. Partial Redemption of Bonds ............................................................. 23 Section 3.07. Effect of Notice of Redemption ......................................................... 23 ARTICLE IV PLEDGE AND ASSIGNMENT; FUNDS AND ACCOUNTS .................... 25 Section 4.01. Pledge and Assignment ...................................................................... 25 Section 4.02. Costs of Issuance Fund ...................................................................... 25 Section 4.03. Payment Fund .................................................................................... 26 Section 4.04. Redemption Fund ............................................................................... 26 Section 4.05. Reserve Fund ..................................................................................... 26 Section 4.06. Rebate Fund ....................................................................................... 28 Section 4.07. Investments ........................................................................................ 29 460 TABLE OF CONTENTS (continued) Page ii 4127-3236-0228.4 ARTICLE V NET PROCEEDS AND TITLE INSURANCE; COVENANTS .................. 31 Section 5.01. Application of Net Proceeds .............................................................. 31 Section 5.02. Title Insurance ................................................................................... 32 Section 5.03. Punctual Payment............................................................................... 32 Section 5.04. Compliance with Indenture ................................................................ 32 Section 5.05. Compliance with Site Lease and Lease Agreement ........................... 33 Section 5.06. Observance of Laws and Regulations ................................................ 33 Section 5.07. Other Liens......................................................................................... 33 Section 5.08. Prosecution and Defense of Suits ...................................................... 33 Section 5.09. Accounting Records and Statements ................................................. 33 Section 5.10. Recordation ........................................................................................ 34 Section 5.11. Tax Covenants ................................................................................... 34 Section 5.12. Continuing Disclosure ....................................................................... 34 Section 5.13. Notifications Required by the Act ..................................................... 34 Section 5.14. Further Assurances............................................................................. 35 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES ................................................ 36 Section 6.01. Events of Default ............................................................................... 36 Section 6.02. Action on Default ............................................................................... 36 Section 6.03. Other Remedies of the Trustee .......................................................... 37 Section 6.04. Remedies Not Exclusive .................................................................... 37 Section 6.05. Application of Amounts After Default .............................................. 37 Section 6.06. Power of Trustee to Enforce .............................................................. 38 Section 6.07. Bond Owners Direction of Proceedings ............................................ 38 Section 6.08. Limitation on Bond Owners’ Right to Sue ........................................ 38 Section 6.09. Termination of Proceedings ............................................................... 38 Section 6.10. No Waiver of Default ......................................................................... 39 ARTICLE VII THE TRUSTEE ............................................................................................. 40 Section 7.01. Duties and Liabilities of Trustee ........................................................ 40 Section 7.02. Removal and Resignation of the Trustee ........................................... 40 Section 7.03. Compensation and Indemnification of the Trustee ............................ 41 Section 7.04. Protection of the Trustee .................................................................... 41 461 TABLE OF CONTENTS (continued) Page iii 4127-3236-0228.4 Section 7.05. Appointment of Co-Trustee ............................................................... 43 ARTICLE VIII SUPPLEMENTAL INDENTURES .............................................................. 45 Section 8.01. Supplemental Indentures .................................................................... 45 Section 8.02. Effect of Supplemental Indenture ...................................................... 46 Section 8.03. Endorsement of Bonds; Preparation of New Bonds .......................... 46 Section 8.04. Amendment of Particular Bonds ........................................................ 46 ARTICLE IX DEFEASANCE.............................................................................................. 47 Section 9.01. Discharge of Indenture ....................................................................... 47 Section 9.02. Bonds Deemed To Have Been Paid ................................................... 47 Section 9.03. Unclaimed Moneys ............................................................................ 48 ARTICLE X MISCELLANEOUS ...................................................................................... 50 Section 10.01. Benefits of Indenture Limited to Parties ............................................ 50 Section 10.02. Successor Deemed Included in all References to Predecessor .......... 50 Section 10.03. Execution of Documents by Owners ................................................. 50 Section 10.04. Waiver of Personal Liability .............................................................. 50 Section 10.05. Acquisition of Bonds by Authority or City........................................ 50 Section 10.06. Disqualified Bonds............................................................................. 51 Section 10.07. Money Held for Particular Bonds ...................................................... 51 Section 10.08. Funds and Accounts ........................................................................... 51 Section 10.09. Gender and References; Article and Section Headings ..................... 51 Section 10.10. Partial Invalidity................................................................................. 52 Section 10.11. California Law ................................................................................... 52 Section 10.12. Notices ............................................................................................... 52 Section 10.13. Business Days .................................................................................... 53 Section 10.14. Execution in Counterparts .................................................................. 53 EXHIBIT A FORM OF SERIES 2020 BOND ................................................................ A-1 EXHIBIT B PERMITTED INVESTMENTS .................................................................. B-1 EXHIBIT C FORM OF COSTS OF ISSUANCE FUND REQUISITION ...................... C-1 462 1 4127-3236-0228.4 MASTER INDENTURE THIS MASTER INDENTURE (this “Indenture”), dated as of [__________] 1, 2020, is by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under the laws of the State of California (the “City”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as Trustee (the “Trustee”). W I T N E S S E T H: WHEREAS, in order to refinance certain capital improvements, including certain improvements to public facilities to be installed as a part of the City’s Pier Plaza project and a portion of the City’s share of the costs of a countywide 800 MHz coordinated communications system (the “1997 Project”) and other capital projects, including South Beach Phase I and II Improvements, a Beach Maintenance Facility, energy retrofitting of various facilities, design costs of the City’s Sports Complex, water system improvements and the City’s Emerald Cove Senior Housing project (the “2000 Project”), the Authority issued its Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior 2010A Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the “1993 Project”) and the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the “2001 Project” and together with the Prior 1993 Project, the 1997 Project and the 2000 Project, the “Projects”), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior 2011A Bonds” and, together with the Prior 2010A Bonds, the “Prior Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refund the Prior Bonds and, therefore, refinance the Projects; and WHEREAS, in order to refund the Prior Bonds and, therefore, refinance the Projects, the City is leasing certain real property, and the improvements thereto, consisting of Donald W. Kiser Corporation Yard (the “Property”), to the Authority pursuant to a Master Site Lease, dated as of the date hereof (the “Site Lease”), and the City is subleasing the Property back from the Authority pursuant to a Master Lease Agreement, dated as of the date hereof (the “Lease Agreement”); and WHEREAS, in order to provide the funds necessary to refund the Prior Bonds and, therefore, refinance the Projects, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”), and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 463 2 4127-3236-0228.4 2020 Series B (Federally Taxable) (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Series 2020 Bonds”), in the respective aggregate principal amounts of $[__________] and $[__________], payable from the base rental payments (the “Base Rental Payments”) to be made by the City pursuant to the Lease Agreement; and WHEREAS, the Authority and the City desire to provide for the issuance of additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2020 Bonds (the Series 2020 Bonds and any such Additional Bonds being collectively referred to as the “Bonds”); and WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, each of the Authority and the City has authorized the execution and delivery of this Indenture; and WHEREAS, the Authority and the City have determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid and binding special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture has been in all respects duly authorized; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Indenture do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Indenture; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, and premium, if any, and interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority and the City do hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: 464 3 4127-3236-0228.4 ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Lease Agreement. “Act” means the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code. “Additional Bonds” means Bonds other than Series 2020 Bonds issued hereunder in accordance with the provisions of Sections 2.04 and 2.05 hereof. “Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Annual Debt Service” means, for each Bond Year, the sum of (a) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions), and (b) the scheduled principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund redemptions due in such Bond Year). “Authority” means the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California. “Authorized Authority Representative” means any member of the Board of Directors of the Authority, the Executive Director of the Authority or the Treasurer of the Authority, and any other Person authorized by the Board of Directors of the Authority or the Executive Director of the Authority to act on behalf of the Authority under or with respect to this Indenture. “Authorized City Representative” means the City Manager of the City, the Assistant City Manager of the City or the Chief Financial Officer of the City, and any other Person authorized by the City Council of the City or the City Manager of the City to act on behalf of the City under or with respect to this Indenture. “Authorized Denominations” means, with respect to the Bonds, $5,000 and any integral multiple thereof. “Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Owners” means those individuals, partnerships, corporations or other entities for whom the Participants have caused the Depository to hold Book-Entry Bonds. 465 4 4127-3236-0228.4 “Bond Year” means each twelve-month period beginning on May 2 in each year and extending to the next succeeding May 1, both dates inclusive, except that the first Bond Year shall begin on the Closing Date and end on May 1, 2021. “Bonds” means the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds issued hereunder, and includes the Series 2020 Bonds and any Additional Bonds. “Book-Entry Bonds” means the Bonds of a Series registered in the name of the nominee of DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.10 hereof. “Business Day” means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city or cities in which the Office of the Trustee is located are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. “Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to Book-Entry Bonds. “City” means the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California. “Closing Date” means the date upon which the Series 2020 Bonds are delivered to the Original Purchaser, being [_________, 2020]. “Code” means the Internal Revenue Code of 1986. “Common Reserve Account” means the account of that name established in the Reserve Fund pursuant to a Supplemental Indenture to secure the Common Reserve Bonds. “Common Reserve Bonds” means each Series of Additional Bonds secured by the Common Reserve Account as provided in the Supplemental Indenture providing for the issuance of such Series of Additional Bonds. “Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the Closing Date, of the City, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Costs of Issuance” means all the costs of issuing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Indenture, the Lease Agreement, the Site Lease, the Bonds and any preliminary official statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service Bureau charges, market study fees, financial advisory fees, legal fees and expenses of counsel with respect to the refinancing of the Projects, the initial fees and expenses of the Trustee and its counsel, any premium for a municipal bond insurance policy insuring payments of debt service on Additional Bonds or any Reserve Facility, and other fees and expenses incurred in connection with the issuance and delivery of the Bonds, to the extent such fees and expenses are approved by the City. 466 5 4127-3236-0228.4 “Costs of Issuance Fund” means the fund by that name established pursuant to Section 4.02 hereof. [“Defeasance Securities” means (a) non-callable direct obligations of the United States of America (“United States Treasury Obligations”), (b) evidences of ownership of proportionate interests in future interest and principal payments on United States Treasury Obligations held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying United States Treasury Obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated, (c) pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively, or (d) securities eligible for “AAA” defeasance under then existing criteria of S&P or Moody’s, or any combination thereof.] “Depository” means the securities depository acting as Depository pursuant to Section 2.10 hereof. “DTC” means The Depository Trust Company, New York, New York and its successors. “Escrow Agreements” means the 2010A Escrow Agreement and the 2011A Escrow Agreement. “Escrow Bank” means U.S. Bank National Association, as trustee and escrow bank under the Escrow Agreements, and any successor thereto. “Event of Default” means an event described as such in Section 6.01. “Fitch” means Fitch, Inc., its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Indenture” means this Master Indenture, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions hereof. “Interest Account” means the Series 2020 Interest Account and each additional account established for the payment of interest of a Series of Additional Bonds within the Payment Fund pursuant to Section 4.03 hereof. “Interest Payment Date” means each May 1 and November 1, commencing [November 1, 2020], so long as any Bonds remain Outstanding. “Lease Agreement” means the Master Lease Agreement, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Lease Default Event” means an event of default pursuant to and as described in Section 8.01 of the Lease Agreement. 467 6 4127-3236-0228.4 “Lease Revenues” means all Base Rental Payments payable by the City pursuant to the Lease Agreement, including any prepayments thereof, any Net Proceeds and any amounts received by the Trustee as a result of or in connection with the Trustee’s pursuit of remedies under the Lease Agreement upon a Lease Default Event. “Letter of Representations” means the letter of the Authority delivered to and accepted by the Depository on or prior to the delivery of the Bonds as Book-Entry Bonds setting forth the basis on which the Depository serves as depository for such Book-Entry Bonds, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute Depository. “Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year, including the Bond Year the calculation is made. “Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.10 hereof. “Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City in writing; provided, however, that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted, which other office or agency shall be specified to the Authority and the City by the Trustee in writing. “Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority. “Original Purchaser” means Stifel, Nicolaus & Company, Incorporated, the original purchaser of the Series 2020 Bonds from the Authority. “Outstanding” means, when used as of any particular time with reference to Bonds, subject to the provisions of Section 10.06 hereof, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (a) Bonds previously canceled by the Trustee or delivered to the Trustee for cancellation, (b) Bonds paid or deemed to have been paid within the meaning of Section 9.02 hereof, and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books. “Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Certificate. 468 7 4127-3236-0228.4 “Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book-Entry Bonds as securities depository. “Payment Fund” means the fund by that name established in accordance with Section 4.03 hereof. “Permitted Investments” is defined in Exhibit B attached hereto. “Person” means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. “Principal Account” means the Series 2020 Principal Account and each additional account established for the payment of principal of a Series of Additional Bonds within the Payment Fund pursuant to Section 4.03 hereof. “Principal Payment Date” means a date on which the principal of the Bonds becomes due and payable, either as a result of the maturity thereof or by mandatory sinking fund redemption. “Prior 2010A Bonds” means the prior bonds of the Authority as defined in recital clauses hereto. “Prior 2011A Bonds” means the prior bonds of the Authority as defined in recital clauses hereto. “Projects” means the capital improvement projects described in recital clauses hereto. “Rebate Fund” means the fund by that name established pursuant to Section 4.05 hereof. “Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate. “Record Date” means the 15th calendar day of the month preceding each Interest Payment Date, whether or not such day is a Business Day. “Redemption Fund” means the fund by that name established pursuant to Section 4.04 hereof. “Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.08 hereof. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments. “Rental Period” means the period from the Closing Date through June 30, 20[__] and, thereafter, the twelve-month period commencing on July 1 of each year during the term of the Lease Agreement. “Reserve Account” means either the Common Reserve Account or any other reserve account established pursuant to Section 4.05 hereof, which account may secure one or more Series 469 8 4127-3236-0228.4 of Additional Bonds as provided in the Supplemental Indenture providing for the establishment thereof. “Reserve Facility” means any line of credit, letter of credit, insurance policy, surety bond or similar instrument, in form reasonably satisfactory to the Trustee, that (a) names the Trustee as beneficiary thereof, (b) provides for payment on demand, (c) cannot be terminated by the issuer thereof so long as any of the Bonds secured by such Reserve Facility remain Outstanding, (d) is issued by an obligor, the obligations of which under the Reserve Facility are, at the time such Reserve Facility is substituted for all or part of the moneys on deposit in the applicable Reserve Account, rated in one of the two highest rating categories (without regard to any modifier) by any one rating agency then rating the Bonds secured by such Reserve Facility, and (e) is deposited with the Trustee pursuant to Section 4.05 hereof. “Reserve Fund” means the fund by that name established in accordance with Section 4.05 hereof pursuant to a Supplemental Indenture. “Reserve Requirement” means, (a) with respect to any Series of Additional Bonds that are Common Reserve Bonds, such amount, as shall be specified in the Supplemental Indenture authorizing the issuance of the first Series of Common Reserve Bonds, and (b) with respect to any Series of Additional Bonds that are not Common Reserve Bonds, such amount, if any, as shall be specified in the Supplemental Indenture authorizing the issuance of such Series of Additional Bonds; provided, however, that in no event shall any Reserve Requirement exceed an amount permitted by the Code. “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Series” means the initial series of Bonds executed, authenticated and delivered on the date of initial issuance of such Bonds and identified pursuant to this Indenture as the Series 2020A Bonds and the Series 2020B Bonds, and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds. “Series 2020 Bonds” means, collectively, the Series 2020A Bonds and the Series 2020B Bonds, issued hereunder. “Series 2020 Interest Account” means the Interest Account by that name within the Payment Fund established pursuant to Section 4.03 hereof. “Series 2020 Principal Account” means the Principal Account by that name within the Payment Fund established pursuant to Section 4.03 hereof. “Series 2020A Bonds” means the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt), issued hereunder. 470 9 4127-3236-0228.4 “Series 2020B Bonds” means the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable), issued hereunder. “Site Lease” means the Master Site Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and of the Lease Agreement. “Supplemental Indenture” means any supplemental indenture amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. “Tax Certificate” means the Tax Certificate executed by the Authority at the time of issuance of the Series 2020A Bonds, relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Tax-Exempt” means, with respect to interest on any obligations of a state or local government, including interest on the Series 2020 Bonds, that such interest is excluded from the gross income of the holders thereof for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax under the Code. “Trustee” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee hereunder substituted in its place as provided herein. “2010A Escrow Agreement” means the Escrow Agreement, dated as of the date hereof, by and between the Authority and the Escrow Bank, relating to the Prior 2010A Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. “2011A Escrow Agreement” means the Escrow Agreement, dated as of the date hereof, by and between the Authority and the Escrow Bank, relating to the Prior 2011A Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. “Verification Report” means, with respect to the deemed payment of Bonds pursuant to clause (ii)(B) of subsection (a) of Section 9.02 hereof, a report of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Defeasance Securities and cash, if any, deposited in connection with such deemed payment satisfy the requirements of clause (ii)(B) of subsection (a) of Section 9.02 hereof. “Written Certificate of the Authority” means a written certificate signed in the name of the Authority by an Authorized Representative of the Authority. Any such certificate may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. 471 10 4127-3236-0228.4 “Written Certificate of the City” means a written certificate signed in the name of the City by an Authorized Representative of the City. Any such certificate may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Request of the Authority” means a written request signed in the name of the Authority by an Authorized Representative of the Authority. Any such request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Request of the City” means a written request signed in the name of the City by an Authorized Representative of the City. Any such request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Section 1.02. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, and premium, if any, and interest on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. 472 11 4127-3236-0228.4 ARTICLE II THE BONDS Section 2.01. Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture, the Act and other applicable laws of the State of California. The Bonds may consist of one or more Series of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. The Bonds shall be designated generally as the “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. The Bonds shall be special obligations of the Authority, payable solely from the Lease Revenues and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. Notwithstanding anything to the contrary contained herein, if, as a result of the limitations contained in Section 3.06 of the Lease Agreement, Base Rental Payments cannot be paid by the City in an amount sufficient to pay the principal of, or interest on, the Bonds otherwise payable on any date, such principal or interest shall be deemed not to be payable on such date, the nonpayment thereof on such date shall not constitute a default or an Event of Default under this Indenture and such principal or interest shall become payable on the date on which such Base Rental Payments becomes payable under and pursuant to the Lease Agreement. Section 2.02. Terms of Series 2020 Bonds. (a) The Series 2020A Bonds shall be designated “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt).” The aggregate principal amount of Series 2020A Bonds that may be issued and Outstanding under this Indenture shall not exceed $[__________], except as may be otherwise provided in Section 2.11 hereof. (b) The Series 2020A Bonds shall be issued in fully registered form without coupons in Authorized Denominations. The Series 2020A Bonds shall be dated as of the Closing Date, shall be in the aggregate principal amount of $[__________], shall mature on May 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows: 473 12 4127-3236-0228.4 Maturity Date (May 1) Principal Amount Interest Rate $ % (a) The Series 2020B Bonds shall be designated “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable).” The aggregate principal amount of Series 2020B Bonds that may be issued and Outstanding under this Indenture shall not exceed $[__________], except as may be otherwise provided in Section 2.11 hereof. (b) The Series 2020B Bonds shall be issued in fully registered form without coupons in Authorized Denominations. The Series 2020B Bonds shall be dated as of the Closing Date, shall be in the aggregate principal amount of $[__________], shall mature on May 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows: Maturity Date (May 1) Principal Amount Interest Rate $ % (c) Interest on the Series 2020 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2020 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Series 2020 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Closing Date, or (iii) interest on any Series 2020 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the United States on each Interest Payment Date. Except as otherwise provided in the Letter of Representations, interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2020 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record 474 13 4127-3236-0228.4 Date; provided, however, that, in the case of an Owner of $1,000,000 or more in aggregate principal amount of Series 2020 Bonds, upon the written request of such Owner to the Trustee, received at least ten days prior to a Record Date, specifying the account or accounts to which such payment shall be made, payment of interest shall be made by wire transfer of immediately available funds on the following Interest Payment Date. Any such request shall remain in effect until revoked or revised by such Owner by an instrument in writing delivered to the Trustee. (d) The principal of and premium, if any, on the Series 2020 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee. (e) The Series 2020 Bonds shall be in substantially the form set forth in Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby. Section 2.03. Issuance of Series 2020 Bonds; Application of Proceeds. (a) The Authority may, at any time, execute the Series 2020 Bonds and deliver the same to the Trustee. The Trustee shall authenticate the Series 2020 Bonds and deliver the Series 2020 Bonds to the Original Purchaser upon receipt of a Written Request of the Authority and upon receipt of the purchase price therefor. (b) On the Closing Date, the proceeds of the sale of the Series 2020A Bonds received by the Trustee, $[__________], shall be deposited by the Trustee as follows: (i) the Trustee shall deposit the amount of $[__________] in the Costs of Issuance Fund; and (ii) the Trustee shall transfer the amount of $[_________] to the Escrow Bank, to be applied to the payment and redemption of the Prior 2010A Bonds in accordance with the 2010A Escrow Agreement. (c) On the Closing Date, the proceeds of the sale of the Series 2020B Bonds received by the Trustee, $[__________], shall be deposited by the Trustee as follows: (i) the Trustee shall deposit the amount of $[__________] in the Costs of Issuance Fund; and (ii) the Trustee shall transfer the amount of $[_________] to the Escrow Bank, to be applied to the payment and redemption of the Prior 2011A Bonds in accordance with the 2011A Escrow Agreement. Section 2.04. Conditions for the Issuance of Additional Bonds. The Authority may at any time issue one or more Series of Additional Bonds (in addition to the Series 2020 Bonds) payable from Lease Revenues as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds: 475 14 4127-3236-0228.4 (a) neither the Authority nor the City shall be in default under this Indenture, the Lease Agreement or the Site Lease; (b) the issuance of such Additional Bonds shall have been authorized under and pursuant to the Act and under and pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify the following: (i) the purposes for which such Additional Bonds are to be issued; provided, that the proceeds of the sale of such Additional Bonds shall be applied only for one or more of the following purposes: (A) providing funds to pay costs of City facilities (including capitalized interest), (B) providing funds to refund any Bonds issued hereunder or other obligations of the City, (C) providing funds to pay Costs of Issuance incurred in connection with the issuance of such Additional Bonds, and (D) providing funds to make any deposit to any Reserve Account required pursuant to paragraph (c) below; (ii) the principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds, which shall be Authorized Denominations; (iii) that such Additional Bonds shall be payable as to interest on the Interest Payment Dates, except that the first installment of interest may be payable on either May 1 or November 1; (iv) the date, the maturity date or dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, that (A) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on May 1 of each year in which principal falls due, and the term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on May 1, (B) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination, and (C) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates; (v) the redemption premiums and terms, if any, for such Additional Bonds; (vi) the form of such Additional Bonds; (vii) the designation as to whether such Additional Bonds shall (A) constitute Common Reserve Bonds secured by the Common Reserve Account, (B) be secured by any other Reserve Account, or (C) not be secured by any Reserve Account; and (viii) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof; (c) upon the issuance of such Additional Bonds, the amount on deposit in the Reserve Account applicable to such Additional Bonds, if any, shall be at least equal to the applicable Reserve Requirement for such Additional Bonds; and 476 15 4127-3236-0228.4 (d) upon the issuance of such Additional Bonds, the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of the issuance of such Additional Bonds, plus Additional Rental Payments, in any Rental Period shall not be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of such Additional Bonds (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City). Section 2.05. Procedure for the Issuance of Additional Bonds. Whenever the Authority and the City shall determine to authorize the issuance of any Additional Bonds, the Authority, the City and the Trustee shall enter into a Supplemental Indenture satisfying the conditions of Section 2.04 hereof. Before such Additional Bonds shall be issued, the Authority and the City shall file or cause to be filed with the Trustee the following: (a) an Opinion of Counsel setting forth (i) that counsel rendering such opinion has examined the Supplemental Indenture, the amendment to the Lease Agreement, if any, and the amendment to the Site Lease, if any, (ii) that the issuance of the Additional Bonds has been duly authorized by the Authority, (iii) that the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease have been duly authorized, executed and delivered by the Authority and the City, (iv) that upon execution and delivery of such Supplemental Indenture and any such amendments to the Lease Agreement and the Site Lease, this Indenture, as amended and supplemented by such Supplemental Indenture, and, if so amended, the Lease Agreement and the Site Lease, as amended by such amendments, will be valid and binding obligations of the Authority and the City, and (v) that the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease, in and of themselves, do not adversely affect the exclusion from gross income for federal income tax purposes of interest on Outstanding Tax-Exempt Bonds; (b) a Written Certificate of the Authority that the requirements of Section 2.04 hereof have been met; (c) a Written Certificate of the City that the requirements of Section 2.04 hereof have been met, which shall include a certification as to the fair rental value of the Property, after giving effect to any amendments to the Lease Agreement and the Site Lease entered into in connection with the issuance of the Additional Bonds and taking into account the use of proceeds of such Additional Bonds; (d) certified copies of the resolutions of the Board of Directors of the Authority and the City Council of the City authorizing the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease; (e) executed counterparts or duly authenticated copies of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease, with satisfactory evidence that any such amendments to the Lease Agreement and the Site Lease have been duly recorded in the appropriate records of the county in which the Property is located; (f) certified copies of the policies of insurance required by Section 5.01 of the Lease Agreement or certificates thereof, which shall evidence that the amounts of the insurance required 477 16 4127-3236-0228.4 under subsections (b) and (c) of Section 5.01 of the Lease Agreement have been increased, if applicable, to cover the amount of such Additional Bonds; and (g) an CLTA title insurance policy or other appropriate form of policy in the amount of the Additional Bonds of the type and with the endorsements described in Section 5.04 of the Lease Agreement. Upon the delivery to the Trustee of the foregoing instruments and upon the Trustee’s being satisfied from an examination of said instruments that all of the documents required by this Section have been delivered, the Trustee shall authenticate such Additional Bonds, and shall deliver such Additional Bonds to, or upon the request of, the Authority. Section 2.06. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the manual or facsimile signature of the Chair of the Board of Directors of the Authority attested by the manual or facsimile signature of the Secretary of the Authority. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers of the Authority who shall have signed or attested any of the Bonds shall cease to be such officers before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority. Section 2.07. Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit A hereto for the Series 2020 Bonds, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.08. Registration Books. The Trustee shall keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be available for inspection and copying by the Authority and the City upon reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as herein provided. Section 2.09. Transfer and Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The 478 17 4127-3236-0228.4 Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period commencing on the date five days before the date of selection of Bonds of such Series for redemption and ending on the date of mailing notice of such redemption, or with respect to any Bonds of such Series selected for redemption. Section 2.10. Book-Entry System. (a) Prior to the issuance of a Series of Bonds, the Authority may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds, and in such event, the Bonds of such Series for each maturity date shall be in the form of a separate single fully registered Bond (which may be typewritten); provided, however, that if different CUSIP numbers are assigned to Bonds of a Series maturing in a single year or, if Bonds of the same Series maturing in a single year are issued with different interest rates, additional bond certificates shall be prepared for each such maturity. Upon initial issuance, the ownership of each such Bond of such Series shall be registered in the Registration Books in the name of the Nominee, as nominee of the Depository. The Series 2020A Bonds and the Series 2020B Bonds shall initially be issued as Book-Entry Bonds. Payment of principal of, and interest and premium, if any, on, any Book-Entry Bond registered in the name of the Nominee shall be made on the applicable payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the Registration Books. (b) With respect to Book-Entry Bonds, the Authority, the City and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book-Entry Bonds. Without limiting the immediately preceding sentence, the Authority, the City and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any notice with respect to Book-Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds of a maturity to be redeemed in the event such Book-Entry Bonds are redeemed in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any amount with respect to principal of, or premium, if any, or interest on Book-Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The Authority, the City and the Trustee may treat and consider the Person in whose name each Book-Entry Bond is registered in the Registration Books as the absolute Owner of such Book-Entry Bond for the purpose of payment of principal of, and premium, if any, and interest on 479 18 4127-3236-0228.4 such Bond, for the purpose of selecting any Bonds, or portions thereof, to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Book-Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the Authority, the City and the Trustee shall not be affected by any notice to the contrary. (d) In the event of a redemption of all or a portion of a Book-Entry Bond, the Depository, in its discretion, (i) may request the Trustee to authenticate and deliver a new Book- Entry Bond, or (ii) if DTC is the sole Owner of such Book-Entry Bond, shall make an appropriate notation on the Book-Entry Bond indicating the date and amounts of the reduction in principal thereof resulting from such redemption, except in the case of final payment, in which case such Book-Entry Bond must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal of, and premium, if any, and interest on the Book-Entry Bonds only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State of California) the respective Owner, as shown in the Registration Books, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, and premium, if any, and interest on the Book-Entry Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Registration Books, shall receive an authenticated Book-Entry Bond. Upon delivery by the Depository to the Owners, the Authority, the City and the Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. (f) In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Authority shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Authority, the City or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Bonds other than the Owners, as shown on the Registration Books. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the Authority, the Authority, the City and the Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book-Entry Bonds for the Depository’s book-entry program. (g) In the event the Authority determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Bonds and that such Bonds should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Bonds. In such event, the Trustee shall transfer and exchange certificated Bonds as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as securities depository for Book-Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Authority shall discontinue the Book-Entry system with the Depository. If the Authority determines to replace the Depository with another qualified securities depository, the Authority shall prepare or direct the preparation of a new single, separate, fully registered Bond of the 480 19 4127-3236-0228.4 appropriate Series for each maturity date of such Book-Entry Bonds, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Authority fails to identify another qualified securities depository to replace the Depository, then the Book-Entry Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.09 and 2.11 hereof. Whenever the Depository requests the Authority to do so, the Authority shall cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book-Entry Bonds to any Participant having Book-Entry Bonds credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Bonds. (h) Notwithstanding any other provision of this Indenture to the contrary, if DTC is the sole Owner of the Bonds of a Series, so long as any Book-Entry Bond of such Series is registered in the name of the Nominee, all payments of principal of, and premium, if any, and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. (i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Authority, the City or the Trustee, with respect to any consent or other action to be taken by Owners of Book-Entry Bonds, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Bonds of a Series. Section 2.11. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like aggregate principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like aggregate principal amount in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture. 481 20 4127-3236-0228.4 Section 2.12. Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such Authorized Denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds of a Series it shall execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series may be surrendered for cancellation at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series and maturities in Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder. 482 21 4127-3236-0228.4 ARTICLE III REDEMPTION OF BONDS Section 3.01. Extraordinary Redemption. The Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Proceeds (other than Net Proceeds of rental interruption insurance) received with respect to all or a portion of the Property and deposited by the Trustee in the Redemption Fund in accordance with the provisions hereof, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. Section 3.02. Optional Redemption. (a) [The Series 2020A Bonds maturing on or before May 1, 20__, are not subject to optional redemption prior to their respective stated maturity dates. The Series 2020A Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturity dates, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) prepaid Base Rental Payments paid pursuant to subsection (a) of Section 6.02 of the Lease Agreement, or (ii) any other source of available funds, [at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium.]] (b) [The Series 2020B Bonds maturing on or before May 1, 20__, are not subject to optional redemption prior to their respective stated maturity dates. The Series 2020B Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturity dates, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) prepaid Base Rental Payments paid pursuant to subsection (a) of Section 6.02 of the Lease Agreement, or (ii) any other source of available funds, [at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium.]] Section 3.03. Mandatory Sinking Fund Redemption. The Series 2020A Bonds maturing May 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on May 1 in each year, commencing May 1, 20__, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium, in the aggregate respective principal amounts in the respective years as follows: Sinking Fund Redemption Date (May 1) Principal Amount to be Redeemed $ (Maturity) If some but not all of the Series 2020A Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.01 hereof, the principal amount of Series 2020A Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount 483 22 4127-3236-0228.4 of the Series 2020A Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.01 hereof, such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis, in amounts equal to Authorized Denominations, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Authority and the City. If some but not all of the Series 2020A Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.02 hereof, the principal amount of Series 2020A Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount of the Series 2020A Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.02 hereof, such reduction to be allocated among redemption dates in Authorized Denominations, as designated by the City in a Written Certificate of the City. The Series 2020B Bonds maturing May 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on May 1 in each year, commencing May 1, 20__, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium, in the aggregate respective principal amounts in the respective years as follows: Sinking Fund Redemption Date (May 1) Principal Amount to be Redeemed $ (Maturity) If some but not all of the Series 2020B Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.01 hereof, the principal amount of Series 2020B Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount of the Series 2020B Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.01 hereof, such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis, in amounts equal to Authorized Denominations, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Authority and the City. If some but not all of the Series 2020B Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.02 hereof, the principal amount of Series 2020B Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount of the Series 2020B Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.02 hereof, such reduction to be allocated among redemption dates in Authorized Denominations, as designated by the City in a Written Certificate of the City. Section 3.04. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any redemption pursuant to Section 3.01 hereof, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, (b) with respect to any optional redemption of Series 2020 Bonds, as directed in a Written Certificate of the City, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity 484 23 4127-3236-0228.4 in any manner which the Trustee in its sole discretion shall deem appropriate and fair. The Trustee shall promptly notify the Authority and the City in writing of the numbers of the Bonds so selected for redemption on such date. For purposes of such selection, any Bond may be redeemed in part in Authorized Denominations. Section 3.05. Notice of Redemption. The Trustee on behalf of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities of the Bonds to be redeemed (except in the event of redempti on of all of the Bonds of such maturity or maturities in whole), and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption. With respect to any notice of any optional redemption of Bonds of a Series, unless at the time such notice is given the Bonds to be redeemed shall be deemed to have been paid within the meaning of Section 9.02 hereof, such notice shall state that such redemption is conditional upon receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys that, together with other available amounts held by the Trustee, are sufficient to pay the redemption price of, and accrued interest on, the Bonds to be redeemed, and that if such moneys shall not have been so received said notice shall be of no force and effect and the Authority shall not be required to redeem such Bonds. In the event a notice of redemption of Bonds contains such a condition and such moneys are not so received, the redemption of Bonds as described in the conditional notice of redemption shall not be made and the Trustee shall, within a reasonable time after the date on which such redemption was to occur, give notice to the Persons and in the manner in which the notice of redemption was given, that such moneys were not so received and that there shall be no redemption of Bonds pursuant to such notice of redemption. Section 3.06. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in Authorized Denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered. Section 3.07. Effect of Notice of Redemption. Notice having been mailed as aforesaid, and moneys for the redemption price, and the interest to the applicable date fixed for redemption, having been set aside, the Bonds shall become due and payable on said date and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the redemption price thereof, together with interest accrued and unpaid to said date. If, on said date fixed for redemption, moneys for the redemption price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and 485 24 4127-3236-0228.4 become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed. 486 25 4127-3236-0228.4 ARTICLE IV PLEDGE AND ASSIGNMENT; FUNDS AND ACCOUNTS Section 4.01. Pledge and Assignment. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Lease Revenues and all amounts on deposit from time to time in the funds and accounts established hereunder (other than the Rebate Fund) are hereby pledged to the payment of the principal of and interest on the Bonds as provided herein, and the Lease Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding. Said pledge shall constitute a first lien on such assets. In order to secure the pledge of the Lease Revenues contained in this Section, the Authority hereby sells, assigns and transfers to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the Owners, all of its right, title and interest in and to the Site Lease and the Lease Agreement, including, without limitation, the right to receive Base Rental Payments and the right to exercise any remedies provided in the Lease Agreement in the event of a default by the City thereunder; provided, however, that the Authority shall retain the rights to indemnification and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement. The Trustee hereby accepts said assignment for the benefit of the Owners, subject to the provisions of this Indenture. The Trustee shall be entitled to and shall receive all of the Base Rental Payments, and any Base Rental Payments collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. Section 4.02. Costs of Issuance Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Fund.” On the Closing Date, the Trustee shall deposit in the Costs of Issuance Fund the amount required to be deposited therein pursuant to Section 2.03 hereof. (b) The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay Costs of Issuance upon submission to the Trustee of a Written Request of the City substantially in the form attached hereto as Exhibit D. Upon receipt of each such Written Request of the City, the Trustee shall pay the amount set forth in such Written Request as directed by the terms thereof. Each such Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. (c) On the date that is six months after the Closing Date, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to one or more accounts or subaccounts within the Payment Fund as directed in a Written Request of the City, and upon such transfer the Costs of Issuance Fund shall be closed. (d) If the Costs of Issuance Fund has been closed in accordance with the provisions hereof, the Costs of Issuance Fund shall be reopened and reestablished by the Trustee in connection 487 26 4127-3236-0228.4 with the issuance of any Additional Bonds, if so provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued. There shall be deposited in the Costs of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. Section 4.03. Payment Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Payment Fund.” Within the Payment Fund, the Trustee shall establish and maintain a separate account designated the “Series 2020 Interest Account” and a separate account designated the “Series 2020 Principal Account.” Upon the issuance of Additional Bonds, the Trustee shall also establish and maintain, within the Payment Fund, a separate Interest Account and a separate Principal Account for each Series of Additional Bonds. (b) All Lease Revenues received by the Trustee shall be deposited by the Trustee in the Payment Fund; provided, however, that Net Proceeds, other than those constituting proceeds of rental interruption insurance received with respect to the Property, shall not be deposited in the Payment Fund but, rather, shall be applied as provided in Section 5.01 or Section 5.02 hereof, as applicable. There shall additionally be deposited in the applicable Interest Account and Principal Account of the Payment Fund amounts transferred from the related Reserve Account pursuant to subsection (c) of Section 4.05 hereof. (c) The Trustee, on each Interest Payment Date, shall transfer from the Payment Fund to each Interest Account an amount equal to the interest on the related Series of Bonds coming due on such Interest Payment Date; provided, however, that if and to the extent that such amount is available for such Series of Bonds in any capitalized interest subaccount established pursuant to a Supplemental Indenture on such Interest Payment Date, the Trustee shall, instead, transfer such amount from such capitalized interest subaccount to the related Interest Account on such Interest Payment Date. Moneys in each Interest Account shall be withdrawn and used by the Trustee for the purpose of paying interest on the related Series of Bonds as and when due and payable. (d) The Trustee, on each Principal Payment Date, shall transfer from the Payment Fund to each Principal Account an amount equal to the principal of the related Series of Bonds, including principal due and payable by reason of mandatory sinking fund redemption, coming due on such date. Moneys in each Principal Account shall be withdrawn and used by the Trustee for the purpose of paying principal of the related Series of Bonds, including principal due and payable by reason of mandatory sinking fund redemption, as and when due and payable. Section 4.04. Redemption Fund. [The Trustee shall establish and maintain a special fund designated the “Redemption Fund.” The Trustee shall deposit in the Redemption Fund any amounts received from the City in connection with the City’s exercise of its right pursuant to Section 6.02 of the Lease Agreement to cause Bonds to be optionally redeemed. Additionally, the Trustee shall deposit in the Redemption Fund any amounts required to be deposited therein pursuant to Section 5.01 or Section 5.02 hereof. Amounts in the Redemption Fund shall be disbursed therefrom by the Trustee for the payment of the redemption price of, and accrued interest on, Bonds redeemed pursuant to Section 3.01 or Section 3.02 hereof.] Section 4.05. Reserve Fund. (a) [The Series 2020 Bonds shall not be secured by any Reserve Account.] When provided for in a Supplemental Indenture, the Trustee shall establish and 488 27 4127-3236-0228.4 maintain a special fund designated the “Reserve Fund.” Within the Reserve Fund, the Trustee, when provided for in a Supplemental Indenture, shall establish and maintain a separate account designated the “Common Reserve Account” and one or more additional Reserve Accounts, each of which may secure one or more Series of Bonds pursuant hereto and pursuant to the Supplemental Indenture authorizing the issuance thereof. In connection with the issuance of Additional Bonds, there shall be deposited in the Common Reserve Account or any other Reserve Account established and/or maintained for such Additional Bonds, as applicable, the amount required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. (b) The City may substitute a Reserve Facility for all or part of the moneys on deposit in any Reserve Account by depositing such Reserve Facility with the Trustee, provided that, at the time of such substitution, the amount on deposit in such Reserve Account, together with the amount available under all Reserve Facilities on deposit in such Reserve Account, shall be at least equal to the Reserve Requirement for such Reserve Account. Moneys for which a Reserve Facility has been substituted as provided herein shall be transferred, at the election of the City, to the Redemption Fund for the purpose of redeeming the related Series of Bonds or, upon receipt of an Opinion of Counsel that such transfer will not, in and of itself, adversely affect the exclusion of interest on Outstanding Tax-Exempt Bonds from gross income for federal income tax purposes, to the City to be applied to the payment of capital costs of the City. Amounts on deposit in any Reserve Account which were not derived from payments under any Reserve Facility credited to such Reserve Account to satisfy a portion of the Reserve Requirement for such Reserve Account shall be used and withdrawn by the Trustee prior to using and withdrawing any amounts derived from payments under such Reserve Facility. In order to accomplish such use and withdrawal of such amounts not derived from payments under any such Reserve Facility, the Trustee shall, as and to the extent necessary, liquidate any investments purchased with such amounts. (c) In the event that, on the second Business Day prior to a date on which the Trustee is to transfer money from the Payment Fund to the Interest Accounts pursuant to subsection (c) of Section 4.03 hereof or to the Principal Accounts pursuant to subsection (e) of Section 4.03 hereof, amounts in the Payment Fund are insufficient for such purpose, the Trustee shall withdraw from each Reserve Account, to the extent of any funds therein, the amount of the insufficiency of the related Series of Bonds, and shall transfer any amounts so withdrawn first to the related Interest Account and then to the related Principal Account. If the amount on deposit in any Reserve Account is not sufficient to make such transfer, the Trustee shall make a claim under any available Reserve Facility, in accordance with the provisions thereof, in order to obtain an amount sufficient to allow the Trustee to make such transfer as and when required. (d) In the event of any transfer from a Reserve Account or the making of any claim under a Reserve Facility, the Trustee shall, within two Business Days thereafter, provide written notice to the Authority and the City of the amount and the date of such transfer or claim; provided, however, that such notice need not be provided if such transfer is made pursuant to subsection (f) or subsection (g) of this Section. (e) If the sum of the amount on deposit in any Reserve Account, plus the amount available under all available Reserve Facilities held for such Reserve Account, is less than the Reserve Fund Requirement for such Reserve Account, the first of Base Rental Payments thereafter 489 28 4127-3236-0228.4 received from the City under the Lease Agreement and not needed to pay the principal of and interest on the Bonds on the next Interest Payment Date or Principal Payment Date shall be used, first, to reinstate the amounts available under any Reserve Facilities that have been drawn upon and, second, to increase the amount on deposit in the Reserve Accounts, so that the amount available under all available Reserve Facilities, when added to the amount on deposit in the Reserve Fund, shall equal the Reserve Requirement for each Reserve Account; provided, however, that such Base Rental Payments shall be allocated among all Reserve Accounts ratably without preference or priority of any kind, according to each Reserve Account’s percentage share of the total deficiencies in all Reserve Accounts. (f) If, as a result of the payment of principal of or interest on any Series of Bonds, the Reserve Requirement applicable to such Series of Bonds is reduced, amounts on deposit in the applicable Reserve Account in excess of such reduced Reserve Requirement shall be transferred to the related Interest Account(s) and Principal Account(s) of the Payment Fund as directed in a Written Request of the City. (g) On any date on which Bonds of a Series are defeased in accordance with Section 9.02 hereof, the Trustee shall, if so directed in a Written Request of the City, transfer any moneys in the related Reserve Account in excess of the applicable Reserve Requirement resulting from such defeasance to the entity or fund so specified in such Written Request of the City, to be applied to such defeasance. (h) Moneys, if any, on deposit in a Reserve Account shall be withdrawn and applied by the Trustee for the final payments of principal of and interest on the Bonds secured by such Reserve Account. Section 4.06. Rebate Fund. (a) The Trustee shall establish and maintain a special fund designated the “Rebate Fund.” There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Authority or a Written Request of the City. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Bonds pursuant to Article IX hereof or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Authority or the City, and shall have no liability or responsibility to enforce compliance by the Authority or the City with the terms of the Tax Certificate. The Trustee may conclusively rely upon the determinations, calculations and certifications of the Authority or the City required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the calculations of the Authority or the City. (b) Any funds remaining in the Rebate Fund after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall, upon receipt by the Trustee of a Written Request of the City, be withdrawn by the Trustee and remitted to the City. 490 29 4127-3236-0228.4 Section 4.07. Investments. (a) Except as otherwise provided herein, any moneys held by the Trustee in the funds and accounts established hereunder shall be invested by the Trustee upon the Written Request of the City, received at least two Business Days prior to the investment date, only in Permitted Investments, and in the absence of such direction shall be invested by the Trustee in Permitted Investments described in clause ([__]) of the definition thereof; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a Written Request of the City specifying a specific money market fund that satisfies the requirements of said paragraph in which such investment is to be made and, if no such Written Request is so received, the Trustee shall hold such moneys uninvested. The Trustee may act as principal or agent in the acquisition or disposition of any such investment. The Trustee shall not be liable or responsible for any loss suffered in connection with any such investment made by it under the terms of and in accordance with this Section. The Trustee shall sell or present for redemption any obligations so purchased whenever it shall be necessary in order to provide moneys to meet any payment of the funds so invested, and the Trustee shall not be liable or responsible for any losses resulting from any such investment sold or presented for redemption. Permitted Investments that are registerable securities shall be registered in the name of the Trustee. The Trustee shall be entitled to rely upon any investment directions from the City as conclusive certification to the Trustee that the investments described therein are permitted by the general laws of the State of California applicable to investments by cities. (b) Investments purchased with funds on deposit in the Payment Fund shall mature not later than the payment date immediately succeeding the investment. Investments purchased with funds on deposit in the Redemption Fund shall be invested in Permitted Investments described in clause (1)(a) of the definition thereof that mature on or prior to the redemption date on which such funds are to be applied to the redemption of Bonds. Notwithstanding anything to the contrary contained herein, investments purchased with funds on deposit in any Reserve Account of the Reserve Fund shall have an average aggregate weighted term to maturity of not greater than five years; provided, however, that if such investments may be redeemed at par so as to be available on each Interest Payment Date, any amount in such Reserve Account may be invested in such redeemable Permitted Investments maturing on any date on or prior to the final maturity date of the Bonds. (c) Investments (except investment agreements) in any fund or account established hereunder shall be valued, exclusive of accrued interest (i) not less often than annually nor more often than monthly, and (ii) upon any draw upon any Reserve Account. All investments of amounts deposited in any fund or account established hereunder shall be valued at the market value thereof. (d) Any interest or profits received with respect to investments held in any of the funds or accounts established under this Indenture (other than any Reserve Account) shall be retained therein. Any interest or profits received with respect to investments held in a Reserve Account shall be transferred to the related Interest Account. Notwithstanding the foregoing, any such transfer or disbursement shall be made from a Reserve Account only if and to the extent that, after such transfer, the amount on deposit in such Reserve Account, together with amounts available to be drawn on all Reserve Facilities held for such Reserve Account, if any, is at least equal to the Reserve Requirement for such Reserve Account. 491 30 4127-3236-0228.4 (e) The Authority and the City acknowledges that to the extent that regulations of the Comptroller of the Currency grant the Authority or the City the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, to the extent permitted by law, the Authority and the City specifically waives receipt of such confirmations. The Trustee shall furnish the Authority and the City periodic transaction statements that include detail for all investment transactions made by the Trustee hereunder. 492 31 4127-3236-0228.4 ARTICLE V NET PROCEEDS AND TITLE INSURANCE; COVENANTS Section 5.01. Application of Net Proceeds. If the Property or any portion thereof shall be damaged or destroyed, subject to the further requirements of this Section, the City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair or replacement thereof, unless the City elects not to repair or replace the Property or the affected portion thereof in accordance with the provisions hereof. The Net Proceeds of any insurance (other than Net Proceeds of rental interruption insurance), including the proceeds of any self-insurance, received on account of any damage or destruction of the Property or a portion thereof shall as soon as possible be deposited with the Trustee and be held by the Trustee in a special account and made available for and, to the extent necessary, shall be applied to the cost of repair or replacement of the Property or the affected portion thereof upon receipt of a Written Request of the City, together with invoices therefor. Pending such application, such proceeds may, pursuant to a Written Request of the City, be invested by the Trustee in Permitted Investments that mature not later than such times as moneys are expected to be needed to pay such costs of repair or replacement. Notwithstanding the foregoing, the City shall, within 60 days of the occurrence of the event of damage or destruction, notify the Trustee in writing as to whether the City intends to replace or repair the Property or the portions of the Property which were damaged or destroyed. If the City does intend to replace or repair the Property or portions thereof, the City shall deposit with the Trustee the full amount of any insurance deductible to be credited to the special account referred to above. If such damage, destruction or loss was such that there resulted a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments results from such damage or destruction pursuant to Section 3.06 of the Lease Agreement, then the City shall be required either to (a) apply sufficient funds from the insurance proceeds and other legally available funds to the replacement or repair of the Property or the portions thereof which have been damaged to the condition which existed prior to such damage or destruction, or (b) apply sufficient funds from the insurance proceeds and other legally available funds to the redemption, pursuant to Section 3.01 hereof (i) of all of the Outstanding Bonds, or (ii) of such portion of the Outstanding Bonds as shall result in the remaining, non-abated Base Rental Payments being sufficient to pay, as and when due, the principal of and interest on the Bonds that will remain Outstanding after such redemption. If the City is required to apply funds from the insurance proceeds and other legally available funds to the redemption of Bonds in accordance with clause (b) above, the City shall direct the Trustee, in a Written Request of the City, to transfer the funds to be applied to such redemption to the Redemption Fund and the Trustee shall transfer such funds to the Redemption Fund. Any proceeds of any insurance, including the proceeds of any self-insurance remaining after the portion of the Property which was damaged or destroyed is restored to and made available to the City in substantially the same condition and annual fair rental value as that which existed prior to the damage or destruction as required by clause (a) above, or the redemption of Bonds as required by clause (b) above, in each case as evidenced by a Written Certificate of the City to such effect, shall be deposited in the Reserve 493 32 4127-3236-0228.4 Accounts, ratably without preference or priority of any kind according to each Reserve Account’s percentage share of the total deficiencies in all Reserve Accounts, to the extent that the amounts therein are less than the applicable Reserve Requirement. If the City is not required to replace or repair the Property, or the affected portion thereof, as set forth in clause (a) above, or to use such amounts to redeem Bonds as set forth in clause (b) above, then such proceeds shall be deposited in the Reserve Accounts, ratably without preference or priority of any kind according to each Reserve Account’s percentage share of the total deficiencies in all Reserve Accounts, to the extent that the amounts therein are less than the applicable Reserve Requirement. Any amounts not required to be so deposited into the Reserve Accounts shall, if there is first delivered to the Trustee a Written Certificate of the City to the effect that the annual fair rental value of the Property after such damage or destruction, and after any repairs or replacements made as a result of such damage or destruction, is at least equal to 100% of the maximum amount of Base Rental Payments becoming due under the Lease Agreement in the then current Rental Period or any subsequent Rental Period and the fair replacement value of the Property after such damage or destruction is at least equal to the sum of the then unpaid principal components of Base Rental Payments, be paid to the City to be used for any lawful purpose. The proceeds of any award in eminent domain shall be deposited by the Trustee in the Redemption Fund and applied to the redemption of Bonds pursuant to Section 3.01 hereof. Section 5.02. Title Insurance. Net Proceeds of any policy of title insurance received by the Trustee in respect of the Property shall be applied and disbursed by the Trustee as follows: (a) if the City determines that the title defect giving rise to such proceeds has not substantially interfered with its use and occupancy of the Property and will not result in an abatement of Rental Payments payable by the City under the Lease Agreement, such proceeds shall, upon Written Request of the City, be remitted to the City and used for any lawful purpose thereof; or (b) if the City determines that the title defect giving rise to such proceeds has substantially interfered with its use and occupancy of the Property and will result in an abatement in whole or in part of Rental Payments payable by the City under the Lease Agreement, then the City shall, in a Written Request of the City, direct the Trustee to, and the Trustee shall immediately deposit such proceeds in the Redemption Fund and such proceeds shall be applied to the redemption of Bonds in the manner provided in Section 3.01 hereof. Section 5.03. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal of, and premium, if any, and interest on the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of the Base Rental Payments and other assets pledged for such payment as provided in this Indenture and received by the Authority or the Trustee. Section 5.04. Compliance with Indenture. The Authority and the City shall faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in this Indenture required to be complied with, kept, observed and performed by them. 494 33 4127-3236-0228.4 Section 5.05. Compliance with Site Lease and Lease Agreement. The Authority and the City shall faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Site Lease and the Lease Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, shall enforce the Site Lease and the Lease Agreement against the other party thereto in accordance with their respective terms. Section 5.06. Observance of Laws and Regulations. The Authority, the City and the Trustee shall faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired. Section 5.07. Other Liens. The City shall keep the Property and all parts thereof free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability which materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City thirty days’ written notice to comply therewith and failure of the City to so comply within such thirty-day period) may defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its obligation hereunder to perform such agreements and covenants. The Trustee shall have no liability with respect to any determination made in good faith to proceed or decline to defend, pay or compromise any such claim or demand. So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof. The Authority and the Trustee shall not encumber the Property other than in accordance with the Site Lease, the Lease Agreement and this Indenture. Section 5.08. Prosecution and Defense of Suits. The City shall promptly, upon request of the Trustee or any Owner, take such action from time to time as may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Property or any part thereof, whether now existing or hereafter developing, shall prosecute all actions, suits or other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee and every Owner harmless from all cost, damage, expense or loss, including attorneys’ fees, which they or any of them may incur by reason of any such cloud, defect, action, suit or other proceeding. Section 5.09. Accounting Records and Statements. The Trustee shall keep proper accounting records in which complete and correct entries shall be made of all transactions of the 495 34 4127-3236-0228.4 Trustee relating to the receipt, deposit and disbursement of the Lease Revenues, and such accounting records shall be available for inspection by the Authority and the City at reasonable hours and under reasonable conditions. The Trustee shall, upon written request, make copies of the foregoing available, at the Owner’s expense, to any Owner or its agent duly authorized in writing. Section 5.10. Recordation. The City shall record, or cause to be recorded, with the appropriate county recorder, the Lease Agreement and the Site Lease, or memoranda thereof, and a memorandum of the assignment of the Authority’s right, title and interest in and to the Site Lease and the Lease Agreement pursuant to Section 4.01 hereof. Section 5.11. Tax Covenants. (a) Neither the Authority nor the City shall take any action , or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the Series 2020A Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, each of the Authority and the City shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Series 2020A Bonds. (b) In the event that at any time the Authority or the City is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee in any of the funds or accounts established hereunder, the Authority or the City shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (c) Notwithstanding any provisions of this Section, if the Authority or the City shall provide to the Trustee an Opinion of Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Series 2020A Bonds, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent. Section 5.12. Continuing Disclosure. The City shall comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of the City to comply with the Continuing Disclosure Certificate shall not constitute an Event of Default hereunder; provided, however, that the Trustee, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Series 2020 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee, or any holder or Beneficial Owner of the Series 2020 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. Section 5.13. Notifications Required by the Act. If at any time the Trustee fails to pay principal or interest due on any scheduled payment date for the Bonds or withdraws funds from a Reserve Account to pay principal and interest on any Series of Bonds, the Trustee shall notify the Authority in writing of such failure or withdrawal, as applicable, and, in accordance with Section 6599.1(c) of the Act, the Authority shall notify the California Debt and Investment 496 35 4127-3236-0228.4 Advisory Commission of such failure or withdrawal, as applicable, within 10 days of the failure or withdrawal, as applicable. Section 5.14. Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Owner, the Authority and the City shall promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee and the Owners all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon them hereby or by the Site Lease or the Lease Agreement. 497 36 4127-3236-0228.4 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES Section 6.01. Events of Default. The occurrence, from time to time, of any one or more of the following events shall constitute an Event of Default under this Indenture: (a) failure to pay any installment of principal of any Bond as and when the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise; (b) failure to pay any installment of interest on any Bond as and when the same shall become due and payable; (c) a Lease Default Event shall have occurred and be continuing; (d) failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Authority by the Trustee, the City or the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if, in the reasonable opinion of the Authority, the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the Authority within such 30 day period and the Authority shall thereafter diligently and in good faith cure such failure in a reasonable period of time; (e) failure by the City to observe and perform any of the covenants, agreements or conditions on its part in this Indenture contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the City by the Trustee, the Authority or the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if, in the reasonable opinion of the City, the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the City within such 30 day period and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time; or (f) the Authority or the City shall commence a voluntary case under Title 11 of the United States Code or any substitute or successor statute. Section 6.02. Action on Default. In each and every case during the continuance of an Event of Default, the Trustee may and, at the direction of the Owners of not less than a majority of the aggregate principal amount of Bonds then Outstanding (and upon indemnification of the Trustee to its reasonable satisfaction as provided herein), shall, upon notice in writing to the Authority and the City, exercise any of the remedies granted to the Authority under the Lease Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by the Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the 498 37 4127-3236-0228.4 specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 6.03 hereof. Section 6.03. Other Remedies of the Trustee. During the continuance of an Event of Default, the Trustee shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority or the City or any member, director, officer or employee thereof, and to compel the Authority or the City or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein or in the Bonds; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee or the Owners; or (c) by suit, action or proceeding in any court of competent jurisdiction, to require the Authority or the City, or both, to account as if it or they were the trustee or trustees of an express trust. Section 6.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 6.05. Application of Amounts After Default. If an Event of Default shall occur and be continuing, all Lease Revenues and any other funds thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order: (a) to the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; (b) to the payment of all amounts then due for interest on the Bonds, ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable, with interest on the overdue interest at the rate borne by the respective Bonds; and (c) to the payment of all amounts then due for principal of the Bonds, ratably without preference or priority of any kind, according to the amounts of principal of the Bonds due and payable, with interest on the overdue principal at the rate borne by the respective Bonds. Notwithstanding anything herein to the contrary, any amounts held in a Reserve Account shall be applied by the Trustee only after the application of all Lease Revenues and other funds pursuant to subsections (a), (b) and (c) above and shall only be applied as provided by subsections 499 38 4127-3236-0228.4 (a), (b) and (c) above toward payments related to the Series of Bonds secured by such Reserve Account. Section 6.06. Power of Trustee to Enforce. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture. Section 6.07. Bond Owners Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided, however, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and, provided, further, that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Owners not parties to such direction. Section 6.08. Limitation on Bond Owners’ Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Act or any other applicable law with respect to such Bonds, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default, (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name, (c) such Owner or said Owners shall have tendered to the Trustee indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and (d) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder or under law; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners, or to enforce any right under the Bonds, this Indenture, the Act or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners, subject to the provisions of this Indenture. Section 6.09. Termination of Proceedings. If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then, subject to any such adverse determination, the Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. In case any proceedings taken by the Trustee or any one or more Owners on account of any Event of Default shall have been discontinued or 500 39 4127-3236-0228.4 abandoned for any reason or shall have been determined adversely to the Trustee or any Owner, then in every such case the Trustee, such Owner, the Authority and the City, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Trustee, the Owners, the Authority and the City shall continue as though no such proceedings had been taken. Section 6.10. No Waiver of Default. No delay or omission of the Trustee or of any Owner to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, and every power and remedy given by this Indenture to the Trustee or to the Owners may be exercised from time to time and as often as may be deemed expedient. 501 40 4127-3236-0228.4 ARTICLE VII THE TRUSTEE Section 7.01. Duties and Liabilities of Trustee. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default which has not been cured or waived, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. Section 7.02. Removal and Resignation of the Trustee. The Authority and the City may by an instrument in writing, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal amount of the Bonds at the time Outstanding (or their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee and any successor Trustee shall be a commercial bank with trust powers having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 (or be part of a bank holding company with a combined capital and surplus of at least $50,000,000) and subject to supervision or examination by federal or state authorities. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority and the City shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the Authority and the City do not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the City, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and the City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless, at the written request of the Authority, the City or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and 502 41 4127-3236-0228.4 interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Indenture and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 7.03. Compensation and Indemnification of the Trustee. The City shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include “overhead expenses” except as such expenses are included as a component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder; provided, however, that the Trustee shall not have any lien for such compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder. The City shall, to the extent permitted by law, indemnify and save the Trustee harmless against any liabilities, costs, claims or expenses, including those of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder and under any related documents, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its willful misconduct. The duty of the City to indemnify the Trustee shall survive the termination and discharge of this Indenture and the resignation or removal of the Trustee. Section 7.04. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to this Indenture, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. Under no circumstances shall the Trustee request or be entitled to indemnification from the City for taking 503 42 4127-3236-0228.4 actions required by and in accordance with this Indenture, including, but not limited to, causing payments of principal of and interest on the Bonds to be made to the Owners thereof and carrying out redemptions of the Bonds in accordance with the terms hereof. The Trustee may consult with counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith. The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement or for statements made in the preliminary or final official statement relating to the Bonds, or of the title to the Property. Except as otherwise expressly provided herein, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Authority or a Written Certificate of the City, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority or the City, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Authority or the City as freely as if it were not the Trustee hereunder. The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder. 504 43 4127-3236-0228.4 The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal amount of Bonds then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 7.05. Appointment of Co-Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the laws of the State of California) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional institution as a separate or co-trustee. The following provisions of this Section are adopted to these ends. In the event that the Trustee appoints an additional institution as a separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable by either of them. Any co-trustee shall be bound by the standards of care, duties and obligations of the Trustee under this Indenture as if such co-trustee were the Trustee. Any co-trustee shall be a national banking association, trust company or commercial bank doing business in the State of California and at all times shall have a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If such national banking association, trust company or commercial bank publishes a report of condition at least annually, pursuant to 505 44 4127-3236-0228.4 law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such national banking association, trust company or commercial bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Should any instrument in writing from the Authority or the City be required by the separate trustee or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority or the City. In case any separate trustee or co-trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new Trustee or successor to such separate trustee or co-trustee. 506 45 4127-3236-0228.4 ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.01. Supplemental Indentures. (a) This Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners hereunder may be modified or amended at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into when the prior written consents of the Owners of a majority of the aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 10.06 hereof, are filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bond, reduce the amount of principal thereof or the rate of interest thereon or alter the redemption provisions with respect thereto, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, without the consent of the Owners of all of the Bonds then Outstanding, or (iii) permit the creation of any lien on the Lease Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Lease Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all Bonds then Outstanding, or (iv) amend this Section without the prior written consent of the Owners of all Bonds then Outstanding. (b) This Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners hereunder may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the consent of any Owners for any one or more of the following purposes: (i) to add to the covenants and agreements of the Authority or the City in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority or the City; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture or in regard to questions arising hereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Section 2.04 and Section 2.05 hereof; (iv) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on Tax-Exempt Bonds or maintain any federal interest subsidies expected to be received with respect to any Bonds; and 507 46 4127-3236-0228.4 (v) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners; provided, however, that the Authority, the City and the Trustee may rely in entering into any such amendment or supplement upon an Opinion of Counsel stating that the requirements of this paragraph have been met with respect to such amendment or supplement. (c) Promptly after the execution by the Authority, the City and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority or the City), by first class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. Section 8.02. Effect of Supplemental Indenture. Upon the execution and delivery of any Supplemental Indenture entered into pursuant to subsection (a) or (b) of Section 8.01 hereof, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the City, the Trustee and the Owners shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 8.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the effective date of any Supplemental Indenture pursuant to this Article may and, if the Authority or the City so determines, shall bear a notation by endorsement or otherwise in form approved by the Authority, the City and the Trustee as to any modification or amendment provided for in such Supplemental Indenture and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date, and presentation of such Bond for such purpose at the Office of the Trustee, a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date, and presentation of such Bond for such purpose at the Office of the Trustee, such a new Bond in equal principal amount of the same Series, interest rate and maturity shall be exchanged for such Owner’s Bond so surrendered. Section 8.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment or modification as to any particular Bond owned by it, provided that due notation thereof is made on such Bond. 508 47 4127-3236-0228.4 ARTICLE IX DEFEASANCE Section 9.01. Discharge of Indenture. (a) If (i) the Authority shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, and (ii) all other amounts due and payable hereunder and under the Lease Agreement shall have been paid, then the Owners shall cease to be entitled to the pledge of the Lease Revenues and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on the Bonds. (b) Subject to the provisions of subsection (a) of this Section, when any Bond shall have been paid and if, at the time of such payment, each of the Authority and the City shall have kept, performed and observed all of the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by it or on its part on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bond and such Bond shall cease to be entitled to the pledge of the Lease Revenues and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City hereunder shall cease, terminate, become void and be completely discharged and satisfied as to such Bond. (c) Notwithstanding the discharge and satisfaction of this Indenture or the discharge and satisfaction of this Indenture in respect of any Bond, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners of the Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the discharge and satisfaction of this Indenture, the provisions of Section 7.03 hereof relating to the compensation of the Trustee shall remain in effect and shall be binding upon the Authority, the City and the Trustee. Section 9.02. Bonds Deemed To Have Been Paid. (a) If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bond and the payment of the interest thereon to the maturity or redemption date thereof, such Bond shall be deemed to have been paid within the meaning and with the effect provided in Section 9.01 hereof. Any Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 9.01 hereof if (i) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall 509 48 4127-3236-0228.4 have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 3.05 hereof, notice of redemption of such Bond on said redemption date, said notice to be given in accordance with Section 3.05 hereof, (ii) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient, or (B) Defeasance Securities, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which shall be sufficient to pay when due the interest to become due on such Bond on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bond, and (iii) in the event such Bond is not by its terms subject to redemption within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the owners of such Bond that the deposit required by clause (ii) above has been made with the Trustee and that such Bond is deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bond. Neither the money nor the Defeasance Securities deposited with the Trustee pursuant to this subsection in connection with the deemed payment of Bonds, nor principal or interest payments on any such Defeasance Securities, shall be withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal of and, premium, if any, and interest on such Bonds. (b) No Bond shall be deemed to have been paid pursuant to clause (ii)(B) of subsection (a) of this Section unless the Authority or the City shall cause to be delivered (A) an executed copy of a Verification Report with respect to such deemed payment, addressed to the Authority, the City and the Trustee, (B) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification Report and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, and (C) a copy of an Opinion of Counsel, dated the date of such deemed payment and addressed to the Authority, the City and the Trustee, to the effect that such Bond has been paid within the meaning and with the effect expressed in this Indenture, and all agreements, covenants and other obligations of the Authority and the City hereunder as to such Bond have ceased, terminated, become void and been completely discharged and satisfied. (c) The Trustee may seek and is entitled to rely upon (i) an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that the conditions precedent to a deemed payment pursuant to clause (ii) of subsection (a) of this Section have been satisfied, and (ii) such other opinions, certifications and computations, as the Trustee may reasonably request, of accountants or other financial consultants concerning the matters described in subsection (b) of this Section. Section 9.03. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment and discharge of the principal of, or premium or interest on, any Bonds which remain unclaimed for two years after the date when such principal, premium or interest has become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when such principal, premium or interest become payable, shall, at the Written Request of the Authority, be repaid by the Trustee 510 49 4127-3236-0228.4 to the City as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of such principal, premium or interest. 511 50 4127-3236-0228.4 ARTICLE X MISCELLANEOUS Section 10.01. Benefits of Indenture Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any Person other than the Authority, the City, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Authority or the City shall be for the sole and exclusive benefit of the Trustee and the Owners. Section 10.02. Successor Deemed Included in all References to Predecessor. Whenever the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Authority, the City or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 10.03. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or its attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which such notary public or other officer purports to act that the Person signing such declaration, request or other instrument or writing acknowledged to such notary public or other officer the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient. The ownership of any Bond and the amount, payment date, number and date of owning the same may be proved by the Registration Books. Any declaration, request or other instrument in writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority, the City or the Trustee in good faith and in accordance therewith. Section 10.04. Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of any moneys, including without limitation, the principal of or interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of the Authority or the City from the performance of any official duty provided by any applicable provisions of law, by the Lease Agreement or hereby. Section 10.05. Acquisition of Bonds by Authority or City. All Bonds acquired by the Authority or the City, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. 512 51 4127-3236-0228.4 Section 10.06. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon the request of the Trustee, the Authority and the City shall specify to the Trustee in a Written Certificate of the Authority and a Written Certificate of the City, as applicable, those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Written Certificates. Section 10.07. Money Held for Particular Bonds. The money held by the Trustee for the payment of the principal of or premium or interest on particular Bonds due on any date (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 9.03 hereof, but without any liability for interest thereon. Section 10.08. Funds and Accounts. Any fund or account required to be established and maintained pursuant hereto by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Bonds and the rights of the Owners. The Trustee may establish such funds and accounts as it deems necessary to perform its obligations hereunder. The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Indenture. Section 10.09. Gender and References; Article and Section Headings. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. Unless the context otherwise clearly requires, all references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, subsection or clause hereof. 513 52 4127-3236-0228.4 Section 10.10. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Authority, the City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law. The Authority, the City and the Trustee hereby declare that they would have executed this Indenture, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution, authentication, issuance and delivery of the Bonds pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any Person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 10.11. California Law. This Indenture and the Bonds shall be construed and governed in accordance with the laws of the State of California. Section 10.12. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Huntington Beach 200 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Authority: Huntington Beach Public Financing Authority c/o City of Huntington Beach 200 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section. 514 53 4127-3236-0228.4 Section 10.13. Business Days. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture and, unless otherwise specifically provided in this Indenture, no interest shall accrue for the period from and after such nominal date. Section 10.14. Execution in Counterparts. This Indenture may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the Authority has caused this Indenture to be signed in its name by its representative thereunto duly authorized, the City has caused this Indenture to be signed in its name by its representative thereunto duly authorized and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written. HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: Robin Estanislau, Secretary CITY OF HUNTINGTON BEACH By: U.S. BANK NATIONAL ASSOCIATION By: Authorized Officer 515 A-1 4127-3236-0228.4 EXHIBIT A FORM OF SERIES 2020 BOND No. R- ***$*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, SERIES 2020[A][B] [(TAX-EXEMPT)][(FEDERALLY TAXABLE)] MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. May 1, 20__ ___% _______, 20__ REGISTERED OWNER: Cede & Co. PRINCIPAL AMOUNT: _____________________________ DOLLARS The Huntington Beach Public Financing Authority (the “Authority”), for value received, hereby promises to pay to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof, payable semiannually on May 1 and November 1 in each year, commencing _________, 20__ (the “Interest Payment Dates”), until payment of such Principal Amount in full. This Bond is issued pursuant to the Master Indenture, dated as of [__________] 1, 2020 (the “Indenture”), by and among the Authority, the City of Huntington Beach (the “City”) and U.S. Bank National Association, as trustee. Capitalized undefined terms used herein have the meanings ascribed thereto in the Indenture. This Bond shall bear interest from the Interest Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date, whether or not such day is a business day, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to ________ 15, 20__, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of U.S. Bank National Association, as trustee, or any successor trustee under the Indenture (the “Trustee”), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the “Office of the Trustee”). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. 516 A-2 4127-3236-0228.4 This Bond is one of a series of a duly authorized issue of bonds designated “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series [A][B] [(Tax-Exempt)][(Federally Taxable)]” (the “Series 2020[A][B] Bonds”) in the aggregate principal amount of $[__________]. The Series 2020[A][B] Bonds are issued pursuant to the Indenture, and this reference incorporates the Indenture herein. An additional series of bonds, the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series [A][B] [(Tax-Exempt)][(Federally Taxable)] (the “Series 2020[A][B] Bonds”), in the aggregate principal amount of $[__________], have also been issued pursuant to the terms of the Indenture. The Series 2020A Bonds and the Series 2020B Bonds are collectively referred to at the “Series 2020 Bonds.” Pursuant to and as more particularly provided in the Indenture, Additional Bonds may be issued by the Authority payable from Lease Revenues as provided in the Indenture on a parity with the Series 2020 Bonds. The Series 2020 Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is entered into, and this Bond is issued under, the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code (the “Act”) and the laws of the State of California. Reference is hereby made to the Indenture and to any and all amendments thereof and supplements thereto for a description of the agreements, conditions, covenants and terms securing the Bonds, for the nature, extent and manner of enforcement of such agreements, conditions, covenants and terms, for the rights, duties and immunities of the Trustee, for the rights and remedies of the Owners of the Bonds with respect thereto and for the other agreements, conditions, covenants and terms upon which the Bonds are issued thereunder, to all of which provisions the Registered Owner by acceptance hereof, assents and agrees. The Bonds are special obligations of the Authority, payable solely from the Lease Revenues and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. The Lease Revenues consist of all Base Rental Payments payable by the City pursuant to the Master Lease Agreement, dated as of [__________] 1, 2020, by and between the City, as lessee, and the Authority, as lessor, (the “Lease Agreement”), including any prepayments thereof, any Net Proceeds and any amounts received by the Trustee as a result of or in connection with the Trustee’s pursuit of remedies under the Lease Agreement upon a Lease Default Event. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Lease Revenues and all amounts on deposit from time to time in the funds and accounts established under the Indenture (other than the Rebate Fund) are pledged to the payment of the principal of and interest on the Bonds as provided therein, and the Lease Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding. Said pledge constitutes a first lien on such assets. In order to secure such pledge of the Lease Revenues, the Authority has sold assigned and transferred to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the Owners, all of its right, title and interest in and to the Site Lease and the Lease Agreement, including, without limitation, the right to receive Base Rental Payments and the right to exercise any remedies provided in the Lease Agreement in the event of a default by the City thereunder; provided, however, that the Authority has retained the rights to indemnification and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement. 517 A-3 4127-3236-0228.4 The Bonds are issuable as fully registered Bonds without coupons in Authorized Denominations ($5,000 or any integral multiple thereof). [The Series 2020 Bonds are subject to extraordinary, optional and mandatory redemption at the times, in the manner, at the redemption prices and upon notice as specified in the Indenture.] Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. To the extent and in the manner permitted by the terms of the Indenture, the provisions of the Indenture may be amended or supplemented by the parties thereto. The Indenture contains provisions permitting the Authority to make provision for the payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds shall no longer be deemed to be outstanding under the terms of the Indenture. This Bond shall not be entitled to any benefit, protection or security under the Indenture or become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been executed and dated by an authorized signatory of the Trustee. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law. IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of the Chair of the Authority, attested by the 518 A-4 4127-3236-0228.4 manual or facsimile signature of the Secretary of the Authority, all as of the Dated Date identified above. HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: _______________________________ Chair ATTEST: ________________________________ Secretary 519 A-5 4127-3236-0228.4 CERTIFICATE OF AUTHENTICATION This is one of the Series 2020 Bonds described in the within-mentioned Indenture and registered on the Registration Books. Dated: U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE By: ______________________________ Authorized Signatory 520 A-6 4127-3236-0228.4 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ______________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. 521 B-1 4127-3236-0228.4 EXHIBIT B PERMITTED INVESTMENTS “Permitted Investments” means any of the following to the extent then permitted by the general laws of the State of California applicable to investments by cities: (1) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated (collectively “United States Obligations”). These include, but are not necessarily limited to: - U.S. Treasury obligations All direct or fully guaranteed obligations - Farmers Home Administration Certificates of beneficial ownership - General Services Administration Participation certificates - U.S. Maritime Administration Guaranteed Title XI financing - Small Business Administration Guaranteed participation certificates - Guaranteed pool certificates - Government National Mortgage Association (GNMA) GNMA-guaranteed mortgage-backed securities GNMA-guaranteed participation certificates - U.S. Department of Housing & Urban Development Local authority bonds (2) Obligations of instrumentalities or agencies of the United States of America limited to the following: (a) the Federal Home Loan Bank Board (“FHLB”); (b) the Federal Home Loan Mortgage Corporation (“FHLMC”); (c) the Federal National Mortgage Association (FNMA); (d) Federal Farm Credit Bank (“FFCB”); and (e) guaranteed portions of Small Business Administration (“SBA”) notes. (3) Commercial Paper having a maximum maturity of not more than 270 days, payable in the United States of America and issued by corporations that are organized and operating in the United States with total assets in excess of $500 million and having “A” or better rating for the 522 B-2 4127-3236-0228.4 issuer’s long-term debt as provided by Moody’s, S&P, or Fitch and “P-1”, “A-1”, “F1” or better rating for the issuer’s short-term debt as provided by Moody’s, S&P, or Fitch, respectively. (4) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as “bankers’ acceptances,” having original maturities of not more than 180 days. The institution must have a minimum short-term debt rating of “A-1”, “P-1”, or “F1” by S&P, Moody’s, or Fitch, respectively, and a long-term debt rating of no less than “A” by S&P, Moody’s, or Fitch. (5) Shares of beneficial interest issued by diversified management companies, known as money market funds, registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) and whose fund has received the highest possible rating from S&P, including funds for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide investment advisory or other management services. (6) Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California which invests exclusively in investments permitted by Section 53601 of Title 5, Division 2, Chapter 4 of the Government Code of California, as it may be amended. (7) Certificates of deposit issued by a nationally- or state-chartered bank or a state or federal association (as defined by Section 5102 of the California Financial Code) or by a state- licensed branch of a foreign bank, in each case which has, or which is a subsidiary of a parent company which has, obligations outstanding having a rating in the “A” category or better from S&P, Moody’s, or Fitch. (8) Pre-refunded municipal obligations rated meeting the following requirements: (a) the municipal obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; (c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”); (d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; 523 B-3 4127-3236-0228.4 (e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and (f) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. (9) Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the State of California or by the state, department, board, agency, or authority of the other 49 United States, having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively (10) California public municipal obligations including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a California municipal entity having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively (11) Repurchase agreements which have a maximum maturity of 30 days and are fully secured at or greater than 102% of the market value plus accrued interest by obligations of the United States Government, its agencies and instrumentalities, in accordance with number (ii) above. (12) Investment agreements and guaranteed investment contracts with issuers having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively. (13) Deposits with the Local Agency Investment Fund (LAIF) of the State. (14) Corporate obligations issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively. 524 C-1 4127-3236-0228.4 EXHIBIT C FORM OF COSTS OF ISSUANCE FUND REQUISITION HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS, SERIES 2020A (TAX-EXEMPT) AND HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS, SERIES 2020B (FEDERALLY TAXABLE) WRITTEN REQUEST NO. __ FOR DISBURSEMENTS FROM COSTS OF ISSUANCE The undersigned hereby states and certifies: (a) that the undersigned is the duly appointed, qualified and acting ____________ of the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the “City”), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that U.S. Bank National Association, as trustee (the “Trustee”), is hereby requested to disburse from the Costs of Issuance Fund, established pursuant to the Master Indenture, dated as of [__________] 1, 2020 (the “Indenture”), by and among the Huntington Beach Public Financing Authority, the City and the Trustee, to the payees set forth on Attachment I attached hereto and by this reference incorporated herein, the amount set forth on Attachment I opposite each such payee, for payment of such costs identified on said Attachment I; (c) that each item of cost identified on Attachment I has been properly incurred and the amounts to be disbursed pursuant to this Written Request are for Costs of Issuance properly chargeable to the Costs of Issuance Fund, and no amounts to be disbursed pursuant to this Written Request have been the subject of a previous Written Request for disbursement from said account; and 525 C-2 4127-3236-0228.4 (d) that an invoice, for each item of cost identified on Attachment I is attached hereto. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Indenture. Dated: _____________ CITY OF HUNTINGTON BEACH By: ______________________________ 526 C-3 4127-3236-0228.4 ATTACHMENT I COST OF ISSUANCE FUND DISBURSEMENTS Payee Name and Address Purpose of Obligation Amount 527 1 $________ HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS $___________ 2020 Series A (Tax-Exempt) $__________ 2020 Series B (Federally Taxable) BOND PURCHASE AGREEMENT _______ __, 2020 Huntington Beach Public Financing Authority c/o City of Huntington Beach Department of Finance 2000 Main Street Huntington Beach, California 92648 Attention: Executive Director City of Huntington Beach c/o City of Huntington Beach Department of Finance 2000 Main Street Huntington Beach, California 92648 Ladies and Gentlemen: The undersigned, Stifel Nicolaus & Co. Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (which, together with Exhibit A, is referred to as the “Purchase Agreement”) with the Huntington Beach Public Financing Authority (the “Authority”) and the City of Huntington Beach, California (the “City”), which, upon the acceptance of the Authority and the City, will be binding upon the Authority, the City and the Underwriter. This offer is made subject to acceptance by the Authority and by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 6:00 P.M., Pacific Standard Time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Master Indenture, dated as of July 1, 2020 (the “Indenture”), by and among the City, the Authority and U.S. Bank National Association, as trustee (the “Trustee”) substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Authority, the City and the Underwriter. Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Authority and the City, and the Authority and the City hereby agree to issue, sell and deliver to the Underwriter all (but not less than all) of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax- 528 2 Exempt) in the aggregate principal amount of $_________ (the “Series 2020A Bonds”) and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable) in the aggregate principal amount of $_________ (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Bonds”). The Bonds will be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually on May 1 and November 1 in each year, commencing _______ 1, 20__ and will bear interest at the rates and mature in the principal amounts and on the dates as set forth in Exhibit A hereto. The purchase price for the Series 2020A Bonds shall be equal to $_________ (being the aggregate principal amount thereof plus net original issue premium of $________ and less an underwriter’s discount with respect to the Series 2020A Bonds of $________) and the purchase price for the Series 2020B Bonds shall be equal to $_________ (being the aggregate principal amount thereof less an underwriter’s discount with respect to the Series 2020B Bonds of $________). The City and Authority acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction among the City, the Authority and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as a Municipal Advisor (as defined in Section 15B of The Securities Exchange Act of 1934, as amended), financial advisor or fiduciary; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or are currently providing other services to the City or the Authority on other matters); (iv) the only obligations the Underwriter has to the City and the Authority with respect to the transaction contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the City and the Authority have consulted their own legal, accounting, tax, financial and other advisors to the extent they have deemed appropriate. Section 2. The Bonds. The Bonds shall be secured by revenues consisting primarily of base rental payments (“Base Rental Payments”) to be paid by the City pursuant to the Master Lease Agreement between the City and the Authority, dated as of July 1, 2020 (the “Lease Agreement”). The Authority’s right to receive the Base Rental Payments due under the Lease Agreement and to exercise remedies upon default under such Lease Agreement shall be assigned to the Trustee for the benefit of the owners of the Bonds pursuant to the Indenture. The Bonds shall be as described in, and shall be secured under and pursuant to the Indenture. The Series 2020A Bonds are being issued to (i) refund the outstanding Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Refunded 2010 Bonds”), and (ii) pay costs of issuance of the Series 2020A Bonds. The Series 2020B Bonds are being issued to (i) advance refund the outstanding Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project)(the “Refunded 2011 Bonds” and, together with the Refunded 2010 Bonds, the “Refunded Bonds”). The Bonds, this Purchase Agreement, the Indenture, the Lease Agreement, the Master Site Lease dated as of July 1, 2020 (the “Site Lease”) by and between the City and the Authority, and the resolution of the Authority authorizing the issuance of the Bonds and the execution and delivery of the Authority Documents (hereinafter defined) are collectively referred to herein as the “Authority Documents.” 529 3 This Purchase Agreement, the Continuing Disclosure Certificate, dated as of the Closing Date (as hereinafter defined) and entered into by the City (the “Continuing Disclosure Certificate”), the Indenture, the Lease Agreement, the Site Lease and the resolution of the City authorizing the execution and delivery of the City Documents (hereinafter defined) are collectively referred to herein as the “City Documents.” Section 3. Public Offering. (a) The Underwriter agrees to make an initial public offering of all of the Bonds at the public offering prices (or yields) set forth on Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as the Underwriter deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A. The Bonds may be offered and sold to certain dealers (including dealers depositing the Bonds into investment trusts) at prices lower than such initial public offering prices. (b) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the Municipal Advisor, identified herein and any notice or report to be provided to the City may be provided to the Municipal Advisor. (c) Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the [Series 2020A Bonds] (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of [Series 2020A Bonds]. If at that time the 10% test has not been satisfied as to any maturity of the [Series 2020A Bonds], the Underwriter agrees to promptly report to the City the prices at which it sells the unsold [Series 2020A Bonds] of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the [Series 2020A Bonds] of that maturity or until all [Series 2020A Bonds] of that maturity have been sold to the public. (d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the [Series 2020A Bonds] for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the [Series 2020A Bonds], the Underwriter will neither offer nor sell unsold [Series 530 4 2020A Bonds] of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: 1. the close of the fifth (5th) business day after the sale date; or 2. the date on which the Underwriter has sold at least 10% of that maturity of the [Series 2020A Bonds] to the public at a price that is no higher than the initial offering price to the public. The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the [Series 2020A Bonds] to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (e) The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to: (1) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the [Series 2020A Bonds] of that maturity or all [Series 2020A Bonds] of that maturity have been sold to the public; and (2) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that a selling group has been created in connection with the initial sale of the [Series 2020A Bonds] to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires; and (B) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the- offering-price rule as applicable to the [Series 2020A Bonds]. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this section: 1. “public” means any person other than an underwriter or a related party; 2. “underwriter” means: (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public; and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public); 3. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to: (A) at least 50% common 531 5 ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another); (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another); or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and 4. “sale date” means the date of execution of this Purchase Agreement by all parties. Section 4. The Official Statement. By its acceptance of this proposal, the Authority and the City ratify, confirm and approve of the use and distribution by the Underwriter prior to the date hereof of the preliminary official statement relating to the Bonds dated _______ __, 2020 (including the cover page, all appendices and all information incorporated therein and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”) that authorized officers of the Authority and the City deemed “final” as of its date, for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”), except for certain information permitted to be omitted therefrom by Rule 15c2-12. The Authority and the City hereby agree to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information previously permitted to have been omitted by Rule 15c2-12) (including the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Authority, the City and the Underwriter, the “Official Statement”), in such quantity and format as the Underwriter shall reasonably request to comply with Section (b)(4) of Rule 15c2-12 and the rules of the Municipal Securities Rulemaking Board (the “MSRB”). The Underwriter hereby agrees that it will not request that payment be made by any purchaser of the Bonds prior to delivery by the Underwriter to the purchaser of a copy of the Official Statement. The Underwriter agrees: (i) to provide the Authority and the City upon request with final pricing information on the Bonds on a timely basis; and (ii) to promptly file a copy of the Official Statement, including any supplements prepared by the Authority or the City with the MSRB at http://emma.msrb.org. The Authority and the City hereby approve of the use and distribution by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Authority and the City will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with the MSRB. Section 5. Closing. At 8:00 a.m., Pacific Standard Time, on _________ __, 2020 (the “Closing Date”), or at such other time or date as the Authority and the Underwriter agree upon, the Authority shall deliver or cause to be delivered to the Trustee, and the Trustee shall deliver or cause to be delivered to The Depository Trust Company, New York New York (“DTC”), the Bonds in definitive form, duly executed and authenticated. Concurrently with the delivery of the Bonds, the Authority and the City will deliver the documents hereinafter mentioned at the offices of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California (“Bond Counsel”), or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer 532 6 in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Bonds shall be registered in the name of Cede & Co., as nominee of DTC in denominations of five thousand dollars ($5,000) or any integral multiple thereof and shall be made available to the Underwriter at least one (1) business day before the Closing for purposes of inspection and packaging. The Authority and the City acknowledge that the services of DTC will be used initially by the Underwriter in order to permit the issuance of the Bonds in book-entry form, and agree to cooperate fully with the Underwriter in employing such services. Section 6. Representations, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter and the City that: (a) The Authority is a public body, duly organized and existing under the Constitution and laws of the State of California (the “State”), including the Authority’s Joint Exercise of Powers Agreement (the “JPA Agreement”) and the Joint Exercise of Powers Act (Government Code Division 7, Chapter 5, Section 6500 et seq.) (the “JPA Act”). (b) The Authority has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the Authority Documents. (c) By all necessary official action, the Authority has duly adopted, authorized and approved the Authority Documents, has duly authorized and approved the Preliminary Official Statement, will, by execution thereof, duly authorize and approve the Official Statement, and has duly adopted or authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in, the Authority Documents and the consummation by it of all other transactions contemplated by the Authority Documents in connection with the issuance of the Bonds. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against joint powers authorities in the State. The Authority will at the Closing be in compliance in all respects, with the terms of the Authority Documents. (d) To the best of its knowledge, the Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party which breach or default has or may have an adverse effect on the ability of the Authority to perform its obligations under the Authority Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the Authority Documents, if applicable, and compliance with the provisions on the Authority’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, 533 7 administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Authority or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Documents. (e) To the best of its knowledge, all material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Authority of its obligations in connection with the Authority Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Preliminary Official Statement and the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Authority Documents have been duly obtained. (f) The Authority hereby agrees that it will notify the other parties hereto if, within the period from the date of this Purchase Agreement to and including the date twenty-five (25) days following the end of the underwriting period (as defined herein), the Authority discovers any pre-existing or subsequent fact or becomes aware of the occurrence of any event, in any such case, which might cause the Official Statement (as the same may have then been supplemented or amended) to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (g) As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental authority, public board or body, pending, with service of process having been accomplished, or threatened in writing and delivered to the Authority: (i) in any way questioning the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Base Rental Payments with respect to the Lease Agreement or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the other Authority Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority or its authority to issue the Bonds; (iii) which would be likely to result in any material adverse change relating to the business, operations or financial condition of the Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 534 8 (h) To the best of the Authority’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of paragraph 6(g). (i) The information in the Official Statement set forth under the captions “INTRODUCTION—The Authority” and “THE AUTHORITY” does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Any certificate signed by any officer of the Authority authorized to execute such certificate in connection with the execution, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation of the Authority to the Underwriter and the City as to the statements made therein but not of the person signing such certificate. Section 7. Representations, Warranties and Covenants of the City. The City represents, warrants and covenants to the Underwriter and the Authority that: (a) The City is a chartered city and municipal corporation duly organized and existing under and by virtue of the laws of the State. (b) The City has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the City Documents. (c) By all necessary official action, the City has duly adopted, authorized and approved the City Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly adopted or authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in, the City Documents and the consummation by it of all other transactions contemplated by the City Documents in connection with the issuance of the Bonds. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the City Documents will constitute the legally valid and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against municipal corporations in the State. The City will at the Closing be in compliance in all respects, with the terms of the City Documents. (d) To the best of its knowledge, the City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City to perform its obligations under the City Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the City Documents, if applicable, and compliance with the provisions on the City’s part contained 535 9 therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. (e) To the best of its knowledge, all material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with the City Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Preliminary Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) The Preliminary Official Statement was as of its date, and the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement and the Official Statement do not and will not contain and up to and including the Closing will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (except that this representation does not include information regarding DTC and its book-entry only system, information under the caption “UNDERWRITING,” CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriter, as to which no view is expressed). (g) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (h) As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental authority, public board or body, pending, with service of process having been accomplished, or threatened in writing and delivered to the City: (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Base Rental Payments with respect to the Lease Agreement or of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, or the City Documents 536 10 or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Series 2020A Bonds from taxation, or contesting the powers of the Authority to issue the Bonds; (iii) which would be likely to result in any material adverse change relating to the business, operations or financial condition of the City; and (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) To the best of the City’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in paragraph 7(h). (j) Until the date which is twenty-five (25) days after the “end of the underwriting period” (as hereinafter defined), if any event shall occur of which the City is aware that would cause the Official Statement to contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements in the Official Statement, in light of the circumstances under which they were made, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “end of the underwriting period” means the later of such time as: (i) the Authority delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives written notice to the contrary, the “end of the underwriting period” shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Authority and the City at or prior to the Closing Date of the Bonds and shall specify a date (other than the Closing Date) to be deemed the “end of the underwriting period.” The City agrees to cooperate with the Underwriter in the filing by the Underwriter of such supplement or amendment to the Official Statement with the MSRB. (k) Except as disclosed in the Preliminary Official Statement and the Official Statement, the City has not within the last five years failed to comply in any material respect with any continuing disclosure undertakings with regard to Rule 15c2-12, to provide annual reports or notices of material events specified in such rule. (l) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2019 attached as Appendix B to the Official Statement fairly represent the receipts, expenditures and cash balances of the City. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the City or in its operations since June 30, 2019 and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change. (m) To the extent required by law, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain enumerated 537 11 events. A description of this undertaking is set forth in Appendix F to the Preliminary Official Statement and will also be set forth in the Official Statement. (n) Any certificate signed by any officer of the City authorized to execute such certificate in connection with the execution, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation of the City to the Underwriter and the Authority as to the statements made therein but not of the person signing such certificate. Section 8. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements of the officers and other officials of the Authority and of the City, as well as authorized representatives of the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof; to the performance by the Authority and the City of their obligations to be performed hereunder at or prior to the Closing Date; and to the following additional conditions: (a) The representations, warranties and covenants of the City and the Authority contained herein shall be true, complete and correct at the date hereof and at the time of the Closing, as if made on the Closing Date. (b) At the time of Closing, the City Documents and the Authority Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the City Documents, the Authority Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter. (c) At the time of the Closing, no default shall have occurred or be existing under the City Documents or the Authority Documents, and the City shall not be in default in the payment of principal or interest with respect to any of its financial obligations, which default would adversely impact the ability of the City to pay the Base Rental Payments. (d) In recognition of the desire of the Authority, the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the absolute discretion of the Underwriter by notification, in writing, to the Authority and the City prior to delivery of and payment for the Bonds, if at any time prior to such time: (i) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of America of a national emergency or war or other calamity or crisis (or the escalation of such calamity or crisis) the effect of which on financial markets is materially adverse such as to make it, in the sole judgment of the Underwriter, impractical to proceed with the purchase or delivery of the Bonds as contemplated by the Official Statement (exclusive of any amendment or supplement thereto); or (ii) a general banking moratorium shall have been declared by federal, State or New York authorities, or the general suspension of trading on any national securities exchange; or 538 12 (iii) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Preliminary Official Statement or the Official Statement, in the light of the circumstances under which they were made, not misleading, which event, in the reasonable opinion of the Underwriter would materially or adversely affect the ability of the Underwriter to market the Bonds; or (iv) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which materially adversely affects the market price of the Bonds; or (v) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States of America or by any legislation in or by the Congress of the United States of America or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States of America, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States of America, the Treasury Department of the United States of America, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States of America, or the favorable reporting for passage of legislation to either House of the Congress of the United States of America by a Committee of such House to which such legislation has been referred for consideration; or (vi) an order, decree or injunction shall have been issued by any court of competent jurisdiction, or order, ruling, regulation (final, temporary or proposed), official statement or other form of notice or communication issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that: (i) obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Trust Agreement is not exempt from qualification under the Trust Indenture Act of 1939; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Preliminary Official Statement and the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; or (vii) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Preliminary Official Statement and the Official Statement, is or would be in violation of any provision of the Securities Act of 539 13 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of the Bonds or obligations of the general character of the Bonds, as contemplated hereby or by the Preliminary Official Statement and the Official Statement; or (viii) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or (ix) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker dealers; or (x) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or (xi) any rating of the Bonds or the rating of any general fund obligations of the City shall have been downgraded or withdrawn by a national rating service, which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or (xii) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States securities market, rendering the marketing and sale of the Bonds, or enforcement of sale contracts with respect thereto impracticable; or (i) the commencement of any action, suit or proceeding described in Section 6(g) or Section 7(h). (e) at or prior to the Closing, the Underwriter shall receive the following documents, in each case to the reasonable satisfaction in form and substance of the Underwriter: (i) All resolutions relating to the Bonds adopted by the Authority and certified by an authorized official of the Authority authorizing the issuance of the Bonds and the execution and delivery of the Authority Documents; (ii) All resolutions relating to the Bonds adopted by the City and certified by an authorized official of the City authorizing the execution and delivery of the City Documents and the delivery of the Bonds and the Official Statement; (iii) The City Documents and the Authority Documents duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter; 540 14 (iv) The approving opinion of Bond Counsel dated the Closing Date and addressed to the Authority and the City, in substantially the form attached as Appendix E to the Official Statement, and a reliance letter thereon addressed to the Underwriter; (v) A supplemental opinion of Bond Counsel dated the Closing Date and addressed to the Underwriter, to the effect that: (A) the statements in the Official Statement under the captions “INTRODUCTION,” “THE BONDS,” “SECURITY FOR THE BONDS” and “TAX MATTERS,” and in Appendix D—“SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS,” excluding any material that may be treated as included under such captions and appendices by any cross-reference, insofar as such statements expressly summarize provisions of the Indenture, Lease Agreement, Site Lease and set out the form and content of Bond Counsel’s final opinion concerning certain federal tax matters relating to the Bonds, are accurate in all material respects as of the Closing Date; (B) The Purchase Agreement has been duly authorized, executed and delivered by the City and the Authority and is the valid, legal and binding agreement of the City and the Authority, enforceable in accordance with its terms, except that the rights and obligations under the Purchase Agreement are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State, and provided that no opinion is expressed with respect to any indemnification or contribution provisions contained therein; and (C) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; (vi) The Official Statement, executed on behalf of the Authority and City, and the Preliminary Official Statement; (vii) Evidence that the ratings on the Bonds are as described in the Official Statement; (viii) A certificate, dated the Closing Date, signed by a duly authorized officer of the Authority satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the Authority contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the Authority, and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to the Closing Date; (ii) to the best of such officer’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement under the captions “INTRODUCTION—The Authority” and “THE AUTHORITY” did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact 541 15 necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (iv) to the best of its knowledge after reasonable investigation, the Authority is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, which would have a material adverse impact on the Authority’s ability to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; (ix) A certificate, dated the Closing Date, signed by a duly authorized officer of the City satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the City, and the City has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (ii) to the best of such officer’s knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement (except that this representation does not include information regarding DTC and its book entry only system, information under the caption “UNDERWRITING,” CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriter, as to which no view is expressed) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (iv) to the best of its knowledge after reasonable investigation, the City is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Lease Agreement) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the City Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; (x) An opinion dated the Closing Date and addressed to the Underwriter, the Authority, the City and Bond Counsel, of the City Attorney of the City of Huntington Beach, as counsel to the Authority, to the effect that: (A) The Authority is a public body, organized and existing under the Constitution and laws of the State, including the JPA Act and the JPA Agreement; (B) The resolution relating to the Bonds adopted by the Authority and certified by an authorized official of the Authority authorizing the issuance and sale of the Bonds and the execution and delivery of the Authority Documents and the Official Statement has been duly adopted at a regular meeting of the Authority, and is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption; 542 16 (C) The Authority Documents have been duly authorized, executed and delivered by the Authority and constitute valid, legal and binding agreements of the Authority enforceable in accordance with their respective terms; (D) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process having been accomplished, or threatened in writing against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Authority Documents or seeking to restrain or enjoin the collection of Base Rental Payments with respect to the Lease Agreement or the repayment of the Bonds or in any way contesting or affecting the validity of the Authority Documents or contesting the authority of the Authority to enter into or perform its obligations under any of the Authority Documents; (E) the execution and delivery of the Authority Documents and the issuance of the Bonds and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject, which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents; (F) no authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the Authority Documents or the Official Statement by the Authority or the consummation by the Authority of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriter; and (G) based on the information made available to such counsel in its role as counsel to the Authority, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement under the caption entitled “THE AUTHORITY,” nothing has come to its attention which would lead it to believe that the statements contained in the above-referenced caption as of the date of the Official Statement and as of the Closing Date (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xi) an opinion dated the Closing Date and addressed to the Underwriter and Bond Counsel, of the City Attorney of the City of Huntington Beach, to the effect that: (A) The City is a chartered city and municipal corporation, duly organized and existing under and by virtue of the laws of the State; (B) The resolution relating to the Bonds adopted by the City and certified by an authorized official of the City authorizing the execution and delivery of the City 543 17 Documents and the Official Statement has been duly adopted and is in full force and effect and has not been modified, amended, rescinded or repealed since the its date of adoption; (C) The City Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other parties thereto, if applicable, constitute the valid, legal and binding agreements of the City enforceable in accordance with their respective terms; (D) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process having been accomplished, or threatened in writing against the City, challenging the creation, organization or existence of the City, or the validity of the City Documents or seeking to restrain or enjoin the payment of the Base Rental Payments or the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Documents, or which, in any manner, questions the right of the City to pay the Base Rental Payments under the Lease Agreement; (E) The execution and delivery of the City Documents and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents; (F) No authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the City Documents or the consummation by the City of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriter; and (G) Based on the information made available to City Attorney, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to its attention which would lead it to believe that the Official Statement as of its date and as of the Closing Date (excluding therefrom financial statements and other statistical data, information regarding DTC and its book entry only system, information under the caption “UNDERWRITING,” CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriter, as to which no view need be expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xii) An opinion of Orrick, Herrington & Sutcliffe LLP as Disclosure Counsel to the Authority and the City, dated the Closing Date and addressed to City, Authority and the Underwriter, to the effect that, based on the information made available to it in its role as Disclosure Counsel, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, but on the basis of 544 18 their participation in the above-mentioned conferences (which did not extend beyond the date of the Official Statement), and in reliance thereon and on the records, documents, certificates and matters mentioned above, such counsel advises the Underwriter as a matter of fact and not opinion that, during the course of such counsel’s role as disclosure counsel with respect to the Bonds, no facts came to the attention of the attorneys in such firm rendering legal services in connection with such role which caused them to believe that the Official Statement as of its date (except for any CUSIP numbers, financial, accounting, statistical, economic or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any information about The Depository Trust Company or its book-entry system, litigation, ratings, rating agencies or underwriting, and Appendices A, B, C, G, H and I included or referred to therein, which such counsel shall expressly exclude from the scope of this paragraph and as to which such counsel shall express no opinion or view) contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xiii) An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, dated the Closing Date, addressed to the Underwriter to the effect that, although such attorneys have not undertaken to check the accuracy, completeness or fairness of, or verified the information contained in, the Official Statement, and are therefore unable to make any representation in that regard, such attorneys have participated in conferences prior to the date of the Official Statement with representatives of the City, the Authority, the Underwriter and others, during which conferences the contents of the Official Statement and related matters were discussed. Based upon the information made available to such attorneys in the course of their participation in such conferences, their review of the documents referred to above, their reliance on the certificates and the opinions of counsel described above and their understanding of applicable law, such attorneys do not believe that the Official Statement (any CUSIP numbers, financial, accounting, statistical, economic or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any information about The Depository Trust Company or its book-entry system, litigation, ratings, rating agencies or underwriting, and the Appendices to the Official Statement, as to which no view need be expressed) as of its date contained, or as of the date of such opinion, contains, any untrue statement or a material fact, or as of its date omitted, or as of the date of such opinion omits, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (xiv) An opinion of counsel to the Trustee, addressed to the Underwriter and dated the Closing Date, in form and substance satisfactory to the Underwriter and to Bond Counsel; (xv) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee in form and substance satisfactory to the Underwriter; (xvi) The preliminary and final Notice of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code; (xvii) A copy of the executed Blanket Issuer Letter of Representations by and between the Authority and DTC relating to the book-entry system; 545 19 (xviii) The tax and nonarbitrage certificate of the City and the Authority in form and substance to the reasonable satisfaction of Bond Counsel and the Underwriter; (xix) A certificate, dated the date of the Preliminary Official Statement, of the City, as required under Rule 15c2-12; (xx) A certificate, dated the date of the Preliminary Official Statement, of the Authority, as required under Rule 15c2-12; (xxi) Certified copies of the JPA Agreement and all amendments thereto and related certificates issued by the Secretary of State of the State; (xxii) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of the Indenture and the authentication and delivery of the Bonds by the Trustee; (xxiii) Evidence of insurance as required by the Lease Agreement; (xxiv) Evidence that the Bonds have been assigned the ratings of “__” and “___”, respectively, by Standard and Poor’s Ratings Service and Fitch Ratings, Inc.; and (xxv) Such additional legal opinions, certificates, proceedings, instruments or other documents as Bond Counsel or the Underwriter may reasonably request. Section 9. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Authority shall pay only from the proceeds of the Bonds, or cause the City to pay out of the proceeds of the Bonds or any other legally available funds of the City or the Authority, but only as the Authority and such other party providing such services may agree, all expenses and costs of the Authority and the City incident to the performance of their obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, rating agency fees and charges, initial fees of the Trustee, including fees and disbursements of their counsel, if any, fees and disbursements of Bond Counsel and Disclosure Counsel and other professional advisors employed by the Authority or the City, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees. The Underwriter shall pay all out-of- pocket expenses of the Underwriter, including, without limitation, the fees and expenses of its counsel, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds. Certain payments may be in the form of inclusion of such expenses in the expense component of the Underwriter’s discount. Section 10. Notices. Any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & 546 20 Company, Incorporated 515 S. Figueroa Street, Suite 1800 Los Angeles, CA 90071, Attention: John Kim. All notices or communications hereunder by any party shall be given and served upon each other party. Any notice or communication to be given the Authority under this Purchase Agreement may be given by delivering the same in writing to the Huntington Beach Public Financing Authority, c/o City of Huntington Beach Department of Finance, 2000 Main Street, Huntington Beach, California 92648, Attention: Executive Director. Any notice or communication to be given the City under this Purchase Agreement may be given by delivering the same in writing to the City of Huntington Beach c/o City of Huntington Beach Department of Finance, 2000 Main Street, Huntington Beach, California 92648. Attention: Chief Financial Oficer. Section 11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof. All representations, warranties and agreements of the Authority and the City in this Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of and payment for the Bonds. Section 12. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 547 21 Section 14. Governing Law. This Purchase Agreement shall be governed by the laws of the State. STIFEL NICOLAUS & CO. INCORPORATED By: Title: Authorized Officer Accepted as of the date first stated above: CITY OF HUNTINGTON BEACH By: Its: City Manager HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Its: Chair 548 A-1 EXHIBIT A Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds 2020 Series A (Tax-Exempt) $_________ Serial Bonds Maturity (May 1) Principal Amount Interest Rate Yield Price 10% Test Used Hold-The- Offering- Price Rule Used C Priced to par call on _____ __, 2020 Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds 2020 Series B (Federally Taxable) $_________ Serial Bonds Maturity (May 1) Principal Amount Interest Rate Yield 549 REDEMPTION PROVISIONS Optional Redemption. The Series 2020A Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturities, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) amounts received from the City in connection with the City’s exercise of its right pursuant to the Lease Agreement to cause Series 2020A Bonds to be optionally redeemed, or (ii) any other source of available funds, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. The Series 2020B Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturities, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) amounts received from the City in connection with the City’s exercise of its right pursuant to the Lease Agreement to cause Series 2020B Bonds to be optionally redeemed, or (ii) any other source of available funds, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. Extraordinary Redemption from Insurance or Condemnation Proceeds. The Series 2020 Bonds are also subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Proceeds (other than Net Proceeds of rental interruption insurance) received with respect to all or a portion of the Property and deposited by the Trustee in the Redemption Fund in accordance with the provisions of the Indenture at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. 550 B-1 EXHIBIT B FORM OF ISSUE PRICE CERTIFICATE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds 2020 Series A (Tax-Exempt) $_________ Serial Bonds The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. 2. [Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement, dated __________, 2020, by and between Stifel and the Issuer, Stifel has agreed in writing that, (i) for each Maturity of the Hold- the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.] 3. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.” (b) [Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Stifel has sold at least 10% of such Hold-the-Offering- Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold- the-Offering-Price Maturity.] 551 (d) Issuer means the City of Huntington Beach, California. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is __________, 2020. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).] The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Orrick Herrington & Sutcliffe LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Name: Dated: ________, 2020 552 SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES [AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES] (Attached) 553 [SCHEDULE B PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached)] 554 4137-2745-9364.2 CONTINUING DISCLOSURE CERTIFICATE City of Huntington Beach relating to | Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, Series 2020 This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the City of Huntington Beach (the “City”) in connection with the issuance of the above-named bonds (the “Bonds”). The Bonds are being issued by the Huntington Beach Public Financing Authority (the “Authority”) pursuant to Article 4, Chapter 5, Division 7, Title 1 (commencing with Section 6584) of the California Government Code, a master indenture, dated as of August 1, 2020 (the “Indenture”), by and among the City, the Authority and U.S. Bank National Association, as trustee (the “Trustee”). The City covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters (Series 2020 Bonds) in complying with Securities and Exchange Commission (“S.E.C.”) Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: “Annual Report” shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Beneficial Owner” shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). “Dissemination Agent” shall mean U.S. Bank National Association, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. “Financial Obligation” shall mean, for the purposes of the Listed Events set out in Section 5(a)(10) and 5(b)(8), a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. “Holder” shall mean the person in whose name any Bond shall be registered. 555 2 4137-2745-9364.2 “Listed Events” shall mean any of the events listed in Section 5(a) or (b) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. “Official Statement” shall mean the Official Statement, dated ______ __, 2020 (including all exhibits or appendices thereto), relating to the offer and sale of Bonds. “Participating Underwriters (Series 2020 Bonds)” shall mean the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than nine months after the end of the City’s fiscal year (which shall be April 1 of each year, so long as the City’s fiscal year ends on June 30), commencing with the report for the 2019-20 fiscal year (which is due not later than April 1, 2021), provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided, that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City’s fiscal year changes, it shall give notice of such change in a filing with the MSRB. The Annual Report shall be submitted on a standard form in use by industry participants or other appropriate form and shall identify the Bonds by name and CUSIP number. (b) Not later than 15 business days prior to the date specified in subsection (a), the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If the City is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the City shall, in a timely manner, send or cause to be sent to the MSRB a notice in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall (if the Dissemination Agent is other than the City) file a report with the City certifying that the Annual Report has been provided to the MSRB pursuant to this Disclosure Certificate, stating the date it was provided to the MSRB. SECTION 4. Content of Annual Reports. The City’s Annual Report shall contain or include by reference the following: 556 3 4137-2745-9364.2 (a) Audited financial statements of the City for the preceding fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board (GASB) and the laws of the State of California and including all statements and information prescribed for inclusion therein by the Controller of the State of California. If the City’s audited financial statements are not available by the time the Annual Report is required to be provided to the MSRB pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be provided to the MSRB in the same manner as the Annual Report when they become available. To the extent not included in the audited financial statement of the City, the Annual Report shall also include the following: (i) Summary of Long and Intermediate Term Obligations; (ii) General Fund Tax Revenues by Source; (iii) Gross Assessed Value of All Taxable Property; (iv) General Fund Property Tax Levies and Collections (Secured Taxes); (v) General Fund Balance Sheet; (vi) General Fund Statement of Revenues, Expenditures and Changes in Fund Balance; (vii) Principal Secured Property Taxpayers; and (viii) Investment Portfolio. An update of the financial and operating data contained in the Official Statement under the caption “CITY FINANCIAL INFORMATION – Current Investments.” An update of the financial and operating data contained in the Official Statement under the captions “OTHER FINANCIAL INFORMATION – Risk Management,” “– Employee Retirement Plan – CalPERS” (including the table entitled “Schedule of Funding Progress and including the Total Pension Liability, Fiduciary Net Assets, and Net Pension Liability”), “– Retirement Plan – Supplemental,” and “– Other Post-Employment Benefits (OPEB).” Any or all of the items listed above may be set forth in one or a set of documents or may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been made available to the public on the MSRB’s website. The City shall clearly identify each such other document so included by reference. 557 4 4137-2745-9364.2 SECTION 5. Reporting of Significant Events. (a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten business days after the occurrence of the event: 1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Adverse tax opinions or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); 6. Tender offers; 7. Defeasances; 8. Rating changes; or 9. Bankruptcy, insolvency, receivership or similar event of the obligated person. 10. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties. Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event: 558 5 4137-2745-9364.2 1. Unless described in paragraph 5(a)(5), other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. Modifications to rights of Bond holders; 3. Optional, unscheduled or contingent Bond calls; 4. Release, substitution, or sale of property securing repayment of the Bonds; 5. Non-payment related defaults; 6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; 7. Appointment of a successor or additional trustee or the change of name of a trustee; or 8. Incurrence of a Financial Obligation of the City, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect Bond holders. (c) The City shall give, or cause to be given, in a timely manner, notice of a failure to provide the annual financial information on or before the date specified in Section 3 hereof, as provided in Section 3(b) hereof. (d) Upon the occurrence of a Listed Event described in Section 5(a), or upon the occurrence of a Listed Event described in Section 5(b) which the City determines that knowledge of a Listed Event described in Section 5(b) would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsection (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Indenture. (e) The City intends to comply with the Listed Events described in subsection (a)(10) and subsection (b)(8), and the definition of “Financial Obligation” in Section 2, with reference to the Rule, any other applicable federal securities laws and the guidance provided by the Securities and Exchange Commission in Release No. 34-83885, dated August 20, 2018 (the “2018 Release”), and any further amendments or written guidance provided by the Securities and Exchange Commission or its staff with respect to the amendments to the Rule effected by the 2018 Release. 559 6 4137-2745-9364.2 SECTION 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB. SECTION 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in a filing with the MSRB. SECTION 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate, and any information that the Dissemination Agent may be instructed to file with the MSRB shall be prepared and provided to it by the City. The initial Dissemination Agent shall be U.S. Bank National Association SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The proposed amendment or waiver either (i) is approved by the Holders in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Holders, or (ii) does, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. 560 7 4137-2745-9364.2 SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice required to be filed pursuant to this Disclosure Certificate, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported. SECTION 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate; provided, that any such action may be instituted only in the Superior Court of the State of California in and for the County of Orange or in U.S. District Court for the Central District of California in or nearest to the County. A default under this Disclosure Certificate shall not be deemed an event of default under the Indenture or under the Lease Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Duties, Immunities and Liabilities of Trustee and Dissemination Agent. Article VII of the Indenture is hereby made applicable to this Disclosure Certificate as if this Disclosure Certificate were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, the Trustee, their officers, directors, employees and agents, harmless against any loss, expense, cost, claim, suit, judgment, damages and liabilities which it may incur arising out of the disclosure of information pursuant to this Disclosure Certificate or arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees and expenses) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as agreed to between the Dissemination Agent and the City from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon and directions from the City or an opinion of nationally recognized bond counsel. Neither the Trustee nor the Dissemination Agent shall have any liability to any party for any monetary damages or other financial liability of any kind whatsoever related to or arising from any breach of this Disclosure Certificate. No person shall have any right to commence any action against the Trustee or Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. Any company succeeding to all or substantially all of the Dissemination Agent’s corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or 561 8 4137-2745-9364.2 filing of any paper or any further act. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriters (Series 2020 Bonds) and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. 562 4137-2745-9364.2 SECTION 14. Governing Law. This Disclosure Certificate shall be construed in accordance with and governed by the laws of the State of California applicable to contracts made and performed in the State of California. Date: ______ __, 2020 CITY OF HUNTINGTON BEACH By: AGREED AND ACKNOWLEDGED: U.S. BANK NATIONAL ASSOCIATION, as Dissemination Agent By: Authorized Officer 563 A-1 4137-2745-9364.2 EXHIBIT A FORM OF NOTICE TO THE MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Obligated Person: City of Huntington Beach Name of Issuer: Huntington Beach Public Financing Authority Name of Bond Issue: Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax- Exempt) and Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable) Date of Issuance: ______ __, 2020 NOTICE IS HEREBY GIVEN that the City of Huntington Beach (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by Section 4 of the City’s Continuing Disclosure Certificate, dated the Date of Issuance. [The City anticipates that the Annual Report will be filed by _____________.] Dated:_______________ CITY OF HUNTINGTON BEACH By: [to be signed only if filed] 564 4158-7929-2708.2 TO BE RECORDED AND WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-2558 Attention: Donald S. Field, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. SECOND AMENDMENT TO SITE LEASE by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [__________] 1, 2020 565 4158-7929-2708.2 SECOND AMENDMENT TO SITE LEASE THIS SECOND AMENDMENT TO SITE LEASE (this “Second Amendment”) executed and entered into as of [_________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and charter city duly organized and existing under and by virtue of the Constitution and laws of the State of California and its Charter (the “City”), and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Lease Agreement (as defined below). RECITALS WHEREAS, the Authority and the City have entered into a Site Lease, dated as of September 1, 2011 (the “Original Site Lease”), as Recorder Instrument No. 2011000479933 with the Official Records, Orange County, on September 28, 2011; and WHEREAS, the Authority and the City have entered into a First Amendment to Site Lease, dated as of November 1, 2014 (the “First Amendment to Site Lease” and together with the Original Site Lease, the “Site Lease”), as Recorder Instrument No. 2014000488049 with the Official Records, Orange County, on November 13, 2014; and WHEREAS, Section 8.03 of the Site Lease provides that the City has the right to substitute alternate real property for the real property and improvements, constituting the Property (as defined in the Site Lease) or to release portions of the Property in accordance with the Lease Agreement, dated as of September 1, 2011, as heretofore amended and supplemented (the “Lease Agreement”), by and between the Authority and the City; and WHEREAS, Section 7.02 of the Lease Agreement provides that the City has the right to substitute alternate real property for any portion of the Property or to release a portion of the Property if certain conditions specified therein are satisfied; and WHEREAS, Section 9.01(b) of the Lease Agreement provides that the Lease Agreement and the Site Lease, and the rights and obligations of the City and the Authority thereunder, may be amended at any time by an amendment thereto, which shall become binding upon execution by the City and the Authority, without the written consents of any owners of the bonds issued under the Indenture, dated as of September 1, 2011, as heretofore amended and supplemented, by and among the Authority, the City and U.S. Bank National Association, as successor trustee (the “Trustee”), to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 7.02 of the Lease Agreement; and WHEREAS, in connection with the refunding of all or a portion of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project), the City and the Authority desire to substitute certain real property, and the improvements thereto, consisting of Central Library as described in Exhibit B hereto (the “Substituted Property”), for the Property currently subject to the Lease Agreement described in Exhibit A hereto (the “Released Property”); and 566 2 4158-7929-2708.2 WHEREAS, in connection therewith, the City and the Authority find it desirable to modify the Site Lease and the Lease Agreement pursuant this Second Amendment and the Second Amendment to Lease Agreement, dated as of [_______] 1, 2020, by and between the City and the Authority; and WHEREAS, the conditions specified in Section 7.02 of the Lease Agreement to be satisfied prior to such substitution have been so satisfied; and WHEREAS, there exists a non-exclusive license agreement, dated September 3, 2019 (the “One Fine Blend Agreement”), by and between the City and the Subhash and Sushila Patel, individuals, doing business as One Fine Blend (“One Fine Blend”), relating to the Substituted Property for the use of certain space and permission to sell coffee and various food and beverage items; and WHEREAS, the One Fine Blend Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and One Fine Blend, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, there exists a non-exclusive license agreement, dated March 19, 2018 (the “Genealogical Agreement”), by and between the City and the Orange County, California Genealogical Society (the “Genealogical Society”), relating to the Substituted Property for the use of certain space and library materials; and WHEREAS, the Genealogical Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and the Genealogical Society, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Second Amendment do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Second Amendment; NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: Section 1. Amendment. Exhibit A to the Site Lease is hereby amended to delete the Released Property described in Exhibit A hereto. Exhibit A to the Site Lease is further amended by substituting the Substituted Property described in Exhibit B hereto. Section 2. Termination and Reversion. All provisions related to the Released Property in the Site Lease are hereby terminated. All right, title and interest of the Authority and the Trustee in the Released Property under the Site Lease shall hereupon revert to the City free and clear of any interest of the Authority and the Trustee. 567 3 4158-7929-2708.2 Section 3. Binding Effect. This Second Amendment shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. Section 4. Severability. In the event any provision of this Second Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 5. Applicable Law. This Second Amendment shall be governed by and construed in accordance with the laws of the State of California. Section 6. Execution in Counterparts. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 568 4 4158-7929-2708.2 IN WITNESS WHEREOF, the City and the Authority have caused this Second Amendment to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF HUNTINGTON BEACH By: HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: ____________________________________ Robin Estanislau, Secretary 569 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 570 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 571 A-1 4158-7929-2708.2 EXHIBIT A DESCRIPTION OF THE RELEASED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: PARCEL 1: THOSE PORTIONS OF BLOCKS 1901, 1903, 2001 AND 2002 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH PARK STREET, UNION AVENUE, AND THE ALLEYS IN SAID BLOCKS, AS SHOWN ON SAID MAP AND AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, AND TOGETHER WITH PORTIONS OF PINE STREET AND SEVENTEENTH STREET, AS SHOWN SAID MAP AND AS VACATED BY RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19' 06" EAST 24.04 FEET; THENCE SOUTH 89° 40' 54" EAST 166.03 FEET TO THE CENTERLINE OF SEVENTEENTH STREET, 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP; THENCE NORTH 41° 38' 23" EAST 427.42 FEET ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SOUTH 89° 40' 54" EAST 137.05 FEET; THENCE NORTH 00° 19' 06" EAST 155.89 FEET ALONG A LINE PARALLEL TO THE CENTERLINE OF SAID LAKE AVENUE, TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38' 23" EAST 134.38 FEET ALONG SAID CENTERLINE OF SAID SEVENTEENTH STREET AND ITS NORTHEASTERLY PROLONGATION TO A POINT ON THE NORTHERLY LINE OF SAID TRACT NO. 12; THENCE NORTH 48° 21' 17" WEST 474.37 FEET ALONG SAID NORTHERLY TRACT LINE OF TRACT NO. 12; THENCE NORTH 89° 40' 01" WEST 535.29 FEET CONTINUING ALONG SAID NORTHERLY TRACT LINE TO THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE SOUTH 00° 20' 13" WEST 1266.12 FEET ALONG SAID EASTERLY LINE TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19' 06" EAST 24.04 FEET; THENCE SOUTH 89° 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID TRACT NO. 12; THENCE NORTH 89° 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. 572 A-2 4158-7929-2708.2 ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 13569, AS SHOWN ON A MAP RECORDED IN BOOK 652, PAGES 28 THROUGH 33, OF SAID MISCELLANEOUS MAPS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, G AS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SU RFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-03, 023-041-04 AND A PORTION OF 023-031-14 PARCEL 2: THOSE PORTIONS OF BLOCKS 1902, 1903 AND 2002 INCLUDING A PORTION OF UTICA STREET, ALL OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF UNION AVENUE AND THE ALLEYS IN SAID BLOCKS AS SHOWN ON SAID MAP AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, TOGETHER WITH THAT PORTION OF SEVENTEENTH STREET AS VACATED BY RESOLUTION NO. 5989 OF SAID CITY COUNCIL, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET 60.00 FEET IN WIDTH AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19' 06" EAST 24.04 FEET; THENCE SOUTH 89° 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID MAP OF TRACT NO. 12; THENCE NORTH 89° 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) 573 A-3 4158-7929-2708.2 FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SU RFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-031-10, 023-031-13 AND A PORTION OF 023-031-14 PARCEL 3: THOSE PORTIONS OF LOTS 13 AND 14 OF BLOCK 1901 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF SEVENTEENTH STREET, AS SHOWN ON SAID MAP AND AS VACATED IN THAT CERTAIN RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS OF ORANGE COUNTY AND PORTIONS OF LAKE AVENUE AND PARK STREET, AS SHOWN ON THE MAP OF TRACT NO. 13569, RECORDED IN BOOK 652, PAGES 28 THROUGH 33 OF MISCELLANEOUS MAPS, RECORDS OF SAID ORANGE COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE CENTERLINE INTERSECTION OF LAKE AVENUE 90.00 FEET IN WIDTH, AND SEVENTEENTH STREET 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 13569; THENCE SOUTH 00° 19' 06" WEST 207.32 FEET ALONG SAID CENTERLINE OF LAKE AVENUE TO THE CENTERLINE INTERSECTION OF PARK STREET, 52.00 FEET IN WIDTH, AS SHOWN ON THE MAP OF SAID TRACT NO. 13569; THENCE NORTH 89° 40' 54" WEST 237.70 FEET ALONG SAID CENTERLINE OF PARK STREET; THENCE NORTH 00° 19' 06" EAST 155.89 FEET TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38' 23" EAST 68.48 FEET ALONG SAID CENTERLINE TO AN ANGLE POINT IN SAID SEVENTEENTH STREET; THENCE CONTINUING ALONG SAID CENTERLINE OF SEVENTEENTH STREET SOUTH 89° 40' 54" EAST 192.48 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE AFOREMENTIONED PARCEL 1. EXCEPTING THEREFROM SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-06 PARCEL 4: THOSE LANDS IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A PORTION OF SEVENTEENTH STREET AS SHOWN ON TRACT NO. 12, FILED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, TOGETHER WITH A PORTION OF MANSION AVENUE AS DESCRIBED IN THE DEEDS TO THE CITY OF HUNTINGTON BEACH RECORDED SEPTEMBER 23, 1916, IN BOOK 294, PAGE 390 574 A-4 4158-7929-2708.2 OF DEEDS, AND THE DEED RECORDED JULY 21, 1950, IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS WHICH WERE VACATED, AS A PORTION OF PARCEL 1 BY CITY OF HUNTINGTON BEACH RESOLUTION NO. 5989, ON JANUARY 17, 1989 RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST EASTERLY CORNER OF LOT 3, BLOCK 2001, AS SHOWN ON SAID TRACT NO. 12, THENCE NORTH 41º 19' 00" EAST, 54.43 FEET, ALONG THE NORTHEAST PROLONGATION OF THE SOUTHEAST LINE OF SAID LOT 3, TO AN INTERSECTION WITH THE SOUTHWESTERLY LINE OF YORKTOWN AVENUE (FORMERLY MANSION AVENUE), SAID INTERSECTION BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 850.00 FEET, A RADIAL LINE TO SAID POINT OF CURVATURE BEARS SOUTH 27º 11' 59" WEST; THENCE SOUTHEASTERLY 36.30 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2º 26' 48", TO THE INTERSECTION OF SAID CURVE AND THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET SAID INTERSECTION BEING THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION, A RADIAL LINE TO SAID TRUE POINT OF BEGINNING BEARS SOUTH 24º 45' 11" WEST; THENCE CONTINUING SOUTHEASTERLY 44.96 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 3º 01' 51", TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUT HWESTERLY, HAVING A RADIUS OF 32.00 FEET; THENCE SOUTHEASTERLY 38.13 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 68º 16' 40", TO THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF LAKE STREET (FORMERLY LAKE AVENUE), 90.00 FEET IN WIDTH, AS SHOWN ON SAID TRACT NO. 12; THENCE SOUTH 00º 00' 00" WEST, 49.93 FEET ALONG SAID PROLONGATION OF THE WESTERLY LINE OF LAKE STREET TO THE CENTERLINE OF SEVENTEENTH STREET (70.00 FEET IN WIDTH) AS SHOWN ON SAID TRACT NO. 12; THENCE WESTERLY ALONG THE CENTERLINE OF SAID SEVENTEENTH STREET, AS SHOWN ON SAID TRACT NO. 12, NORTH 90º 00' 00" WEST, 147.08 FEET, TO AN ANGLE POINT IN SAID CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12; THENCE NORTHEASTERLY, LEAVING SAID CENTERLINE OF SEVENTEENTH STREET ALONG THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12, NORTH 41º 19' 00" EAST, 129.68 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL MINERALS, PETROLEUM, ASPHALTUM, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON OR UNDER, OR THAT MAY BE PRODUCED FROM THE LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM ADJACENT LANDS INTO AND THROUGH THE SUBSURFACE OF THE LAND; PROVIDED, HOWEVER, THAT GRANTORS SHALL NOT USE THE SURFACE OF THE LAND FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION OR REMOVAL OF SAID MINERALS OR SUBSTANCES, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION AND STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION IN A DEED RECORDED JULY 21, 1950 IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS. APN: 023-031-14 and 023-031-14 [END OF LEGAL DESCRIPTION] 575 A-2 4158-7929-2708.2 The above-described property is commonly referred to as the Civic Center located at 1900 Main Street, Huntington Beach, California. 576 B-1 4158-7929-2708.2 EXHIBIT B DESCRIPTION OF THE SUBSTITUTED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE 11 WEST, AS SHOWN ON MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.751 FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND EASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26; THENCE SOUTH 89° 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2° 07' 44" WEST, 320.54 FEET; THENCE NORTH 87° 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36° 13' 50" WEST, 535.78 FEET; THENCE NORTH 0° 12' 15" EAST, 377.82 FEET; THENCE NORTH 83° 19' 27" WEST, 562.50 FEET; THENCE SOUTH 21° 08' 07" WEST, 261.18 FEET; THENCE SOUTH 14° 28' 10" EAST, 235.93 FEET; THENCE SOUTH 77° 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2° 07' 44" WEST, 92.62 FEET TO THE TRUE POINT OF BEGINNING. Excluding the rights granted under the Master Communications Site Lease, dated April 18, 1996 (the “Communications Lease”), by and between the City and [T-Mobile, as successor in interest to] Pacific Bell Mobile Services, relating to the installation of mobile/wireless communications facilities on such property, while the Communications Lease is in effect for the term thereof. [END OF LEGAL DESCRIPTION] The above-described property is commonly referred to as the Central Library located at 7111 Talbert Avenue, Huntington Beach, California. 577 4158-7929-2708.2 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Site Lease, dated as of September 1, 2011, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), as amended and supplemented by the First Amendment to Site Lease, dated as of November 1, 2014, by and between the City and the Authority, as amended by the Second Amendment to Site Lease, dated as of [________] 1, 2020, from the City to the Authority, is hereby accepted by the undersigned on behalf of the Authority pursuant to authority conferred by resolution of the Board of Directors of the Authority adopted on [_________], 2020, and the Authority consents to recordation thereof by its duly authorized officer. Dated: [__________], 2020 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: 578 4156-5476-6116.2 TO BE RECORDED AND WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine, CA 92614‐2558 Attention: Donald S. Field, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. SECOND AMENDMENT TO LEASE AGREEMENT by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [_________] 1, 2020 579 1 4156-5476-6116.2 SECOND AMENDMENT TO LEASE AGREEMENT THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Second Amendment”) executed and entered into as of [__________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and charter city duly organized and existing under and by virtue of the Constitution and laws of the State of California and its Charter (the “City”), and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Lease Agreement (as defined below). RECITALS WHEREAS, the Authority and the City have entered into a Lease Agreement, dated as of September 1, 2011 (the “Original Lease Agreement”), with regard to which a Memorandum of Lease Agreement and Assignment was recorded, as Recorder Instrument No. 2011000479934 with the Official Records, Orange County, on September 28, 2011; WHEREAS, the Authority and the City have entered into a First Amendment to Lease Agreement, dated as of November 1, 2014 (the “First Amendment to Lease Agreement” and together with the Original Lease Agreement, the “Lease Agreement”), with regard to which a Memorandum of Lease Agreement and Assignment was recorded, as Recorder Instrument No. 2014000488050 with the Official Records, Orange County, on November 13, 2014; WHEREAS, Section 7.02 of the Lease Agreement provides that the City has the right to substitute alternate real property for any portion of the real property and improvements, constituting the Property (as defined in the Lease Agreement) or to release a portion of the Property if certain conditions specified therein are satisfied; and WHEREAS, Section 9.01(b) of the Lease Agreement provides that the Lease Agreement and the Site Lease, dated as of September 1, 2011, as heretofore amended and supplemented (the “Site Lease”), by and between the City and Authority, and the rights and obligations of the City and the Authority thereunder, may be amended at any time by an amendment thereto, which shall become binding upon execution by the City and the Authority, without the written consents of any owners of the bonds issued under the Indenture, dated as of September 1, 2011, as heretofore amended and supplemented, by and among the Authority, the City and U.S. Bank National Association, as successor trustee (the “Trustee”), to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 7.02 of the Lease Agreement; and WHEREAS, in connection with the refunding of all or a portion of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project), the City and the Authority desire to substitute certain real property, and the improvements thereto, consisting of Central Library as described in Exhibit B hereto (the “Substituted Property”), for the Property currently subject to the Lease Agreement described in Exhibit A hereto (the “Released Property”); and 580 2 4156-5476-6116.2 WHEREAS, in connection therewith, the City and the Authority find it desirable to modify the Site Lease and the Lease Agreement pursuant the Second Amendment to Site Lease Agreement, dated as of [______] 1, 2020, by and between the City and the Authority and this Second Amendment; and WHEREAS, the conditions specified in Section 7.02 of the Lease Agreement to be satisfied prior to such substitution have been so satisfied; and WHEREAS, there exists a non-exclusive license agreement, dated September 3, 2019 (the “One Fine Blend Agreement”), by and between the City and the Subhash and Sushila Patel, individuals, doing business as One Fine Blend (“One Fine Blend”), relating to the Substituted Property for the use of certain space and permission to sell coffee and various food and beverage items; and WHEREAS, the One Fine Blend Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and One Fine Blend, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, there exists a non-exclusive license agreement, dated March 19, 2018 (the “Genealogical Agreement”), by and between the City and the Orange County, California Genealogical Society (the “Genealogical Society”), relating to the Substituted Property for the use of certain space and library materials; and WHEREAS, the Genealogical Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and the Genealogical Society, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Second Amendment do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Second Amendment; NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: Section 1. Amendment. Exhibit A to the Lease Agreement is hereby amended to delete the Released Property described in Exhibit A hereto. Exhibit A to the Lease Agreement is further amended by substituting the Substituted Property described in Exhibit B hereto. Section 2. Termination and Reversion. All provisions related to the Released Property in the Lease Agreement are hereby terminated. All right, title and interest of the Authority and the Trustee in the Released Property under the Lease Agreement shall hereupon revert to the City free and clear of any interest of the Authority and the Trustee. 581 3 4156-5476-6116.2 Section 3. Binding Effect. This Second Amendment shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. Section 4. Severability. In the event any provision of this Second Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 5. Applicable Law. This Second Amendment shall be governed by and construed in accordance with the laws of the State of California. Section 6. Execution in Counterparts. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 582 4 4156-5476-6116.2 IN WITNESS WHEREOF, the Authority and the City have caused this Second Amendment to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: ____________________________________ Robin Estanislau, Secretary CITY OF HUNTINGTON BEACH By: 583 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 584 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 585 A-1 4156-5476-6116.2 EXHIBIT A DESCRIPTION OF THE RELEASED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: PARCEL 1: THOSE PORTIONS OF BLOCKS 1901, 1903, 2001 AND 2002 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH PARK STREET, UNION AVENUE, AND THE ALLEYS IN SAID BLOCKS, AS SHOWN ON SAID MAP AND AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, AND TOGETHER WITH PORTIONS OF PINE STREET AND SEVENTEENTH STREET, AS SHOWN SAID MAP AND AS VACATED BY RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19’ 06” EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19’ 06” EAST 24.04 FEET; THENCE SOUTH 89° 40’ 54” EAST 166.03 FEET TO THE CENTERLINE OF SEVENTEENTH STREET, 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP; THENCE NORTH 41° 38’ 23” EAST 427.42 FEET ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SOUTH 89° 40’ 54” EAST 137.05 FEET; THENCE NORTH 00° 19’ 06” EAST 155.89 FEET ALONG A LINE PARALLEL TO THE CENTERLINE OF SAID LAKE AVENUE, TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38’ 23” EAST 134.38 FEET ALONG SAID CENTERLINE OF SAID SEVENTEENTH STREET AND ITS NORTHEASTERLY PROLONGATION TO A POINT ON THE NORTHERLY LINE OF SAID TRACT NO. 12; THENCE NORTH 48° 21’ 17” WEST 474.37 FEET ALONG SAID NORTHERLY TRACT LINE OF TRACT NO. 12; THENCE NORTH 89° 40’ 01” WEST 535.29 FEET CONTINUING ALONG SAID NORTHERLY TRACT LINE TO THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE SOUTH 00° 20’ 13” WEST 1266.12 FEET ALONG SAID EASTERLY LINE TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39’ 33” EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19’ 06” EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19’ 06” EAST 24.04 FEET; THENCE SOUTH 89° 40’ 54” EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20’ 13” EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID TRACT NO. 12; THENCE NORTH 89° 40’ 01” WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20’ 13” WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39’ 33” EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. 586 A-2 4156-5476-6116.2 ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 13569, AS SHOWN ON A MAP RECORDED IN BOOK 652, PAGES 28 THROUGH 33, OF SAID MISCELLANEOUS MAPS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-03, 023-041-04 AND A PORTION OF 023-031-14 PARCEL 2: THOSE PORTIONS OF BLOCKS 1902, 1903 AND 2002 INCLUDING A PORTION OF UTICA STREET, ALL OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF UNION AVENUE AND THE ALLEYS IN SAID BLOCKS AS SHOWN ON SAID MAP AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, TOGETHER WITH THAT PORTION OF SEVENTEENTH STREET AS VACATED BY RESOLUTION NO. 5989 OF SAID CITY COUNCIL, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET 60.00 FEET IN WIDTH AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19’ 06” EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19’ 06” EAST 24.04 FEET; THENCE SOUTH 89° 40’ 54” EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20’ 13” EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID MAP OF TRACT NO. 12; THENCE NORTH 89° 40’ 01” WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20’ 13” WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39’ 33” EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, 587 A-3 4156-5476-6116.2 AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-031-10, 023-031-13 AND A PORTION OF 023-031-14 PARCEL 3: THOSE PORTIONS OF LOTS 13 AND 14 OF BLOCK 1901 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF SEVENTEENTH STREET, AS SHOWN ON SAID MAP AND AS VACATED IN THAT CERTAIN RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS OF ORANGE COUNTY AND PORTIONS OF LAKE AVENUE AND PARK STREET, AS SHOWN ON THE MAP OF TRACT NO. 13569, RECORDED IN BOOK 652, PAGES 28 THROUGH 33 OF MISCELLANEOUS MAPS, RECORDS OF SAID ORANGE COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE CENTERLINE INTERSECTION OF LAKE AVENUE 90.00 FEET IN WIDTH, AND SEVENTEENTH STREET 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 13569; THENCE SOUTH 00° 19’ 06” WEST 207.32 FEET ALONG SAID CENTERLINE OF LAKE AVENUE TO THE CENTERLINE INTERSECTION OF PARK STREET, 52.00 FEET IN WIDTH, AS SHOWN ON THE MAP OF SAID TRACT NO. 13569; THENCE NORTH 89° 40’ 54” WEST 237.70 FEET ALONG SAID CENTERLINE OF PARK STREET; THENCE NORTH 00° 19’ 06” EAST 155.89 FEET TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38’ 23” EAST 68.48 FEET ALONG SAID CENTERLINE TO AN ANGLE POINT IN SAID SEVENTEENTH STREET; THENCE CONTINUING ALONG SAID CENTERLINE OF SEVENTEENTH STREET SOUTH 89° 40’ 54” EAST 192.48 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE AFOREMENTIONED PARCEL 1. EXCEPTING THEREFROM SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-06 PARCEL 4: THOSE LANDS IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A PORTION OF SEVENTEENTH STREET AS SHOWN ON TRACT NO. 12, FILED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, TOGETHER WITH A PORTION OF MANSION AVENUE AS DESCRIBED IN THE DEEDS TO THE CITY OF HUNTINGTON BEACH RECORDED SEPTEMBER 23, 1916, IN BOOK 294, PAGE 390 OF DEEDS, AND THE DEED RECORDED JULY 21, 1950, IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS WHICH WERE VACATED, AS A PORTION OF PARCEL 1 BY CITY OF HUNTINGTON BEACH 588 A-4 4156-5476-6116.2 RESOLUTION NO. 5989, ON JANUARY 17, 1989 RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89- 137620 OF OFFICIAL RECORDS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST EASTERLY CORNER OF LOT 3, BLOCK 2001, AS SHOWN ON SAID TRACT NO. 12, THENCE NORTH 41º 19’ 00” EAST, 54.43 FEET, ALONG THE NORTHEAST PROLONGATION OF THE SOUTHEAST LINE OF SAID LOT 3, TO AN INTERSECTION WITH THE SOUTHWESTERLY LINE OF YORKTOWN AVENUE (FORMERLY MANSION AVENUE), SAID INTERSECTION BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 850.00 FEET, A RADIAL LINE TO SAID POINT OF CURVATURE BEARS SOUTH 27º 11’ 59” WEST; THENCE SOUTHEASTERLY 36.30 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2º 26’ 48”, TO THE INTERSECTION OF SAID CURVE AND THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET SAID INTERSECTION BEING THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION, A RADIAL LINE TO SAID TRUE POINT OF BEGINNING BEARS SOUTH 24º 45’ 11” WEST; THENCE CONTINUING SOUTHEASTERLY 44.96 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 3º 01’ 51”, TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 32.00 FEET; THENCE SOUTHEASTERLY 38.13 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 68º 16’ 40”, TO THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF LAKE STREET (FORMERLY LAKE AVENUE), 90.00 FEET IN WIDTH, AS SHOWN ON SAID TRACT NO. 12; THENCE SOUTH 00º 00’ 00” WEST, 49.93 FEET ALONG SAID PROLONGATION OF THE WESTERLY LINE OF LAKE STREET TO THE CENTERLINE OF SEVENTEENTH STREET (70.00 FEET IN WIDTH) AS SHOWN ON SAID TRACT NO. 12; THENCE WESTERLY ALONG THE CENTERLINE OF SAID SEVENTEENTH STREET, AS SHOWN ON SAID TRACT NO. 12, NORTH 90º 00’ 00” WEST, 147.08 FEET, TO AN ANGLE POINT IN SAID CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12; THENCE NORTHEASTERLY, LEAVING SAID CENTERLINE OF SEVENTEENTH STREET ALONG THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12, NORTH 41º 19’ 00” EAST, 129.68 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL MINERALS, PETROLEUM, ASPHALTUM, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON OR UNDER, OR THAT MAY BE PRODUCED FROM THE LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM ADJACENT LANDS INTO AND THROUGH THE SUBSURFACE OF THE LAND; PROVIDED, HOWEVER, THAT GRANTORS SHALL NOT USE THE SURFACE OF THE LAND FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION OR REMOVAL OF SAID MINERALS OR SUBSTANCES, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION AND STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION IN A DEED RECORDED JULY 21, 1950 IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS. APN: 023-031-14 and 023-031-14 [END OF LEGAL DESCRIPTION] The above-described property is commonly referred to as the Civic Center located at 1900 Main Street, Huntington Beach, California. 589 B-1 4156-5476-6116.2 EXHIBIT B DESCRIPTION OF THE SUBSTITUTED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE 11 WEST, AS SHOWN ON MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.751 FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND EASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26; THENCE SOUTH 89° 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2° 07' 44" WEST, 320.54 FEET; THENCE NORTH 87° 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36° 13' 50" WEST, 535.78 FEET; THENCE NORTH 0° 12' 15" EAST, 377.82 FEET; THENCE NORTH 83° 19' 27" WEST, 562.50 FEET; THENCE SOUTH 21° 08' 07" WEST, 261.18 FEET; THENCE SOUTH 14° 28' 10" EAST, 235.93 FEET; THENCE SOUTH 77° 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2° 07' 44" WEST, 92.62 FEET TO THE TRUE POINT OF BEGINNING. Excluding the rights granted under the Master Communications Site Lease, dated April 18, 1996 (the “Communications Lease”), by and between the City and [T-Mobile, as successor in interest to] Pacific Bell Mobile Services, relating to the installation of mobile/wireless communications facilities on such property, while the Communications Lease is in effect for the term thereof. [END OF LEGAL DESCRIPTION] The above-described property is commonly referred to as the Central Library located at 7111 Talbert Avenue, Huntington Beach, California. 590 4156-5476-6116.2 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Lease Agreement, dated as of September 1, 2011, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), as amended and supplemented by the First Amendment to Lease Agreement, dated as of November 1, 2014, as amended by the Second Amendment to Lease Agreement, dated as of [_________] 1, 2020, by and between the City and the Authority, from the Authority to the City, is hereby accepted by the undersigned on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on [___________], 2020, and the City consents to recordation thereof by its duly authorized officer. Dated: [__________], 2020 CITY OF HUNTINGTON BEACH By: ________________________________ 591 City of Huntington Beach File #:20-1764 MEETING DATE:7/20/2020 REQUEST FOR PUBLIC FINANCING AUTHORITY ACTION SUBMITTED TO:Honorable Chair and Board Members SUBMITTED BY:Oliver Chi, Executive Director PREPARED BY:Dahle Bulosan, Chief Financial Officer Subject: Adopt Public Financing Authority Resolution No. 25 authorizing the execution and delivery by the Authority of a Master Site Lease, a Master Lease Agreement, a Master Indenture, a Bond Purchase Agreement, a Second Amendment to Site Lease and a Second Amendment to Lease Agreement in connection with the issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in one or more series, approving the issuance of such bonds in an aggregate principal amount of not to exceed $21,000,000, authorizing the distribution of an official statement and authorizing the execution of necessary documents and certificates and related actions in connection therewith Statement of Issue: Authorization is requested from the Public Financing Authority to approve the refunding of the Huntington Beach Public Financing Authority’s outstanding 2010 Lease Revenue Refunding Bonds, Series A ($7,410,000) and 2011 Lease Revenue Refunding Bonds, Series A ($15,725,000) in an amount not to exceed $21,000,000. Financial Impact: General Fund debt service expenditures will be reduced by over $900,000 in the first two years of refunding, followed by an average annual savings of $390,000 thereafter through 2032. All costs of the bond refunding will be paid from bond proceeds. The maturity dates of the new bonds coincide on a fiscal year basis with the maturity dates of the bonds that are being refunded. Public Financing Authority Recommended Action: A) Adopt Resolution No. 25, “A Resolution of the Board of Directors of the Huntington Beach Public Financing Authority Authorizing the Execution and Delivery by the Authority of a Master Site Lease, A Master Lease Agreement, A Master Indenture, A Bond Purchase Agreement, A Second Amendment to Site Lease and a Second Amendment to Lease Agreement in Connection with the Issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in One or More Series, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $21,000,000, Authorizing the Distribution of an Official Statement and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith;” and, City of Huntington Beach Printed on 7/17/2020Page 1 of 4 powered by Legistar™592 File #:20-1764 MEETING DATE:7/20/2020 B) Authorize the Executive Director and Authority Secretary to take all administrative and budgetary actions necessary to perform the bond refunding. Alternative Action(s): Do not approve the recommended actions and the refinancing of the bonds, and direct staff accordingly. Analysis: The Huntington Beach Public Financing Authority (PFA) was formed in 1988 to issue debt to finance public improvements and other capital projects for the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach. The PFA’s governing body is the City Council, which also adopts the PFA annual budget. The PFA is financially dependent on the City for all its operations. Currently, the PFA has three separate debt issues outstanding (2010 Series A, 2011 Series A, and 2014 Series A) totaling $35,665,000. Staff regularly monitors the market for municipal securities. Recently, the municipal bond market has improved to the point where refunding the bonds will be economically beneficial. The 2010 Series A Bonds are callable on September 1, 2020 and can be refunded on a tax-exempt basis. The 2011 Series A Bonds are callable on September 1, 2021 and will be advance refunded on a taxable basis. The Tax Cuts and Jobs Act of 2017, which went into effect on January 1, 2018, prohibits the use of tax-exempt bonds for advance refundings. Below is a summary of the proposed transaction: Bond Issue Original Issuance Amount Amount Currently Outstanding Economic Benefit of Refinancing Current Average Coupon Rate Refunding Coupon Rate 2010 Lease Revenue Bonds, Series A 14,745,000 7,410,000 2,085,300 5.0%4.0% 2011 Lease Revenue Bonds, Series A 36,275,000 15,725,000 3,637,700 4.1%2.4% Total $ 51,020,000 $ 23,135,000 $ 5,723,000 The City’s economic benefit is the difference between the cash flows for the new debt compared to the old debt, or $5,723,000, which takes into account all of the expenditures of the new debt. The proposed refunding will be structured to provide over $900,000 in annual savings for the first two years of the refunding, and an average of $390,000 in annual debt service savings through 2032. The maturity dates of the new bonds coincide on a fiscal year basis with the maturity dates of the bonds that are being refunded. Staff is recommending that the existing debt be refunded by the issuance of new debt, not to exceed $21,000,000. The recommended “not to exceed” amount is determined by the City’s financial advisors, and is a conservative estimate based on issuing bonds at par, without the additional proceeds generated from bond “premium.” Upon issuance of the new debt, the City will have no further obligation to fund debt service on the original debt. Staff is recommending that the bonds be sold through its selected underwriter, Stifel, through a negotiated sale. Stifel was selected through a competitive Request for Proposals process where seven different firms submitted proposals. Stifel provided the most competitive qualified proposal and will market the bonds to investors. City of Huntington Beach Printed on 7/17/2020Page 2 of 4 powered by Legistar™593 File #:20-1764 MEETING DATE:7/20/2020 The bonds are payable from rental payments received by the Huntington Beach Public Financing Authority from General Fund lease payments made on City-owned properties. The 2010 Series A and 2011 Series B bonds have been payable from General Fund lease payments made on the following properties: ·Donald W. Kiser Corporate Yard ·Civic Center Given current valuations, the City will only use the Donald W. Kiser Corporate Yard as a leased property for the new debt and will release the Civic Center from the remaining lease obligation of the 2014 bonds. The leased asset securing the 2014 bonds will now be the Central Library. Consistent with financial industry standards, in order for staff to proceed with the transaction, the net present value savings to the City must be at least 3% of the refunded principal amount. The minimum savings amount is calculated as follows: Principal Amount of Debt to be Redeemed $ 23,135,000 Multiplied by 3%3% Minimum Necessary Present Value Savings $ 694,050 If the savings is less than $694,050, then the transaction will not be completed. Currently, the City is anticipating Net Present Value Savings of ~8.4%. Staff will continue to monitor interest rate trends to determine when and if additional debt refunding or defeasances will create a financial benefit. If such a situation occurs, staff will present the proposal to the Authority for approval. Environmental Status: Not applicable. Strategic Plan Goal: Strengthen long-term financial and economic sustainability Attachment(s): 1. Resolution No. 25, “A Resolution of the Board of Directors of the Huntington Beach Public Financing Authority Authorizing the Execution and Delivery by the Authority of a Master Site Lease, A Master Lease Agreement, A Master Indenture, A Bond Purchase Agreement, A Second Amendment to Site Lease and a Second Amendment to Lease Agreement in Connection with the Issuance of Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, in One or More Series, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $21,000,000, Authorizing the Distribution of an Official Statement and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith.” 2. Master Site Lease 3. Master Lease Agreement 4. Master Indenture City of Huntington Beach Printed on 7/17/2020Page 3 of 4 powered by Legistar™594 File #:20-1764 MEETING DATE:7/20/2020 5. Bond Purchase Agreement 6. 2010A Escrow Agreement 7. 2011A Escrow Agreement 8. Second Amendment to Site Lease 9. Second Amendment to Lease Agreement 10.Preliminary Official Statement City of Huntington Beach Printed on 7/17/2020Page 4 of 4 powered by Legistar™595 596 597 598 599 600 601 602 603 604 4162-0786-5380.3 TO BE RECORDED AND WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine, California 92614-8255 Attention: Donald S. Field, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. MASTER SITE LEASE by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [__________] 1, 2020 605 4162-0786-5380.3 MASTER SITE LEASE THIS MASTER SITE LEASE (this “Site Lease”), executed and entered into as of [__________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH (the “City”), a municipal corporation and chartered city organized and existing under the laws of the State of California, as lessor, and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (the “Authority”), a joint powers authority organized and existing under the laws of the State of California, as lessee. RECITALS WHEREAS, in order to refinance certain capital improvements, including certain improvements to public facilities to be installed as a part of the City’s Pier Plaza project and a portion of the City’s share of the costs of a countywide 800 MHz coordinated communications system (the “1997 Project”) and other capital projects, including South Beach Phase I and II Improvements, a Beach Maintenance Facility, energy retrofitting of various facilities, design costs of the City’s Sports Complex, water system improvements and the City’s Emerald Cove Senior Housing project (the “2000 Project”), the Authority issued its Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior 2010A Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the “1993 Project”) and the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the “2001 Project” and together with the Prior 1993 Project, the 1997 Project and the 2000 Project, the “Projects”), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior 2011A Bonds” and, together with the Prior 2010A Bonds, the “Prior Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refund the Prior Bonds and, therefore, refinance the Projects; and WHEREAS, in order to refund the Prior Bonds and, therefore, refinance the Projects, the City will lease certain real property, and the improvements thereto, consisting of the Donald W. Kiser Corporation Yard (the “Property”), to the Authority pursuant to this Site Lease, and the City will sublease the Property back from the Authority pursuant to a Master Lease Agreement, dated the date hereof (the “Lease Agreement”); and WHEREAS, the Property is more particularly described in Exhibit A hereto; and WHEREAS, in order to provide the funds necessary to refund the Prior Bonds and, therefore, refinance the Projects, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”), and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable) (the “Series 2020B Bonds” and, together with the Series 2020A 606 2 4162-0786-5380.3 Bonds, the “Series 2020 Bonds”), in the respective aggregate principal amounts of $[__________] and $[__________], pursuant to a Master Indenture (the “Indenture”), by and among the Authority, the City and U.S. Bank National Association, as trustee (the “Trustee”), payable from the base rental payments to be made by the City pursuant to the Lease Agreement and the other assets pledged therefor under the Indenture; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Site Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Site Lease; NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases defined in Article I of the Lease Agreement shall have the same meanings in this Site Lease. ARTICLE II LEASE OF THE PROPERTY; RENTAL Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Site Lease. Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the sum of not to exceed $[___________] (the “Site Lease Payment”). The Site Lease Payment shall be paid from the proceeds of the Series 2020 Bonds; provided, however, that in the event the available proceeds of the Series 2020 Bonds are not sufficient to enable the Authority to pay such amount in full, the remaining amount of the Site Lease Payment shall be reduced to an amount equal to the amount of such available proceeds. The City shall deposit the Site Lease Payment in one or more separate funds or accounts to be held and administered for the purpose of refinancing the Projects. The Authority and the City hereby find and determine that the amount of the Site Lease Payment does not exceed the fair market value of the leasehold interest in the Property which is conveyed hereunder by the City to the Authority. No other amounts of rental shall be due and payable by the Authority for the use and occupancy of the Property under this Site Lease. ARTICLE III QUIET ENJOYMENT 607 3 4162-0786-5380.3 The parties intend that the Property will be leased back to the City pursuant to the Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in the Lease Agreement, if an event of default occurs under the Lease Agreement, the Authority, or its assignee, will have the right, for the then remaining term of this Site Lease to (a) take possession of the Property, (b) if it deems it appropriate, cause an appraisal of the Property and a study of the then reasonable use thereof to be undertaken, and (c) relet the Property. Subject to any rights the City may have under the Lease Agreement (in the absence of an event of default) to possession and enjoyment of the Property, the City hereby covenants and agrees that it will not take any action to prevent the Authority from having quiet and peaceable possession and enjoyment of the Property during the term hereof and will, at the request of the Authority and at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the Authority asserts its right to such possession and enjoyment. ARTICLE IV SPECIAL COVENANTS AND PROVISIONS Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and that it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act. Section 4.02 Further Assurances and Corrective Instruments. The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Site Lease, the Indenture and the Lease Agreement. Section 4.03 Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority shall be solely liabilities of the Authority as a joint powers authority, and the City hereby releases each and every director, officer and employee of the Authority of and from any personal or individual liability under this Site Lease. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Site Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder. All liabilities under this Site Lease on the part of the City shall be solely liabilities of the City as a governmental entity, and the Authority hereby releases each and every council member, officer and employee of the City of and from any personal or individual liability under this Site Lease. No council member, officer or employee of the City shall at any time or under any circumstances be individually or personally liable under this Site Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder. Section 4.04 Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property. 608 4 4162-0786-5380.3 Section 4.05 Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same. Section 4.06 Representations of the City. The City represents and warrants to the Authority and the Trustee as follows: (a) the City has the full power and authority to enter into, to execute and to deliver this Site Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Site Lease; (b) except for Permitted Encumbrances, the Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for governmental purposes as contemplated by the City; (c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full; and (d) the Property is necessary to the City in order for the City to perform its governmental functions. Section 4.07 Representations of the Authority. The Authority represents and warrants to the City and the Trustee that the Authority has the full power and authority to enter into, to execute and to deliver this Site Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Site Lease. ARTICLE V ASSIGNMENT, SELLING AND SUBLEASING Section 5.01 Assignment, Selling and Subleasing. This Site Lease may be assigned or sold, and the Property may be subleased, as a whole or in part, by the Authority, without the necessity of obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sublease or sale, as the case may be. The Authority shall assign all of its rights hereunder to the Trustee appointed pursuant to the Indenture. Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Site Lease. ARTICLE VI IMPROVEMENTS 609 5 4162-0786-5380.3 Title to all improvements made on the Property during the term hereof shall vest in the City. ARTICLE VII TERM; TERMINATION Section 7.01 Term. The term of this Site Lease shall commence as of the date of commencement of the term of the Lease Agreement and shall remain in full force and effect from such date to and including [May 1, 20__], unless such term is extended or sooner terminated as hereinafter provided. Section 7.02 Extension; Early Termination. If, on [May 1, 20__], the Bonds shall not be fully paid, or provision therefor made in accordance with Article IX of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments payable under the Lease Agreement shall have been abated at any time, then the term of this Site Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article IX of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Site Lease shall in no event be extended more than ten years. If, prior to [May 1, 20__], all Bonds shall be fully paid, or provisions therefor made in accordance with Article IX of the Indenture, and the Indenture shall be discharged by its terms, the term of this Site Lease shall end simultaneously therewith. Section 7.03 Action on Default. In each and every case upon the occurrence and during the continuance of a default by the Authority hereunder, the City shall have all the rights and remedies permitted by law, except the City, to the extent permitted by law, waives any and all rights to terminate this Site Lease. ARTICLE VIII MISCELLANEOUS Section 8.01 Binding Effect. This Site Lease shall inure to the benefit of and shall be binding upon the City, the Authority and their respective successors and assigns. Section 8.02 Severability. In the event any provision of this Site Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 8.03 Amendments; Substitution and Release. This Site Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement. The City shall have the right to substitute alternate real property for the Property or to release portions of the Property as provided in the Lease Agreement. Section 8.04 Assignment. The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Site Lease to the Trustee pursuant to the Indenture. The City consents to such assignment. The City consents to the Indenture and acknowledges and agrees to the rights of the Trustee as set forth therein. 610 6 4162-0786-5380.3 Section 8.05 Execution in Counterparts. This Site Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 8.06 Applicable Law. This Site Lease shall be governed by and construed in accordance with the laws of the State of California. Section 8.07 Captions. The captions or headings in this Site Lease are for convenience only and in no way define or limit the scope or intent of any provision of this Site Lease. IN WITNESS WHEREOF, the parties hereto have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. CITY OF HUNTINGTON BEACH By: HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Attest: Robin Estanislau, Secretary 611 A-1 EXHIBIT A DESCRIPTION OF THE PROPERTY All that certain real property situated in the County of Orange, State of California, and any improvements thereto, described as follows: 612 4162-0786-5380.3 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On ______________________ before me, ____________________, Notary Public, personally appeared ______________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ____________________________ [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 613 4162-0786-5380.3 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On ______________________ before me, ____________________, Notary Public, personally appeared ______________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ____________________________ [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 614 4162-0786-5380.3 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Master Site Lease, dated as of [__________] 1, 2020, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under of the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), from the City to the Authority, is hereby accepted by the undersigned on behalf of the Authority pursuant to authority conferred by resolution of the Board of Directors of the Authority adopted on [________], 2020, and the Authority consents to recordation thereof by its duly authorized officer. Dated: [__________], 2020 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ______________________________ 615 4149-0022-5572.4 MASTER LEASE AGREEMENT by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [_________] 1, 2020 616 TABLE OF CONTENTS Page i 4149-0022-5572.4 ARTICLE I DEFINITIONS ................................................................................................. 3 Section 1.01. Definitions............................................................................................ 3 ARTICLE II LEASE OF PROPERTY; TERM .................................................................... 5 Section 2.01. Lease of Property ................................................................................. 5 Section 2.02. Term; Occupancy ................................................................................. 5 ARTICLE III RENTAL PAYMENTS ................................................................................... 6 Section 3.01. Base Rental Payments .......................................................................... 6 Section 3.02. Additional Rental Payments ................................................................ 6 Section 3.03. Fair Rental Value ................................................................................. 7 Section 3.04. Payment Provisions .............................................................................. 7 Section 3.05. Appropriations Covenant ..................................................................... 7 Section 3.06. Rental Abatement................................................................................. 7 ARTICLE IV REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS ............................................................................................... 9 Section 4.01. Power and Authority of the City .......................................................... 9 Section 4.02. Power and Authority of the Authority ................................................. 9 Section 4.03. Net-Net-Net Lease ............................................................................... 9 Section 4.04. Disclaimer of Warranties ..................................................................... 9 Section 4.05. Quiet Enjoyment .................................................................................. 9 Section 4.06. Right of Entry ...................................................................................... 9 Section 4.07. Use of the Property .............................................................................. 9 Section 4.08. Maintenance and Utilities .................................................................. 10 Section 4.09. Additions to Property ......................................................................... 10 Section 4.10. Installation of City’s Equipment ........................................................ 10 Section 4.11. Taxes .................................................................................................. 10 Section 4.12. Liens ................................................................................................... 11 Section 4.13. Compliance with Law, Regulations, Etc ............................................ 11 Section 4.14. No Condemnation .............................................................................. 11 Section 4.15. Authority’s Purpose ........................................................................... 11 ARTICLE V INSURANCE ................................................................................................. 12 Section 5.01. Public Liability and Property Damage Insurance .............................. 12 Section 5.02. Additional Insurance Provision; Form of Policies ............................. 12 617 TABLE OF CONTENTS (continued) Page ii 4149-0022-5572.4 Section 5.03. Self-Insurance .................................................................................... 12 Section 5.04. Title Insurance ................................................................................... 13 ARTICLE VI EMINENT DOMAIN; RIGHT TO REDEEM .............................................. 14 Section 6.01. Eminent Domain ................................................................................ 14 Section 6.02. Right to Redeem Bonds ..................................................................... 14 ARTICLE VII ASSIGNMENT AND SUBLETTING; SUBSTITUTION OR RELEASE; TITLE ......................................................................................... 15 Section 7.01. Assignment and Subleasing ............................................................... 15 Section 7.02. Substitution or Release of the Property ............................................. 15 Section 7.03. Title to Property ................................................................................. 16 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ................................................ 17 Section 8.01. Events of Default ............................................................................... 17 Section 8.02. Action on Default ............................................................................... 17 Section 8.03. Other Remedies .................................................................................. 19 Section 8.04. No Acceleration ................................................................................. 19 Section 8.05. Remedies Not Exclusive .................................................................... 19 Section 8.06. Waiver ................................................................................................ 20 Section 8.07. Attorney’s Fees .................................................................................. 20 Section 8.08. Authority Event of Default; Action on Authority Event of Default................................................................................................ 20 ARTICLE IX AMENDMENTS ........................................................................................... 21 Section 9.01. Amendments ...................................................................................... 21 ARTICLE X MISCELLANEOUS ...................................................................................... 22 Section 10.01. Authority Not Liable .......................................................................... 22 Section 10.02. Assignment to Trustee; Effect ........................................................... 22 Section 10.03. Gender and References; Article and Section Headings ..................... 22 Section 10.04. Validity and Severability ................................................................... 22 Section 10.05. California Law ................................................................................... 23 Section 10.06. Notices ............................................................................................... 23 Section 10.07. Execution in Counterparts .................................................................. 23 618 4149-0022-5572.4 LEASE AGREEMENT THIS MASTER LEASE AGREEMENT (this “Lease Agreement”), dated as of [_________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under the laws of the State of California (the “City”), as lessee, and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), as lessor. RECITALS WHEREAS, in order to refinance certain capital improvements, including certain improvements to public facilities to be installed as a part of the City’s Pier Plaza project and a portion of the City’s share of the costs of a countywide 800 MHz coordinated communications system (the “1997 Project”) and other capital projects, including South Beach Phase I and II Improvements, a Beach Maintenance Facility, energy retrofitting of various facilities, design costs of the City’s Sports Complex, water system improvements and the City’s Emerald Cove Senior Housing project (the “2000 Project”), the Authority issued its Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior 2010A Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the “1993 Project”) and the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the “2001 Project” and together with the Prior 1993 Project, the 1997 Project and the 2000 Project, the “Projects”), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior 2011A Bonds” and, together with the Prior 2010A Bonds, the “Prior Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refund the Prior Bonds and, therefore, refinance the Projects; and WHEREAS, in order to refund the Prior Bonds and, therefore, refinance the Projects, the City is leasing certain real property, and the improvements thereto, consisting of Donald W. Kiser Corporation Yard (the “Property”), to the Authority pursuant to a Master Site Lease, dated as of the date hereof (the “Site Lease”), and the City is subleasing the Property back from the Authority pursuant to this Lease Agreement; and WHEREAS, the Property is more particularly described in Exhibit A hereto; and WHEREAS, in order to provide the funds necessary to refund the Prior Bonds and, therefore, refinance the Projects, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”), and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 619 2 4149-0022-5572.4 2020 Series B (Federally Taxable) (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Series 2020 Bonds”), in the respective aggregate principal amounts of $[__________] and $[__________], pursuant to the Master Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and U.S. Bank National Association, as trustee (the “Trustee”), which bonds are payable from the base rental payments to be made by the City pursuant to this Lease Agreement; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement; NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows: 620 3 4149-0022-5572.4 ARTICLE I DEFINITIONS Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Lease Agreement and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Indenture. “Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 hereof. “Authority” means the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California. “Authority Event of Default” means an event described as such in Section 8.08. “Base Rental Deposit Date” means the fifth Business Day next preceding each Interest Payment Date. “Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 hereof. “City” means the City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California. “Closing Date” means [__________], 2020. “Event of Default” means an event described as such in Section 8.01. “Indenture” means the Master Indenture, dated as of the date hereof, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. “Independent Insurance Consultant” means a nationally recognized independent actuary, insurance company or broker that has actuarial personnel experienced in the area of insurance for which the City is to be self-insured, as may from time to time be designated by the City. “Laws and Regulations” means, with respect to the Property, any applicable law, regulation, code, order, rule, judgment or consent agreement, including, without limitation, those relating to zoning, building, use and occupancy, fire safety, health, sanitation, air pollution, ecological matters, environmental protection, hazardous or toxic materials, substances or wastes, conservation, parking, architectural barriers to the handicapped, or restrictive covenants or other agreements affecting title to the Property. “Lease Agreement” means this Master Lease Agreement, as originally executed and as it may from time to time be amended in accordance with the provisions hereof. 621 4 4149-0022-5572.4 “Net Proceeds” means any insurance proceeds or condemnation award paid with respect to any of the Property, which proceeds or award, after payment therefrom of all reasonable expenses incurred in the collection thereof, are in an amount greater than $50,000. “Permitted Encumbrances” means, with respect to the Property (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Section 4.11 hereof, permit to remain unpaid, (b) this Lease Agreement, (c) the Site Lease, (d) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law, (e) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Closing Date, and (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Closing Date which the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and to which the Authority consents in writing. “Property” means the real property described in Exhibit A hereto, and any improvements thereto. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments. “Rental Period” means the period from the Closing Date through [June 30, 20__] and, thereafter, the twelve-month period commencing on July 1 of each year during the term of this Lease Agreement. “Scheduled Termination Date” means [May 1, 20__]. “Site Lease” means the Master Site Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and hereof. “Trustee” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee under the Indenture substituted in its place as provided therein. 622 5 4149-0022-5572.4 ARTICLE II LEASE OF PROPERTY; TERM Section 2.01. Lease of Property. (a) The Authority hereby leases to the City and the City hereby leases from the Authority the Property, on the terms and conditions hereinafter set forth, subject to all Permitted Encumbrances. (b) The leasing of the Property by the City to the Authority pursuant to the Site Lease shall not effect or result in a merger of the City’s leasehold estate in the Property as lessee under this Lease Agreement and its fee estate in the Property as lessor under the Site Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Site Lease throughout the term thereof and hereof. This Lease Agreement shall constitute a sublease with respect to the Property. The leasehold interest in the Property granted by the City to the Authority pursuant to the Site Lease is and shall be independent of this Lease Agreement and this Lease Agreement shall not be an assignment or surrender of the leasehold interest in the Property granted to the Authority under the Site Lease. Section 2.02. Term; Occupancy. (a) The term of this Lease Agreement shall commence on the Closing Date and shall end on the Scheduled Termination Date, unless such term is extended or sooner terminated as hereinafter provided. If, on the Scheduled Termination Date, all of the Bonds shall not be fully paid or deemed to have been paid in accordance with Article IX of the Indenture, or any Rental Payments shall remain due and payable or shall have been abated at any time, then the term of this Lease Agreement shall be extended until the date upon which all of the Bonds shall be fully paid or deemed to have been paid in accordance with Article IX of the Indenture, and all Rental Payments due and payable shall have been paid in full; provided, however, that the term of this Lease Agreement shall in no event be extended more than ten years beyond the Scheduled Termination Date. If, prior to the Scheduled Termination Date, all of the Bonds shall be fully paid or deemed to have been paid in accordance with Article IX of the Indenture, and all Rental Payments due and payable shall have been paid in full, the term of this Lease Agreement shall end simultaneously therewith. (b) The City shall take possession of the Property on the Closing Date. 623 6 4149-0022-5572.4 ARTICLE III RENTAL PAYMENTS Section 3.01. Base Rental Payments. (a) General. The Rental Payments, including Base Rental Payments, for each Rental Period shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during such Rental Period. The obligation of the City to pay the Base Rental Payments does not constitute a debt of the City or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. (b) Base Rental Payments. Subject to the provisions of Section 3.06 hereof, the City shall, on each Base Rental Deposit Date, pay to the Authority a Base Rental Payment in an amount equal to the principal of, and interest on, the Bonds due and payable on the next succeeding Principal Payment Date or Interest Payment Date, as applicable, including any such principal due and payable by reason of mandatory sinking fund redemption of the Bonds; provided, however, that the amount of such Base Rental Payment shall be reduced by the amount, if any, available in the Payment Fund, the Principal Account or the Interest Account on such Base Rental Deposit Date to pay such principal of, or interest on, the Bonds. (c) Payments other than Regularly Scheduled Payments. If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date of termination of this Lease Agreement (as so extended pursuant to Section 2.02 hereof). Upon such extension, the Base Rental Payments payable during such extended term shall be established so that such Base Rental Payments will in the aggregate be sufficient to pay the unpaid principal of, and interest accrued and to accrue on, the Bonds; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property. Section 3.02. Additional Rental Payments. The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following: (a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein; (b) all reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or this Lease Agreement or to defend the Authority and its members, officers, agents and employees; (c) insurance premiums for all insurance required pursuant to Article V hereof; 624 7 4149-0022-5572.4 (d) any amounts with respect to the Bonds required to be rebated to the federal government in accordance with section 148(f) of the Code; and (e) all other payments required to be paid by the City under the provisions of this Lease Agreement or the Indenture. Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof. Section 3.03. Fair Rental Value. The parties hereto have agreed and determined that the Rental Payments are not in excess of the fair rental value of the Property. In making such determination of fair rental value, consideration has been given to the uses and purposes which may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period. Section 3.04. Payment Provisions. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the Principal Office of the Trustee, or such other place or entity as the Authority shall designate. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent Rental Payments due hereunder or refunded at the time of such determination. Section 3.05. Appropriations Covenant. The City covenants to take such action as may be necessary to include all Rental Payments due hereunder in its annual budgets and to make necessary annual appropriations for all such Rental Payments. The covenants on the part of the City contained in this Section shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform such covenants. Section 3.06. Rental Abatement. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated, proportionately, and the City waives the benefits of California Civil Code Sections 1932(2) and 1933(4) and any and all other rights to terminate this Lease Agreement by virtue of any such interference, and this Lease Agreement shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Authority. The City and the Authority shall provide the Trustee with a certificate setting forth the amount of such abatement and the basis therefor. Such abatement shall continue for the period commencing with the date of interference 625 8 4149-0022-5572.4 resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed, and the term of this Lease Agreement shall be extended as provided in Section 2.02 hereof; provided, however, that such term shall in no event be extended more than ten years beyond the Scheduled Termination Date. Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds and accounts. 626 9 4149-0022-5572.4 ARTICLE IV REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS Section 4.01. Power and Authority of the City. The City represents and warrants to the Authority that (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Site Lease and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Site Lease and the Indenture, and (b) the Property is zoned for use for governmental related facilities. Section 4.02. Power and Authority of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Site Lease and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Site Lease and the Indenture. Section 4.03. Net-Net-Net Lease. This Lease Agreement shall be, and shall be deemed and construed to be, a “net-net-net lease” and the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and notwithstanding any dispute between the City and the Authority. Section 4.04. Disclaimer of Warranties. THE AUTHORITY MAKES NO AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT THE AUTHORITY IS NOT A MANUFACTURER OF ANY PORTION OF THE PROPERTY OR A DEALER THEREIN, THAT THE CITY LEASES THE PROPERTY AS IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. Section 4.05. Quiet Enjoyment. So long as no Event of Default shall have occurred and be continuing, the City shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority. Section 4.06. Right of Entry. The Authority shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes. Section 4.07. Use of the Property. The City shall not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule 627 10 4149-0022-5572.4 in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement. Section 4.08. Maintenance and Utilities. As part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City. In exchange for the Rental Payments, the Authority agrees to provide only the Property. Section 4.09. Additions to Property. Subject to Section 4.12 hereof, the City and any sublessee shall, at its own expense, have the right to make additions, modifications and improvements to the Property. To the extent that the removal of such additions, modifications or improvements would not cause material damage to the Property, such additions, modifications and improvements shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. Such additions, modifications and improvements shall not in any way damage the Property or cause it to be used for purposes other than those authorized under the provisions of state and federal law, and the Property, upon completion of any addition, modification or improvement made pursuant to this Section, shall be of a value which is at least equal to the value of the Property immediately prior to the making of such addition, modification or improvement. Section 4.10. Installation of City’s Equipment. The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items, and the Property, upon completion of any installation, modification or removal made pursuant to this Section, shall be of a value which is at least equal to the value of the Property immediately prior to the making of such installation, modification or removal. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property. Section 4.11. Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as and when the same become due. 628 11 4149-0022-5572.4 Upon notice to the Authority and the Trustee, the City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority and the Trustee. Section 4.12. Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and shall cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contest is in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment. Section 4.13. Compliance with Law, Regulations, Etc. The City represents and warrants that, after due inquiry, it has no knowledge and has not given or received any written notice indicating that the Property or the use thereof or any practice, procedure or policy employed by it in the conduct of its business with respect to the Property materially violates any Laws and Regulations. Section 4.14. No Condemnation. The City shall not exercise the power of condemnation with respect to the Property. If for any reason the foregoing covenant shall be held by a court of competent jurisdiction to be unenforceable and the City condemns the Property or if the City breaches such covenant, the City agrees that the value of the City’s leasehold estate hereunder in the Property shall be not less than the greater of (a) the amount sufficient to redeem the Bonds pursuant to the Indenture if the Bonds are then subject to redemption, or (b) the amount sufficient to defease the Bonds to the first available redemption date in accordance with the Indenture if the Bonds are not then subject to redemption. Section 4.15. Authority’s Purpose. So long as any Bonds are Outstanding, the Authority shall not engage in any activities inconsistent with the purposes for which the Authority is organized, as set forth in the agreement pursuant to which the Authority was created. 629 12 4149-0022-5572.4 ARTICLE V INSURANCE Section 5.01. Public Liability and Property Damage Insurance. (a) The City shall maintain reasonable and customary liability insurance. The insurance required under this subsection may be maintained in whole or in part in the form of self-insurance, provided that such self-insurance complies with the provisions of Section 5.03 hereof. (b) The City shall maintain or cause to be maintained insurance insuring the Property against fire, lightning and all other risks covered by an extended coverage endorsement (all risk basis excluding earthquake) to be written at full replacement cost of the Property structures, subject to a minimum $25,000 loss deductible provision. Full replacement cost shall not be less than the aggregate principal amount of the Outstanding Bonds. The insurance required under this subsection may be maintained in whole or in part in the form of self-insurance, provided that such self-insurance complies with the provisions of Section 5.03 hereof. (c) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to subsection (b) of this Section in an amount not less than an amount equal to two times Maximum Annual Debt Service. The insurance required under this subsection may not be maintained in whole or in part in the form of self-insurance. (d) The insurance required by this Section shall be provided by insurers rated “A” or better by Fitch, A.M. Best Company or S&P. Section 5.02. Additional Insurance Provision; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 5.01 hereof. All such policies shall provide that the Trustee shall be given 30 days notice of the expiration thereof, any intended cancellation thereof or any reduction in the coverage provided thereby. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee. The City shall, following receipt of a written request of the Trustee, cause to be delivered to the Trustee on or before August 15 of each year, commencing [August 15, 20__], a schedule of the insurance policies being maintained in accordance herewith and a Written Certificate of the City stating that such policies are in full force and effect and that the City is in full compliance with the requirements of this Article. The Trustee shall be entitled to rely upon said Written Certificate of the City as to the City’s compliance with this Article. The Trustee shall not be responsible for the sufficiency of the coverage or the amounts of such policies. Section 5.03. Self-Insurance. Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance shall be deemed to be self-insurance for purposes hereof. Any self-insurance maintained by the City pursuant to this Article shall be approved in writing by an Independent Insurance Consultant or the City’s Risk Manager. 630 13 4149-0022-5572.4 Section 5.04. Title Insurance. The City shall provide, at its own expense, one or more CLTA title insurance policies for the Property, in the aggregate amount of not less than the aggregate principal amount of the Bonds. Said policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Site Lease, and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances; provided, however, that one or more of said estates may be insured through an endorsement to such policy or policies. All Net Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in Section 5.02 of the Indenture. So long as any of the Bonds remain Outstanding, each policy of title insurance obtained pursuant hereto or required hereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Owners. 631 14 4149-0022-5572.4 ARTICLE VI EMINENT DOMAIN; RIGHT TO REDEEM Section 6.01. Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less than all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then this Lease Agreement shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06 hereof. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in Sections 3.01 and 5.01 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the City. Section 6.02. Right to Redeem Bonds. (a) [The City shall have the right to cause the Bonds to be redeemed pursuant to, and in accordance with the provisions of, Section 3.02 of the Indenture by providing the Trustee with funds sufficient for such purpose (which funds may be derived by the City from any source) and giving notice of the City’s exercise of such right as provided in subsection (b) of this Section.] (b) [In order to exercise its right to cause Bonds to be redeemed pursuant to subsection (a) of this Section, the City shall give written notice to the Trustee of its intention to exercise such right, specifying the date on which such redemption shall be made, which date shall be not less than 35 days from the date such notice is given (unless otherwise agreed by the Trustee), and specifying the Series, maturities and amounts of Bonds to be redeemed.] (c) The City shall have the right to cause Bonds to be deemed to have been paid pursuant to, and in accordance with the provisions of, Section 9.02 of the Indenture by providing the Trustee with funds sufficient for such purpose (which funds may be derived by the City from any source) and providing and delivering, or causing to be provided and delivered the other items required pursuant to said Section 9.02 to be provided or delivered in connection with such deemed payment. 632 15 4149-0022-5572.4 ARTICLE VII ASSIGNMENT AND SUBLETTING; SUBSTITUTION OR RELEASE; TITLE Section 7.01. Assignment and Subleasing. Neither this Lease Agreement nor any interest of the City hereunder shall be sold, mortgaged, pledged, assigned, or transferred by the City by voluntary act or by operation of law or otherwise; provided, however, that the Property may be subleased in whole or in part by the City, but only subject to the following conditions, which are hereby made conditions precedent to any such sublease: (a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) no such sublease by the City shall cause the Property to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State of California; (d) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under this Lease Agreement, including, the right to re-enter and re-let the Property or terminate this Lease Agreement upon a default by the City; and (e) the City shall have filed or caused to be filed with the Authority and the Trustee an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on Tax-Exempt Bonds to be included in gross income for federal income tax purposes. Section 7.02. Substitution or Release of the Property. Subject to the provisions of this Section, the City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with any such substitution or release shall be borne by the City. Notwithstanding any substitution or release pursuant to this Section, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following conditions, which are hereby made conditions precedent to such substitution or release: (a) a qualified employee of the City or an independent certified real estate appraiser selected by the City shall have found (and shall have delivered a certificate to the Trustee setting forth its findings) that (i) the sum of Base Rental Payments plus Additional Rental Payments due under the Lease Agreement in any Rental Period is not in excess of the annual fair rental value of the Property, as constituted after such substitution or release, and (ii) the Property, as constituted after such substitution or release, has a useful life equal to or greater than the maximum remaining term of this Lease Agreement (including extensions thereof under Section 2.02 hereof); (b) the City shall have obtained or caused to be obtained an CLTA title insurance policy or policies with respect to any substituted property in the amount of the fair market value of such 633 16 4149-0022-5572.4 substituted property (which fair market value shall have been determined by a qualified employee of the City or an independent certified real estate appraiser), of the type and with the endorsements described in Section 5.04 hereof; (c) the City shall have filed or caused to be filed with the Trustee an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on Tax- Exempt Bonds to be included in gross income for federal income tax purposes; (d) the City shall have given, or shall have made arrangements for the giving of, any notice of the occurrence of such substitution or release required to be given pursuant to paragraph [(__) of subsection (__) of Section 5 of the Continuing Disclosure Certificate]; (e) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the county recorder of the county in which the Property is located, any document necessary to reconvey to the City the portion of the Property being substituted or released and to include any substituted real property in the description of the Property contained herein and in the Site Lease; and (f) the City shall have certified to the Trustee that the substituted real property is essential for performing the City’s governmental functions. Section 7.03. Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Section 8.02 hereof), and the first date upon which no Bonds are any longer Outstanding, all right, title and interest in and to the Property shall vest in the City. Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record. 634 17 4149-0022-5572.4 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.01. Events of Default. The occurrence, from time to time, of any one or more of the following events shall constitute an Event of Default under this Lease Agreement: (a) the failure of the City to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this Lease Agreement; (b) the failure by the City to observe and perform any of the other covenants, agreements or conditions on its part in this Lease Agreement contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the City by the Trustee, the Authority or the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if, in the reasonable opinion of the City, the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the City within such 30 day period and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time, provided, further, however, that the period of time for such cure shall not exceed 90 days without the prior written consent of the Authority; (c) except as otherwise expressly permitted by this Lease Agreement, the assignment or transfer, either voluntarily or by operation of law or otherwise, of the City’s interest in this Lease Agreement or any part thereof without the written consent of the Authority; (d) the abandonment of the Property by the City; or (e) the commencement by the City of a voluntary case under Title 11 of the United States Code or any substitute or successor statute. Section 8.02. Action on Default. (a) In each and every case during the continuance of an Event of Default hereunder, the Authority, in addition to all other rights and remedies it may have at law, shall have the option either to exercise the rights provided for in subsection (b) of this Section or to exercise the rights provided for in subsection (c) of this Section. (b) In each and every case during the continuance of an Event of Default hereunder, the Authority shall have the right to terminate this Lease Agreement in the manner hereinafter provided, notwithstanding any re-entry or re-letting of the Property as provided in subsection (c) of this Section, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon the Property and removal and storage of such property by the Authority or its duly authorized 635 18 4149-0022-5572.4 agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the Authority by such written notice. (c) In each and every case during the continuance of an Event of Default hereunder, the Authority shall have the right, without terminating this Lease Agreement (i) to collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property, or (ii) to exercise any and all rights of entry and re-entry upon the Property. In the event the Authority does not elect to terminate this Lease Agreement in the manner provided for in subsection (b) of this Section, the City shall remain liable and agrees to keep or perform all covenants and conditions herein contained to be kept or performed by the City and, if the Property is not re-let, to pay the full amount of the Rental Payments to the end of the term of this Lease Agreement or, in the event that the Property is re-let, to pay any deficiency in Rental Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re- enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subsection (b) of this 636 19 4149-0022-5572.4 Section. The City further agrees to pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations. The term “re-let” or “re- letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the Property. (d) The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property. (e) Notwithstanding anything herein to the contrary, the termination of this Lease Agreement by the Authority on account of an Event of Default hereunder shall not effect or result in a termination of the lease of the Property by the City to the Authority pursuant to the Ground Lease. Section 8.03. Other Remedies. In addition to the other remedies provided for in Section 8.02 hereof, during the continuance of an Event of Default hereunder, the Authority shall be entitled to proceed to protect and enforce the rights vested in the Authority by this Lease Agreement or by law. The provisions of this Lease Agreement and the duties of the City and of its board, officers or employees shall be enforceable by the Authority by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority shall have the right to bring the following actions: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any board member, officer or employee thereof, and to compel the City or any such board member, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Authority; or (c) by suit, action or proceeding in any court of competent jurisdiction, to require the City and its board, officers and employees to account as if it or they were the trustee or trustees of an express trust. Section 8.04. No Acceleration. Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right to accelerate Rental Payments upon the occurrence or continuance of a default or an Event of Default hereunder. Section 8.05. Remedies Not Exclusive. Subject to the provisions of Section 8.02 hereof, no remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. If any statute or rule of law validly shall limit the remedies given to the Authority 637 20 4149-0022-5572.4 hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law. Section 8.06. Waiver. No delay or omission of the Authority to exercise any right or power arising from the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, and every power and remedy given by this Lease Agreement to the Authority may be exercised from time to time and as often as may be deemed expedient. A waiver of a particular default or Event of Default shall not be deemed to be a waiver of any other default or Event of Default or of the same default or Event of Default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement. Section 8.07. Attorney’s Fees. In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder. Section 8.08. Authority Event of Default; Action on Authority Event of Default. The failure by the Authority to observe and perform any covenants, agreements or conditions on its part in this Lease Agreement contained, including under Section 4.05 and Section 4.15, if such failure shall have continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Authority and the Trustee, by the City, shall constitute an Authority Event of Default under this Lease Agreement; provided, however, that if, in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not within such 60 day period, such failure shall not constitute an Authority Event of Default if corrective action is instituted by the Authority within such 60 day period and the Authority shall thereafter diligently and in good faith cure such failure in a reasonable period of time. In each and every case upon the occurrence and during the continuance of an Authority Event of Default by the Authority hereunder, the City shall have all the rights and remedies permitted by law. 638 21 4149-0022-5572.4 ARTICLE IX AMENDMENTS Section 9.01. Amendments. (a) This Lease Agreement and the Site Lease, and the rights and obligations of the City and the Authority hereunder and thereunder, may be amended at any time by an amendment hereto or thereto, which shall become binding upon execution by the City and the Authority, but only with the prior written consent of the Owners of a majority of the aggregate principal amount of Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 10.06 of the Indenture. No such amendment shall (i) extend the payment date of any Base Rental Payment or reduce the amount of any Base Rental Payment without the prior written consent of the Owner of each Bond so affected, (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required for any amendment of this Lease Agreement or the Site Lease to become binding without the prior written consent of the Owners of all the Bonds then Outstanding, or (iii) amend this Section without the prior written consent of the Owners of all the Bonds then Outstanding. (b) This Lease Agreement and the Site Lease, and the rights and obligations of the City and the Authority hereunder and thereunder, may also be amended at any time by an amendment hereto or thereto, which shall become binding upon execution by the City and the Authority, without the written consents of any Owners, for any one or more of the following purposes: (i) to add to the covenants and agreements of the City or the Authority herein or therein contained other covenants and agreements thereafter to be observed, or to surrender any right or power herein or therein reserved to or conferred upon the City or the Authority; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in herein or therein or in regard to questions arising hereunder or thereunder which the City or the Authority may deem desirable or necessary and not inconsistent herewith; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Section 2.04 and Section 2.05 of the Indenture; (iv) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 7.02 hereof; (v) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on Tax-Exempt Bonds or maintain any federal interest subsidies expected to be received with respect to any Bonds; or (vi) to make such other changes herein or therein as the City or the Authority may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners. 639 22 4149-0022-5572.4 ARTICLE X MISCELLANEOUS Section 10.01. Authority Not Liable. The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and its directors, officers, agents and employees harmless against and from any and all claims by or on behalf of any Person arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. In no event shall the Authority be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property. Section 10.02. Assignment to Trustee; Effect. The parties hereto understand and agree that, upon the execution and delivery of the Indenture (which is occurring simultaneously with the execution and delivery hereof), all right, title and interest of the Authority in and to this Lease Agreement will be sold, assigned and transferred to the Trustee for the benefit of the Owners of the Bonds. The City hereby consents to such sale, assignment and transfer. Upon the execution and delivery of the Indenture, references in the operative provisions hereof to the Authority shall be deemed to be references to the Trustee, as assignee of the Authority. Section 10.03. Gender and References; Article and Section Headings. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. Unless the context otherwise clearly requires, all references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Lease Agreement as a whole and not to any particular Article, Section, subsection or clause hereof. Section 10.04. Validity and Severability. If for any reason any one or more of the agreements, covenants or terms of this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the City or by the Authority, all of the remaining agreements, covenants and terms hereof shall nonetheless continue in full force and effect. If for any reason it is held by such a court that any agreement, covenant or term of this Lease Agreement required to be observed or performed by the City, including the covenant to pay Rental Payments, is unenforceable for the full term hereof, then and in such event this Lease Agreement is and shall be deemed to be a lease from year to year under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and 640 23 4149-0022-5572.4 use the Property, and all of the other agreements, covenants and terms of this Lease Agreement, except to the extent that such agreements, covenants and terms are contrary to or inconsistent with such holding, shall remain in full force and effect. Section 10.05. California Law. THIS LEASE AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Section 10.06. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Authority: Huntington Beach Public Financing Authority c/o City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section. Section 10.07. Execution in Counterparts. This Lease Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 641 24 4149-0022-5572.4 IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. CITY OF HUNTINGTON BEACH By: HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: Robin Estanislau, Secretary 642 4149-0022-5572.4 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, 2020, before me, , Notary Public, personally appeared _________________, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 643 4149-0022-5572.4 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, 2020, before me, , Notary Public, personally appeared _________________, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature [SEAL] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 644 A-1 4149-0022-5572.4 EXHIBIT A DESCRIPTION OF THE PROPERTY All that certain real property situated in the County of Orange, State of California, and any improvements thereto, described as follows: 645 4149-0022-5572.4 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Master Lease Agreement, dated as of [_________] 1, 2020, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), from the Authority to the City, is hereby accepted by the undersigned on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on [_________], 2020, and the City consents to recordation thereof by its duly authorized officer. Dated: __________, 2020 CITY OF HUNTINGTON BEACH By: ________________________________ 646 4127-3236-0228.4 MASTER INDENTURE by and among HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY and CITY OF HUNTINGTON BEACH and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE Dated as of [__________] 1, 2020 Relating to Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds 647 TABLE OF CONTENTS Page i 4127-3236-0228.4 ARTICLE I DEFINITIONS; EQUAL SECURITY ............................................................ 3 Section 1.01. Definitions............................................................................................ 3 Section 1.02. Equal Security .................................................................................... 10 ARTICLE II THE BONDS ................................................................................................. 11 Section 2.01. Authorization of Bonds ...................................................................... 11 Section 2.02. Terms of Series 2020 Bonds .............................................................. 11 Section 2.03. Issuance of Series 2020 Bonds; Application of Proceeds .................. 13 Section 2.04. Conditions for the Issuance of Additional Bonds .............................. 13 Section 2.05. Procedure for the Issuance of Additional Bonds ............................... 15 Section 2.06. Execution of Bonds ............................................................................ 16 Section 2.07. Authentication of Bonds .................................................................... 16 Section 2.08. Registration Books ............................................................................. 16 Section 2.09. Transfer and Exchange of Bonds ....................................................... 16 Section 2.10. Book-Entry System ............................................................................ 17 Section 2.11. Bonds Mutilated, Lost, Destroyed or Stolen ...................................... 19 Section 2.12. Temporary Bonds ............................................................................... 20 ARTICLE III REDEMPTION OF BONDS ......................................................................... 21 Section 3.01. Extraordinary Redemption ................................................................. 21 Section 3.02. Optional Redemption ......................................................................... 21 Section 3.03. Mandatory Sinking Fund Redemption ............................................... 21 Section 3.04. Selection of Bonds for Redemption ................................................... 22 Section 3.05. Notice of Redemption ........................................................................ 23 Section 3.06. Partial Redemption of Bonds ............................................................. 23 Section 3.07. Effect of Notice of Redemption ......................................................... 23 ARTICLE IV PLEDGE AND ASSIGNMENT; FUNDS AND ACCOUNTS .................... 25 Section 4.01. Pledge and Assignment ...................................................................... 25 Section 4.02. Costs of Issuance Fund ...................................................................... 25 Section 4.03. Payment Fund .................................................................................... 26 Section 4.04. Redemption Fund ............................................................................... 26 Section 4.05. Reserve Fund ..................................................................................... 26 Section 4.06. Rebate Fund ....................................................................................... 28 Section 4.07. Investments ........................................................................................ 29 648 TABLE OF CONTENTS (continued) Page ii 4127-3236-0228.4 ARTICLE V NET PROCEEDS AND TITLE INSURANCE; COVENANTS .................. 31 Section 5.01. Application of Net Proceeds .............................................................. 31 Section 5.02. Title Insurance ................................................................................... 32 Section 5.03. Punctual Payment............................................................................... 32 Section 5.04. Compliance with Indenture ................................................................ 32 Section 5.05. Compliance with Site Lease and Lease Agreement ........................... 33 Section 5.06. Observance of Laws and Regulations ................................................ 33 Section 5.07. Other Liens......................................................................................... 33 Section 5.08. Prosecution and Defense of Suits ...................................................... 33 Section 5.09. Accounting Records and Statements ................................................. 33 Section 5.10. Recordation ........................................................................................ 34 Section 5.11. Tax Covenants ................................................................................... 34 Section 5.12. Continuing Disclosure ....................................................................... 34 Section 5.13. Notifications Required by the Act ..................................................... 34 Section 5.14. Further Assurances............................................................................. 35 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES ................................................ 36 Section 6.01. Events of Default ............................................................................... 36 Section 6.02. Action on Default ............................................................................... 36 Section 6.03. Other Remedies of the Trustee .......................................................... 37 Section 6.04. Remedies Not Exclusive .................................................................... 37 Section 6.05. Application of Amounts After Default .............................................. 37 Section 6.06. Power of Trustee to Enforce .............................................................. 38 Section 6.07. Bond Owners Direction of Proceedings ............................................ 38 Section 6.08. Limitation on Bond Owners’ Right to Sue ........................................ 38 Section 6.09. Termination of Proceedings ............................................................... 38 Section 6.10. No Waiver of Default ......................................................................... 39 ARTICLE VII THE TRUSTEE ............................................................................................. 40 Section 7.01. Duties and Liabilities of Trustee ........................................................ 40 Section 7.02. Removal and Resignation of the Trustee ........................................... 40 Section 7.03. Compensation and Indemnification of the Trustee ............................ 41 Section 7.04. Protection of the Trustee .................................................................... 41 649 TABLE OF CONTENTS (continued) Page iii 4127-3236-0228.4 Section 7.05. Appointment of Co-Trustee ............................................................... 43 ARTICLE VIII SUPPLEMENTAL INDENTURES .............................................................. 45 Section 8.01. Supplemental Indentures .................................................................... 45 Section 8.02. Effect of Supplemental Indenture ...................................................... 46 Section 8.03. Endorsement of Bonds; Preparation of New Bonds .......................... 46 Section 8.04. Amendment of Particular Bonds ........................................................ 46 ARTICLE IX DEFEASANCE.............................................................................................. 47 Section 9.01. Discharge of Indenture ....................................................................... 47 Section 9.02. Bonds Deemed To Have Been Paid ................................................... 47 Section 9.03. Unclaimed Moneys ............................................................................ 48 ARTICLE X MISCELLANEOUS ...................................................................................... 50 Section 10.01. Benefits of Indenture Limited to Parties ............................................ 50 Section 10.02. Successor Deemed Included in all References to Predecessor .......... 50 Section 10.03. Execution of Documents by Owners ................................................. 50 Section 10.04. Waiver of Personal Liability .............................................................. 50 Section 10.05. Acquisition of Bonds by Authority or City........................................ 50 Section 10.06. Disqualified Bonds............................................................................. 51 Section 10.07. Money Held for Particular Bonds ...................................................... 51 Section 10.08. Funds and Accounts ........................................................................... 51 Section 10.09. Gender and References; Article and Section Headings ..................... 51 Section 10.10. Partial Invalidity................................................................................. 52 Section 10.11. California Law ................................................................................... 52 Section 10.12. Notices ............................................................................................... 52 Section 10.13. Business Days .................................................................................... 53 Section 10.14. Execution in Counterparts .................................................................. 53 EXHIBIT A FORM OF SERIES 2020 BOND ................................................................ A-1 EXHIBIT B PERMITTED INVESTMENTS .................................................................. B-1 EXHIBIT C FORM OF COSTS OF ISSUANCE FUND REQUISITION ...................... C-1 650 1 4127-3236-0228.4 MASTER INDENTURE THIS MASTER INDENTURE (this “Indenture”), dated as of [__________] 1, 2020, is by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under the laws of the State of California (the “City”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as Trustee (the “Trustee”). W I T N E S S E T H: WHEREAS, in order to refinance certain capital improvements, including certain improvements to public facilities to be installed as a part of the City’s Pier Plaza project and a portion of the City’s share of the costs of a countywide 800 MHz coordinated communications system (the “1997 Project”) and other capital projects, including South Beach Phase I and II Improvements, a Beach Maintenance Facility, energy retrofitting of various facilities, design costs of the City’s Sports Complex, water system improvements and the City’s Emerald Cove Senior Housing project (the “2000 Project”), the Authority issued its Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior 2010A Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the “1993 Project”) and the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the “2001 Project” and together with the Prior 1993 Project, the 1997 Project and the 2000 Project, the “Projects”), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior 2011A Bonds” and, together with the Prior 2010A Bonds, the “Prior Bonds”), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refund the Prior Bonds and, therefore, refinance the Projects; and WHEREAS, in order to refund the Prior Bonds and, therefore, refinance the Projects, the City is leasing certain real property, and the improvements thereto, consisting of Donald W. Kiser Corporation Yard (the “Property”), to the Authority pursuant to a Master Site Lease, dated as of the date hereof (the “Site Lease”), and the City is subleasing the Property back from the Authority pursuant to a Master Lease Agreement, dated as of the date hereof (the “Lease Agreement”); and WHEREAS, in order to provide the funds necessary to refund the Prior Bonds and, therefore, refinance the Projects, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”), and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 651 2 4127-3236-0228.4 2020 Series B (Federally Taxable) (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Series 2020 Bonds”), in the respective aggregate principal amounts of $[__________] and $[__________], payable from the base rental payments (the “Base Rental Payments”) to be made by the City pursuant to the Lease Agreement; and WHEREAS, the Authority and the City desire to provide for the issuance of additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2020 Bonds (the Series 2020 Bonds and any such Additional Bonds being collectively referred to as the “Bonds”); and WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, each of the Authority and the City has authorized the execution and delivery of this Indenture; and WHEREAS, the Authority and the City have determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid and binding special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture has been in all respects duly authorized; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Indenture do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Indenture; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, and premium, if any, and interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority and the City do hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: 652 3 4127-3236-0228.4 ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Lease Agreement. “Act” means the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code. “Additional Bonds” means Bonds other than Series 2020 Bonds issued hereunder in accordance with the provisions of Sections 2.04 and 2.05 hereof. “Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Annual Debt Service” means, for each Bond Year, the sum of (a) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions), and (b) the scheduled principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund redemptions due in such Bond Year). “Authority” means the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California. “Authorized Authority Representative” means any member of the Board of Directors of the Authority, the Executive Director of the Authority or the Treasurer of the Authority, and any other Person authorized by the Board of Directors of the Authority or the Executive Director of the Authority to act on behalf of the Authority under or with respect to this Indenture. “Authorized City Representative” means the City Manager of the City, the Assistant City Manager of the City or the Chief Financial Officer of the City, and any other Person authorized by the City Council of the City or the City Manager of the City to act on behalf of the City under or with respect to this Indenture. “Authorized Denominations” means, with respect to the Bonds, $5,000 and any integral multiple thereof. “Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Owners” means those individuals, partnerships, corporations or other entities for whom the Participants have caused the Depository to hold Book-Entry Bonds. 653 4 4127-3236-0228.4 “Bond Year” means each twelve-month period beginning on May 2 in each year and extending to the next succeeding May 1, both dates inclusive, except that the first Bond Year shall begin on the Closing Date and end on May 1, 2021. “Bonds” means the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds issued hereunder, and includes the Series 2020 Bonds and any Additional Bonds. “Book-Entry Bonds” means the Bonds of a Series registered in the name of the nominee of DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.10 hereof. “Business Day” means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city or cities in which the Office of the Trustee is located are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. “Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to Book-Entry Bonds. “City” means the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California. “Closing Date” means the date upon which the Series 2020 Bonds are delivered to the Original Purchaser, being [_________, 2020]. “Code” means the Internal Revenue Code of 1986. “Common Reserve Account” means the account of that name established in the Reserve Fund pursuant to a Supplemental Indenture to secure the Common Reserve Bonds. “Common Reserve Bonds” means each Series of Additional Bonds secured by the Common Reserve Account as provided in the Supplemental Indenture providing for the issuance of such Series of Additional Bonds. “Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the Closing Date, of the City, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Costs of Issuance” means all the costs of issuing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Indenture, the Lease Agreement, the Site Lease, the Bonds and any preliminary official statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service Bureau charges, market study fees, financial advisory fees, legal fees and expenses of counsel with respect to the refinancing of the Projects, the initial fees and expenses of the Trustee and its counsel, any premium for a municipal bond insurance policy insuring payments of debt service on Additional Bonds or any Reserve Facility, and other fees and expenses incurred in connection with the issuance and delivery of the Bonds, to the extent such fees and expenses are approved by the City. 654 5 4127-3236-0228.4 “Costs of Issuance Fund” means the fund by that name established pursuant to Section 4.02 hereof. [“Defeasance Securities” means (a) non-callable direct obligations of the United States of America (“United States Treasury Obligations”), (b) evidences of ownership of proportionate interests in future interest and principal payments on United States Treasury Obligations held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying United States Treasury Obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated, (c) pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively, or (d) securities eligible for “AAA” defeasance under then existing criteria of S&P or Moody’s, or any combination thereof.] “Depository” means the securities depository acting as Depository pursuant to Section 2.10 hereof. “DTC” means The Depository Trust Company, New York, New York and its successors. “Escrow Agreements” means the 2010A Escrow Agreement and the 2011A Escrow Agreement. “Escrow Bank” means U.S. Bank National Association, as trustee and escrow bank under the Escrow Agreements, and any successor thereto. “Event of Default” means an event described as such in Section 6.01. “Fitch” means Fitch, Inc., its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Indenture” means this Master Indenture, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions hereof. “Interest Account” means the Series 2020 Interest Account and each additional account established for the payment of interest of a Series of Additional Bonds within the Payment Fund pursuant to Section 4.03 hereof. “Interest Payment Date” means each May 1 and November 1, commencing [November 1, 2020], so long as any Bonds remain Outstanding. “Lease Agreement” means the Master Lease Agreement, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Lease Default Event” means an event of default pursuant to and as described in Section 8.01 of the Lease Agreement. 655 6 4127-3236-0228.4 “Lease Revenues” means all Base Rental Payments payable by the City pursuant to the Lease Agreement, including any prepayments thereof, any Net Proceeds and any amounts received by the Trustee as a result of or in connection with the Trustee’s pursuit of remedies under the Lease Agreement upon a Lease Default Event. “Letter of Representations” means the letter of the Authority delivered to and accepted by the Depository on or prior to the delivery of the Bonds as Book-Entry Bonds setting forth the basis on which the Depository serves as depository for such Book-Entry Bonds, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute Depository. “Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year, including the Bond Year the calculation is made. “Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.10 hereof. “Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City in writing; provided, however, that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted, which other office or agency shall be specified to the Authority and the City by the Trustee in writing. “Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority. “Original Purchaser” means Stifel, Nicolaus & Company, Incorporated, the original purchaser of the Series 2020 Bonds from the Authority. “Outstanding” means, when used as of any particular time with reference to Bonds, subject to the provisions of Section 10.06 hereof, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (a) Bonds previously canceled by the Trustee or delivered to the Trustee for cancellation, (b) Bonds paid or deemed to have been paid within the meaning of Section 9.02 hereof, and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books. “Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Certificate. 656 7 4127-3236-0228.4 “Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book-Entry Bonds as securities depository. “Payment Fund” means the fund by that name established in accordance with Section 4.03 hereof. “Permitted Investments” is defined in Exhibit B attached hereto. “Person” means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. “Principal Account” means the Series 2020 Principal Account and each additional account established for the payment of principal of a Series of Additional Bonds within the Payment Fund pursuant to Section 4.03 hereof. “Principal Payment Date” means a date on which the principal of the Bonds becomes due and payable, either as a result of the maturity thereof or by mandatory sinking fund redemption. “Prior 2010A Bonds” means the prior bonds of the Authority as defined in recital clauses hereto. “Prior 2011A Bonds” means the prior bonds of the Authority as defined in recital clauses hereto. “Projects” means the capital improvement projects described in recital clauses hereto. “Rebate Fund” means the fund by that name established pursuant to Section 4.05 hereof. “Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate. “Record Date” means the 15th calendar day of the month preceding each Interest Payment Date, whether or not such day is a Business Day. “Redemption Fund” means the fund by that name established pursuant to Section 4.04 hereof. “Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.08 hereof. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments. “Rental Period” means the period from the Closing Date through June 30, 20[__] and, thereafter, the twelve-month period commencing on July 1 of each year during the term of the Lease Agreement. “Reserve Account” means either the Common Reserve Account or any other reserve account established pursuant to Section 4.05 hereof, which account may secure one or more Series 657 8 4127-3236-0228.4 of Additional Bonds as provided in the Supplemental Indenture providing for the establishment thereof. “Reserve Facility” means any line of credit, letter of credit, insurance policy, surety bond or similar instrument, in form reasonably satisfactory to the Trustee, that (a) names the Trustee as beneficiary thereof, (b) provides for payment on demand, (c) cannot be terminated by the issuer thereof so long as any of the Bonds secured by such Reserve Facility remain Outstanding, (d) is issued by an obligor, the obligations of which under the Reserve Facility are, at the time such Reserve Facility is substituted for all or part of the moneys on deposit in the applicable Reserve Account, rated in one of the two highest rating categories (without regard to any modifier) by any one rating agency then rating the Bonds secured by such Reserve Facility, and (e) is deposited with the Trustee pursuant to Section 4.05 hereof. “Reserve Fund” means the fund by that name established in accordance with Section 4.05 hereof pursuant to a Supplemental Indenture. “Reserve Requirement” means, (a) with respect to any Series of Additional Bonds that are Common Reserve Bonds, such amount, as shall be specified in the Supplemental Indenture authorizing the issuance of the first Series of Common Reserve Bonds, and (b) with respect to any Series of Additional Bonds that are not Common Reserve Bonds, such amount, if any, as shall be specified in the Supplemental Indenture authorizing the issuance of such Series of Additional Bonds; provided, however, that in no event shall any Reserve Requirement exceed an amount permitted by the Code. “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Series” means the initial series of Bonds executed, authenticated and delivered on the date of initial issuance of such Bonds and identified pursuant to this Indenture as the Series 2020A Bonds and the Series 2020B Bonds, and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds. “Series 2020 Bonds” means, collectively, the Series 2020A Bonds and the Series 2020B Bonds, issued hereunder. “Series 2020 Interest Account” means the Interest Account by that name within the Payment Fund established pursuant to Section 4.03 hereof. “Series 2020 Principal Account” means the Principal Account by that name within the Payment Fund established pursuant to Section 4.03 hereof. “Series 2020A Bonds” means the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt), issued hereunder. 658 9 4127-3236-0228.4 “Series 2020B Bonds” means the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable), issued hereunder. “Site Lease” means the Master Site Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and of the Lease Agreement. “Supplemental Indenture” means any supplemental indenture amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. “Tax Certificate” means the Tax Certificate executed by the Authority at the time of issuance of the Series 2020A Bonds, relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Tax-Exempt” means, with respect to interest on any obligations of a state or local government, including interest on the Series 2020 Bonds, that such interest is excluded from the gross income of the holders thereof for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax under the Code. “Trustee” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee hereunder substituted in its place as provided herein. “2010A Escrow Agreement” means the Escrow Agreement, dated as of the date hereof, by and between the Authority and the Escrow Bank, relating to the Prior 2010A Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. “2011A Escrow Agreement” means the Escrow Agreement, dated as of the date hereof, by and between the Authority and the Escrow Bank, relating to the Prior 2011A Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. “Verification Report” means, with respect to the deemed payment of Bonds pursuant to clause (ii)(B) of subsection (a) of Section 9.02 hereof, a report of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Defeasance Securities and cash, if any, deposited in connection with such deemed payment satisfy the requirements of clause (ii)(B) of subsection (a) of Section 9.02 hereof. “Written Certificate of the Authority” means a written certificate signed in the name of the Authority by an Authorized Representative of the Authority. Any such certificate may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. 659 10 4127-3236-0228.4 “Written Certificate of the City” means a written certificate signed in the name of the City by an Authorized Representative of the City. Any such certificate may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Request of the Authority” means a written request signed in the name of the Authority by an Authorized Representative of the Authority. Any such request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Request of the City” means a written request signed in the name of the City by an Authorized Representative of the City. Any such request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Section 1.02. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, and premium, if any, and interest on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. 660 11 4127-3236-0228.4 ARTICLE II THE BONDS Section 2.01. Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture, the Act and other applicable laws of the State of California. The Bonds may consist of one or more Series of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. The Bonds shall be designated generally as the “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. The Bonds shall be special obligations of the Authority, payable solely from the Lease Revenues and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. Notwithstanding anything to the contrary contained herein, if, as a result of the limitations contained in Section 3.06 of the Lease Agreement, Base Rental Payments cannot be paid by the City in an amount sufficient to pay the principal of, or interest on, the Bonds otherwise payable on any date, such principal or interest shall be deemed not to be payable on such date, the nonpayment thereof on such date shall not constitute a default or an Event of Default under this Indenture and such principal or interest shall become payable on the date on which such Base Rental Payments becomes payable under and pursuant to the Lease Agreement. Section 2.02. Terms of Series 2020 Bonds. (a) The Series 2020A Bonds shall be designated “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt).” The aggregate principal amount of Series 2020A Bonds that may be issued and Outstanding under this Indenture shall not exceed $[__________], except as may be otherwise provided in Section 2.11 hereof. (b) The Series 2020A Bonds shall be issued in fully registered form without coupons in Authorized Denominations. The Series 2020A Bonds shall be dated as of the Closing Date, shall be in the aggregate principal amount of $[__________], shall mature on May 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows: 661 12 4127-3236-0228.4 Maturity Date (May 1) Principal Amount Interest Rate $ % (a) The Series 2020B Bonds shall be designated “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable).” The aggregate principal amount of Series 2020B Bonds that may be issued and Outstanding under this Indenture shall not exceed $[__________], except as may be otherwise provided in Section 2.11 hereof. (b) The Series 2020B Bonds shall be issued in fully registered form without coupons in Authorized Denominations. The Series 2020B Bonds shall be dated as of the Closing Date, shall be in the aggregate principal amount of $[__________], shall mature on May 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows: Maturity Date (May 1) Principal Amount Interest Rate $ % (c) Interest on the Series 2020 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2020 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Series 2020 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Closing Date, or (iii) interest on any Series 2020 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the United States on each Interest Payment Date. Except as otherwise provided in the Letter of Representations, interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2020 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record 662 13 4127-3236-0228.4 Date; provided, however, that, in the case of an Owner of $1,000,000 or more in aggregate principal amount of Series 2020 Bonds, upon the written request of such Owner to the Trustee, received at least ten days prior to a Record Date, specifying the account or accounts to which such payment shall be made, payment of interest shall be made by wire transfer of immediately available funds on the following Interest Payment Date. Any such request shall remain in effect until revoked or revised by such Owner by an instrument in writing delivered to the Trustee. (d) The principal of and premium, if any, on the Series 2020 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee. (e) The Series 2020 Bonds shall be in substantially the form set forth in Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby. Section 2.03. Issuance of Series 2020 Bonds; Application of Proceeds. (a) The Authority may, at any time, execute the Series 2020 Bonds and deliver the same to the Trustee. The Trustee shall authenticate the Series 2020 Bonds and deliver the Series 2020 Bonds to the Original Purchaser upon receipt of a Written Request of the Authority and upon receipt of the purchase price therefor. (b) On the Closing Date, the proceeds of the sale of the Series 2020A Bonds received by the Trustee, $[__________], shall be deposited by the Trustee as follows: (i) the Trustee shall deposit the amount of $[__________] in the Costs of Issuance Fund; and (ii) the Trustee shall transfer the amount of $[_________] to the Escrow Bank, to be applied to the payment and redemption of the Prior 2010A Bonds in accordance with the 2010A Escrow Agreement. (c) On the Closing Date, the proceeds of the sale of the Series 2020B Bonds received by the Trustee, $[__________], shall be deposited by the Trustee as follows: (i) the Trustee shall deposit the amount of $[__________] in the Costs of Issuance Fund; and (ii) the Trustee shall transfer the amount of $[_________] to the Escrow Bank, to be applied to the payment and redemption of the Prior 2011A Bonds in accordance with the 2011A Escrow Agreement. Section 2.04. Conditions for the Issuance of Additional Bonds. The Authority may at any time issue one or more Series of Additional Bonds (in addition to the Series 2020 Bonds) payable from Lease Revenues as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds: 663 14 4127-3236-0228.4 (a) neither the Authority nor the City shall be in default under this Indenture, the Lease Agreement or the Site Lease; (b) the issuance of such Additional Bonds shall have been authorized under and pursuant to the Act and under and pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify the following: (i) the purposes for which such Additional Bonds are to be issued; provided, that the proceeds of the sale of such Additional Bonds shall be applied only for one or more of the following purposes: (A) providing funds to pay costs of City facilities (including capitalized interest), (B) providing funds to refund any Bonds issued hereunder or other obligations of the City, (C) providing funds to pay Costs of Issuance incurred in connection with the issuance of such Additional Bonds, and (D) providing funds to make any deposit to any Reserve Account required pursuant to paragraph (c) below; (ii) the principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds, which shall be Authorized Denominations; (iii) that such Additional Bonds shall be payable as to interest on the Interest Payment Dates, except that the first installment of interest may be payable on either May 1 or November 1; (iv) the date, the maturity date or dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, that (A) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on May 1 of each year in which principal falls due, and the term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on May 1, (B) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination, and (C) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates; (v) the redemption premiums and terms, if any, for such Additional Bonds; (vi) the form of such Additional Bonds; (vii) the designation as to whether such Additional Bonds shall (A) constitute Common Reserve Bonds secured by the Common Reserve Account, (B) be secured by any other Reserve Account, or (C) not be secured by any Reserve Account; and (viii) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof; (c) upon the issuance of such Additional Bonds, the amount on deposit in the Reserve Account applicable to such Additional Bonds, if any, shall be at least equal to the applicable Reserve Requirement for such Additional Bonds; and 664 15 4127-3236-0228.4 (d) upon the issuance of such Additional Bonds, the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of the issuance of such Additional Bonds, plus Additional Rental Payments, in any Rental Period shall not be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of such Additional Bonds (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City). Section 2.05. Procedure for the Issuance of Additional Bonds. Whenever the Authority and the City shall determine to authorize the issuance of any Additional Bonds, the Authority, the City and the Trustee shall enter into a Supplemental Indenture satisfying the conditions of Section 2.04 hereof. Before such Additional Bonds shall be issued, the Authority and the City shall file or cause to be filed with the Trustee the following: (a) an Opinion of Counsel setting forth (i) that counsel rendering such opinion has examined the Supplemental Indenture, the amendment to the Lease Agreement, if any, and the amendment to the Site Lease, if any, (ii) that the issuance of the Additional Bonds has been duly authorized by the Authority, (iii) that the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease have been duly authorized, executed and delivered by the Authority and the City, (iv) that upon execution and delivery of such Supplemental Indenture and any such amendments to the Lease Agreement and the Site Lease, this Indenture, as amended and supplemented by such Supplemental Indenture, and, if so amended, the Lease Agreement and the Site Lease, as amended by such amendments, will be valid and binding obligations of the Authority and the City, and (v) that the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease, in and of themselves, do not adversely affect the exclusion from gross income for federal income tax purposes of interest on Outstanding Tax-Exempt Bonds; (b) a Written Certificate of the Authority that the requirements of Section 2.04 hereof have been met; (c) a Written Certificate of the City that the requirements of Section 2.04 hereof have been met, which shall include a certification as to the fair rental value of the Property, after giving effect to any amendments to the Lease Agreement and the Site Lease entered into in connection with the issuance of the Additional Bonds and taking into account the use of proceeds of such Additional Bonds; (d) certified copies of the resolutions of the Board of Directors of the Authority and the City Council of the City authorizing the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease; (e) executed counterparts or duly authenticated copies of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease, with satisfactory evidence that any such amendments to the Lease Agreement and the Site Lease have been duly recorded in the appropriate records of the county in which the Property is located; (f) certified copies of the policies of insurance required by Section 5.01 of the Lease Agreement or certificates thereof, which shall evidence that the amounts of the insurance required 665 16 4127-3236-0228.4 under subsections (b) and (c) of Section 5.01 of the Lease Agreement have been increased, if applicable, to cover the amount of such Additional Bonds; and (g) an CLTA title insurance policy or other appropriate form of policy in the amount of the Additional Bonds of the type and with the endorsements described in Section 5.04 of the Lease Agreement. Upon the delivery to the Trustee of the foregoing instruments and upon the Trustee’s being satisfied from an examination of said instruments that all of the documents required by this Section have been delivered, the Trustee shall authenticate such Additional Bonds, and shall deliver such Additional Bonds to, or upon the request of, the Authority. Section 2.06. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the manual or facsimile signature of the Chair of the Board of Directors of the Authority attested by the manual or facsimile signature of the Secretary of the Authority. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers of the Authority who shall have signed or attested any of the Bonds shall cease to be such officers before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority. Section 2.07. Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit A hereto for the Series 2020 Bonds, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.08. Registration Books. The Trustee shall keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be available for inspection and copying by the Authority and the City upon reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as herein provided. Section 2.09. Transfer and Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The 666 17 4127-3236-0228.4 Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period commencing on the date five days before the date of selection of Bonds of such Series for redemption and ending on the date of mailing notice of such redemption, or with respect to any Bonds of such Series selected for redemption. Section 2.10. Book-Entry System. (a) Prior to the issuance of a Series of Bonds, the Authority may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds, and in such event, the Bonds of such Series for each maturity date shall be in the form of a separate single fully registered Bond (which may be typewritten); provided, however, that if different CUSIP numbers are assigned to Bonds of a Series maturing in a single year or, if Bonds of the same Series maturing in a single year are issued with different interest rates, additional bond certificates shall be prepared for each such maturity. Upon initial issuance, the ownership of each such Bond of such Series shall be registered in the Registration Books in the name of the Nominee, as nominee of the Depository. The Series 2020A Bonds and the Series 2020B Bonds shall initially be issued as Book-Entry Bonds. Payment of principal of, and interest and premium, if any, on, any Book-Entry Bond registered in the name of the Nominee shall be made on the applicable payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the Registration Books. (b) With respect to Book-Entry Bonds, the Authority, the City and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book-Entry Bonds. Without limiting the immediately preceding sentence, the Authority, the City and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any notice with respect to Book-Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds of a maturity to be redeemed in the event such Book-Entry Bonds are redeemed in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any amount with respect to principal of, or premium, if any, or interest on Book-Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The Authority, the City and the Trustee may treat and consider the Person in whose name each Book-Entry Bond is registered in the Registration Books as the absolute Owner of such Book-Entry Bond for the purpose of payment of principal of, and premium, if any, and interest on 667 18 4127-3236-0228.4 such Bond, for the purpose of selecting any Bonds, or portions thereof, to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Book-Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the Authority, the City and the Trustee shall not be affected by any notice to the contrary. (d) In the event of a redemption of all or a portion of a Book-Entry Bond, the Depository, in its discretion, (i) may request the Trustee to authenticate and deliver a new Book- Entry Bond, or (ii) if DTC is the sole Owner of such Book-Entry Bond, shall make an appropriate notation on the Book-Entry Bond indicating the date and amounts of the reduction in principal thereof resulting from such redemption, except in the case of final payment, in which case such Book-Entry Bond must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal of, and premium, if any, and interest on the Book-Entry Bonds only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State of California) the respective Owner, as shown in the Registration Books, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, and premium, if any, and interest on the Book-Entry Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Registration Books, shall receive an authenticated Book-Entry Bond. Upon delivery by the Depository to the Owners, the Authority, the City and the Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. (f) In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Authority shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Authority, the City or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Bonds other than the Owners, as shown on the Registration Books. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the Authority, the Authority, the City and the Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book-Entry Bonds for the Depository’s book-entry program. (g) In the event the Authority determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Bonds and that such Bonds should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Bonds. In such event, the Trustee shall transfer and exchange certificated Bonds as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as securities depository for Book-Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Authority shall discontinue the Book-Entry system with the Depository. If the Authority determines to replace the Depository with another qualified securities depository, the Authority shall prepare or direct the preparation of a new single, separate, fully registered Bond of the 668 19 4127-3236-0228.4 appropriate Series for each maturity date of such Book-Entry Bonds, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Authority fails to identify another qualified securities depository to replace the Depository, then the Book-Entry Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.09 and 2.11 hereof. Whenever the Depository requests the Authority to do so, the Authority shall cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book-Entry Bonds to any Participant having Book-Entry Bonds credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Bonds. (h) Notwithstanding any other provision of this Indenture to the contrary, if DTC is the sole Owner of the Bonds of a Series, so long as any Book-Entry Bond of such Series is registered in the name of the Nominee, all payments of principal of, and premium, if any, and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. (i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Authority, the City or the Trustee, with respect to any consent or other action to be taken by Owners of Book-Entry Bonds, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Bonds of a Series. Section 2.11. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like aggregate principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like aggregate principal amount in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture. 669 20 4127-3236-0228.4 Section 2.12. Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such Authorized Denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds of a Series it shall execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series may be surrendered for cancellation at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series and maturities in Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder. 670 21 4127-3236-0228.4 ARTICLE III REDEMPTION OF BONDS Section 3.01. Extraordinary Redemption. The Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Proceeds (other than Net Proceeds of rental interruption insurance) received with respect to all or a portion of the Property and deposited by the Trustee in the Redemption Fund in accordance with the provisions hereof, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. Section 3.02. Optional Redemption. (a) [The Series 2020A Bonds maturing on or before May 1, 20__, are not subject to optional redemption prior to their respective stated maturity dates. The Series 2020A Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturity dates, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) prepaid Base Rental Payments paid pursuant to subsection (a) of Section 6.02 of the Lease Agreement, or (ii) any other source of available funds, [at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium.]] (b) [The Series 2020B Bonds maturing on or before May 1, 20__, are not subject to optional redemption prior to their respective stated maturity dates. The Series 2020B Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturity dates, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) prepaid Base Rental Payments paid pursuant to subsection (a) of Section 6.02 of the Lease Agreement, or (ii) any other source of available funds, [at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium.]] Section 3.03. Mandatory Sinking Fund Redemption. The Series 2020A Bonds maturing May 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on May 1 in each year, commencing May 1, 20__, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium, in the aggregate respective principal amounts in the respective years as follows: Sinking Fund Redemption Date (May 1) Principal Amount to be Redeemed $ (Maturity) If some but not all of the Series 2020A Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.01 hereof, the principal amount of Series 2020A Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount 671 22 4127-3236-0228.4 of the Series 2020A Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.01 hereof, such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis, in amounts equal to Authorized Denominations, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Authority and the City. If some but not all of the Series 2020A Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.02 hereof, the principal amount of Series 2020A Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount of the Series 2020A Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.02 hereof, such reduction to be allocated among redemption dates in Authorized Denominations, as designated by the City in a Written Certificate of the City. The Series 2020B Bonds maturing May 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on May 1 in each year, commencing May 1, 20__, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium, in the aggregate respective principal amounts in the respective years as follows: Sinking Fund Redemption Date (May 1) Principal Amount to be Redeemed $ (Maturity) If some but not all of the Series 2020B Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.01 hereof, the principal amount of Series 2020B Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount of the Series 2020B Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.01 hereof, such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis, in amounts equal to Authorized Denominations, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Authority and the City. If some but not all of the Series 2020B Bonds maturing on May 1, 20__ are redeemed pursuant to Section 3.02 hereof, the principal amount of Series 2020B Bonds maturing on May 1, 20__ to be redeemed pursuant to this Section shall be reduced by the aggregate principal amount of the Series 2020B Bonds maturing on May 1, 20__ so redeemed pursuant to Section 3.02 hereof, such reduction to be allocated among redemption dates in Authorized Denominations, as designated by the City in a Written Certificate of the City. Section 3.04. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any redemption pursuant to Section 3.01 hereof, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, (b) with respect to any optional redemption of Series 2020 Bonds, as directed in a Written Certificate of the City, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity 672 23 4127-3236-0228.4 in any manner which the Trustee in its sole discretion shall deem appropriate and fair. The Trustee shall promptly notify the Authority and the City in writing of the numbers of the Bonds so selected for redemption on such date. For purposes of such selection, any Bond may be redeemed in part in Authorized Denominations. Section 3.05. Notice of Redemption. The Trustee on behalf of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities of the Bonds to be redeemed (except in the event of redempti on of all of the Bonds of such maturity or maturities in whole), and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption. With respect to any notice of any optional redemption of Bonds of a Series, unless at the time such notice is given the Bonds to be redeemed shall be deemed to have been paid within the meaning of Section 9.02 hereof, such notice shall state that such redemption is conditional upon receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys that, together with other available amounts held by the Trustee, are sufficient to pay the redemption price of, and accrued interest on, the Bonds to be redeemed, and that if such moneys shall not have been so received said notice shall be of no force and effect and the Authority shall not be required to redeem such Bonds. In the event a notice of redemption of Bonds contains such a condition and such moneys are not so received, the redemption of Bonds as described in the conditional notice of redemption shall not be made and the Trustee shall, within a reasonable time after the date on which such redemption was to occur, give notice to the Persons and in the manner in which the notice of redemption was given, that such moneys were not so received and that there shall be no redemption of Bonds pursuant to such notice of redemption. Section 3.06. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in Authorized Denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered. Section 3.07. Effect of Notice of Redemption. Notice having been mailed as aforesaid, and moneys for the redemption price, and the interest to the applicable date fixed for redemption, having been set aside, the Bonds shall become due and payable on said date and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the redemption price thereof, together with interest accrued and unpaid to said date. If, on said date fixed for redemption, moneys for the redemption price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and 673 24 4127-3236-0228.4 become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed. 674 25 4127-3236-0228.4 ARTICLE IV PLEDGE AND ASSIGNMENT; FUNDS AND ACCOUNTS Section 4.01. Pledge and Assignment. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Lease Revenues and all amounts on deposit from time to time in the funds and accounts established hereunder (other than the Rebate Fund) are hereby pledged to the payment of the principal of and interest on the Bonds as provided herein, and the Lease Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding. Said pledge shall constitute a first lien on such assets. In order to secure the pledge of the Lease Revenues contained in this Section, the Authority hereby sells, assigns and transfers to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the Owners, all of its right, title and interest in and to the Site Lease and the Lease Agreement, including, without limitation, the right to receive Base Rental Payments and the right to exercise any remedies provided in the Lease Agreement in the event of a default by the City thereunder; provided, however, that the Authority shall retain the rights to indemnification and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement. The Trustee hereby accepts said assignment for the benefit of the Owners, subject to the provisions of this Indenture. The Trustee shall be entitled to and shall receive all of the Base Rental Payments, and any Base Rental Payments collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. Section 4.02. Costs of Issuance Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Fund.” On the Closing Date, the Trustee shall deposit in the Costs of Issuance Fund the amount required to be deposited therein pursuant to Section 2.03 hereof. (b) The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay Costs of Issuance upon submission to the Trustee of a Written Request of the City substantially in the form attached hereto as Exhibit D. Upon receipt of each such Written Request of the City, the Trustee shall pay the amount set forth in such Written Request as directed by the terms thereof. Each such Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. (c) On the date that is six months after the Closing Date, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to one or more accounts or subaccounts within the Payment Fund as directed in a Written Request of the City, and upon such transfer the Costs of Issuance Fund shall be closed. (d) If the Costs of Issuance Fund has been closed in accordance with the provisions hereof, the Costs of Issuance Fund shall be reopened and reestablished by the Trustee in connection 675 26 4127-3236-0228.4 with the issuance of any Additional Bonds, if so provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued. There shall be deposited in the Costs of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. Section 4.03. Payment Fund. (a) The Trustee shall establish and maintain a separate fund designated the “Payment Fund.” Within the Payment Fund, the Trustee shall establish and maintain a separate account designated the “Series 2020 Interest Account” and a separate account designated the “Series 2020 Principal Account.” Upon the issuance of Additional Bonds, the Trustee shall also establish and maintain, within the Payment Fund, a separate Interest Account and a separate Principal Account for each Series of Additional Bonds. (b) All Lease Revenues received by the Trustee shall be deposited by the Trustee in the Payment Fund; provided, however, that Net Proceeds, other than those constituting proceeds of rental interruption insurance received with respect to the Property, shall not be deposited in the Payment Fund but, rather, shall be applied as provided in Section 5.01 or Section 5.02 hereof, as applicable. There shall additionally be deposited in the applicable Interest Account and Principal Account of the Payment Fund amounts transferred from the related Reserve Account pursuant to subsection (c) of Section 4.05 hereof. (c) The Trustee, on each Interest Payment Date, shall transfer from the Payment Fund to each Interest Account an amount equal to the interest on the related Series of Bonds coming due on such Interest Payment Date; provided, however, that if and to the extent that such amount is available for such Series of Bonds in any capitalized interest subaccount established pursuant to a Supplemental Indenture on such Interest Payment Date, the Trustee shall, instead, transfer such amount from such capitalized interest subaccount to the related Interest Account on such Interest Payment Date. Moneys in each Interest Account shall be withdrawn and used by the Trustee for the purpose of paying interest on the related Series of Bonds as and when due and payable. (d) The Trustee, on each Principal Payment Date, shall transfer from the Payment Fund to each Principal Account an amount equal to the principal of the related Series of Bonds, including principal due and payable by reason of mandatory sinking fund redemption, coming due on such date. Moneys in each Principal Account shall be withdrawn and used by the Trustee for the purpose of paying principal of the related Series of Bonds, including principal due and payable by reason of mandatory sinking fund redemption, as and when due and payable. Section 4.04. Redemption Fund. [The Trustee shall establish and maintain a special fund designated the “Redemption Fund.” The Trustee shall deposit in the Redemption Fund any amounts received from the City in connection with the City’s exercise of its right pursuant to Section 6.02 of the Lease Agreement to cause Bonds to be optionally redeemed. Additionally, the Trustee shall deposit in the Redemption Fund any amounts required to be deposited therein pursuant to Section 5.01 or Section 5.02 hereof. Amounts in the Redemption Fund shall be disbursed therefrom by the Trustee for the payment of the redemption price of, and accrued interest on, Bonds redeemed pursuant to Section 3.01 or Section 3.02 hereof.] Section 4.05. Reserve Fund. (a) [The Series 2020 Bonds shall not be secured by any Reserve Account.] When provided for in a Supplemental Indenture, the Trustee shall establish and 676 27 4127-3236-0228.4 maintain a special fund designated the “Reserve Fund.” Within the Reserve Fund, the Trustee, when provided for in a Supplemental Indenture, shall establish and maintain a separate account designated the “Common Reserve Account” and one or more additional Reserve Accounts, each of which may secure one or more Series of Bonds pursuant hereto and pursuant to the Supplemental Indenture authorizing the issuance thereof. In connection with the issuance of Additional Bonds, there shall be deposited in the Common Reserve Account or any other Reserve Account established and/or maintained for such Additional Bonds, as applicable, the amount required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. (b) The City may substitute a Reserve Facility for all or part of the moneys on deposit in any Reserve Account by depositing such Reserve Facility with the Trustee, provided that, at the time of such substitution, the amount on deposit in such Reserve Account, together with the amount available under all Reserve Facilities on deposit in such Reserve Account, shall be at least equal to the Reserve Requirement for such Reserve Account. Moneys for which a Reserve Facility has been substituted as provided herein shall be transferred, at the election of the City, to the Redemption Fund for the purpose of redeeming the related Series of Bonds or, upon receipt of an Opinion of Counsel that such transfer will not, in and of itself, adversely affect the exclusion of interest on Outstanding Tax-Exempt Bonds from gross income for federal income tax purposes, to the City to be applied to the payment of capital costs of the City. Amounts on deposit in any Reserve Account which were not derived from payments under any Reserve Facility credited to such Reserve Account to satisfy a portion of the Reserve Requirement for such Reserve Account shall be used and withdrawn by the Trustee prior to using and withdrawing any amounts derived from payments under such Reserve Facility. In order to accomplish such use and withdrawal of such amounts not derived from payments under any such Reserve Facility, the Trustee shall, as and to the extent necessary, liquidate any investments purchased with such amounts. (c) In the event that, on the second Business Day prior to a date on which the Trustee is to transfer money from the Payment Fund to the Interest Accounts pursuant to subsection (c) of Section 4.03 hereof or to the Principal Accounts pursuant to subsection (e) of Section 4.03 hereof, amounts in the Payment Fund are insufficient for such purpose, the Trustee shall withdraw from each Reserve Account, to the extent of any funds therein, the amount of the insufficiency of the related Series of Bonds, and shall transfer any amounts so withdrawn first to the related Interest Account and then to the related Principal Account. If the amount on deposit in any Reserve Account is not sufficient to make such transfer, the Trustee shall make a claim under any available Reserve Facility, in accordance with the provisions thereof, in order to obtain an amount sufficient to allow the Trustee to make such transfer as and when required. (d) In the event of any transfer from a Reserve Account or the making of any claim under a Reserve Facility, the Trustee shall, within two Business Days thereafter, provide written notice to the Authority and the City of the amount and the date of such transfer or claim; provided, however, that such notice need not be provided if such transfer is made pursuant to subsection (f) or subsection (g) of this Section. (e) If the sum of the amount on deposit in any Reserve Account, plus the amount available under all available Reserve Facilities held for such Reserve Account, is less than the Reserve Fund Requirement for such Reserve Account, the first of Base Rental Payments thereafter 677 28 4127-3236-0228.4 received from the City under the Lease Agreement and not needed to pay the principal of and interest on the Bonds on the next Interest Payment Date or Principal Payment Date shall be used, first, to reinstate the amounts available under any Reserve Facilities that have been drawn upon and, second, to increase the amount on deposit in the Reserve Accounts, so that the amount available under all available Reserve Facilities, when added to the amount on deposit in the Reserve Fund, shall equal the Reserve Requirement for each Reserve Account; provided, however, that such Base Rental Payments shall be allocated among all Reserve Accounts ratably without preference or priority of any kind, according to each Reserve Account’s percentage share of the total deficiencies in all Reserve Accounts. (f) If, as a result of the payment of principal of or interest on any Series of Bonds, the Reserve Requirement applicable to such Series of Bonds is reduced, amounts on deposit in the applicable Reserve Account in excess of such reduced Reserve Requirement shall be transferred to the related Interest Account(s) and Principal Account(s) of the Payment Fund as directed in a Written Request of the City. (g) On any date on which Bonds of a Series are defeased in accordance with Section 9.02 hereof, the Trustee shall, if so directed in a Written Request of the City, transfer any moneys in the related Reserve Account in excess of the applicable Reserve Requirement resulting from such defeasance to the entity or fund so specified in such Written Request of the City, to be applied to such defeasance. (h) Moneys, if any, on deposit in a Reserve Account shall be withdrawn and applied by the Trustee for the final payments of principal of and interest on the Bonds secured by such Reserve Account. Section 4.06. Rebate Fund. (a) The Trustee shall establish and maintain a special fund designated the “Rebate Fund.” There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Authority or a Written Request of the City. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Bonds pursuant to Article IX hereof or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Authority or the City, and shall have no liability or responsibility to enforce compliance by the Authority or the City with the terms of the Tax Certificate. The Trustee may conclusively rely upon the determinations, calculations and certifications of the Authority or the City required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the calculations of the Authority or the City. (b) Any funds remaining in the Rebate Fund after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall, upon receipt by the Trustee of a Written Request of the City, be withdrawn by the Trustee and remitted to the City. 678 29 4127-3236-0228.4 Section 4.07. Investments. (a) Except as otherwise provided herein, any moneys held by the Trustee in the funds and accounts established hereunder shall be invested by the Trustee upon the Written Request of the City, received at least two Business Days prior to the investment date, only in Permitted Investments, and in the absence of such direction shall be invested by the Trustee in Permitted Investments described in clause ([__]) of the definition thereof; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a Written Request of the City specifying a specific money market fund that satisfies the requirements of said paragraph in which such investment is to be made and, if no such Written Request is so received, the Trustee shall hold such moneys uninvested. The Trustee may act as principal or agent in the acquisition or disposition of any such investment. The Trustee shall not be liable or responsible for any loss suffered in connection with any such investment made by it under the terms of and in accordance with this Section. The Trustee shall sell or present for redemption any obligations so purchased whenever it shall be necessary in order to provide moneys to meet any payment of the funds so invested, and the Trustee shall not be liable or responsible for any losses resulting from any such investment sold or presented for redemption. Permitted Investments that are registerable securities shall be registered in the name of the Trustee. The Trustee shall be entitled to rely upon any investment directions from the City as conclusive certification to the Trustee that the investments described therein are permitted by the general laws of the State of California applicable to investments by cities. (b) Investments purchased with funds on deposit in the Payment Fund shall mature not later than the payment date immediately succeeding the investment. Investments purchased with funds on deposit in the Redemption Fund shall be invested in Permitted Investments described in clause (1)(a) of the definition thereof that mature on or prior to the redemption date on which such funds are to be applied to the redemption of Bonds. Notwithstanding anything to the contrary contained herein, investments purchased with funds on deposit in any Reserve Account of the Reserve Fund shall have an average aggregate weighted term to maturity of not greater than five years; provided, however, that if such investments may be redeemed at par so as to be available on each Interest Payment Date, any amount in such Reserve Account may be invested in such redeemable Permitted Investments maturing on any date on or prior to the final maturity date of the Bonds. (c) Investments (except investment agreements) in any fund or account established hereunder shall be valued, exclusive of accrued interest (i) not less often than annually nor more often than monthly, and (ii) upon any draw upon any Reserve Account. All investments of amounts deposited in any fund or account established hereunder shall be valued at the market value thereof. (d) Any interest or profits received with respect to investments held in any of the funds or accounts established under this Indenture (other than any Reserve Account) shall be retained therein. Any interest or profits received with respect to investments held in a Reserve Account shall be transferred to the related Interest Account. Notwithstanding the foregoing, any such transfer or disbursement shall be made from a Reserve Account only if and to the extent that, after such transfer, the amount on deposit in such Reserve Account, together with amounts available to be drawn on all Reserve Facilities held for such Reserve Account, if any, is at least equal to the Reserve Requirement for such Reserve Account. 679 30 4127-3236-0228.4 (e) The Authority and the City acknowledges that to the extent that regulations of the Comptroller of the Currency grant the Authority or the City the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, to the extent permitted by law, the Authority and the City specifically waives receipt of such confirmations. The Trustee shall furnish the Authority and the City periodic transaction statements that include detail for all investment transactions made by the Trustee hereunder. 680 31 4127-3236-0228.4 ARTICLE V NET PROCEEDS AND TITLE INSURANCE; COVENANTS Section 5.01. Application of Net Proceeds. If the Property or any portion thereof shall be damaged or destroyed, subject to the further requirements of this Section, the City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair or replacement thereof, unless the City elects not to repair or replace the Property or the affected portion thereof in accordance with the provisions hereof. The Net Proceeds of any insurance (other than Net Proceeds of rental interruption insurance), including the proceeds of any self-insurance, received on account of any damage or destruction of the Property or a portion thereof shall as soon as possible be deposited with the Trustee and be held by the Trustee in a special account and made available for and, to the extent necessary, shall be applied to the cost of repair or replacement of the Property or the affected portion thereof upon receipt of a Written Request of the City, together with invoices therefor. Pending such application, such proceeds may, pursuant to a Written Request of the City, be invested by the Trustee in Permitted Investments that mature not later than such times as moneys are expected to be needed to pay such costs of repair or replacement. Notwithstanding the foregoing, the City shall, within 60 days of the occurrence of the event of damage or destruction, notify the Trustee in writing as to whether the City intends to replace or repair the Property or the portions of the Property which were damaged or destroyed. If the City does intend to replace or repair the Property or portions thereof, the City shall deposit with the Trustee the full amount of any insurance deductible to be credited to the special account referred to above. If such damage, destruction or loss was such that there resulted a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments results from such damage or destruction pursuant to Section 3.06 of the Lease Agreement, then the City shall be required either to (a) apply sufficient funds from the insurance proceeds and other legally available funds to the replacement or repair of the Property or the portions thereof which have been damaged to the condition which existed prior to such damage or destruction, or (b) apply sufficient funds from the insurance proceeds and other legally available funds to the redemption, pursuant to Section 3.01 hereof (i) of all of the Outstanding Bonds, or (ii) of such portion of the Outstanding Bonds as shall result in the remaining, non-abated Base Rental Payments being sufficient to pay, as and when due, the principal of and interest on the Bonds that will remain Outstanding after such redemption. If the City is required to apply funds from the insurance proceeds and other legally available funds to the redemption of Bonds in accordance with clause (b) above, the City shall direct the Trustee, in a Written Request of the City, to transfer the funds to be applied to such redemption to the Redemption Fund and the Trustee shall transfer such funds to the Redemption Fund. Any proceeds of any insurance, including the proceeds of any self-insurance remaining after the portion of the Property which was damaged or destroyed is restored to and made available to the City in substantially the same condition and annual fair rental value as that which existed prior to the damage or destruction as required by clause (a) above, or the redemption of Bonds as required by clause (b) above, in each case as evidenced by a Written Certificate of the City to such effect, shall be deposited in the Reserve 681 32 4127-3236-0228.4 Accounts, ratably without preference or priority of any kind according to each Reserve Account’s percentage share of the total deficiencies in all Reserve Accounts, to the extent that the amounts therein are less than the applicable Reserve Requirement. If the City is not required to replace or repair the Property, or the affected portion thereof, as set forth in clause (a) above, or to use such amounts to redeem Bonds as set forth in clause (b) above, then such proceeds shall be deposited in the Reserve Accounts, ratably without preference or priority of any kind according to each Reserve Account’s percentage share of the total deficiencies in all Reserve Accounts, to the extent that the amounts therein are less than the applicable Reserve Requirement. Any amounts not required to be so deposited into the Reserve Accounts shall, if there is first delivered to the Trustee a Written Certificate of the City to the effect that the annual fair rental value of the Property after such damage or destruction, and after any repairs or replacements made as a result of such damage or destruction, is at least equal to 100% of the maximum amount of Base Rental Payments becoming due under the Lease Agreement in the then current Rental Period or any subsequent Rental Period and the fair replacement value of the Property after such damage or destruction is at least equal to the sum of the then unpaid principal components of Base Rental Payments, be paid to the City to be used for any lawful purpose. The proceeds of any award in eminent domain shall be deposited by the Trustee in the Redemption Fund and applied to the redemption of Bonds pursuant to Section 3.01 hereof. Section 5.02. Title Insurance. Net Proceeds of any policy of title insurance received by the Trustee in respect of the Property shall be applied and disbursed by the Trustee as follows: (a) if the City determines that the title defect giving rise to such proceeds has not substantially interfered with its use and occupancy of the Property and will not result in an abatement of Rental Payments payable by the City under the Lease Agreement, such proceeds shall, upon Written Request of the City, be remitted to the City and used for any lawful purpose thereof; or (b) if the City determines that the title defect giving rise to such proceeds has substantially interfered with its use and occupancy of the Property and will result in an abatement in whole or in part of Rental Payments payable by the City under the Lease Agreement, then the City shall, in a Written Request of the City, direct the Trustee to, and the Trustee shall immediately deposit such proceeds in the Redemption Fund and such proceeds shall be applied to the redemption of Bonds in the manner provided in Section 3.01 hereof. Section 5.03. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal of, and premium, if any, and interest on the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of the Base Rental Payments and other assets pledged for such payment as provided in this Indenture and received by the Authority or the Trustee. Section 5.04. Compliance with Indenture. The Authority and the City shall faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in this Indenture required to be complied with, kept, observed and performed by them. 682 33 4127-3236-0228.4 Section 5.05. Compliance with Site Lease and Lease Agreement. The Authority and the City shall faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Site Lease and the Lease Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, shall enforce the Site Lease and the Lease Agreement against the other party thereto in accordance with their respective terms. Section 5.06. Observance of Laws and Regulations. The Authority, the City and the Trustee shall faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired. Section 5.07. Other Liens. The City shall keep the Property and all parts thereof free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability which materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City thirty days’ written notice to comply therewith and failure of the City to so comply within such thirty-day period) may defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its obligation hereunder to perform such agreements and covenants. The Trustee shall have no liability with respect to any determination made in good faith to proceed or decline to defend, pay or compromise any such claim or demand. So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof. The Authority and the Trustee shall not encumber the Property other than in accordance with the Site Lease, the Lease Agreement and this Indenture. Section 5.08. Prosecution and Defense of Suits. The City shall promptly, upon request of the Trustee or any Owner, take such action from time to time as may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Property or any part thereof, whether now existing or hereafter developing, shall prosecute all actions, suits or other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee and every Owner harmless from all cost, damage, expense or loss, including attorneys’ fees, which they or any of them may incur by reason of any such cloud, defect, action, suit or other proceeding. Section 5.09. Accounting Records and Statements. The Trustee shall keep proper accounting records in which complete and correct entries shall be made of all transactions of the 683 34 4127-3236-0228.4 Trustee relating to the receipt, deposit and disbursement of the Lease Revenues, and such accounting records shall be available for inspection by the Authority and the City at reasonable hours and under reasonable conditions. The Trustee shall, upon written request, make copies of the foregoing available, at the Owner’s expense, to any Owner or its agent duly authorized in writing. Section 5.10. Recordation. The City shall record, or cause to be recorded, with the appropriate county recorder, the Lease Agreement and the Site Lease, or memoranda thereof, and a memorandum of the assignment of the Authority’s right, title and interest in and to the Site Lease and the Lease Agreement pursuant to Section 4.01 hereof. Section 5.11. Tax Covenants. (a) Neither the Authority nor the City shall take any action , or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the Series 2020A Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, each of the Authority and the City shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Series 2020A Bonds. (b) In the event that at any time the Authority or the City is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee in any of the funds or accounts established hereunder, the Authority or the City shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (c) Notwithstanding any provisions of this Section, if the Authority or the City shall provide to the Trustee an Opinion of Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Series 2020A Bonds, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent. Section 5.12. Continuing Disclosure. The City shall comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of the City to comply with the Continuing Disclosure Certificate shall not constitute an Event of Default hereunder; provided, however, that the Trustee, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Series 2020 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee, or any holder or Beneficial Owner of the Series 2020 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. Section 5.13. Notifications Required by the Act. If at any time the Trustee fails to pay principal or interest due on any scheduled payment date for the Bonds or withdraws funds from a Reserve Account to pay principal and interest on any Series of Bonds, the Trustee shall notify the Authority in writing of such failure or withdrawal, as applicable, and, in accordance with Section 6599.1(c) of the Act, the Authority shall notify the California Debt and Investment 684 35 4127-3236-0228.4 Advisory Commission of such failure or withdrawal, as applicable, within 10 days of the failure or withdrawal, as applicable. Section 5.14. Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Owner, the Authority and the City shall promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee and the Owners all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon them hereby or by the Site Lease or the Lease Agreement. 685 36 4127-3236-0228.4 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES Section 6.01. Events of Default. The occurrence, from time to time, of any one or more of the following events shall constitute an Event of Default under this Indenture: (a) failure to pay any installment of principal of any Bond as and when the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise; (b) failure to pay any installment of interest on any Bond as and when the same shall become due and payable; (c) a Lease Default Event shall have occurred and be continuing; (d) failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Authority by the Trustee, the City or the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if, in the reasonable opinion of the Authority, the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the Authority within such 30 day period and the Authority shall thereafter diligently and in good faith cure such failure in a reasonable period of time; (e) failure by the City to observe and perform any of the covenants, agreements or conditions on its part in this Indenture contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the City by the Trustee, the Authority or the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if, in the reasonable opinion of the City, the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the City within such 30 day period and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time; or (f) the Authority or the City shall commence a voluntary case under Title 11 of the United States Code or any substitute or successor statute. Section 6.02. Action on Default. In each and every case during the continuance of an Event of Default, the Trustee may and, at the direction of the Owners of not less than a majority of the aggregate principal amount of Bonds then Outstanding (and upon indemnification of the Trustee to its reasonable satisfaction as provided herein), shall, upon notice in writing to the Authority and the City, exercise any of the remedies granted to the Authority under the Lease Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by the Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the 686 37 4127-3236-0228.4 specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 6.03 hereof. Section 6.03. Other Remedies of the Trustee. During the continuance of an Event of Default, the Trustee shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority or the City or any member, director, officer or employee thereof, and to compel the Authority or the City or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein or in the Bonds; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee or the Owners; or (c) by suit, action or proceeding in any court of competent jurisdiction, to require the Authority or the City, or both, to account as if it or they were the trustee or trustees of an express trust. Section 6.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 6.05. Application of Amounts After Default. If an Event of Default shall occur and be continuing, all Lease Revenues and any other funds thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order: (a) to the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; (b) to the payment of all amounts then due for interest on the Bonds, ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable, with interest on the overdue interest at the rate borne by the respective Bonds; and (c) to the payment of all amounts then due for principal of the Bonds, ratably without preference or priority of any kind, according to the amounts of principal of the Bonds due and payable, with interest on the overdue principal at the rate borne by the respective Bonds. Notwithstanding anything herein to the contrary, any amounts held in a Reserve Account shall be applied by the Trustee only after the application of all Lease Revenues and other funds pursuant to subsections (a), (b) and (c) above and shall only be applied as provided by subsections 687 38 4127-3236-0228.4 (a), (b) and (c) above toward payments related to the Series of Bonds secured by such Reserve Account. Section 6.06. Power of Trustee to Enforce. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture. Section 6.07. Bond Owners Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided, however, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and, provided, further, that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Owners not parties to such direction. Section 6.08. Limitation on Bond Owners’ Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Act or any other applicable law with respect to such Bonds, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default, (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name, (c) such Owner or said Owners shall have tendered to the Trustee indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and (d) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder or under law; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners, or to enforce any right under the Bonds, this Indenture, the Act or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners, subject to the provisions of this Indenture. Section 6.09. Termination of Proceedings. If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then, subject to any such adverse determination, the Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. In case any proceedings taken by the Trustee or any one or more Owners on account of any Event of Default shall have been discontinued or 688 39 4127-3236-0228.4 abandoned for any reason or shall have been determined adversely to the Trustee or any Owner, then in every such case the Trustee, such Owner, the Authority and the City, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Trustee, the Owners, the Authority and the City shall continue as though no such proceedings had been taken. Section 6.10. No Waiver of Default. No delay or omission of the Trustee or of any Owner to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, and every power and remedy given by this Indenture to the Trustee or to the Owners may be exercised from time to time and as often as may be deemed expedient. 689 40 4127-3236-0228.4 ARTICLE VII THE TRUSTEE Section 7.01. Duties and Liabilities of Trustee. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default which has not been cured or waived, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. Section 7.02. Removal and Resignation of the Trustee. The Authority and the City may by an instrument in writing, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal amount of the Bonds at the time Outstanding (or their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee and any successor Trustee shall be a commercial bank with trust powers having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 (or be part of a bank holding company with a combined capital and surplus of at least $50,000,000) and subject to supervision or examination by federal or state authorities. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority and the City shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the Authority and the City do not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the City, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and the City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless, at the written request of the Authority, the City or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and 690 41 4127-3236-0228.4 interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Indenture and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 7.03. Compensation and Indemnification of the Trustee. The City shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include “overhead expenses” except as such expenses are included as a component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder; provided, however, that the Trustee shall not have any lien for such compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder. The City shall, to the extent permitted by law, indemnify and save the Trustee harmless against any liabilities, costs, claims or expenses, including those of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder and under any related documents, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its willful misconduct. The duty of the City to indemnify the Trustee shall survive the termination and discharge of this Indenture and the resignation or removal of the Trustee. Section 7.04. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to this Indenture, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. Under no circumstances shall the Trustee request or be entitled to indemnification from the City for taking 691 42 4127-3236-0228.4 actions required by and in accordance with this Indenture, including, but not limited to, causing payments of principal of and interest on the Bonds to be made to the Owners thereof and carrying out redemptions of the Bonds in accordance with the terms hereof. The Trustee may consult with counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith. The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement or for statements made in the preliminary or final official statement relating to the Bonds, or of the title to the Property. Except as otherwise expressly provided herein, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Authority or a Written Certificate of the City, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority or the City, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Authority or the City as freely as if it were not the Trustee hereunder. The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder. 692 43 4127-3236-0228.4 The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal amount of Bonds then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 7.05. Appointment of Co-Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the laws of the State of California) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional institution as a separate or co-trustee. The following provisions of this Section are adopted to these ends. In the event that the Trustee appoints an additional institution as a separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable by either of them. Any co-trustee shall be bound by the standards of care, duties and obligations of the Trustee under this Indenture as if such co-trustee were the Trustee. Any co-trustee shall be a national banking association, trust company or commercial bank doing business in the State of California and at all times shall have a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If such national banking association, trust company or commercial bank publishes a report of condition at least annually, pursuant to 693 44 4127-3236-0228.4 law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such national banking association, trust company or commercial bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Should any instrument in writing from the Authority or the City be required by the separate trustee or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority or the City. In case any separate trustee or co-trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new Trustee or successor to such separate trustee or co-trustee. 694 45 4127-3236-0228.4 ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.01. Supplemental Indentures. (a) This Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners hereunder may be modified or amended at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into when the prior written consents of the Owners of a majority of the aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 10.06 hereof, are filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bond, reduce the amount of principal thereof or the rate of interest thereon or alter the redemption provisions with respect thereto, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, without the consent of the Owners of all of the Bonds then Outstanding, or (iii) permit the creation of any lien on the Lease Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Lease Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all Bonds then Outstanding, or (iv) amend this Section without the prior written consent of the Owners of all Bonds then Outstanding. (b) This Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners hereunder may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the consent of any Owners for any one or more of the following purposes: (i) to add to the covenants and agreements of the Authority or the City in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority or the City; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture or in regard to questions arising hereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Section 2.04 and Section 2.05 hereof; (iv) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on Tax-Exempt Bonds or maintain any federal interest subsidies expected to be received with respect to any Bonds; and 695 46 4127-3236-0228.4 (v) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners; provided, however, that the Authority, the City and the Trustee may rely in entering into any such amendment or supplement upon an Opinion of Counsel stating that the requirements of this paragraph have been met with respect to such amendment or supplement. (c) Promptly after the execution by the Authority, the City and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority or the City), by first class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. Section 8.02. Effect of Supplemental Indenture. Upon the execution and delivery of any Supplemental Indenture entered into pursuant to subsection (a) or (b) of Section 8.01 hereof, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the City, the Trustee and the Owners shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 8.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the effective date of any Supplemental Indenture pursuant to this Article may and, if the Authority or the City so determines, shall bear a notation by endorsement or otherwise in form approved by the Authority, the City and the Trustee as to any modification or amendment provided for in such Supplemental Indenture and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date, and presentation of such Bond for such purpose at the Office of the Trustee, a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date, and presentation of such Bond for such purpose at the Office of the Trustee, such a new Bond in equal principal amount of the same Series, interest rate and maturity shall be exchanged for such Owner’s Bond so surrendered. Section 8.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment or modification as to any particular Bond owned by it, provided that due notation thereof is made on such Bond. 696 47 4127-3236-0228.4 ARTICLE IX DEFEASANCE Section 9.01. Discharge of Indenture. (a) If (i) the Authority shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, and (ii) all other amounts due and payable hereunder and under the Lease Agreement shall have been paid, then the Owners shall cease to be entitled to the pledge of the Lease Revenues and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on the Bonds. (b) Subject to the provisions of subsection (a) of this Section, when any Bond shall have been paid and if, at the time of such payment, each of the Authority and the City shall have kept, performed and observed all of the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by it or on its part on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bond and such Bond shall cease to be entitled to the pledge of the Lease Revenues and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City hereunder shall cease, terminate, become void and be completely discharged and satisfied as to such Bond. (c) Notwithstanding the discharge and satisfaction of this Indenture or the discharge and satisfaction of this Indenture in respect of any Bond, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners of the Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the discharge and satisfaction of this Indenture, the provisions of Section 7.03 hereof relating to the compensation of the Trustee shall remain in effect and shall be binding upon the Authority, the City and the Trustee. Section 9.02. Bonds Deemed To Have Been Paid. (a) If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bond and the payment of the interest thereon to the maturity or redemption date thereof, such Bond shall be deemed to have been paid within the meaning and with the effect provided in Section 9.01 hereof. Any Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 9.01 hereof if (i) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall 697 48 4127-3236-0228.4 have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 3.05 hereof, notice of redemption of such Bond on said redemption date, said notice to be given in accordance with Section 3.05 hereof, (ii) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient, or (B) Defeasance Securities, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which shall be sufficient to pay when due the interest to become due on such Bond on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bond, and (iii) in the event such Bond is not by its terms subject to redemption within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the owners of such Bond that the deposit required by clause (ii) above has been made with the Trustee and that such Bond is deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bond. Neither the money nor the Defeasance Securities deposited with the Trustee pursuant to this subsection in connection with the deemed payment of Bonds, nor principal or interest payments on any such Defeasance Securities, shall be withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal of and, premium, if any, and interest on such Bonds. (b) No Bond shall be deemed to have been paid pursuant to clause (ii)(B) of subsection (a) of this Section unless the Authority or the City shall cause to be delivered (A) an executed copy of a Verification Report with respect to such deemed payment, addressed to the Authority, the City and the Trustee, (B) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification Report and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, and (C) a copy of an Opinion of Counsel, dated the date of such deemed payment and addressed to the Authority, the City and the Trustee, to the effect that such Bond has been paid within the meaning and with the effect expressed in this Indenture, and all agreements, covenants and other obligations of the Authority and the City hereunder as to such Bond have ceased, terminated, become void and been completely discharged and satisfied. (c) The Trustee may seek and is entitled to rely upon (i) an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that the conditions precedent to a deemed payment pursuant to clause (ii) of subsection (a) of this Section have been satisfied, and (ii) such other opinions, certifications and computations, as the Trustee may reasonably request, of accountants or other financial consultants concerning the matters described in subsection (b) of this Section. Section 9.03. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment and discharge of the principal of, or premium or interest on, any Bonds which remain unclaimed for two years after the date when such principal, premium or interest has become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when such principal, premium or interest become payable, shall, at the Written Request of the Authority, be repaid by the Trustee 698 49 4127-3236-0228.4 to the City as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of such principal, premium or interest. 699 50 4127-3236-0228.4 ARTICLE X MISCELLANEOUS Section 10.01. Benefits of Indenture Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any Person other than the Authority, the City, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Authority or the City shall be for the sole and exclusive benefit of the Trustee and the Owners. Section 10.02. Successor Deemed Included in all References to Predecessor. Whenever the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Authority, the City or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 10.03. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or its attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which such notary public or other officer purports to act that the Person signing such declaration, request or other instrument or writing acknowledged to such notary public or other officer the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient. The ownership of any Bond and the amount, payment date, number and date of owning the same may be proved by the Registration Books. Any declaration, request or other instrument in writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority, the City or the Trustee in good faith and in accordance therewith. Section 10.04. Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of any moneys, including without limitation, the principal of or interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of the Authority or the City from the performance of any official duty provided by any applicable provisions of law, by the Lease Agreement or hereby. Section 10.05. Acquisition of Bonds by Authority or City. All Bonds acquired by the Authority or the City, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. 700 51 4127-3236-0228.4 Section 10.06. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon the request of the Trustee, the Authority and the City shall specify to the Trustee in a Written Certificate of the Authority and a Written Certificate of the City, as applicable, those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Written Certificates. Section 10.07. Money Held for Particular Bonds. The money held by the Trustee for the payment of the principal of or premium or interest on particular Bonds due on any date (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 9.03 hereof, but without any liability for interest thereon. Section 10.08. Funds and Accounts. Any fund or account required to be established and maintained pursuant hereto by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Bonds and the rights of the Owners. The Trustee may establish such funds and accounts as it deems necessary to perform its obligations hereunder. The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Indenture. Section 10.09. Gender and References; Article and Section Headings. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. Unless the context otherwise clearly requires, all references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, subsection or clause hereof. 701 52 4127-3236-0228.4 Section 10.10. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Authority, the City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law. The Authority, the City and the Trustee hereby declare that they would have executed this Indenture, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution, authentication, issuance and delivery of the Bonds pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any Person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 10.11. California Law. This Indenture and the Bonds shall be construed and governed in accordance with the laws of the State of California. Section 10.12. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Huntington Beach 200 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Authority: Huntington Beach Public Financing Authority c/o City of Huntington Beach 200 Main Street Huntington Beach, California 92648 Attention: Chief Financial Officer If to the Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section. 702 53 4127-3236-0228.4 Section 10.13. Business Days. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture and, unless otherwise specifically provided in this Indenture, no interest shall accrue for the period from and after such nominal date. Section 10.14. Execution in Counterparts. This Indenture may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the Authority has caused this Indenture to be signed in its name by its representative thereunto duly authorized, the City has caused this Indenture to be signed in its name by its representative thereunto duly authorized and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written. HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: Robin Estanislau, Secretary CITY OF HUNTINGTON BEACH By: U.S. BANK NATIONAL ASSOCIATION By: Authorized Officer 703 A-1 4127-3236-0228.4 EXHIBIT A FORM OF SERIES 2020 BOND No. R- ***$*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, SERIES 2020[A][B] [(TAX-EXEMPT)][(FEDERALLY TAXABLE)] MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. May 1, 20__ ___% _______, 20__ REGISTERED OWNER: Cede & Co. PRINCIPAL AMOUNT: _____________________________ DOLLARS The Huntington Beach Public Financing Authority (the “Authority”), for value received, hereby promises to pay to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof, payable semiannually on May 1 and November 1 in each year, commencing _________, 20__ (the “Interest Payment Dates”), until payment of such Principal Amount in full. This Bond is issued pursuant to the Master Indenture, dated as of [__________] 1, 2020 (the “Indenture”), by and among the Authority, the City of Huntington Beach (the “City”) and U.S. Bank National Association, as trustee. Capitalized undefined terms used herein have the meanings ascribed thereto in the Indenture. This Bond shall bear interest from the Interest Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date, whether or not such day is a business day, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to ________ 15, 20__, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of U.S. Bank National Association, as trustee, or any successor trustee under the Indenture (the “Trustee”), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the “Office of the Trustee”). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. 704 A-2 4127-3236-0228.4 This Bond is one of a series of a duly authorized issue of bonds designated “Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series [A][B] [(Tax-Exempt)][(Federally Taxable)]” (the “Series 2020[A][B] Bonds”) in the aggregate principal amount of $[__________]. The Series 2020[A][B] Bonds are issued pursuant to the Indenture, and this reference incorporates the Indenture herein. An additional series of bonds, the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series [A][B] [(Tax-Exempt)][(Federally Taxable)] (the “Series 2020[A][B] Bonds”), in the aggregate principal amount of $[__________], have also been issued pursuant to the terms of the Indenture. The Series 2020A Bonds and the Series 2020B Bonds are collectively referred to at the “Series 2020 Bonds.” Pursuant to and as more particularly provided in the Indenture, Additional Bonds may be issued by the Authority payable from Lease Revenues as provided in the Indenture on a parity with the Series 2020 Bonds. The Series 2020 Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is entered into, and this Bond is issued under, the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code (the “Act”) and the laws of the State of California. Reference is hereby made to the Indenture and to any and all amendments thereof and supplements thereto for a description of the agreements, conditions, covenants and terms securing the Bonds, for the nature, extent and manner of enforcement of such agreements, conditions, covenants and terms, for the rights, duties and immunities of the Trustee, for the rights and remedies of the Owners of the Bonds with respect thereto and for the other agreements, conditions, covenants and terms upon which the Bonds are issued thereunder, to all of which provisions the Registered Owner by acceptance hereof, assents and agrees. The Bonds are special obligations of the Authority, payable solely from the Lease Revenues and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. The Lease Revenues consist of all Base Rental Payments payable by the City pursuant to the Master Lease Agreement, dated as of [__________] 1, 2020, by and between the City, as lessee, and the Authority, as lessor, (the “Lease Agreement”), including any prepayments thereof, any Net Proceeds and any amounts received by the Trustee as a result of or in connection with the Trustee’s pursuit of remedies under the Lease Agreement upon a Lease Default Event. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Lease Revenues and all amounts on deposit from time to time in the funds and accounts established under the Indenture (other than the Rebate Fund) are pledged to the payment of the principal of and interest on the Bonds as provided therein, and the Lease Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding. Said pledge constitutes a first lien on such assets. In order to secure such pledge of the Lease Revenues, the Authority has sold assigned and transferred to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the Owners, all of its right, title and interest in and to the Site Lease and the Lease Agreement, including, without limitation, the right to receive Base Rental Payments and the right to exercise any remedies provided in the Lease Agreement in the event of a default by the City thereunder; provided, however, that the Authority has retained the rights to indemnification and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement. 705 A-3 4127-3236-0228.4 The Bonds are issuable as fully registered Bonds without coupons in Authorized Denominations ($5,000 or any integral multiple thereof). [The Series 2020 Bonds are subject to extraordinary, optional and mandatory redemption at the times, in the manner, at the redemption prices and upon notice as specified in the Indenture.] Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. To the extent and in the manner permitted by the terms of the Indenture, the provisions of the Indenture may be amended or supplemented by the parties thereto. The Indenture contains provisions permitting the Authority to make provision for the payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds shall no longer be deemed to be outstanding under the terms of the Indenture. This Bond shall not be entitled to any benefit, protection or security under the Indenture or become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been executed and dated by an authorized signatory of the Trustee. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law. IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of the Chair of the Authority, attested by the 706 A-4 4127-3236-0228.4 manual or facsimile signature of the Secretary of the Authority, all as of the Dated Date identified above. HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: _______________________________ Chair ATTEST: ________________________________ Secretary 707 A-5 4127-3236-0228.4 CERTIFICATE OF AUTHENTICATION This is one of the Series 2020 Bonds described in the within-mentioned Indenture and registered on the Registration Books. Dated: U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE By: ______________________________ Authorized Signatory 708 A-6 4127-3236-0228.4 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ______________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. 709 B-1 4127-3236-0228.4 EXHIBIT B PERMITTED INVESTMENTS “Permitted Investments” means any of the following to the extent then permitted by the general laws of the State of California applicable to investments by cities: (1) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated (collectively “United States Obligations”). These include, but are not necessarily limited to: - U.S. Treasury obligations All direct or fully guaranteed obligations - Farmers Home Administration Certificates of beneficial ownership - General Services Administration Participation certificates - U.S. Maritime Administration Guaranteed Title XI financing - Small Business Administration Guaranteed participation certificates - Guaranteed pool certificates - Government National Mortgage Association (GNMA) GNMA-guaranteed mortgage-backed securities GNMA-guaranteed participation certificates - U.S. Department of Housing & Urban Development Local authority bonds (2) Obligations of instrumentalities or agencies of the United States of America limited to the following: (a) the Federal Home Loan Bank Board (“FHLB”); (b) the Federal Home Loan Mortgage Corporation (“FHLMC”); (c) the Federal National Mortgage Association (FNMA); (d) Federal Farm Credit Bank (“FFCB”); and (e) guaranteed portions of Small Business Administration (“SBA”) notes. (3) Commercial Paper having a maximum maturity of not more than 270 days, payable in the United States of America and issued by corporations that are organized and operating in the United States with total assets in excess of $500 million and having “A” or better rating for the 710 B-2 4127-3236-0228.4 issuer’s long-term debt as provided by Moody’s, S&P, or Fitch and “P-1”, “A-1”, “F1” or better rating for the issuer’s short-term debt as provided by Moody’s, S&P, or Fitch, respectively. (4) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as “bankers’ acceptances,” having original maturities of not more than 180 days. The institution must have a minimum short-term debt rating of “A-1”, “P-1”, or “F1” by S&P, Moody’s, or Fitch, respectively, and a long-term debt rating of no less than “A” by S&P, Moody’s, or Fitch. (5) Shares of beneficial interest issued by diversified management companies, known as money market funds, registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) and whose fund has received the highest possible rating from S&P, including funds for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide investment advisory or other management services. (6) Shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California which invests exclusively in investments permitted by Section 53601 of Title 5, Division 2, Chapter 4 of the Government Code of California, as it may be amended. (7) Certificates of deposit issued by a nationally- or state-chartered bank or a state or federal association (as defined by Section 5102 of the California Financial Code) or by a state- licensed branch of a foreign bank, in each case which has, or which is a subsidiary of a parent company which has, obligations outstanding having a rating in the “A” category or better from S&P, Moody’s, or Fitch. (8) Pre-refunded municipal obligations rated meeting the following requirements: (a) the municipal obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; (c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”); (d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; 711 B-3 4127-3236-0228.4 (e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and (f) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. (9) Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the State of California or by the state, department, board, agency, or authority of the other 49 United States, having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively (10) California public municipal obligations including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a California municipal entity having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively (11) Repurchase agreements which have a maximum maturity of 30 days and are fully secured at or greater than 102% of the market value plus accrued interest by obligations of the United States Government, its agencies and instrumentalities, in accordance with number (ii) above. (12) Investment agreements and guaranteed investment contracts with issuers having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively. (13) Deposits with the Local Agency Investment Fund (LAIF) of the State. (14) Corporate obligations issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States having a long-term debt rating of at least “AA-” or “Aa3” by S&P or Moody’s, respectively. 712 C-1 4127-3236-0228.4 EXHIBIT C FORM OF COSTS OF ISSUANCE FUND REQUISITION HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS, SERIES 2020A (TAX-EXEMPT) AND HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS, SERIES 2020B (FEDERALLY TAXABLE) WRITTEN REQUEST NO. __ FOR DISBURSEMENTS FROM COSTS OF ISSUANCE The undersigned hereby states and certifies: (a) that the undersigned is the duly appointed, qualified and acting ____________ of the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the “City”), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that U.S. Bank National Association, as trustee (the “Trustee”), is hereby requested to disburse from the Costs of Issuance Fund, established pursuant to the Master Indenture, dated as of [__________] 1, 2020 (the “Indenture”), by and among the Huntington Beach Public Financing Authority, the City and the Trustee, to the payees set forth on Attachment I attached hereto and by this reference incorporated herein, the amount set forth on Attachment I opposite each such payee, for payment of such costs identified on said Attachment I; (c) that each item of cost identified on Attachment I has been properly incurred and the amounts to be disbursed pursuant to this Written Request are for Costs of Issuance properly chargeable to the Costs of Issuance Fund, and no amounts to be disbursed pursuant to this Written Request have been the subject of a previous Written Request for disbursement from said account; and 713 C-2 4127-3236-0228.4 (d) that an invoice, for each item of cost identified on Attachment I is attached hereto. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Indenture. Dated: _____________ CITY OF HUNTINGTON BEACH By: ______________________________ 714 C-3 4127-3236-0228.4 ATTACHMENT I COST OF ISSUANCE FUND DISBURSEMENTS Payee Name and Address Purpose of Obligation Amount 715 1 $________ HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS $___________ 2020 Series A (Tax-Exempt) $__________ 2020 Series B (Federally Taxable) BOND PURCHASE AGREEMENT _______ __, 2020 Huntington Beach Public Financing Authority c/o City of Huntington Beach Department of Finance 2000 Main Street Huntington Beach, California 92648 Attention: Executive Director City of Huntington Beach c/o City of Huntington Beach Department of Finance 2000 Main Street Huntington Beach, California 92648 Ladies and Gentlemen: The undersigned, Stifel Nicolaus & Co. Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (which, together with Exhibit A, is referred to as the “Purchase Agreement”) with the Huntington Beach Public Financing Authority (the “Authority”) and the City of Huntington Beach, California (the “City”), which, upon the acceptance of the Authority and the City, will be binding upon the Authority, the City and the Underwriter. This offer is made subject to acceptance by the Authority and by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 6:00 P.M., Pacific Standard Time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Master Indenture, dated as of July 1, 2020 (the “Indenture”), by and among the City, the Authority and U.S. Bank National Association, as trustee (the “Trustee”) substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Authority, the City and the Underwriter. Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Authority and the City, and the Authority and the City hereby agree to issue, sell and deliver to the Underwriter all (but not less than all) of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax- 716 2 Exempt) in the aggregate principal amount of $_________ (the “Series 2020A Bonds”) and Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable) in the aggregate principal amount of $_________ (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Bonds”). The Bonds will be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually on May 1 and November 1 in each year, commencing _______ 1, 20__ and will bear interest at the rates and mature in the principal amounts and on the dates as set forth in Exhibit A hereto. The purchase price for the Series 2020A Bonds shall be equal to $_________ (being the aggregate principal amount thereof plus net original issue premium of $________ and less an underwriter’s discount with respect to the Series 2020A Bonds of $________) and the purchase price for the Series 2020B Bonds shall be equal to $_________ (being the aggregate principal amount thereof less an underwriter’s discount with respect to the Series 2020B Bonds of $________). The City and Authority acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction among the City, the Authority and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as a Municipal Advisor (as defined in Section 15B of The Securities Exchange Act of 1934, as amended), financial advisor or fiduciary; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or are currently providing other services to the City or the Authority on other matters); (iv) the only obligations the Underwriter has to the City and the Authority with respect to the transaction contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the City and the Authority have consulted their own legal, accounting, tax, financial and other advisors to the extent they have deemed appropriate. Section 2. The Bonds. The Bonds shall be secured by revenues consisting primarily of base rental payments (“Base Rental Payments”) to be paid by the City pursuant to the Master Lease Agreement between the City and the Authority, dated as of July 1, 2020 (the “Lease Agreement”). The Authority’s right to receive the Base Rental Payments due under the Lease Agreement and to exercise remedies upon default under such Lease Agreement shall be assigned to the Trustee for the benefit of the owners of the Bonds pursuant to the Indenture. The Bonds shall be as described in, and shall be secured under and pursuant to the Indenture. The Series 2020A Bonds are being issued to (i) refund the outstanding Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Refunded 2010 Bonds”), and (ii) pay costs of issuance of the Series 2020A Bonds. The Series 2020B Bonds are being issued to (i) advance refund the outstanding Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project)(the “Refunded 2011 Bonds” and, together with the Refunded 2010 Bonds, the “Refunded Bonds”). The Bonds, this Purchase Agreement, the Indenture, the Lease Agreement, the Master Site Lease dated as of July 1, 2020 (the “Site Lease”) by and between the City and the Authority, and the resolution of the Authority authorizing the issuance of the Bonds and the execution and delivery of the Authority Documents (hereinafter defined) are collectively referred to herein as the “Authority Documents.” 717 3 This Purchase Agreement, the Continuing Disclosure Certificate, dated as of the Closing Date (as hereinafter defined) and entered into by the City (the “Continuing Disclosure Certificate”), the Indenture, the Lease Agreement, the Site Lease and the resolution of the City authorizing the execution and delivery of the City Documents (hereinafter defined) are collectively referred to herein as the “City Documents.” Section 3. Public Offering. (a) The Underwriter agrees to make an initial public offering of all of the Bonds at the public offering prices (or yields) set forth on Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as the Underwriter deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A. The Bonds may be offered and sold to certain dealers (including dealers depositing the Bonds into investment trusts) at prices lower than such initial public offering prices. (b) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the Municipal Advisor, identified herein and any notice or report to be provided to the City may be provided to the Municipal Advisor. (c) Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the [Series 2020A Bonds] (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of [Series 2020A Bonds]. If at that time the 10% test has not been satisfied as to any maturity of the [Series 2020A Bonds], the Underwriter agrees to promptly report to the City the prices at which it sells the unsold [Series 2020A Bonds] of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the [Series 2020A Bonds] of that maturity or until all [Series 2020A Bonds] of that maturity have been sold to the public. (d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the [Series 2020A Bonds] for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the [Series 2020A Bonds], the Underwriter will neither offer nor sell unsold [Series 718 4 2020A Bonds] of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: 1. the close of the fifth (5th) business day after the sale date; or 2. the date on which the Underwriter has sold at least 10% of that maturity of the [Series 2020A Bonds] to the public at a price that is no higher than the initial offering price to the public. The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the [Series 2020A Bonds] to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (e) The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to: (1) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the [Series 2020A Bonds] of that maturity or all [Series 2020A Bonds] of that maturity have been sold to the public; and (2) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that a selling group has been created in connection with the initial sale of the [Series 2020A Bonds] to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires; and (B) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the- offering-price rule as applicable to the [Series 2020A Bonds]. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this section: 1. “public” means any person other than an underwriter or a related party; 2. “underwriter” means: (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public; and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public); 3. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to: (A) at least 50% common 719 5 ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another); (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another); or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and 4. “sale date” means the date of execution of this Purchase Agreement by all parties. Section 4. The Official Statement. By its acceptance of this proposal, the Authority and the City ratify, confirm and approve of the use and distribution by the Underwriter prior to the date hereof of the preliminary official statement relating to the Bonds dated _______ __, 2020 (including the cover page, all appendices and all information incorporated therein and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”) that authorized officers of the Authority and the City deemed “final” as of its date, for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”), except for certain information permitted to be omitted therefrom by Rule 15c2-12. The Authority and the City hereby agree to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information previously permitted to have been omitted by Rule 15c2-12) (including the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Authority, the City and the Underwriter, the “Official Statement”), in such quantity and format as the Underwriter shall reasonably request to comply with Section (b)(4) of Rule 15c2-12 and the rules of the Municipal Securities Rulemaking Board (the “MSRB”). The Underwriter hereby agrees that it will not request that payment be made by any purchaser of the Bonds prior to delivery by the Underwriter to the purchaser of a copy of the Official Statement. The Underwriter agrees: (i) to provide the Authority and the City upon request with final pricing information on the Bonds on a timely basis; and (ii) to promptly file a copy of the Official Statement, including any supplements prepared by the Authority or the City with the MSRB at http://emma.msrb.org. The Authority and the City hereby approve of the use and distribution by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Authority and the City will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with the MSRB. Section 5. Closing. At 8:00 a.m., Pacific Standard Time, on _________ __, 2020 (the “Closing Date”), or at such other time or date as the Authority and the Underwriter agree upon, the Authority shall deliver or cause to be delivered to the Trustee, and the Trustee shall deliver or cause to be delivered to The Depository Trust Company, New York New York (“DTC”), the Bonds in definitive form, duly executed and authenticated. Concurrently with the delivery of the Bonds, the Authority and the City will deliver the documents hereinafter mentioned at the offices of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California (“Bond Counsel”), or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer 720 6 in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Bonds shall be registered in the name of Cede & Co., as nominee of DTC in denominations of five thousand dollars ($5,000) or any integral multiple thereof and shall be made available to the Underwriter at least one (1) business day before the Closing for purposes of inspection and packaging. The Authority and the City acknowledge that the services of DTC will be used initially by the Underwriter in order to permit the issuance of the Bonds in book-entry form, and agree to cooperate fully with the Underwriter in employing such services. Section 6. Representations, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter and the City that: (a) The Authority is a public body, duly organized and existing under the Constitution and laws of the State of California (the “State”), including the Authority’s Joint Exercise of Powers Agreement (the “JPA Agreement”) and the Joint Exercise of Powers Act (Government Code Division 7, Chapter 5, Section 6500 et seq.) (the “JPA Act”). (b) The Authority has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the Authority Documents. (c) By all necessary official action, the Authority has duly adopted, authorized and approved the Authority Documents, has duly authorized and approved the Preliminary Official Statement, will, by execution thereof, duly authorize and approve the Official Statement, and has duly adopted or authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in, the Authority Documents and the consummation by it of all other transactions contemplated by the Authority Documents in connection with the issuance of the Bonds. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against joint powers authorities in the State. The Authority will at the Closing be in compliance in all respects, with the terms of the Authority Documents. (d) To the best of its knowledge, the Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party which breach or default has or may have an adverse effect on the ability of the Authority to perform its obligations under the Authority Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the Authority Documents, if applicable, and compliance with the provisions on the Authority’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, 721 7 administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Authority or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Documents. (e) To the best of its knowledge, all material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Authority of its obligations in connection with the Authority Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Preliminary Official Statement and the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Authority Documents have been duly obtained. (f) The Authority hereby agrees that it will notify the other parties hereto if, within the period from the date of this Purchase Agreement to and including the date twenty-five (25) days following the end of the underwriting period (as defined herein), the Authority discovers any pre-existing or subsequent fact or becomes aware of the occurrence of any event, in any such case, which might cause the Official Statement (as the same may have then been supplemented or amended) to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (g) As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental authority, public board or body, pending, with service of process having been accomplished, or threatened in writing and delivered to the Authority: (i) in any way questioning the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Base Rental Payments with respect to the Lease Agreement or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the other Authority Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority or its authority to issue the Bonds; (iii) which would be likely to result in any material adverse change relating to the business, operations or financial condition of the Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 722 8 (h) To the best of the Authority’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of paragraph 6(g). (i) The information in the Official Statement set forth under the captions “INTRODUCTION—The Authority” and “THE AUTHORITY” does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Any certificate signed by any officer of the Authority authorized to execute such certificate in connection with the execution, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation of the Authority to the Underwriter and the City as to the statements made therein but not of the person signing such certificate. Section 7. Representations, Warranties and Covenants of the City. The City represents, warrants and covenants to the Underwriter and the Authority that: (a) The City is a chartered city and municipal corporation duly organized and existing under and by virtue of the laws of the State. (b) The City has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the City Documents. (c) By all necessary official action, the City has duly adopted, authorized and approved the City Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly adopted or authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in, the City Documents and the consummation by it of all other transactions contemplated by the City Documents in connection with the issuance of the Bonds. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the City Documents will constitute the legally valid and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against municipal corporations in the State. The City will at the Closing be in compliance in all respects, with the terms of the City Documents. (d) To the best of its knowledge, the City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City to perform its obligations under the City Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the City Documents, if applicable, and compliance with the provisions on the City’s part contained 723 9 therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. (e) To the best of its knowledge, all material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with the City Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Preliminary Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) The Preliminary Official Statement was as of its date, and the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement and the Official Statement do not and will not contain and up to and including the Closing will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (except that this representation does not include information regarding DTC and its book-entry only system, information under the caption “UNDERWRITING,” CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriter, as to which no view is expressed). (g) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (h) As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental authority, public board or body, pending, with service of process having been accomplished, or threatened in writing and delivered to the City: (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Base Rental Payments with respect to the Lease Agreement or of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, or the City Documents 724 10 or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Series 2020A Bonds from taxation, or contesting the powers of the Authority to issue the Bonds; (iii) which would be likely to result in any material adverse change relating to the business, operations or financial condition of the City; and (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) To the best of the City’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in paragraph 7(h). (j) Until the date which is twenty-five (25) days after the “end of the underwriting period” (as hereinafter defined), if any event shall occur of which the City is aware that would cause the Official Statement to contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements in the Official Statement, in light of the circumstances under which they were made, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “end of the underwriting period” means the later of such time as: (i) the Authority delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives written notice to the contrary, the “end of the underwriting period” shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Authority and the City at or prior to the Closing Date of the Bonds and shall specify a date (other than the Closing Date) to be deemed the “end of the underwriting period.” The City agrees to cooperate with the Underwriter in the filing by the Underwriter of such supplement or amendment to the Official Statement with the MSRB. (k) Except as disclosed in the Preliminary Official Statement and the Official Statement, the City has not within the last five years failed to comply in any material respect with any continuing disclosure undertakings with regard to Rule 15c2-12, to provide annual reports or notices of material events specified in such rule. (l) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2019 attached as Appendix B to the Official Statement fairly represent the receipts, expenditures and cash balances of the City. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the City or in its operations since June 30, 2019 and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change. (m) To the extent required by law, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain enumerated 725 11 events. A description of this undertaking is set forth in Appendix F to the Preliminary Official Statement and will also be set forth in the Official Statement. (n) Any certificate signed by any officer of the City authorized to execute such certificate in connection with the execution, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation of the City to the Underwriter and the Authority as to the statements made therein but not of the person signing such certificate. Section 8. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements of the officers and other officials of the Authority and of the City, as well as authorized representatives of the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof; to the performance by the Authority and the City of their obligations to be performed hereunder at or prior to the Closing Date; and to the following additional conditions: (a) The representations, warranties and covenants of the City and the Authority contained herein shall be true, complete and correct at the date hereof and at the time of the Closing, as if made on the Closing Date. (b) At the time of Closing, the City Documents and the Authority Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the City Documents, the Authority Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter. (c) At the time of the Closing, no default shall have occurred or be existing under the City Documents or the Authority Documents, and the City shall not be in default in the payment of principal or interest with respect to any of its financial obligations, which default would adversely impact the ability of the City to pay the Base Rental Payments. (d) In recognition of the desire of the Authority, the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the absolute discretion of the Underwriter by notification, in writing, to the Authority and the City prior to delivery of and payment for the Bonds, if at any time prior to such time: (i) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of America of a national emergency or war or other calamity or crisis (or the escalation of such calamity or crisis) the effect of which on financial markets is materially adverse such as to make it, in the sole judgment of the Underwriter, impractical to proceed with the purchase or delivery of the Bonds as contemplated by the Official Statement (exclusive of any amendment or supplement thereto); or (ii) a general banking moratorium shall have been declared by federal, State or New York authorities, or the general suspension of trading on any national securities exchange; or 726 12 (iii) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Preliminary Official Statement or the Official Statement, in the light of the circumstances under which they were made, not misleading, which event, in the reasonable opinion of the Underwriter would materially or adversely affect the ability of the Underwriter to market the Bonds; or (iv) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which materially adversely affects the market price of the Bonds; or (v) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States of America or by any legislation in or by the Congress of the United States of America or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States of America, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States of America, the Treasury Department of the United States of America, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States of America, or the favorable reporting for passage of legislation to either House of the Congress of the United States of America by a Committee of such House to which such legislation has been referred for consideration; or (vi) an order, decree or injunction shall have been issued by any court of competent jurisdiction, or order, ruling, regulation (final, temporary or proposed), official statement or other form of notice or communication issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that: (i) obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Trust Agreement is not exempt from qualification under the Trust Indenture Act of 1939; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Preliminary Official Statement and the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; or (vii) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Preliminary Official Statement and the Official Statement, is or would be in violation of any provision of the Securities Act of 727 13 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of the Bonds or obligations of the general character of the Bonds, as contemplated hereby or by the Preliminary Official Statement and the Official Statement; or (viii) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or (ix) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker dealers; or (x) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or (xi) any rating of the Bonds or the rating of any general fund obligations of the City shall have been downgraded or withdrawn by a national rating service, which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or (xii) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States securities market, rendering the marketing and sale of the Bonds, or enforcement of sale contracts with respect thereto impracticable; or (i) the commencement of any action, suit or proceeding described in Section 6(g) or Section 7(h). (e) at or prior to the Closing, the Underwriter shall receive the following documents, in each case to the reasonable satisfaction in form and substance of the Underwriter: (i) All resolutions relating to the Bonds adopted by the Authority and certified by an authorized official of the Authority authorizing the issuance of the Bonds and the execution and delivery of the Authority Documents; (ii) All resolutions relating to the Bonds adopted by the City and certified by an authorized official of the City authorizing the execution and delivery of the City Documents and the delivery of the Bonds and the Official Statement; (iii) The City Documents and the Authority Documents duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter; 728 14 (iv) The approving opinion of Bond Counsel dated the Closing Date and addressed to the Authority and the City, in substantially the form attached as Appendix E to the Official Statement, and a reliance letter thereon addressed to the Underwriter; (v) A supplemental opinion of Bond Counsel dated the Closing Date and addressed to the Underwriter, to the effect that: (A) the statements in the Official Statement under the captions “INTRODUCTION,” “THE BONDS,” “SECURITY FOR THE BONDS” and “TAX MATTERS,” and in Appendix D—“SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS,” excluding any material that may be treated as included under such captions and appendices by any cross-reference, insofar as such statements expressly summarize provisions of the Indenture, Lease Agreement, Site Lease and set out the form and content of Bond Counsel’s final opinion concerning certain federal tax matters relating to the Bonds, are accurate in all material respects as of the Closing Date; (B) The Purchase Agreement has been duly authorized, executed and delivered by the City and the Authority and is the valid, legal and binding agreement of the City and the Authority, enforceable in accordance with its terms, except that the rights and obligations under the Purchase Agreement are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State, and provided that no opinion is expressed with respect to any indemnification or contribution provisions contained therein; and (C) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; (vi) The Official Statement, executed on behalf of the Authority and City, and the Preliminary Official Statement; (vii) Evidence that the ratings on the Bonds are as described in the Official Statement; (viii) A certificate, dated the Closing Date, signed by a duly authorized officer of the Authority satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the Authority contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the Authority, and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to the Closing Date; (ii) to the best of such officer’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement under the captions “INTRODUCTION—The Authority” and “THE AUTHORITY” did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact 729 15 necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (iv) to the best of its knowledge after reasonable investigation, the Authority is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, which would have a material adverse impact on the Authority’s ability to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; (ix) A certificate, dated the Closing Date, signed by a duly authorized officer of the City satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the City, and the City has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (ii) to the best of such officer’s knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement (except that this representation does not include information regarding DTC and its book entry only system, information under the caption “UNDERWRITING,” CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriter, as to which no view is expressed) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (iv) to the best of its knowledge after reasonable investigation, the City is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Lease Agreement) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the City Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; (x) An opinion dated the Closing Date and addressed to the Underwriter, the Authority, the City and Bond Counsel, of the City Attorney of the City of Huntington Beach, as counsel to the Authority, to the effect that: (A) The Authority is a public body, organized and existing under the Constitution and laws of the State, including the JPA Act and the JPA Agreement; (B) The resolution relating to the Bonds adopted by the Authority and certified by an authorized official of the Authority authorizing the issuance and sale of the Bonds and the execution and delivery of the Authority Documents and the Official Statement has been duly adopted at a regular meeting of the Authority, and is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption; 730 16 (C) The Authority Documents have been duly authorized, executed and delivered by the Authority and constitute valid, legal and binding agreements of the Authority enforceable in accordance with their respective terms; (D) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process having been accomplished, or threatened in writing against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Authority Documents or seeking to restrain or enjoin the collection of Base Rental Payments with respect to the Lease Agreement or the repayment of the Bonds or in any way contesting or affecting the validity of the Authority Documents or contesting the authority of the Authority to enter into or perform its obligations under any of the Authority Documents; (E) the execution and delivery of the Authority Documents and the issuance of the Bonds and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject, which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents; (F) no authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the Authority Documents or the Official Statement by the Authority or the consummation by the Authority of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriter; and (G) based on the information made available to such counsel in its role as counsel to the Authority, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement under the caption entitled “THE AUTHORITY,” nothing has come to its attention which would lead it to believe that the statements contained in the above-referenced caption as of the date of the Official Statement and as of the Closing Date (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xi) an opinion dated the Closing Date and addressed to the Underwriter and Bond Counsel, of the City Attorney of the City of Huntington Beach, to the effect that: (A) The City is a chartered city and municipal corporation, duly organized and existing under and by virtue of the laws of the State; (B) The resolution relating to the Bonds adopted by the City and certified by an authorized official of the City authorizing the execution and delivery of the City 731 17 Documents and the Official Statement has been duly adopted and is in full force and effect and has not been modified, amended, rescinded or repealed since the its date of adoption; (C) The City Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other parties thereto, if applicable, constitute the valid, legal and binding agreements of the City enforceable in accordance with their respective terms; (D) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process having been accomplished, or threatened in writing against the City, challenging the creation, organization or existence of the City, or the validity of the City Documents or seeking to restrain or enjoin the payment of the Base Rental Payments or the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Documents, or which, in any manner, questions the right of the City to pay the Base Rental Payments under the Lease Agreement; (E) The execution and delivery of the City Documents and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents; (F) No authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the City Documents or the consummation by the City of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriter; and (G) Based on the information made available to City Attorney, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to its attention which would lead it to believe that the Official Statement as of its date and as of the Closing Date (excluding therefrom financial statements and other statistical data, information regarding DTC and its book entry only system, information under the caption “UNDERWRITING,” CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriter, as to which no view need be expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xii) An opinion of Orrick, Herrington & Sutcliffe LLP as Disclosure Counsel to the Authority and the City, dated the Closing Date and addressed to City, Authority and the Underwriter, to the effect that, based on the information made available to it in its role as Disclosure Counsel, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, but on the basis of 732 18 their participation in the above-mentioned conferences (which did not extend beyond the date of the Official Statement), and in reliance thereon and on the records, documents, certificates and matters mentioned above, such counsel advises the Underwriter as a matter of fact and not opinion that, during the course of such counsel’s role as disclosure counsel with respect to the Bonds, no facts came to the attention of the attorneys in such firm rendering legal services in connection with such role which caused them to believe that the Official Statement as of its date (except for any CUSIP numbers, financial, accounting, statistical, economic or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any information about The Depository Trust Company or its book-entry system, litigation, ratings, rating agencies or underwriting, and Appendices A, B, C, G, H and I included or referred to therein, which such counsel shall expressly exclude from the scope of this paragraph and as to which such counsel shall express no opinion or view) contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xiii) An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, dated the Closing Date, addressed to the Underwriter to the effect that, although such attorneys have not undertaken to check the accuracy, completeness or fairness of, or verified the information contained in, the Official Statement, and are therefore unable to make any representation in that regard, such attorneys have participated in conferences prior to the date of the Official Statement with representatives of the City, the Authority, the Underwriter and others, during which conferences the contents of the Official Statement and related matters were discussed. Based upon the information made available to such attorneys in the course of their participation in such conferences, their review of the documents referred to above, their reliance on the certificates and the opinions of counsel described above and their understanding of applicable law, such attorneys do not believe that the Official Statement (any CUSIP numbers, financial, accounting, statistical, economic or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any information about The Depository Trust Company or its book-entry system, litigation, ratings, rating agencies or underwriting, and the Appendices to the Official Statement, as to which no view need be expressed) as of its date contained, or as of the date of such opinion, contains, any untrue statement or a material fact, or as of its date omitted, or as of the date of such opinion omits, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (xiv) An opinion of counsel to the Trustee, addressed to the Underwriter and dated the Closing Date, in form and substance satisfactory to the Underwriter and to Bond Counsel; (xv) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee in form and substance satisfactory to the Underwriter; (xvi) The preliminary and final Notice of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code; (xvii) A copy of the executed Blanket Issuer Letter of Representations by and between the Authority and DTC relating to the book-entry system; 733 19 (xviii) The tax and nonarbitrage certificate of the City and the Authority in form and substance to the reasonable satisfaction of Bond Counsel and the Underwriter; (xix) A certificate, dated the date of the Preliminary Official Statement, of the City, as required under Rule 15c2-12; (xx) A certificate, dated the date of the Preliminary Official Statement, of the Authority, as required under Rule 15c2-12; (xxi) Certified copies of the JPA Agreement and all amendments thereto and related certificates issued by the Secretary of State of the State; (xxii) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of the Indenture and the authentication and delivery of the Bonds by the Trustee; (xxiii) Evidence of insurance as required by the Lease Agreement; (xxiv) Evidence that the Bonds have been assigned the ratings of “__” and “___”, respectively, by Standard and Poor’s Ratings Service and Fitch Ratings, Inc.; and (xxv) Such additional legal opinions, certificates, proceedings, instruments or other documents as Bond Counsel or the Underwriter may reasonably request. Section 9. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Authority shall pay only from the proceeds of the Bonds, or cause the City to pay out of the proceeds of the Bonds or any other legally available funds of the City or the Authority, but only as the Authority and such other party providing such services may agree, all expenses and costs of the Authority and the City incident to the performance of their obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, rating agency fees and charges, initial fees of the Trustee, including fees and disbursements of their counsel, if any, fees and disbursements of Bond Counsel and Disclosure Counsel and other professional advisors employed by the Authority or the City, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees. The Underwriter shall pay all out-of- pocket expenses of the Underwriter, including, without limitation, the fees and expenses of its counsel, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds. Certain payments may be in the form of inclusion of such expenses in the expense component of the Underwriter’s discount. Section 10. Notices. Any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & 734 20 Company, Incorporated 515 S. Figueroa Street, Suite 1800 Los Angeles, CA 90071, Attention: John Kim. All notices or communications hereunder by any party shall be given and served upon each other party. Any notice or communication to be given the Authority under this Purchase Agreement may be given by delivering the same in writing to the Huntington Beach Public Financing Authority, c/o City of Huntington Beach Department of Finance, 2000 Main Street, Huntington Beach, California 92648, Attention: Executive Director. Any notice or communication to be given the City under this Purchase Agreement may be given by delivering the same in writing to the City of Huntington Beach c/o City of Huntington Beach Department of Finance, 2000 Main Street, Huntington Beach, California 92648. Attention: Chief Financial Oficer. Section 11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof. All representations, warranties and agreements of the Authority and the City in this Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of and payment for the Bonds. Section 12. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 735 21 Section 14. Governing Law. This Purchase Agreement shall be governed by the laws of the State. STIFEL NICOLAUS & CO. INCORPORATED By: Title: Authorized Officer Accepted as of the date first stated above: CITY OF HUNTINGTON BEACH By: Its: City Manager HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Its: Chair 736 A-1 EXHIBIT A Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds 2020 Series A (Tax-Exempt) $_________ Serial Bonds Maturity (May 1) Principal Amount Interest Rate Yield Price 10% Test Used Hold-The- Offering- Price Rule Used C Priced to par call on _____ __, 2020 Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds 2020 Series B (Federally Taxable) $_________ Serial Bonds Maturity (May 1) Principal Amount Interest Rate Yield 737 REDEMPTION PROVISIONS Optional Redemption. The Series 2020A Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturities, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) amounts received from the City in connection with the City’s exercise of its right pursuant to the Lease Agreement to cause Series 2020A Bonds to be optionally redeemed, or (ii) any other source of available funds, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. The Series 2020B Bonds maturing on or after May 1, 20__, are subject to optional redemption prior to their respective stated maturities, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from (i) amounts received from the City in connection with the City’s exercise of its right pursuant to the Lease Agreement to cause Series 2020B Bonds to be optionally redeemed, or (ii) any other source of available funds, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. Extraordinary Redemption from Insurance or Condemnation Proceeds. The Series 2020 Bonds are also subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Proceeds (other than Net Proceeds of rental interruption insurance) received with respect to all or a portion of the Property and deposited by the Trustee in the Redemption Fund in accordance with the provisions of the Indenture at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium. 738 B-1 EXHIBIT B FORM OF ISSUE PRICE CERTIFICATE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds 2020 Series A (Tax-Exempt) $_________ Serial Bonds The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. 2. [Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement, dated __________, 2020, by and between Stifel and the Issuer, Stifel has agreed in writing that, (i) for each Maturity of the Hold- the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.] 3. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.” (b) [Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Stifel has sold at least 10% of such Hold-the-Offering- Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold- the-Offering-Price Maturity.] 739 (d) Issuer means the City of Huntington Beach, California. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is __________, 2020. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).] The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Orrick Herrington & Sutcliffe LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Name: Dated: ________, 2020 740 SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES [AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES] (Attached) 741 [SCHEDULE B PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached)] 742 4151-8642-2820.4 ESCROW AGREEMENT by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY and U.S. BANK NATIONAL ASSOCIATION Dated as of August 1, 2020 Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A 743 4151-8642-2820.4 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this “Escrow Agreement”), executed and entered into and dated as of August 1, 2020, is by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK NATIONAL ASSOCIATION, as escrow bank (the “Escrow Bank”) and as Prior Trustee (as defined herein). RECITALS WHEREAS, there are currently outstanding Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds, 2010 Series A (the “Prior Bonds”), in the aggregate principal amount of $7,410,000; and WHEREAS, the Prior Bonds were issued pursuant to the Indenture, dated as of June 1, 2010 (the “Prior Indenture”), by and between the Authority and U.S. Bank National Association, as trustee (the “Prior Trustee”); and WHEREAS, the Prior Bonds are payable from certain lease payments to be made by the City of Huntington Beach (the “City”) under the Lease Agreement, dated as of June 1, 2010, by and between the City and the Authority (the “Lease Agreement”), pursuant to which the Authority leased certain real property and the improvements thereto to the City; and WHEREAS, the Escrow Bank is the trustee under the Prior Indenture; and WHEREAS, the Authority and the City have determined that savings will be realized by providing the funds necessary to pay, when due, the principal of and interest on the Prior Bonds to September 1, 2020 (the “Redemption Date”) and to redeem the callable Prior Bonds on the Redemption Date at a redemption price (the “Redemption Price”) equal to the principal of the Prior Bonds plus the accrued but unpaid interest on the Prior Bonds to the Redemption Date, without premium; and WHEREAS, in order to provide the funds necessary to redeem the Prior Bonds, the Authority has issued $[___________] aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series A (Tax-Exempt) (the “Series 2020A Bonds”) pursuant to the Indenture, dated as of August 1, 2020 (the “Indenture”), by and among the Authority, the City and U.S. Bank National Association, as trustee (the “Trustee”); and WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and the City has determined to provide for the call for redemption on the Redemption Date of the Prior Bonds outstanding on the Redemption Date; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Authority and the Escrow Bank agree as follows: Section 1. Definitions. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Prior Indenture. 744 2 4151-8642-2820.4 Section 2. The Escrow Fund. (a) There is hereby established a fund (the “Escrow Fund”) to be held as an irrevocably pledged escrow by the Escrow Bank, which the Escrow Bank shall keep separate and apart from all other funds of the Authority and the Escrow Bank and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged and assigned solely to the payment of (i) the principal and interest evidenced by the Prior Bonds coming due on and prior to the Redemption Date, and (ii) the Redemption Price on the Redemption Date, which amounts shall be held in trust by the Escrow Bank for the Owners of the Prior Bonds. (b) Upon the execution and delivery of the Series 2020A Bonds, there shall be deposited in the Escrow Fund $[__________] received from the proceeds of the sale of the Series 2020A Bonds as provided in Section 2.03 of the Indenture. [The Escrow Bank, as Prior Trustee, has informed the City that, as of the date hereof, there is no less than $[__________] on deposit in the Reserve Fund established under the Prior Indenture. The Authority has determined that $[__________] may be released as a result of the refunding of the Refunded Bonds. On the date hereof, the Prior Trustee is directed by the Authority to transfer such moneys to the Escrow Bank and the Escrow Bank shall deposit such moneys in the Escrow Fund.] (c) Upon the deposit of moneys pursuant to Section 2(b), the Authority has determined or caused to be determined that the moneys on deposit in the Escrow Fund will be at least equal to an amount sufficient to make the payments required by Section 4 hereof. Section 3. Use and Investment of Moneys. (a) The Escrow Bank hereby acknowledges deposit of the moneys described in Section 2(b) and is directed by the Authority, and agrees to invest $[__________] of such moneys in the Exhibit A Securities upon receipt of certification by a nationally recognized firm of independent certified public accountants that the Exhibit A Securities will mature in such principal amounts and earn interest in such amounts and, in each case, at such times, so that sufficient moneys will be available from maturing principal and interest on the Exhibit A Securities, together with any uninvested moneys then held by the Escrow Bank in the Escrow Fund, to make all payments required by Section 4 hereof. Except as provided in Section 3(b) or Section 3(c), the balance of the moneys described in Section 2 shall be held uninvested in the Escrow Fund. (b) Upon the written request of an Authorized Representative of the Authority, but subject to the conditions and limitations herein set forth, the Escrow Bank shall purchase substitute Defeasance Obligations for the Defeasance Obligations then held in an Escrow Fund with the proceeds derived from the sale, transfer, redemption or other disposition of Defeasance Obligations then on deposit in such Escrow Fund and any uninvested money then held by the Escrow Bank hereunder in accordance with the provisions of this Section. Such sale, transfer, redemption or other disposition of Defeasance Obligations then on deposit in such Escrow Fund and substitution of other Defeasance Obligations shall be effected by the Escrow Bank upon the written request of an Authorized Representative of the Authority but only by a simultaneous transaction and only upon receipt of (i) certification by a nationally recognized firm of independent certified public accountants that the Defeasance Obligations to be substituted, together with the Defeasance Obligations which will continue to be held in such Escrow Fund, will mature in such 745 3 4151-8642-2820.4 principal amounts and earn interest in such amounts and, in each case, at such times so that sufficient moneys will be available from maturing principal and interest on such Defeasance Obligations held in such Escrow Fund, together with any uninvested moneys, to make all payments required by Section 4 hereof, which have not previously been made, and (ii) receipt by the Escrow Bank of an opinion of counsel of recognized standing in the field of law relating to municipal bonds to the effect that the sale, transfer, redemption or other disposition and substitution of Defeasance Obligations will not adversely affect the exclusion of interest evidenced by any Prior Bonds or by any Prior Bonds from gross income for purposes of federal income taxation. (c) Upon the written request of an Authorized Representative of the Authority, but subject to the conditions and limitations herein set forth, the Escrow Bank will apply any moneys received from the maturing principal of or interest or other investment income on any Defeasance Obligations held in an Escrow Fund, or the proceeds from any sale, transfer, redemption or other disposition of Defeasance Obligations pursuant to Section 3(b) not required for the purposes of said Section (i) to the extent such moneys will not be required at any time for the purpose of making a payment required by Section 4 hereof, as certified by a nationally recognized firm of independent certified public accountants delivered to the Escrow Bank, such moneys shall be transferred to the Trustee for deposit in the Interest Account of the Payment Fund established under the Indenture upon the written request of an Authorized Representative of the Authority as received by the Escrow Bank, free and clear of any trust, lien, pledge or assignment securing the Prior Bonds or otherwise existing hereunder, and (ii) to the extent such moneys will be required for such purpose at a later date, shall, to the extent practicable, be invested or reinvested in Defeasance Obligations maturing at times and in amounts sufficient, as certified by a nationally recognized firm of independent certified public accountants delivered to the Escrow Bank, to make such payment required by Section 4 hereof. (d) All Defeasance Obligations purchased pursuant to this Escrow Agreement shall be deposited in and held for the credit of the Escrow Fund. Except as provided in this Section 3, no moneys or Defeasance Obligations deposited with the Escrow Bank pursuant to this Escrow Agreement nor principal of, or interest payments or other investment income on, any such Defeasance Obligations shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the Prior Bonds as provided by Section 4 hereof. (e) The Owners of the Prior Bonds shall have a first and exclusive lien on the moneys and Defeasance Obligations in the Escrow Fund until such moneys and Defeasance Obligations are used and applied as provided in this Escrow Agreement. (f) The Escrow Bank shall not be held liable for investment losses resulting from compliance with the provisions of this Escrow Agreement Section 4. Payment of Prior Bonds. From the maturing principal of the Defeasance Obligations held in the Escrow Fund and the investment income and other earnings thereon and any uninvested money then held in the Escrow Fund, the Escrow Bank shall, on the Redemption Date, pay the Redemption Price in accordance with the terms of the Prior Indenture. To the extent that the amount on deposit in the Escrow Fund on the Redemption Date is in excess of the amount necessary to make the required payments with respect to the Prior Bonds, as 746 4 4151-8642-2820.4 shown in the then applicable escrow verification of the nationally recognized firm of independent certified public accountants, such excess shall be transferred to the Trustee for deposit in the Interest Account of the Payment Fund established under the Indenture. Section 5. Irrevocable Designation of Redemption and Instructions to Mail Notices. The Authority hereby irrevocably designates the Prior Bonds for prior redemption on the Redemption Date as indicated in Section 4 hereof. The Authority has instructed the Prior Trustee to provide conditional notice of optional redemption of the Prior Bonds in accordance with Section 4.03 of the Prior Indenture. The Authority hereby waives the right to rescind such notice and deems such notice irrevocable. Section 6. Performance of Duties. The Escrow Bank agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Bank herein provided are in a form satisfactory to it. Section 7. Escrow Bank’s Authority to Make Investments. The Escrow Bank shall have no power or duty to invest any funds held under this Escrow Agreement except as provided in Section 3 hereof. The Escrow Bank shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Escrow Agreement. Section 8. Indemnity. To the extent permitted by law, the Authority hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns, agents, officers, directors, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the purchase of any securities to be purchased thereto, the retention of such securities or the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Agreement; provided, however, that the Authority shall not be required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Bank’s respective successors, assigns, agents and employees or the material breach by the Escrow Bank of the terms of this Escrow Agreement. In no event shall the Authority or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 9. Responsibilities of Escrow Bank. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Funds, the acceptance of the moneys or any securities deposited therein, the purchase of the securities to be purchased pursuant hereto, the retention of 747 5 4151-8642-2820.4 such securities or the proceeds thereof, the sufficiency of the securities or any uninvested moneys held hereunder to accomplish the redemption of the Prior Bonds, or any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Authority, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the securities to be purchased pursuant hereto and to any uninvested moneys to accomplish the redemption of the Prior Bonds pursuant to the Prior Indenture or to the validity of this Escrow Agreement as to the Authority and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to be conclusively established by a written certification of the Authority. Whenever the Escrow Bank shall deem it necessary or desirable that a matter specifically requiring a certificate of a nationally recognized form of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only a certificate signed by a nationally recognized firm of certified public accountants or such opinion of counsel of recognized standing in the field of law relating to municipal bonds. No provision of this Escrow Agreement shall require the Escrow Bank to risk or advance its own funds. The Escrow Bank shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Bank may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care. The Escrow Bank agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Bank shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Escrow Bank e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Bank in its discretion elects to act upon such instructions, the Escrow Bank’s understanding of such instructions shall be deemed controlling. The Escrow Bank 748 6 4151-8642-2820.4 shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 10. Amendments. The Authority and the Escrow Bank may (but only with the consent of the Owners of all of the Prior Bonds and the Insurer) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 11. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Prior Bonds have been paid in accordance with this Escrow Agreement. Section 12. Compensation. The Authority shall from time to time pay or cause to be paid to the Escrow Bank the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank under this Escrow Agreement or otherwise. Section 13. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. 749 7 4151-8642-2820.4 Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. U.S. BANK NATIONAL ASSOCIATION, as Escrow Bank and Prior Trustee By: Authorized Officer HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: Robin Estanislau, Secretary 750 A-1 4151-8642-2820.4 EXHIBIT A DEFEASANCE OBLIGATIONS Type Maturity Par Amount Interest Rate Price Cost 751 4165-9649-5396.4 ESCROW AGREEMENT by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY and U.S. BANK NATIONAL ASSOCIATION Dated as of August 1, 2020 Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) 752 4165-9649-5396.4 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this “Escrow Agreement”), executed and entered into and dated as of August 1, 2020, is by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK NATIONAL ASSOCIATION, as escrow bank (the “Escrow Bank”) and as Prior Trustee (as defined herein). RECITALS WHEREAS, there are currently outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the “Prior Bonds”), in the aggregate principal amount of $15,725,000; and WHEREAS, the Prior Bonds were issued pursuant to the Indenture, dated as of September 1, 2011 (the “Prior Indenture”), by and between the Authority and U.S. Bank National Association, as successor trustee (the “Prior Trustee”); and WHEREAS, the Prior Bonds are payable from certain lease payments to be made by the City of Huntington Beach (the “City”) under the Lease Agreement, dated as of September 1, 2011, by and between the City and the Authority (the “Lease Agreement”), pursuant to which the Authority leased certain real property and the improvements thereto to the City; and WHEREAS, the City has determined that debt service savings can be achieved by refunding the Prior Bonds maturing on September 1 of each of the years [2020 through 2031], inclusive (the “Refunded Bonds”); and WHEREAS, the Escrow Bank is the trustee under the Prior Indenture; and WHEREAS, the Authority and the City have determined that savings will be realized by providing the funds necessary to pay, when due, the principal of and interest on the Refunded Bonds to September 1, 2021 (the “Redemption Date”) and to redeem the callable Refunded Bonds on the Redemption Date at a redemption price (the “Redemption Price”) equal to the principal amount thereof, plus unpaid accrued interest thereon to the Redemption Date, without premium; and WHEREAS, in order to provide the funds necessary to redeem the Refunded Bonds, the Authority has issued $[___________] aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable) (the “Series 2020B Bonds”) pursuant to the Indenture, dated as of August 1, 2020 (the “Indenture”), by and among the Authority, the City and U.S. Bank National Association, as trustee (the “Trustee”); and WHEREAS, the Refunded Bonds are subject to redemption on the Redemption Date and the City has determined to provide for the call for redemption on the Redemption Date of the Refunded Bonds outstanding on the Redemption Date; 753 2 4165-9649-5396.4 NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Authority and the Escrow Bank agree as follows: Section 1. Definitions. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Prior Indenture. Section 2. The Escrow Fund. (a) There is hereby established a fund (the “Escrow Fund”) to be held as an irrevocably pledged escrow by the Escrow Bank, which the Escrow Bank shall keep separate and apart from all other funds of the Authority and the Escrow Bank and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged and assigned solely to the payment of (i) the principal and interest evidenced by the Refunded Bonds coming due on and prior to the Redemption Date, and (ii) the Redemption Price on the Redemption Date, which amounts shall be held in trust by the Escrow Bank for the Owners of the Refunded Bonds. (b) Upon the execution and delivery of the Series 2020B Bonds, there shall be deposited in the Escrow Fund $[__________] received from the proceeds of the sale of the Series 2020B Bonds as provided in Section 2.03 of the Indenture. [The Escrow Bank, as Prior Trustee, has informed the City that, as of the date hereof, there is no less than $[__________] on deposit in the Reserve Fund established under the Prior Indenture. The Authority has determined that $[__________] may be released as a result of the refunding of the Refunded Bonds. On the date hereof, the Prior Trustee is directed by the Authority to transfer such moneys to the Escrow Bank and the Escrow Bank shall deposit such moneys in the Escrow Fund.] (c) Upon the deposit of moneys pursuant to Section 2(b), the Authority has determined or caused to be determined that the moneys on deposit in the Escrow Fund will be at least equal to an amount sufficient to make the payments required by Section 4 hereof. Section 3. Use and Investment of Moneys. (a) The Escrow Bank hereby acknowledges deposit of the moneys described in Section 2(b) and is directed by the Authority, and agrees to invest $[__________] of such moneys in the Exhibit A Securities upon receipt of certification by a nationally recognized firm of independent certified public accountants that the Exhibit A Securities will mature in such principal amounts and earn interest in such amounts and, in each case, at such times, so that sufficient moneys will be available from maturing principal and interest on the Exhibit A Securities, together with any uninvested moneys then held by the Escrow Bank in the Escrow Fund, to make all payments required by Section 4 hereof. Except as provided in Section 3(b) or Section 3(c), the balance of the moneys described in Section 2 shall be held uninvested in the Escrow Fund. (b) Upon the written request of an Authorized Representative of the Authority, but subject to the conditions and limitations herein set forth, the Escrow Bank shall purchase substitute Defeasance Securities for the Defeasance Securities then held in an Escrow Fund with the proceeds derived from the sale, transfer, redemption or other disposition of Defeasance Securities then on deposit in such Escrow Fund and any uninvested money then held by the Escrow Bank hereunder in accordance with the provisions of this Section. Such sale, transfer, redemption or other 754 3 4165-9649-5396.4 disposition of Defeasance Securities then on deposit in such Escrow Fund and substitution of other Defeasance Securities shall be effected by the Escrow Bank upon the written request of an Authorized Representative of the Authority but only by a simultaneous transaction and only upon receipt of (i) certification by a nationally recognized firm of independent certified public accountants that the Defeasance Securities to be substituted, together with the Defeasance Securities which will continue to be held in such Escrow Fund, will mature in such principal amounts and earn interest in such amounts and, in each case, at such times so that sufficient moneys will be available from maturing principal and interest on such Defeasance Securities held in such Escrow Fund, together with any uninvested moneys, to make all payments required by Section 4 hereof, which have not previously been made, and (ii) receipt by the Escrow Bank of an opinion of counsel of recognized standing in the field of law relating to municipal bonds to the effect that the sale, transfer, redemption or other disposition and substitution of Defeasance Securities will not adversely affect the exclusion of interest evidenced by any Prior Bonds or by any Prior Bonds from gross income for purposes of federal income taxation. (c) Upon the written request of an Authorized Representative of the Authority, but subject to the conditions and limitations herein set forth, the Escrow Bank will apply any moneys received from the maturing principal of or interest or other investment income on any Defeasance Securities held in an Escrow Fund, or the proceeds from any sale, transfer, redemption or other disposition of Defeasance Securities pursuant to Section 3(b) not required for the purposes of said Section (i) to the extent such moneys will not be required at any time for the purpose of making a payment required by Section 4 hereof, as certified by a nationally recognized firm of independent certified public accountants delivered to the Escrow Bank, such moneys shall be transferred to the Trustee for deposit in the Interest Account of the Payment Fund established under the Indenture upon the written request of an Authorized Representative of the Authority as received by the Escrow Bank, free and clear of any trust, lien, pledge or assignment securing the Refunded Bonds or otherwise existing hereunder, and (ii) to the extent such moneys will be required for such purpose at a later date, shall, to the extent practicable, be invested or reinvested in Defeasance Securities maturing at times and in amounts sufficient, as certified by a nationally recognized firm of independent certified public accountants delivered to the Escrow Bank, to make such payment required by Section 4 hereof. (d) All Defeasance Securities purchased pursuant to this Escrow Agreement shall be deposited in and held for the credit of the Escrow Fund. Except as provided in this Section 3, no moneys or Defeasance Securities deposited with the Escrow Bank pursuant to this Escrow Agreement nor principal of, or interest payments or other investment income on, any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the Refunded Bonds as provided by Section 4 hereof. (e) The Owners of the Refunded Bonds shall have a first and exclusive lien on the moneys and Defeasance Securities in the Escrow Fund until such moneys and Defeasance Securities are used and applied as provided in this Escrow Agreement. (f) The Escrow Bank shall not be held liable for investment losses resulting from compliance with the provisions of this Escrow Agreement 755 4 4165-9649-5396.4 Section 4. Payment of Refunded Bonds. From the maturing principal of the Defeasance Securities held in the Escrow Fund and the investment income and other earnings thereon and any uninvested money then held in the Escrow Fund, the Escrow Bank shall pay, when due, the principal of and interest on the Refunded Bonds to the Redemption Date and, on the Redemption Date, pay the Redemption Price in accordance with the terms of the Prior Indenture. To the extent that the amount on deposit in the Escrow Fund on the Redemption Date is in excess of the amount necessary to make the required payments with respect to the Refunded Bonds, as shown in the then applicable escrow verification of the nationally recognized firm of independent certified public accountants, such excess shall be transferred to the Trustee for deposit in the Interest Account of the Payment Fund established under the Indenture. Section 5. Irrevocable Instructions to Mail Notices. The Authority hereby irrevocably designates the Refunded Bonds for prior redemption on the Redemption Date as indicated in Section 4 hereof and hereby irrevocably instructs the Escrow Bank to give, in accordance with Section 3.04 of the Prior Indenture, notice of redemption of the Refunded Bonds. Section 6. Performance of Duties. The Escrow Bank agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Bank herein provided are in a form satisfactory to it. Section 7. Escrow Bank’s Authority to Make Investments. The Escrow Bank shall have no power or duty to invest any funds held under this Escrow Agreement except as provided in Section 3 hereof. The Escrow Bank shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Escrow Agreement. Section 8. Indemnity. To the extent permitted by law, the Authority hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns, agents, officers, directors, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the purchase of any securities to be purchased thereto, the retention of such securities or the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Agreement; provided, however, that the Authority shall not be required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Bank’s respective successors, assigns, agents and employees or the material breach by the Escrow Bank of the terms of this Escrow Agreement. In no event shall the Authority or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. 756 5 4165-9649-5396.4 Section 9. Responsibilities of Escrow Bank. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Funds, the acceptance of the moneys or any securities deposited therein, the purchase of the securities to be purchased pursuant hereto, the retention of such securities or the proceeds thereof, the sufficiency of the securities or any uninvested moneys held hereunder to accomplish the redemption of the Refunded Bonds, or any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non- negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Authority, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the securities to be purchased pursuant hereto and to any uninvested moneys to accomplish the redemption of the Refunded Bonds pursuant to the Prior Indenture or to the validity of this Escrow Agreement as to the Authority and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to be conclusively established by a written certification of the Authority. Whenever the Escrow Bank shall deem it necessary or desirable that a matter specifically requiring a certificate of a nationally recognized form of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only a certificate signed by a nationally recognized firm of certified public accountants or such opinion of counsel of recognized standing in the field of law relating to municipal bonds. No provision of this Escrow Agreement shall require the Escrow Bank to risk or advance its own funds. The Escrow Bank shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Bank may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care. The Escrow Bank agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Bank shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing 757 6 4165-9649-5396.4 specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Escrow Bank e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Bank in its discretion elects to act upon such instructions, the Escrow Bank’s understanding of such instructions shall be deemed controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 10. Amendments. The Authority and the Escrow Bank may (but only with the consent of the Owners of all of the Refunded Bonds and the Insurer) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 11. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Refunded Bonds have been paid in accordance with this Escrow Agreement. Section 12. Compensation. The Authority shall from time to time pay or cause to be paid to the Escrow Bank the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank under this Escrow Agreement or otherwise. Section 13. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. 758 7 4165-9649-5396.4 Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. U.S. BANK NATIONAL ASSOCIATION, as Escrow Bank and Prior Trustee By: Authorized Officer HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: Robin Estanislau, Secretary 759 A-1 4165-9649-5396.4 EXHIBIT A DEFEASANCE SECURITIES Type Maturity Par Amount Interest Rate Price Cost 760 B-1 4165-9649-5396.4 EXHIBIT B NOTICE OF REDEMPTION Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Each maturity of the Refunded Bonds relating to this notice (as defined below) is identified by the corresponding CUSIP number set forth below: Bond Number Maturity Date (September 1) Principal Amount Interest Rate Redemption Price CUSIP R-11 2022 $1,150,000.00 3.000% 100.00% 446216 FV0 R-12 2023 1,185,000.00 3.375 100.00 446216 FW8 R-13 2024 1,225,000.00 3.625 100.00 446216 FX6 R-14 2025 1,265,000.00 4.000 100.00 446216 FY4 R-15 2026 1,315,000.00 4.000 100.00 446216 FZ1 R-16 2027 1,370,000.00 4.000 100.00 446216 GA5 R-17 2028 1,425,000.00 4.125 100.00 446216 GB3 R-18 2029 1,480,000.00 4.250 100.00 446216 GC1 R-19 2030 1,545,000.00 4.250 100.00 446216 GD9 R-20 2031 1,610,000.00 4.500 100.00 446216 GE7 NOTICE IS HEREBY GIVEN that the Huntington Beach Public Financing Authority (the “Authority”), has caused to be deposited a portion of the proceeds of its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2020 Series B (Federally Taxable), with U.S. Bank National Association, as escrow bank (the “Escrow Bank”) pursuant to the Escrow Agreement, dated as of August 1, 2020 (the “Escrow Agreement”), by and between the Authority and the Escrow Bank, to redeem the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project), maturing on September 1 in the years 2022 through 2031, inclusive, as further described in the table above (the “Refunded Bonds”) on September 1, 2021 (the “Redemption Date”) at a redemption price (the “Redemption Price”) equal to the principal amount thereof, plus accrued interest thereon to the Redemption Date, without premium. The Refunded Bonds were issued pursuant to the Indenture, dated as of September 1, 2011, by and between the Authority and U.S. Bank National Association, as successor trustee (the “Trustee”). On the Redemption Date, there shall become due and payable upon the Refunded Bonds the Redemption Price and interest on the Refunded Bonds will not accrue from and after the Redemption Date. The Refunded Bonds must be surrendered by the owners at the corporate trust office of the Trustee (or at such other place or places designated by the Trustee): U.S. Bank National Association Global Corporate Trust 761 B-2 4165-9649-5396.4 111 Fillmore Avenue E St. Paul, Minnesota 55107 In compliance with federal law, the Trustee is required to withhold at the current rate of withholding from payments of principal to individuals who fail to furnish valid Taxpayer Identification Numbers. A completed form W-9 should be presented with your Refunded Bonds. The CUSIP numbers have been assigned to this issue are included solely for the convenience of the holders. Neither the Authority nor the Trustee nor the Escrow Bank shall be responsible for the selection or use of the CUSIP numbers, nor is any representation made as to their correctness on the Refunded Bonds or as indicated in any notice of redemption. Dated: ______________, 2021. U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE 762 4158-7929-2708.2 TO BE RECORDED AND WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine, CA 92614-2558 Attention: Donald S. Field, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. SECOND AMENDMENT TO SITE LEASE by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [__________] 1, 2020 763 4158-7929-2708.2 SECOND AMENDMENT TO SITE LEASE THIS SECOND AMENDMENT TO SITE LEASE (this “Second Amendment”) executed and entered into as of [_________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and charter city duly organized and existing under and by virtue of the Constitution and laws of the State of California and its Charter (the “City”), and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Lease Agreement (as defined below). RECITALS WHEREAS, the Authority and the City have entered into a Site Lease, dated as of September 1, 2011 (the “Original Site Lease”), as Recorder Instrument No. 2011000479933 with the Official Records, Orange County, on September 28, 2011; and WHEREAS, the Authority and the City have entered into a First Amendment to Site Lease, dated as of November 1, 2014 (the “First Amendment to Site Lease” and together with the Original Site Lease, the “Site Lease”), as Recorder Instrument No. 2014000488049 with the Official Records, Orange County, on November 13, 2014; and WHEREAS, Section 8.03 of the Site Lease provides that the City has the right to substitute alternate real property for the real property and improvements, constituting the Property (as defined in the Site Lease) or to release portions of the Property in accordance with the Lease Agreement, dated as of September 1, 2011, as heretofore amended and supplemented (the “Lease Agreement”), by and between the Authority and the City; and WHEREAS, Section 7.02 of the Lease Agreement provides that the City has the right to substitute alternate real property for any portion of the Property or to release a portion of the Property if certain conditions specified therein are satisfied; and WHEREAS, Section 9.01(b) of the Lease Agreement provides that the Lease Agreement and the Site Lease, and the rights and obligations of the City and the Authority thereunder, may be amended at any time by an amendment thereto, which shall become binding upon execution by the City and the Authority, without the written consents of any owners of the bonds issued under the Indenture, dated as of September 1, 2011, as heretofore amended and supplemented, by and among the Authority, the City and U.S. Bank National Association, as successor trustee (the “Trustee”), to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 7.02 of the Lease Agreement; and WHEREAS, in connection with the refunding of all or a portion of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project), the City and the Authority desire to substitute certain real property, and the improvements thereto, consisting of Central Library as described in Exhibit B hereto (the “Substituted Property”), for the Property currently subject to the Lease Agreement described in Exhibit A hereto (the “Released Property”); and 764 2 4158-7929-2708.2 WHEREAS, in connection therewith, the City and the Authority find it desirable to modify the Site Lease and the Lease Agreement pursuant this Second Amendment and the Second Amendment to Lease Agreement, dated as of [_______] 1, 2020, by and between the City and the Authority; and WHEREAS, the conditions specified in Section 7.02 of the Lease Agreement to be satisfied prior to such substitution have been so satisfied; and WHEREAS, there exists a non-exclusive license agreement, dated September 3, 2019 (the “One Fine Blend Agreement”), by and between the City and the Subhash and Sushila Patel, individuals, doing business as One Fine Blend (“One Fine Blend”), relating to the Substituted Property for the use of certain space and permission to sell coffee and various food and beverage items; and WHEREAS, the One Fine Blend Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and One Fine Blend, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, there exists a non-exclusive license agreement, dated March 19, 2018 (the “Genealogical Agreement”), by and between the City and the Orange County, California Genealogical Society (the “Genealogical Society”), relating to the Substituted Property for the use of certain space and library materials; and WHEREAS, the Genealogical Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and the Genealogical Society, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Second Amendment do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Second Amendment; NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: Section 1. Amendment. Exhibit A to the Site Lease is hereby amended to delete the Released Property described in Exhibit A hereto. Exhibit A to the Site Lease is further amended by substituting the Substituted Property described in Exhibit B hereto. Section 2. Termination and Reversion. All provisions related to the Released Property in the Site Lease are hereby terminated. All right, title and interest of the Authority and the Trustee in the Released Property under the Site Lease shall hereupon revert to the City free and clear of any interest of the Authority and the Trustee. 765 3 4158-7929-2708.2 Section 3. Binding Effect. This Second Amendment shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. Section 4. Severability. In the event any provision of this Second Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 5. Applicable Law. This Second Amendment shall be governed by and construed in accordance with the laws of the State of California. Section 6. Execution in Counterparts. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 766 4 4158-7929-2708.2 IN WITNESS WHEREOF, the City and the Authority have caused this Second Amendment to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF HUNTINGTON BEACH By: HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: ____________________________________ Robin Estanislau, Secretary 767 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 768 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 769 A-1 4158-7929-2708.2 EXHIBIT A DESCRIPTION OF THE RELEASED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: PARCEL 1: THOSE PORTIONS OF BLOCKS 1901, 1903, 2001 AND 2002 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH PARK STREET, UNION AVENUE, AND THE ALLEYS IN SAID BLOCKS, AS SHOWN ON SAID MAP AND AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, AND TOGETHER WITH PORTIONS OF PINE STREET AND SEVENTEENTH STREET, AS SHOWN SAID MAP AND AS VACATED BY RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19' 06" EAST 24.04 FEET; THENCE SOUTH 89° 40' 54" EAST 166.03 FEET TO THE CENTERLINE OF SEVENTEENTH STREET, 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP; THENCE NORTH 41° 38' 23" EAST 427.42 FEET ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SOUTH 89° 40' 54" EAST 137.05 FEET; THENCE NORTH 00° 19' 06" EAST 155.89 FEET ALONG A LINE PARALLEL TO THE CENTERLINE OF SAID LAKE AVENUE, TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38' 23" EAST 134.38 FEET ALONG SAID CENTERLINE OF SAID SEVENTEENTH STREET AND ITS NORTHEASTERLY PROLONGATION TO A POINT ON THE NORTHERLY LINE OF SAID TRACT NO. 12; THENCE NORTH 48° 21' 17" WEST 474.37 FEET ALONG SAID NORTHERLY TRACT LINE OF TRACT NO. 12; THENCE NORTH 89° 40' 01" WEST 535.29 FEET CONTINUING ALONG SAID NORTHERLY TRACT LINE TO THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE SOUTH 00° 20' 13" WEST 1266.12 FEET ALONG SAID EASTERLY LINE TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19' 06" EAST 24.04 FEET; THENCE SOUTH 89° 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID TRACT NO. 12; THENCE NORTH 89° 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. 770 A-2 4158-7929-2708.2 ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 13569, AS SHOWN ON A MAP RECORDED IN BOOK 652, PAGES 28 THROUGH 33, OF SAID MISCELLANEOUS MAPS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, G AS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SU RFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-03, 023-041-04 AND A PORTION OF 023-031-14 PARCEL 2: THOSE PORTIONS OF BLOCKS 1902, 1903 AND 2002 INCLUDING A PORTION OF UTICA STREET, ALL OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF UNION AVENUE AND THE ALLEYS IN SAID BLOCKS AS SHOWN ON SAID MAP AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, TOGETHER WITH THAT PORTION OF SEVENTEENTH STREET AS VACATED BY RESOLUTION NO. 5989 OF SAID CITY COUNCIL, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET 60.00 FEET IN WIDTH AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19' 06" EAST 24.04 FEET; THENCE SOUTH 89° 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID MAP OF TRACT NO. 12; THENCE NORTH 89° 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) 771 A-3 4158-7929-2708.2 FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SU RFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-031-10, 023-031-13 AND A PORTION OF 023-031-14 PARCEL 3: THOSE PORTIONS OF LOTS 13 AND 14 OF BLOCK 1901 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF SEVENTEENTH STREET, AS SHOWN ON SAID MAP AND AS VACATED IN THAT CERTAIN RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS OF ORANGE COUNTY AND PORTIONS OF LAKE AVENUE AND PARK STREET, AS SHOWN ON THE MAP OF TRACT NO. 13569, RECORDED IN BOOK 652, PAGES 28 THROUGH 33 OF MISCELLANEOUS MAPS, RECORDS OF SAID ORANGE COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE CENTERLINE INTERSECTION OF LAKE AVENUE 90.00 FEET IN WIDTH, AND SEVENTEENTH STREET 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 13569; THENCE SOUTH 00° 19' 06" WEST 207.32 FEET ALONG SAID CENTERLINE OF LAKE AVENUE TO THE CENTERLINE INTERSECTION OF PARK STREET, 52.00 FEET IN WIDTH, AS SHOWN ON THE MAP OF SAID TRACT NO. 13569; THENCE NORTH 89° 40' 54" WEST 237.70 FEET ALONG SAID CENTERLINE OF PARK STREET; THENCE NORTH 00° 19' 06" EAST 155.89 FEET TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38' 23" EAST 68.48 FEET ALONG SAID CENTERLINE TO AN ANGLE POINT IN SAID SEVENTEENTH STREET; THENCE CONTINUING ALONG SAID CENTERLINE OF SEVENTEENTH STREET SOUTH 89° 40' 54" EAST 192.48 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE AFOREMENTIONED PARCEL 1. EXCEPTING THEREFROM SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-06 PARCEL 4: THOSE LANDS IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A PORTION OF SEVENTEENTH STREET AS SHOWN ON TRACT NO. 12, FILED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, TOGETHER WITH A PORTION OF MANSION AVENUE AS DESCRIBED IN THE DEEDS TO THE CITY OF HUNTINGTON BEACH RECORDED SEPTEMBER 23, 1916, IN BOOK 294, PAGE 390 772 A-4 4158-7929-2708.2 OF DEEDS, AND THE DEED RECORDED JULY 21, 1950, IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS WHICH WERE VACATED, AS A PORTION OF PARCEL 1 BY CITY OF HUNTINGTON BEACH RESOLUTION NO. 5989, ON JANUARY 17, 1989 RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST EASTERLY CORNER OF LOT 3, BLOCK 2001, AS SHOWN ON SAID TRACT NO. 12, THENCE NORTH 41º 19' 00" EAST, 54.43 FEET, ALONG THE NORTHEAST PROLONGATION OF THE SOUTHEAST LINE OF SAID LOT 3, TO AN INTERSECTION WITH THE SOUTHWESTERLY LINE OF YORKTOWN AVENUE (FORMERLY MANSION AVENUE), SAID INTERSECTION BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 850.00 FEET, A RADIAL LINE TO SAID POINT OF CURVATURE BEARS SOUTH 27º 11' 59" WEST; THENCE SOUTHEASTERLY 36.30 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2º 26' 48", TO THE INTERSECTION OF SAID CURVE AND THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET SAID INTERSECTION BEING THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION, A RADIAL LINE TO SAID TRUE POINT OF BEGINNING BEARS SOUTH 24º 45' 11" WEST; THENCE CONTINUING SOUTHEASTERLY 44.96 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 3º 01' 51", TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUT HWESTERLY, HAVING A RADIUS OF 32.00 FEET; THENCE SOUTHEASTERLY 38.13 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 68º 16' 40", TO THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF LAKE STREET (FORMERLY LAKE AVENUE), 90.00 FEET IN WIDTH, AS SHOWN ON SAID TRACT NO. 12; THENCE SOUTH 00º 00' 00" WEST, 49.93 FEET ALONG SAID PROLONGATION OF THE WESTERLY LINE OF LAKE STREET TO THE CENTERLINE OF SEVENTEENTH STREET (70.00 FEET IN WIDTH) AS SHOWN ON SAID TRACT NO. 12; THENCE WESTERLY ALONG THE CENTERLINE OF SAID SEVENTEENTH STREET, AS SHOWN ON SAID TRACT NO. 12, NORTH 90º 00' 00" WEST, 147.08 FEET, TO AN ANGLE POINT IN SAID CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12; THENCE NORTHEASTERLY, LEAVING SAID CENTERLINE OF SEVENTEENTH STREET ALONG THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12, NORTH 41º 19' 00" EAST, 129.68 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL MINERALS, PETROLEUM, ASPHALTUM, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON OR UNDER, OR THAT MAY BE PRODUCED FROM THE LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM ADJACENT LANDS INTO AND THROUGH THE SUBSURFACE OF THE LAND; PROVIDED, HOWEVER, THAT GRANTORS SHALL NOT USE THE SURFACE OF THE LAND FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION OR REMOVAL OF SAID MINERALS OR SUBSTANCES, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION AND STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION IN A DEED RECORDED JULY 21, 1950 IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS. APN: 023-031-14 and 023-031-14 [END OF LEGAL DESCRIPTION] 773 A-2 4158-7929-2708.2 The above-described property is commonly referred to as the Civic Center located at 1900 Main Street, Huntington Beach, California. 774 B-1 4158-7929-2708.2 EXHIBIT B DESCRIPTION OF THE SUBSTITUTED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE 11 WEST, AS SHOWN ON MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.751 FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND EASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26; THENCE SOUTH 89° 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2° 07' 44" WEST, 320.54 FEET; THENCE NORTH 87° 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36° 13' 50" WEST, 535.78 FEET; THENCE NORTH 0° 12' 15" EAST, 377.82 FEET; THENCE NORTH 83° 19' 27" WEST, 562.50 FEET; THENCE SOUTH 21° 08' 07" WEST, 261.18 FEET; THENCE SOUTH 14° 28' 10" EAST, 235.93 FEET; THENCE SOUTH 77° 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2° 07' 44" WEST, 92.62 FEET TO THE TRUE POINT OF BEGINNING. Excluding the rights granted under the Master Communications Site Lease, dated April 18, 1996 (the “Communications Lease”), by and between the City and [T-Mobile, as successor in interest to] Pacific Bell Mobile Services, relating to the installation of mobile/wireless communications facilities on such property, while the Communications Lease is in effect for the term thereof. [END OF LEGAL DESCRIPTION] The above-described property is commonly referred to as the Central Library located at 7111 Talbert Avenue, Huntington Beach, California. 775 4158-7929-2708.2 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Site Lease, dated as of September 1, 2011, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), as amended and supplemented by the First Amendment to Site Lease, dated as of November 1, 2014, by and between the City and the Authority, as amended by the Second Amendment to Site Lease, dated as of [________] 1, 2020, from the City to the Authority, is hereby accepted by the undersigned on behalf of the Authority pursuant to authority conferred by resolution of the Board of Directors of the Authority adopted on [_________], 2020, and the Authority consents to recordation thereof by its duly authorized officer. Dated: [__________], 2020 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: 776 4156-5476-6116.2 TO BE RECORDED AND WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine, CA 92614‐2558 Attention: Donald S. Field, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. SECOND AMENDMENT TO LEASE AGREEMENT by and between CITY OF HUNTINGTON BEACH and HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY Dated as of [_________] 1, 2020 777 1 4156-5476-6116.2 SECOND AMENDMENT TO LEASE AGREEMENT THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Second Amendment”) executed and entered into as of [__________] 1, 2020, is by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and charter city duly organized and existing under and by virtue of the Constitution and laws of the State of California and its Charter (the “City”), and the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Lease Agreement (as defined below). RECITALS WHEREAS, the Authority and the City have entered into a Lease Agreement, dated as of September 1, 2011 (the “Original Lease Agreement”), with regard to which a Memorandum of Lease Agreement and Assignment was recorded, as Recorder Instrument No. 2011000479934 with the Official Records, Orange County, on September 28, 2011; WHEREAS, the Authority and the City have entered into a First Amendment to Lease Agreement, dated as of November 1, 2014 (the “First Amendment to Lease Agreement” and together with the Original Lease Agreement, the “Lease Agreement”), with regard to which a Memorandum of Lease Agreement and Assignment was recorded, as Recorder Instrument No. 2014000488050 with the Official Records, Orange County, on November 13, 2014; WHEREAS, Section 7.02 of the Lease Agreement provides that the City has the right to substitute alternate real property for any portion of the real property and improvements, constituting the Property (as defined in the Lease Agreement) or to release a portion of the Property if certain conditions specified therein are satisfied; and WHEREAS, Section 9.01(b) of the Lease Agreement provides that the Lease Agreement and the Site Lease, dated as of September 1, 2011, as heretofore amended and supplemented (the “Site Lease”), by and between the City and Authority, and the rights and obligations of the City and the Authority thereunder, may be amended at any time by an amendment thereto, which shall become binding upon execution by the City and the Authority, without the written consents of any owners of the bonds issued under the Indenture, dated as of September 1, 2011, as heretofore amended and supplemented, by and among the Authority, the City and U.S. Bank National Association, as successor trustee (the “Trustee”), to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 7.02 of the Lease Agreement; and WHEREAS, in connection with the refunding of all or a portion of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project), the City and the Authority desire to substitute certain real property, and the improvements thereto, consisting of Central Library as described in Exhibit B hereto (the “Substituted Property”), for the Property currently subject to the Lease Agreement described in Exhibit A hereto (the “Released Property”); and 778 2 4156-5476-6116.2 WHEREAS, in connection therewith, the City and the Authority find it desirable to modify the Site Lease and the Lease Agreement pursuant the Second Amendment to Site Lease Agreement, dated as of [______] 1, 2020, by and between the City and the Authority and this Second Amendment; and WHEREAS, the conditions specified in Section 7.02 of the Lease Agreement to be satisfied prior to such substitution have been so satisfied; and WHEREAS, there exists a non-exclusive license agreement, dated September 3, 2019 (the “One Fine Blend Agreement”), by and between the City and the Subhash and Sushila Patel, individuals, doing business as One Fine Blend (“One Fine Blend”), relating to the Substituted Property for the use of certain space and permission to sell coffee and various food and beverage items; and WHEREAS, the One Fine Blend Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and One Fine Blend, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, there exists a non-exclusive license agreement, dated March 19, 2018 (the “Genealogical Agreement”), by and between the City and the Orange County, California Genealogical Society (the “Genealogical Society”), relating to the Substituted Property for the use of certain space and library materials; and WHEREAS, the Genealogical Agreement has been subordinated to the Site Lease and Lease Agreement pursuant to a Subordination Agreement, dated as of [_______], 2020, by and between the City and the Genealogical Society, which was recorded, as Recorder Instrument No. [____________] with the Official Records, Orange County, on [__________], 2020; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Second Amendment do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Second Amendment; NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: Section 1. Amendment. Exhibit A to the Lease Agreement is hereby amended to delete the Released Property described in Exhibit A hereto. Exhibit A to the Lease Agreement is further amended by substituting the Substituted Property described in Exhibit B hereto. Section 2. Termination and Reversion. All provisions related to the Released Property in the Lease Agreement are hereby terminated. All right, title and interest of the Authority and the Trustee in the Released Property under the Lease Agreement shall hereupon revert to the City free and clear of any interest of the Authority and the Trustee. 779 3 4156-5476-6116.2 Section 3. Binding Effect. This Second Amendment shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. Section 4. Severability. In the event any provision of this Second Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 5. Applicable Law. This Second Amendment shall be governed by and construed in accordance with the laws of the State of California. Section 6. Execution in Counterparts. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 780 4 4156-5476-6116.2 IN WITNESS WHEREOF, the Authority and the City have caused this Second Amendment to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: ATTEST: ____________________________________ Robin Estanislau, Secretary CITY OF HUNTINGTON BEACH By: 781 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 782 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________ [Seal] A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 783 A-1 4156-5476-6116.2 EXHIBIT A DESCRIPTION OF THE RELEASED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: PARCEL 1: THOSE PORTIONS OF BLOCKS 1901, 1903, 2001 AND 2002 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH PARK STREET, UNION AVENUE, AND THE ALLEYS IN SAID BLOCKS, AS SHOWN ON SAID MAP AND AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, AND TOGETHER WITH PORTIONS OF PINE STREET AND SEVENTEENTH STREET, AS SHOWN SAID MAP AND AS VACATED BY RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19’ 06” EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19’ 06” EAST 24.04 FEET; THENCE SOUTH 89° 40’ 54” EAST 166.03 FEET TO THE CENTERLINE OF SEVENTEENTH STREET, 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP; THENCE NORTH 41° 38’ 23” EAST 427.42 FEET ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SOUTH 89° 40’ 54” EAST 137.05 FEET; THENCE NORTH 00° 19’ 06” EAST 155.89 FEET ALONG A LINE PARALLEL TO THE CENTERLINE OF SAID LAKE AVENUE, TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38’ 23” EAST 134.38 FEET ALONG SAID CENTERLINE OF SAID SEVENTEENTH STREET AND ITS NORTHEASTERLY PROLONGATION TO A POINT ON THE NORTHERLY LINE OF SAID TRACT NO. 12; THENCE NORTH 48° 21’ 17” WEST 474.37 FEET ALONG SAID NORTHERLY TRACT LINE OF TRACT NO. 12; THENCE NORTH 89° 40’ 01” WEST 535.29 FEET CONTINUING ALONG SAID NORTHERLY TRACT LINE TO THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE SOUTH 00° 20’ 13” WEST 1266.12 FEET ALONG SAID EASTERLY LINE TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39’ 33” EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19’ 06” EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19’ 06” EAST 24.04 FEET; THENCE SOUTH 89° 40’ 54” EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20’ 13” EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID TRACT NO. 12; THENCE NORTH 89° 40’ 01” WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20’ 13” WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39’ 33” EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. 784 A-2 4156-5476-6116.2 ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 13569, AS SHOWN ON A MAP RECORDED IN BOOK 652, PAGES 28 THROUGH 33, OF SAID MISCELLANEOUS MAPS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-03, 023-041-04 AND A PORTION OF 023-031-14 PARCEL 2: THOSE PORTIONS OF BLOCKS 1902, 1903 AND 2002 INCLUDING A PORTION OF UTICA STREET, ALL OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF UNION AVENUE AND THE ALLEYS IN SAID BLOCKS AS SHOWN ON SAID MAP AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 06, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, TOGETHER WITH THAT PORTION OF SEVENTEENTH STREET AS VACATED BY RESOLUTION NO. 5989 OF SAID CITY COUNCIL, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET 60.00 FEET IN WIDTH AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19’ 06” EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45° 19’ 06” EAST 24.04 FEET; THENCE SOUTH 89° 40’ 54” EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 20’ 13” EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID MAP OF TRACT NO. 12; THENCE NORTH 89° 40’ 01” WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00° 20’ 13” WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89° 39’ 33” EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, 785 A-3 4156-5476-6116.2 AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-031-10, 023-031-13 AND A PORTION OF 023-031-14 PARCEL 3: THOSE PORTIONS OF LOTS 13 AND 14 OF BLOCK 1901 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF SEVENTEENTH STREET, AS SHOWN ON SAID MAP AND AS VACATED IN THAT CERTAIN RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS OF ORANGE COUNTY AND PORTIONS OF LAKE AVENUE AND PARK STREET, AS SHOWN ON THE MAP OF TRACT NO. 13569, RECORDED IN BOOK 652, PAGES 28 THROUGH 33 OF MISCELLANEOUS MAPS, RECORDS OF SAID ORANGE COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE CENTERLINE INTERSECTION OF LAKE AVENUE 90.00 FEET IN WIDTH, AND SEVENTEENTH STREET 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 13569; THENCE SOUTH 00° 19’ 06” WEST 207.32 FEET ALONG SAID CENTERLINE OF LAKE AVENUE TO THE CENTERLINE INTERSECTION OF PARK STREET, 52.00 FEET IN WIDTH, AS SHOWN ON THE MAP OF SAID TRACT NO. 13569; THENCE NORTH 89° 40’ 54” WEST 237.70 FEET ALONG SAID CENTERLINE OF PARK STREET; THENCE NORTH 00° 19’ 06” EAST 155.89 FEET TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 41° 38’ 23” EAST 68.48 FEET ALONG SAID CENTERLINE TO AN ANGLE POINT IN SAID SEVENTEENTH STREET; THENCE CONTINUING ALONG SAID CENTERLINE OF SEVENTEENTH STREET SOUTH 89° 40’ 54” EAST 192.48 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE AFOREMENTIONED PARCEL 1. EXCEPTING THEREFROM SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 05, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-06 PARCEL 4: THOSE LANDS IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A PORTION OF SEVENTEENTH STREET AS SHOWN ON TRACT NO. 12, FILED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, TOGETHER WITH A PORTION OF MANSION AVENUE AS DESCRIBED IN THE DEEDS TO THE CITY OF HUNTINGTON BEACH RECORDED SEPTEMBER 23, 1916, IN BOOK 294, PAGE 390 OF DEEDS, AND THE DEED RECORDED JULY 21, 1950, IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS WHICH WERE VACATED, AS A PORTION OF PARCEL 1 BY CITY OF HUNTINGTON BEACH 786 A-4 4156-5476-6116.2 RESOLUTION NO. 5989, ON JANUARY 17, 1989 RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89- 137620 OF OFFICIAL RECORDS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST EASTERLY CORNER OF LOT 3, BLOCK 2001, AS SHOWN ON SAID TRACT NO. 12, THENCE NORTH 41º 19’ 00” EAST, 54.43 FEET, ALONG THE NORTHEAST PROLONGATION OF THE SOUTHEAST LINE OF SAID LOT 3, TO AN INTERSECTION WITH THE SOUTHWESTERLY LINE OF YORKTOWN AVENUE (FORMERLY MANSION AVENUE), SAID INTERSECTION BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 850.00 FEET, A RADIAL LINE TO SAID POINT OF CURVATURE BEARS SOUTH 27º 11’ 59” WEST; THENCE SOUTHEASTERLY 36.30 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2º 26’ 48”, TO THE INTERSECTION OF SAID CURVE AND THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET SAID INTERSECTION BEING THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION, A RADIAL LINE TO SAID TRUE POINT OF BEGINNING BEARS SOUTH 24º 45’ 11” WEST; THENCE CONTINUING SOUTHEASTERLY 44.96 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 3º 01’ 51”, TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 32.00 FEET; THENCE SOUTHEASTERLY 38.13 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 68º 16’ 40”, TO THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF LAKE STREET (FORMERLY LAKE AVENUE), 90.00 FEET IN WIDTH, AS SHOWN ON SAID TRACT NO. 12; THENCE SOUTH 00º 00’ 00” WEST, 49.93 FEET ALONG SAID PROLONGATION OF THE WESTERLY LINE OF LAKE STREET TO THE CENTERLINE OF SEVENTEENTH STREET (70.00 FEET IN WIDTH) AS SHOWN ON SAID TRACT NO. 12; THENCE WESTERLY ALONG THE CENTERLINE OF SAID SEVENTEENTH STREET, AS SHOWN ON SAID TRACT NO. 12, NORTH 90º 00’ 00” WEST, 147.08 FEET, TO AN ANGLE POINT IN SAID CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12; THENCE NORTHEASTERLY, LEAVING SAID CENTERLINE OF SEVENTEENTH STREET ALONG THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12, NORTH 41º 19’ 00” EAST, 129.68 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL MINERALS, PETROLEUM, ASPHALTUM, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON OR UNDER, OR THAT MAY BE PRODUCED FROM THE LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM ADJACENT LANDS INTO AND THROUGH THE SUBSURFACE OF THE LAND; PROVIDED, HOWEVER, THAT GRANTORS SHALL NOT USE THE SURFACE OF THE LAND FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION OR REMOVAL OF SAID MINERALS OR SUBSTANCES, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION AND STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION IN A DEED RECORDED JULY 21, 1950 IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS. APN: 023-031-14 and 023-031-14 [END OF LEGAL DESCRIPTION] The above-described property is commonly referred to as the Civic Center located at 1900 Main Street, Huntington Beach, California. 787 B-1 4156-5476-6116.2 EXHIBIT B DESCRIPTION OF THE SUBSTITUTED PROPERTY All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE 11 WEST, AS SHOWN ON MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.751 FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND EASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26; THENCE SOUTH 89° 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2° 07' 44" WEST, 320.54 FEET; THENCE NORTH 87° 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36° 13' 50" WEST, 535.78 FEET; THENCE NORTH 0° 12' 15" EAST, 377.82 FEET; THENCE NORTH 83° 19' 27" WEST, 562.50 FEET; THENCE SOUTH 21° 08' 07" WEST, 261.18 FEET; THENCE SOUTH 14° 28' 10" EAST, 235.93 FEET; THENCE SOUTH 77° 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2° 07' 44" WEST, 92.62 FEET TO THE TRUE POINT OF BEGINNING. Excluding the rights granted under the Master Communications Site Lease, dated April 18, 1996 (the “Communications Lease”), by and between the City and [T-Mobile, as successor in interest to] Pacific Bell Mobile Services, relating to the installation of mobile/wireless communications facilities on such property, while the Communications Lease is in effect for the term thereof. [END OF LEGAL DESCRIPTION] The above-described property is commonly referred to as the Central Library located at 7111 Talbert Avenue, Huntington Beach, California. 788 4156-5476-6116.2 CERTIFICATE OF ACCEPTANCE In accordance with Section 27281 of the California Government Code, this is to certify that the interest in the real property conveyed by the Lease Agreement, dated as of September 1, 2011, by and between the City of Huntington Beach, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the “City”) and the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the “Authority”), as amended and supplemented by the First Amendment to Lease Agreement, dated as of November 1, 2014, as amended by the Second Amendment to Lease Agreement, dated as of [_________] 1, 2020, by and between the City and the Authority, from the Authority to the City, is hereby accepted by the undersigned on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on [___________], 2020, and the City consents to recordation thereof by its duly authorized officer. Dated: [__________], 2020 CITY OF HUNTINGTON BEACH By: ________________________________ 789 City of Huntington Beach File #:20-1777 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: **ITEM WITHDRAWN BY STAFF PER MEMO FROM ASSISTANT CITY MANAGER** Authorize and direct the City Manager to execute a Ground Lease Agreement, in a form approved by the City Attorney, to lease real property located at 17642 Beach Blvd. by and between the City of Huntington Beach and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitburu Yamada, Trustee of the Mitsuru Yamada Living Trust; Approve allocation of funds necessary to lease the property for a period not to exceed 8 months; and Approve allocation of funds necessary to acquire 17642 Beach Blvd Statement of Issue: Click or tap here to enter text. Financial Impact: Click or tap here to enter text. Recommended Action: A) Authorize and direct the City Manager to execute a Ground Lease Agreement, in a form approved by the City Attorney, by and between the City of Huntington Beach and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitburu Yamada, Trustee of the Mitsuru Yamada Living Trust to acquire the Property; and B) Appropriate funds of $120,000 from COVID-19 monies available to the City; and C) Appropriate funds of $3,250,000 from Fund 352 for acquisition of the Property. Alternative Action(s): Click or tap here to enter text. Analysis: Click or tap here to enter text. City of Huntington Beach Printed on 7/17/2020Page 1 of 2 powered by Legistar™790 File #:20-1777 MEETING DATE:7/20/2020 Environmental Status: Click or tap here to enter text. Strategic Plan Goal: Choose an item. Attachment(s): 1.Click or tap here to enter text. City of Huntington Beach Printed on 7/17/2020Page 2 of 2 powered by Legistar™791 CITY OF HUNTINGTON BEACH Inter-Office Memo TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: TRAVIS HOPKINS, ASSISTANT CITY MANAGER DATE: JULY 17, 2020 SUBJECT: WITHDRAWL OF AGENDA ITEM 18 (20-1777) FROM THE JULY 20 MEETING AGENDA Based on recent developments, staff is withdrawing Agenda Item 18 (20-1777) from the July 20 City Council Meeting Agenda, and will instead agendize the matter as a Closed Session real property negotiation discussion. 792 From:Fikes, Cathy To:Agenda Alerts Subject:FW: On the Agenda published. Date:Thursday, July 16, 2020 11:23:16 AM From: larry mcneely <lmwater@yahoo.com> Sent: Thursday, July 16, 2020 11:18 AM To: CITY COUNCIL <city.council@surfcity-hb.org> Subject: On the Agenda published. First I want to comment on Agenda Item #18 brought forward by Patrick Brenden. This item is asking our council to effective close escrow and Pay for the Toxic site and Lease the Toxic property next door for eight months for $120,000 long before we can place a shovel in the ground and a waste $120,000. We entered a agreement once again without the required Due Diligence on who's advice ? the new staff that recently joined our city our City Manager Oliver Chi and Community Development Director Ursula Luna, why was our City Attorney Micheal Gates left out ? As you should know when entering escrow this is the time to place requirements as soils testing, termite testing, land use requirements capabilities and to make sure there are no no property encumbrances as contractor liens and a clear clean title to the property. These are to be included in the escrow instructions to be completed Before escrow can close, NOT AFTER THE FACT. Due Diligence is to be performed before escrow is entered and Again we have another Pipeline Shelter Fiasco. And this location was purchased under the False guise of Woman, Children and Seniors living on our streets, while there may be a few these are not the people camping in our parks doing drugs and leaving their needles all over. The Street People who are the major source of complaints to our police department are stealing from our cars for the loose change and anything of value and stealing our bicycles and setting up chop shops and selling parts and bikes swapped with parts to make them unrecognizable. The question are you going to vote to approve such a Crazy Effort when we will be forced to delay any efforts to open a shelter because of the conditions, OK your choice but you have been warned. This as the homeless issues explode in our our community. What will be the True costs of the purchase of this property the clean up costs the delays Michael Poseys SB2 funds that took away our building and development standards ? Lets get off this Crazy Train and wake up. Now Agenda Item #21. brought forward by Erik Peterson. This is a Get It Done and Address the Real Issuers and Problems. Place a temporary mobile shelter facility on city owned property. Take action Now that will have a effect on the homeless population by un-tying our police hands. Where ever we place these people we will have opposition this is temporary until we can get help for all ages of homeless and get past the False Misrepresentation of the numbers of Woman,Children and Seniors living on out streets. I hope you heed the advise of those looking into these issuers without input from those who gain financially by their Homeless efforts. We have been Duped long enough look for your selves identify the problems and issues talk to our Chief of Police Ignore the carpetbaggers and special interests who gain profits off these people and rely on volunteer efforts and money to support their gains. We have seen how volunteers are asked to support causes and spend their time and efforts for a cause from their Hearts, Just take the example of the Bolsa Chica Wetlands Preservation Efforts this as Patrick Brenden collects over $100,000 as a CEO ??? what happened to working for a cause from your Hearts and not financial Gain and Political support. Shame on You Patrick Brenden I get it i see the Advisory Board and the Directors all the names of Developers and Special Interests who gain off your votes and have found a new way to direct money into a election through employment as a CEO for a nonprofit who rely on volunteers and their heartfelt donations. Wake Up 793 From:Fikes, Cathy To:Agenda Alerts Subject:Homeless housing! Date:Thursday, July 16, 2020 12:41:28 PM Importance:High From: Gary Tarkington <garytarkington@msn.com> Sent: Thursday, July 16, 2020 12:35 PM To: CITY COUNCIL <city.council@surfcity-hb.org>; Chi, Oliver <oliver.chi@surfcity-hb.org> Subject: Homeless housing! Importance: High Here you go, what so many of us think!! First I want to comment on Agenda Item #18 brought forward by Patrick Brenden. This item is asking our council to effectively close escrow and Pay for the Toxic site and Lease the Toxic property next door for eight months for $120,000 long before we can place a shovel in the ground and a waste $120,000. We entered an agreement once again without the required Due Diligence on who's advice? the new staff that recently joined our City Manager Oliver Chi and Community Development Director Ursula Luna, why was our City Attorney Micheal Gates left out? As you should know when entering escrow this is the time to place requirements as soils testing, termite testing, land use requirements capabilities, and to make sure there are no property encumbrances as contractor liens and a clear clean title to the property. These are to be included in the escrow instructions to be completed Before escrow can close, NOT AFTER THE FACT. Due Diligence is to be performed before escrow is entered and Again we have another Pipeline Shelter Fiasco. And this location was purchased under the False guise of Woman, Children, and Seniors living on our streets, while there may be a few these are not the people camping in our parks doing drugs and leaving their needles all over. The Street People who are the major source of complaints to our police department are stealing from our cars for the loose change and anything of value and stealing our bicycles and setting up chop shops and selling parts and bikes swapped with parts to make them unrecognizable. The question are you going to vote to approve such a Crazy Effort when we will be forced to delay any efforts to open a shelter because of the conditions, OK your choice but you have been warned. This as the homeless issues explode in our community. What will be the True costs of the purchase of this property the cleanup costs the delays Michael Poseys SB2 funds that took away our building and development standards? Let's get off this Crazy Train and wake up. Now Agenda Item #21. brought forward by Erik Peterson. This is a Get It Done and Address the Real Issuers and Problems. Place a temporary mobile shelter facility on city-owned property. Take action Now that will have an effect on the homeless population by un-tying our police hands. Where ever we place these people we will have opposition this is temporary until we can get help for all ages of homeless and get past the False Misrepresentation of the numbers of Women, Children, and Seniors living on out streets. I hope you heed the advice of those looking into these issuers without input from those who gain financially by their Homeless efforts. We have been Duped long enough look for your selves identify the problems and issues talk to our Chief of Police Ignore the carpetbaggers and special interests who gain profits off these people and rely on volunteer efforts and money to support their gains. We have seen how volunteers are asked to support causes and spend their time and efforts for a cause from their Hearts, Just take the example of the 794 Bolsa Chica Wetlands Preservation Efforts this as Patrick Brenden collects over $100,000 as a CEO ??? what happened to working for a cause from your Hearts and not financial Gain and Political support. Shame on You Patrick Brenden I get it I see the Advisory Board and the Directors all the names of Developers and Special Interests who gain off your votes and have found a new way to direct money into an election through employment as a CEO for a nonprofit who rely on volunteers and their heartfelt donations. Wake Up Ann Tarkington, Huntington Beach, CA. 795 City of Huntington Beach File #:19-1130 MEETING DATE:7/20/2020 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Approve for Introduction Ordinance No. 4201 repealing Chapter 8.48 and adopting a new Chapter 8.48 of the Huntington Beach Municipal Code (HBMC) relating to Public Nuisance Abatement of Abandoned, Wrecked, Dismantled or Inoperative Vehicles Statement of Issue: Code Enforcement often receives requests for service from the community regarding inoperable and abandoned vehicles on private property. There is a need to amend Huntington Beach Municipal Code Chapter 8.48 Inoperable Vehicles to update the process for abatement of Inoperable and Abandoned Vehicles consistent with the California Vehicle Code. If adopted by the City Council, the proposed amendment will enable the Code Enforcement Division to be more responsive to the citizens of Huntington Beach and improve the City’s enforcement actions. Financial Impact: Not applicable. Recommended Action: Approve for introduction Ordinance No. 4201, “An Ordinance of the City of Huntington Beach Repealing Chapter 8.48 and Adopting New Chapter 8.48 of the Huntington Beach Municipal Code Relating to Public Nuisance Abatement of Abandoned Vehicles.” (Attachment No. 1) Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: Since Chapter 8.48 of the Huntington Beach Municipal Code was originally adopted, updates to the California Vehicle Code relating to the process for the abatement of inoperable vehicles have been passed by the State. As the Community Development Department Code Enforcement Division works to modernize the City’s processes, the need to update this code chapter has become necessary. If the proposed amendment is adopted by the City Council, the Code Enforcement Division will be able to cause the abatement by removal of inoperable vehicles on private property, thereby City of Huntington Beach Printed on 7/17/2020Page 1 of 2 powered by Legistar™796 File #:19-1130 MEETING DATE:7/20/2020 able to cause the abatement by removal of inoperable vehicles on private property, thereby enhancing the City’s enforcement actions. On an annual basis, Code Enforcement receives an average of 170 reported violations of abandoned and inoperable vehicles on private properties. The current process involves the issuance of a Notice of Violation, Final Notice, three different levels of civil citations, and further review by the City Attorney’s Office for other legal remedies. The entire duration of this process can take three (3) to five (5) months before an abandoned and inoperable vehicle violation is fully resolved. The proposed amendment provides a more efficient process for resolving these types of violations. Environmental Status: The proposed Huntington Beach Municipal Code amendments are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061 (b) (3) of the CEQA Guidelines because there is no potential for the amendments to have a significant effect on the environment. Strategic Plan Goal: Enhance and maintain high quality City services Attachment(s): 1. Ordinance 4201 amending Chapter 8.48 relating to Inoperable Vehicles 2. Legislative Draft - Chapter 8.48 - New 3. Legislative Draft - Chapter 8.48 - Repealing City of Huntington Beach Printed on 7/17/2020Page 2 of 2 powered by Legistar™797 798 799 800 801 802 LEGISLATIVE DRAFT HBMC 8.48 8.48.010 Intent and Purpose This Chapter is intended to provide a procedure for the abatement of Abandoned, Wrecked, Dismantled and Inoperable Vehicles, and Vehicle Parts, and is enacted under the authority of the Huntington Beach Charter and Section 22660 of the California Vehicle Code. It is the intent of the City Council to provide that the abatement of public nuisances consisting of Abandoned, Wrecked, Dismantled and Inoperable Vehicles may be carried on either concurrently with or separately from the abatement of other conditions, if any, constituting a public nuisance on any premises within the City, as deemed appropriate under the circumstances. 8.48.020 Definitions For the purposes of this Chapter, the following terms shall mean as follows, unless the context in which they are used clearly indicates to the contrary: A. “Abandoned Vehicle” means a Vehicle abandoned on a street, public property or private property in such an inoperable or neglected condition and the Director determines that the owner relinquished all rights or interest in the Vehicle. B. “Director” means the Director of the Department of Community Development, or his or her designee. C. “Dismantled Vehicle” means any Vehicle which is partially or wholly disassembled. D. “Inoperable Vehicle” means any Vehicle in a condition that renders it unable to drive or unsafe for operation upon a street, or in which operation upon a street would violate the Vehicle Code or any other law or regulation related to the operation of Vehicles upon a street in the City of Huntington Beach or the State of California. E. “Vehicle Part” includes, but is not limited to, any item, device, component, frame, bumper, wheel or glass associated with a Vehicle. F. “Public Property” is any property owned by the City, or any State, County or local government agency. Public property does not include a street. G. “Street” means any highway, sidewalk, alley or right-of-way dedicated to the public, or maintained as private. H. “Vehicle” generally means a device, or substantial part of a device by which any person or property may be propelled, moved or drawn upon a street, except a device moved by human power or used exclusively upon stationary rails or tracks. The term Vehicle includes automobiles, tractors, boats, motorcycles, special purpose vehicle, etc. as well as trailers designed for carrying persons or property on its own structure and for being drawn by a motor Vehicle and so constructed that no part of its weight rests upon any other Vehicle. The term Vehicle includes any Abandoned, Dismantled, Inoperable, Wrecked or Part of a Vehicle. I. “Wrecked Vehicle” means any Vehicle, or a substantial part of a Vehicle that is damaged to such an extent that it cannot be operated upon the street. A Vehicle which has been wrecked in a traffic accident, and which has been removed from the street to a storage facility, but which has not been claimed by its owner, is not an Abandoned Vehicle. 803 8.48.030 Applicability This Chapter shall not apply to: A. A Vehicle or Vehicle Part, which is completely enclosed within a building in a lawful manner where it is not visible from the street or other public or private property. B. A Vehicle or Vehicle Part which is stored or parked in a lawful manner on private property in connection with the business of a licensed dismantler, licensed Vehicle dealer, a junk dealer, or when such storage or parking is necessary to the operation of a lawfully conducted business or commercial enterprise. C. These exceptions shall not authorize the maintenance of a public or private nuisance as defined under provisions of law other than this Chapter. 8.48.040 Enforcement Except as otherwise provided herein, both the Police Chief and the Director of Community Development may administer and enforce the provisions of this Chapter. 8.48.050 Notice Upon discovery of an Abandoned, Wrecked, Dismantled or Inoperable Vehicle or Vehicle Part, the City may issue a ten (10) day Notice of Intention to abate and remove the Vehicle or Vehicle Part as a public nuisance. The notice shall be mailed, by registered or certified mail, to the owner of the land as shown on the last equalized assessment roll and to the last registered and legal owner of record of the Vehicle, unless the Vehicle is in such condition that the identification number is not available to determine ownership. 8.48.060 Circumstances Where Notice of Intent Not Required. A Notice of Intention to Abate shall not be required: A. If the property owner and the owner of the Vehicle have signed releases authorizing removal and waiving further interest in the Vehicle or Vehicle Part. B. The Vehicle is located upon a parcel that either is zoned for agricultural use or is not improved with a residential structure containing one or more dwelling units and : 1. The Vehicle or Vehicle Part is inoperable due to the absence of a motor, transmission, or wheels and is incapable of being towed; 2. The Vehicle or Vehicle Part is valued at less than two hundred dollars ($200.00) by the Director; 3. The Director has determined that the Vehicle or Vehicle Part is a public nuisance presenting an immediate threat to public health and safety; 4. The property owner has signed a release authorizing the removal and waiving further interest in the Vehicle or Vehicle Part; and If a Vehicle is removed pursuant to this Section, prior to final disposition, the registered or legal owner shall be notified of the intent to dispose of the Vehicle or Vehicle Part. If the Vehicle or Vehicle Part is not claimed and removed from the scrapyard, automobile dismantler’s yard or public disposal area within twelve (12) days after the notice to dispose of Vehicle is mailed, final disposition may proceed. 8.48.070 Public Hearing Upon Written Request. A. If the Vehicle owner or the owner of the property where the Vehicle is located requests a hearing within ten (10) days of mailing the Notice of Intention to Abate, the Director shall conduct a public hearing. The landowner and/or Vehicle owner may appear in person at the hearing or present a 804 sworn written statement in time for consideration at the hearing and deny responsibility for the presence of the Vehicle on the land and his/her reasons for such denial. B. At the public hearing, the Director shall hear all relevant facts and testimony. The Director shall determine two questions: 1. Whether the Vehicle or Vehicle Part is Abandoned, Wrecked, Dismantled, or Inoperable Vehicle or Vehicle part such that it is a public nuisance. 2. Whether the City should assess the administrative costs and the costs of removal of the Vehicle, or Vehicle Part, against the property on which it is located in consideration of the circumstances that lead to the Vehicle or Vehicle Part being located on the property. C. If the City does not receive a request for a hearing within ten (10) days after mailing of the notice of intention to abate and remove, the city shall have the authority to abate and remove the Vehicle, or Vehicle Part, as a public nuisance without holding public hearing. 8.48.080 Notice of Decision. A. At the conclusion of the public hearing, the Director may find that a Vehicle or Vehicle Part has been Abandoned, Wrecked, Dismantled, or Inoperable such that it is a public nuisance and ordered removal or disposal, and determine the administrative costs and the cost of removal and disposal to be charged against the responsible person. The order requiring removal shall include a description of the Vehicle, or Vehicle Part, and the correct identification number and license number of the Vehicle, if available at the site. B. Director shall not assess the costs of administration or removal of the Vehicle or Vehicle Part against the property upon which the Vehicle or Vehicle Part is located if he or she determines that the Vehicle or Vehicle Part was placed on the property without the owner’s consent. C. Any interested party makes a written statement to the Director but does not appear, he/she shall be notified in writing of the decision. D. The Director’s decision shall be final and set forth in an order that is mailed to both the owner of the property and the owner of the Vehicle or Vehicle Part. The order shall specify that the Vehicle or Vehicle Part shall be removed from the property within fifteen (15) days of the mailing of the order to the property owner and owner of the Vehicle or Vehicle Part. 8.48.090 Notice of Removal to Department of Motor Vehicles. The Director will provide notice to the DMV identifying the Vehicle removed, or the parts thereof within 5 days after removal. The Director shall also transmit to the DMV any evidence of registration available, including, but not limited to the registration card, certificates of ownership, and license plates. 8.48.100 Removal—Costs—Lien If the administrative costs and the cost of removal which are charged against the owner of a parcel of land pursuant to this chapter are not paid within 30 days of the date of the order, such costs shall be assessed against the parcel of land pursuant to Section 38773.5 of the Government Code and shall be transmitted to the tax collector for collection. The assessment shall have the same priority as other City taxes. 8.48.110 Violation---Abandonment It is unlawful and an infraction for any person to abandon or fail or refuse to remove an abandoned, wrecked, dismantled or inoperative vehicle or part thereof or refused to abate such nuisance when ordered to do so in accordance with the abatement provisions of this chapter or state law where such law is applicable. 805 LEGISLATIVE DRAFT HBMC 8.48 Chapter 8.48 INOPERABLE VEHICLES 8.48.010 Intent and Purpose The intent and purpose of this chapter is to accomplish the removal of inoperable vehicles from public and private properties throughout the City of Huntington Beach, except as specified in Section 8.48.030. (1393-3/68) 8.48.020 Definitions For the purpose of this chapter, the following words and phrases shall have the meanings hereafter set forth unless a different meaning is clearly intended from the context in which such word or phrase is used. Any word or phrase not herein defined shall have the meaning attributed to it in ordinary usage: “Highway” means a way or place of whatever nature publicly maintained and open to the use of the public for purposes of vehicular travel. “Highway” includes street. “Inoperable vehicle” means any vehicle which does not qualify to be operated upon a highway under the Vehicle Code of the State of California. “Public property” does not include highway. “Vehicle” means a device by which any person or property may be propelled, moved or drawn upon a highway except a device moved by human power or used exclusively upon stationary rails or tracks. (1393-3/68, 1449-10/68) 8.48.030 Applicability This chapter shall not apply to: A. A vehicle or part thereof which is completely enclosed in a building in a lawful manner where it is not visible from the street or other public or private property; or B. A vehicle or part thereof which is stored or parked in a lawful manner on private property in connection with the business of a licensed dismantler, licensed vehicle dealer, a junk dealer or when such storage or parking is necessary to the operation of a lawfully conducted business or commercial enterprise. (1393-3/68) 8.48.040 Nuisance Not Authorized Nothing in this section shall authorize the maintenance of a public or private nuisance as defined under provisions of law other than Chapter 10, commencing with Section 22650, of Division 11 of the Vehicle Code and this chapter. (1393-3/68) 806 8.48.050 Chapter Not Exclusive Regulation This chapter is not the exclusive regulation of abandoned, wrecked, dismantled or inoperative vehicles within the City. It shall supplement and be in addition to the other regulatory codes, statutes and ordinances heretofore or hereafter enacted by the City, the state, or any other legal entity or agency having jurisdiction. (1393-3/68) 8.48.060 Enforcement Except as otherwise provided herein, the provisions of this chapter shall be administered and enforced by the Police Chief or the Director of Planning. In the enforcement of this chapter, such officers and their deputies may enter upon private or public property to examine a vehicle or part thereof, or obtain information as to the identity of the vehicle and to remove or cause removal of a vehicle or part thereof declared to be a nuisance pursuant to this chapter. (1393-3/68, 1449-10/68, 2217-10/77, 3552-5/02) 8.48.070 Removal—Contracts or Franchises When the City Council has contracted with or granted a franchise to any person or persons, such person or persons shall be authorized to enter upon private property or public property to remove or cause the removal of a vehicle or parts thereof declared to be a nuisance pursuant to this chapter. (1393-3/68) 8.48.080 Administrative Costs The City Council shall from time to time determine and fix an amount to be assessed as administrative costs (excluding the actual costs of removal of any vehicle or part thereof) under this chapter. (1393-3/68) 8.48.090 Abatement—Hearing A public hearing shall be held on the question of abatement and removal of the vehicle or part thereof as an abandoned, wrecked, dismantled or inoperative vehicle and the assessment of the administrative costs and the cost of removal of the vehicle or part thereof against the property on which it is located. Notice of hearing shall be mailed at least 10 days before the hearing by certified mail, with a five-day return requested to the owner of the land as shown on the last equalized assessment roll and to the last registered and legal owner of record unless the vehicle is in such condition that identification numbers are not available to determine ownership. If any of the foregoing notices are returned undelivered by the United States Post Office, the hearing shall be continued to a date not less than 10 days from the date of such return. (1393-3/68) 8.48.100 Hearing—Notice to Highway Patrol Notice of hearing shall also be given to the California Highway Patrol identifying the vehicle or part thereof proposed for removal, such notice to be mailed at least 10 days prior to the public hearing. (1393- 3/68) 807 8.48.110 Hearing—Facts and Testimony All hearings under this chapter shall be held before the City Council which shall hear all facts and testimony it deems pertinent. Said facts and testimony may include testimony on the condition of the vehicle or part thereof and the circumstances concerning its location on the private property or public property. The City Council shall not be limited by the technical rules of evidence. The owner of the land on which the vehicle is located may appear in person, or through an agent, at the hearing or present a written statement in time for consideration at the hearing, and deny responsibility for the presence of the vehicle on the land, with his or her reasons for such denial. (1393-3/68) 8.48.120 Abatement—Council Action The City Council may impose such conditions and take such other action as it deems appropriate under the circumstances to carry out the purpose of this chapter. It may delay the time for removal of the vehicle or part thereof if, in its opinion, the circumstances justify it. At the conclusion of the public hearing, the City Council may find that a vehicle or part thereof has been abandoned, wrecked, dismantled or is inoperative on private or public property and order the same removed from the property as a public nuisance and disposed of as hereinafter provided and determine the administrative costs and the cost of removal to be charged against the owner of the parcel of land on which the vehicle or part thereof is located. The order requiring removal shall include a description of the vehicle or part thereof and the correct identification number and license number of the vehicle, if available at the site. (1393-3/68) 8.48.130 Landowner Not Assessed If it is determined at the hearing that the vehicle was placed on the land without the consent of the landowner and that he or she has not subsequently acquiesced in its presence, the City Council shall not assess costs of administration or removal of the vehicle against the property upon which the vehicle is located or otherwise attempt to collect such costs from such landowner. (1393-3/68) 8.48.140 Decision Notice to Interested Party If an interested party makes a written presentation to the City Council but does not appear, he or she shall be notified in writing of the decision. (1393-3/68) 8.48.150 Order to Remove Five days after issuance of the order declaring the vehicle or parts thereof to be a public nuisance and five days from the date of mailing of notice of the decision as required by this chapter, the vehicles or parts thereof may be disposed of by removal to a scrapyard or automobile dismantler’s yard. After a vehicle has been removed it shall not thereafter be reconstructed or made operable. (1393-3/68) 8.48.160 Removal—Motor Vehicle Department Notified Within five days after the date of removal of the vehicle or part thereof, notice shall be given to the Department of Motor Vehicles identifying the vehicle or part thereof removed. At the same time there 808 shall be transmitted to the Department of Motor Vehicles any evidence of registration available, including registration certificates, certificates of title and license plates. (1393-3/68) 8.48.170 Removal—Costs—Lien If the administrative costs and the cost of removal which are charged against the owner of a parcel of land pursuant to this chapter are not paid within 30 days of the date of the order, or the final disposition of an appeal therefrom, such costs shall be assessed against the parcel of land pursuant to Section 38773.5 of the Government Code and shall be transmitted to the tax collector for collection. The assessment shall have the same priority as other City taxes. (1393-3/68) 8.48.180 Violation—Abandonment It is unlawful and an infraction for any person to abandon, park, store, or leave or permit the abandonment, parking, storing or leaving of any licensed or unlicensed vehicle or part thereof which is in an abandoned, wrecked, dismantled or inoperative condition upon any private property or public property not including highways within the City for a period in excess of 10 days unless such vehicle or part thereof is completely enclosed within a building in a lawful manner where it is not plainly visible from the street or other public or private property, or unless such vehicle is stored or parked in a lawful manner on private property in connection with the business of a licensed dismantler, licensed vehicle dealer or a junkyard. (1393-3/68, 1935-11/74) 8.48.190 Violation—Failure to Remove It is unlawful and an infraction for any person to fail or refuse to remove an abandoned, wrecked, dismantled or inoperative vehicle or part thereof or refused to abate such nuisance when ordered to do so in accordance with the abatement provisions of this chapter or state law where such law is applicable. (1393-3/68, 1935-11/74) 809 City of Huntington Beach File #:20-1760 MEETING DATE:7/20/2020 Submitted by Mayor Semeta - Consideration of a Prohibition on the City’s use of Public Funds for any Tax Measure Advocacy After assessing the situation, I believe that Huntington Beach should enact safeguards to prevent the use of public funds to advocate for a tax measure under the guise of information or education. I am requesting that the City Council vote to direct the City Attorney to prepare a resolution to prohibit the City’s use of public funds for informational or educational campaigns regarding any local tax measure. The resolution should be placed on a future City Council meeting agendafor consideration within 30 days. City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™810 811 City of Huntington Beach File #:20-1761 MEETING DATE:7/20/2020 Submitted by Councilmember Peterson - Proposed establishment of a 40+ Bed Temporary Emergency Shelter at the City’s Public Works Yard on Gothard Street Pursuant to the powers of the City to address a health and safety crisis, and pursuant to the City’s Emergency Declaration, direct the City Manager bring back a proposal in 2 weeks for the establishment of a 40+ bed temporary emergency shelter in the City Public Works Yard on Gothard Street. The shelter should be considered temporary and be constructed with basic necessities. City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™812 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: ERIK PETERSON, CITY COUNCIL MEMBER DATE: JULY 20, 2020 SUBJECT: PROPOSED ESTABLISHMENT OF A 40+ BED TEMPORARY EMERGENCY SHELTER AT THE CITY’S PUBLIC WORKS YARD ON GOTHARD STREET STATEMENT OF ISSUE The City’s most recent 2019 Point in Time count for our homeless population identified 349 total homeless individuals, out of which 289 were unsheltered. Estimates are that the number has increased since then. With the current COVID-19 pandemic, which has been spreading rapidly throughout the County and the City since April of this year, a perfect storm has developed for a serious health and safety crisis in Huntington Beach. Pursuant to the State’s direction on the homeless crisis during this pandemic, the County of Orange has been taking steps since May of this year to get the homeless population into shelters to reduce the risk of COVID-19 transmission. For the safety of the homeless and the safety of our residents, we need to take action, just like the State and the County have for months, to get the homeless off the streets and public spaces and into shelters so that they can receive the medical treatment and safe / sanitary environment they need. Since the pending Cameron Lane City shelter is many months away from being ready to house the homeless, and since the City will not be able to house its homeless at that shelter for many more months after establishment, a temporary emergency shelter must be established and available to address the City’s growing health and safety crisis. The State has declared a State of Emergency, and so has the County and City. RECOMMENDED ACTION Pursuant to the powers of the City to address a health and safety crisis, and pursuant to the City’s Emergency Declaration, direct the City Manager bring back a proposal in 2 weeks for the establishment of a 40+ bed temporary emergency shelter in the City Public Works Yard on Gothard Street. The shelter should be considered temporary and be constructed with basic necessities. 813 City of Huntington Beach File #:20-1762 MEETING DATE:7/20/2020 Submitted by Councilmember Posey - Consideration of a Resolution of the City Council acknowledging Hoag Memorial Hospital Presbyterian for their continued delivery of the highest quality Health Care and supporting their efforts to seek independence as a Community-Based Hospital for Orange County I recommend that the City Council direct the City Manager to prepare a Resolution, similar to the attached document, to support Hoag’s efforts to seek independence from its current affiliation with Seattle-based Providence Health. City of Huntington Beach Printed on 7/17/2020Page 1 of 1 powered by Legistar™814 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: MIKE POSEY, CITY COUNCIL MEMBER DATE: JULY 20, 2020 SUBJECT: CONSIDERATION OF A RESOLUTION OF THE CITY COUNCIL ACKNOWLEDGING HOAG MEMORIAL HOSPITAL PRESBYTERIAN FOR THEIR CONTINUED DELIVERY OF THE HIGHEST QUALITY HEALTH CARE AND SUPPORTING THEIR EFFORTS TO SEEK INDEPENDENCE AS A COMMUNITY-BASED HOSPITAL FOR ORANGE COUNTY Since its founding in 1952, Hoag Memorial Hospital Presbyterian (Hoag) has provided our community with the highest quality of health care services. Hoag initially began in Newport Beach as a community-based hospital and has since expanded with the growth of Orange County’s population. Hoag is now considered a top-rated medical provider that is devoted to the health of our local communities and has served the residents of Huntington Beach well. Hoag has demonstrated a strong commitment to our City, and it is essential to support their mission to expand and transform their health care delivery model in the region. Their investments in Huntington Beach include the Hoag Health Care Center and two urgent care facilities. Hoag has also donated millions towards the Huntington Beach Senior Center in Central Park as a sign of their continued partnership with the City. In 2014, Hoag became affiliated with St. Joseph’s Hospital System to expand its network and better serve the Orange County area. Two years later, St. Joseph (and therefore, Hoag) became affiliated with Seattle-based Providence Health. Hoag’s founders, Board of Directors, physicians, and staff believe that this affiliation with a health care system outside Orange County does not further their mission to transform the quality of care locally. To better serve our region’s needs, Hoag and its representatives are currently seeking independence from Providence and a return to a community-based hospital model. Hoag believes that this path will allow Hoag’s local physicians and staff to determine and deliver the best course of care for Orange County patients. RECOMMENDED ACTION I recommend that the City Council direct the City Manager to prepare a Resolution, similar to the attached document, to support Hoag’s efforts to seek independence from its current affiliation with Seattle-based Providence Health. 815 RESOLUTION NO. 2020-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ACKNOWLEDGING HOAG MEMORIAL HOSPITAL PRESBYTERIAN FOR THEIR CONTINUED DELIVERY OF THE HIGHEST QUALITY HEALTH CARE AND SUPPORTING THEIR EFFORTS TO SEEK INDEPENDENCE AS A COMMUNITY-BASED HOSPITAL FOR ORANGE COUNTY WHEREAS, Hoag Memorial Hospital Presbyterian (Hoag) was founded in Newport Beach as a community hospital in 1952 by the Association of Presbyterian Members of Hoag and the George Hoag Family Foundation to support the Orange County community; and WHEREAS, from 1952 to 2020 Hoag has expanded from a small facility serving west Orange County to a top-rated regional health care provider with two full-service hospitals and thirteen clinics in the County; and WHEREAS, in 1978 the Hoag Memorial Hospital Presbyterian Foundation was formed with Dr. Arnold O. Beckman as President. Over the ensuing 42-years the Foundation has raised nearly $2 billion to support health care services for Orange County’s growing population; and WHEREAS, in 2013 Hoag entered into an “affiliation” with St. Joseph’s Hospital System to support an ambitious plan to transform care in in Orange County, and WHEREAS, in 2014 Hoag opened Hoag Health Center Huntington Beach and currently operates two Urgent Care facilities in the City; and WHEREAS, in 2016 St. Joseph’s Health System affiliated with Seattle-based Providence Health, one of the largest health systems in the country; and WHEREAS, Hoag’s goals of transforming care in Orange County through an affiliation have not been achieved and Hoag’s Board, medical staff, and founders believe it is in the best interests of the community for Hoag to regain its independence and keep resources and decision making local; and WHEREAS, after nearly one year of efforts by Hoag to negotiate an amicable separation, on May 1, 2020 the Hoag Family Foundation and Association of Presbyterian Members (Founders) filed a lawsuit to dissolve their relationship with Providence; and WHEREAS, Hoag’s doctors and Board of Directors voted unanimously to support the legal action of the Founders to dissolve the Providence relationship; and WHEREAS, Hoag seeks its independence to meet the future health care needs of the entire community and allow physicians to decide the course of care. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: SECTION 1. The City of Huntington Beach recognizes Hoag Memorial Hospital Presbyterian’s 68-year history of providing the highest quality health care to Orange County; and SECTION 2. The City of Huntington Beach acknowledges Hoag Memorial Hospital Presbyterian’s commitment to Huntington Beach with its $3.775 million dollar donation to the Huntington Beach Senior Center in Central Park; and 816 SECTION 3. The City of Huntington Beach supports Hoag Memorial Hospital Presbyterian in their effort to become independent and return to a community-based hospital serving Orange County’s residents with the high-quality health care they deserve. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of July 2020 by the following vote. ________________________________ Mayor REVIEWED AND APPROVED: INITIATED AND APPROVED: _________________________________ _________________________________ City Manager Assistant City Manager APPROVED AS TO FORM: _________________________________ City Attorney 817