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HomeMy WebLinkAbout2007-05-09 e-packet AGENDA REDEVELOPMENT AGENCY CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIP AL SERVICE BUILDING COMMUNITY ROOM WEDNESDAY, MAY 9, 2007 7:00 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meeting of the Redevelopment Agency is held on the second Wednesday of each month at 7:00 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. RICHARD A. GARBARINO, SR. Chair PEDRO GONZALEZ V ice Chair MARK N. ADDIEGO Boardmember JOSEPH A. FERNEKES Boardmember KARYL MATSUMOTO Boardmember RICHARD BATTAGLIA Investment Officer BARRYM. NAGEL Executive Director STEVEN T. MATTAS Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR 1. Motion to approve the minutes of April 11, 2007 2. Motion to confirm expense claims of May 9,2007 3. Resolution authorizing a contract to Harris & Associates for construction management and inspection services for the Lindenville Storm Drainage Pump Station Project in an amount not to exceed $425,000 ADMINISTRATIVE BUSINESS 4. Resolution authorizing execution of loan agreement and related documents with HIP Housing for acquisition of residential apartment building located at 317-321 Commercial Avenue and adoption of a relocation plan CLOSED SESSION 5. Pursuant to Government Code section 54956.8 real property negotiations related to 356 Grand Avenue; Agency Negotiator: Assistant Negotiator: Assistant Director Marty Van Duyn 7. Pursuant to Government Code section 54956.8 real property negotiations related to 472 Grand Avenue, 306 Spruce Avenue, 468 Miller Avenue, 340 Grand Avenue and 161 So. Spruce Avenue, Agency Negotiator: Assistant Director Marty Van Duyn ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING AGENDA MAY 9, 2007 PAGE 2 Redevelopmellt Agency Staff Report RDA AGENDA ITEM # 3 DATE: TO: FROM: SUBJECT: May 9,2007 Redevelopment Agency Board Marty Van Duyn, Assistant Executive Director ADOPT A RESOLUTION AWARDING CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR THE LINDENVILLE STORM DRAIN PUMP STATION PROJECT RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a resolution awarding the contract for construction management and inspection services for the Lindenville Storm Drainage Pump Station Project to Harris and Associates, in an amount not to exceed $425,000. BACKGROUNDIDISCUSSION On April 11, 2007 the Redevelopment Agency Board awarded a construction contract for the Lindenville Storm Drainage Pump Station project to 1MB Construction. The construction management and inspection services cost of $425,000 was included in the project budget and approved by the Agency Board. Through an RFP process, staff selected three qualified construction management firms to provide construction management and inspection services necessary for the Wet Weather Program and Lindenville Storm Drain projects. The three companies selected were; Harris and Associates of Pleasanton, CA, CSG Consultants of San Mateo, CA and Mendoza and Associates of San Francisco, CA. Harris and Associates was selected for the Lindenville Storm Drain Pump Station project due to their expertise in pump station design and inspection capabilities. They have also performed the constructability review for this project and are familiar with the complexities ofthe design. The scope includes providing construction management, scheduling and inspection services through project completion. Staff Report Subject: ADOPT A RESOLUTION AWARDING CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR THE Lll\TDENVILLE STORe\1 DRAIN PUMP STATION PROJECT Page 2 of2 FUNDING The Lindenville Storm Drain Pump Station project has a total budget of$4,997,900. This project is included in the City of South San Francisco's 2006-2007 Capital Improvement Program. Redevelopment Bond funds have been budgeted for the project costs. CONCLUSION Approval of this construction management and inspection services contract will ensure that the construction work is performed according to the approved plans/specifications and would meet the requirements of Department of Toxic and Substance Control and Cal-OSHA. By: )J6)~ ~S() Marty VanDuyn Assistant Executive Director Approve RR/rdldc Attachment: Resolution Attachment A Attachment B RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AWARDING AN AGREEMENT FOR CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES TO HARRIS A1\TD ASSOCIATES IN THE AMOUNT OF $425,000.00 FOR CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR LINDENVILLE STORM DRAIN PUMP STATION PROJECT WHEREAS, staff recommends that the Redevelopment Agency approve the award of a contract to Ha..rris and Associates for construction management and inspection services for the Lindenville Storm Drain Pump Station Project in an amount not to exceed $425,000.00; and WHEREAS, the City desires to utilize Harris and Associates for their expertise in the construction of storm drain pump stations; and WHEREAS, sufficient funds for this project are included in the City's Capital Improvement Program and sufficient redevelopment bond funds were budgeted to cover the project cost, NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that the Agency hereby awards the construction management and inspection services contract to Harris and Associates in the amount of$ 425,000.00 for the Lindenville Storm Drain Pump Proj ect. BE IT FUR THER RESOLVED that the Executive Director is hereby authorized to execute the Agreement on behalf ofthe Redevelopment Agency ofthe City of South San Francisco, subject to approval as to form by the City Attorney. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of , 2007 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 957629 _I.DOC Attachment A Constructability Review Review contract documents for biddability and constructability. Look for problem areas that could lead to delays, disputes, and change orders during construction. Look for problems that could arise during bid process. Bid Process Assistance Contract Approvals and Awards Assistance Preconstruction Conference Fewer change orders, disputes, and claims. Lower bids. Simplifies the construction process. - Biddability/constructability recommendations Review bids for conformity to requirements including all bonds, insurance and legal requirements. Review contracts, prepare staff reports, and recommendations for award. Outline project specifics. Inform Contractor of project administration procedures. Objective evaluation of bids, minimize bid protests. Provide justification for award of contracts. Establish ground rules and responsibilities. - Bid tabulation matrix - Staff recommendation report - Agenda - Meeting minutes Management Information System (MIS) Weekly Meetings Implement system for organizing, tracking, filing, and managing paper/electronic correspondence including letters, information requests, submittals, contracts, reports, O&M manuals, progress payments, and change orders, etc. Better recordkeeping. Improved claim resolution capabilities. Conduct weekly meetings to discuss Maintains official dialogue schedule, current, and past issues. between team members. Issues Management Analyze issue, seek appropriate advice, and recommendations. Provides solutions to actual conditions found in field. Minimizes delays. - Paper files - Electronic files - Correspondence logs - Suspense lists. - Agenda - Meeting minutes - Design clarifications - Contract change orders II I Harris & Associates Attachment A Schedule Monitor contractor's CPM schedule Better project coordination. - Schedule reports, monthly. Notify parties of actual or Fewer delays. Fewer time recommendations. potential deviation from schedule. related disputes. - "As-built" schedule Work with project team to correct non-compliance with schedule. Cost Control Monitor project funding and Effective use of funds. Early - Cash flow reports financing. Monitor project budgets. warning of potential funding - Budget reports Review AlE's estimates, contract problems. item payments, material quantities, - Cost estimate reviews and change order payments. Change Orders Review potential change orders for Change orders reflect fair price - Independent cost estimates contractual and technical merit. for added or deleted work. - Change orders ready for Prepare independent cost estimate and schedule analysis of work. execution Negotiate and prepare change - Change order summary orders for execution by the City. reports Keep the City apprised of impact of cumulative change orders. Dispute Resolution Make recommendations and Disputes are avoided or - Dispute avoidance implement procedures for reducing resolved quickly. procedures and the likelihood of disputes and recommendations claims. Assist in the resolution of disputes. Quality Controll Observe and monitor all aspects of Completed project meets the - Photography and videotapes Inspection project. Notify contractor when work City's expectations for quality - Project files is not in compliance. Prepare daily and functionality. inspection reports. Provide photographic and video documentation of construction process. Encourage and stress quality in the constructed product. Special Inspections Provide code inspections for Project meets applicable - Inspection reports concrete, masonry, and structural building codes. steel. 2 = I Harris & Associates Attachment A Permit I Environmental Compliance Progress Payments Monthly Status Reports Site Safety Review and enforce requirements stipulated in permits issued by regulatory and environmental agencies. Minimize or eliminate violations - Daily inspection reports, of permit requirements. correspondence Review contractors' payment Contractor is paid only for work requests. Verify contractor pay in place and acceptable. In items. Prepare payment case of contractor default, documentation for execution by the funds are available to complete City. project. Prepare monthly reports highlighting I Keeps parties informed on project progress, ceo's, cost project status. issues, and schedule. Review and monitor contractors' safety program for compliance with Cal/OSHA. Notify contractor if unsafe condition is observed. Notify the Authority if contractor refuses to rectify unsafe condition. Investigate accidents. - Progress payment request documents - Monthly report Jobsite is safer. Avoids litigation. - Accident reports - Monthly reports "As-Built" Drawings Collate, review, and transmit contractor's data to NE's. Final Walkthrough Project Completion Report Make final inspections. Prepare punch-list. Verify that required certificates of compliance, O&M manuals and as-built drawings have been delivered. Process final progress payment to contractor. 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U1 Q) .2 0. ~ -C/l .8 .~ ~ 2 ~ 'g. ~ .~ ,q.q 0:: <ZU-lU-l::r:uu N~~~\O""":oO - :\)1\\ S~ m ~ . ~\i.\ o ("l >- ~ ~ r') v 0 ~ ~~ 4lIFOp..~ - Redevelopment Agency Staff Report RDA AGENDA ITEM # 4 DATE: TO: FROM: SUBJECT: May 9, 2007 Redevelopment Agency Board Marty VanDuyn, Assistant Executive Director EXECUTION OF LOAN AGREEMENT AND RELATED DOCUMENTS WITH HIP HOUSING DEVELOPMENT CORPORATION FOR ACQUISITION OF RESIDENTIAL APARTMENT BUILDING LOCATED AT 317-321 COMMERCIAL AVENUE RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a Resolution authorizing the execution of a Loan Agreement, Promissory Note, Deed of Trust, Regulatory Agreement and Subordination Agreement with HIP Housing Development Corporation and approving a loan in an amount not to exceed $1,800,000 for the acquisition of an apartment building located at 317-321 Commercial Avenue. BACKGROUND/DISCUSSION In 2006, the Redevelopment Agency agreed to work with HIP Housing Development Corporation (HIP) to explore the acquisition of a fifteen (15) unit apartment building located at 317-321 Commercial Avenue that would be owned and managed by HIP (the Project). According to an appraisal conducted in 2006, the value of the property is $3.4 million. HIP signed an option to purchase the property for $3.12 million. Thus, the value of each of the units is $208,000 which is comparable to other residential acquisitions funded by the Agency during the last year. The Project will consist of 15 one-and two-bedroom rental units. The intent of the Project is to preserve the units, which are currently occupied by very low- and low-income households. Five apartments will be affordable to families earning less than 50% of median income and nine apartments will be affordable to families earning between 51 % and 60% of median income. The Project has a well-maintained design that includes tuck-under garages with storage for each unit and ample space for tandem parking off the street, security gates for access and a laundry room in a central courtyard. Because several of the units are overcrowded, the Project will require that some of the tenants be relocated to a unit more suitable for their family size. The County of San Mateo formally approved a $540,000 loan to HIP from County Community Development Block Grant (CDBG) funds for acquisition, seismic retrofit, general rehabilitation and relocation of existing tenants. HIP has also secured a $1,305,000 conventionalloan from Washington Mutual Bank for the acquisition of this property. All funding sources are contingent upon the closing of each of the other sources of funding. The South San Francisco Redevelopment Agency's loan is the last component of the financing plan needing approval. Staff Report Subject: Loan Agreement with HIP Housing Development Corporation Page 2 Over ten years ago, the property participated in the City's Rental Rehabilitation Program and that loan has since been paid in full. During that time, and in subsequent years, the property underwent extensive rehabilitation. Although the property is in good structural condition and meets the City's building code requirements for seismic bracing, the County of San Mateo may require that the building undergo additional minor seismic retrofitting. City staff inspected the property and a building inspector retained by HIP inspected each unit finding that mostly cosmetic repairs are needed, such as repairs to the bathrooms, new kitchen counters and new windows. RELOCATION PLAN California Redevelopment Law (CRL) requires the governing body (City Council) to adopt a relocation plan that is tailored to the specific project (as distinguished from the general relocation plan adopted as part of a redevelopment plan). Additionally, CRL requires that the project- specific relocation plan be provided to all households that may be displaced at least 30 days prior to the governing body's consideration of the plan. Accordingly, all residents ofthe apartment complex received a copy of the Relocation Plan on April 3, 2007. Prior to that, all residents received initial notices regarding the potential acquisition of the building and their rights under the law with regard to relocation benefits. In this case, both federal and state relocation requirements apply as both funding sources are contemplated for the acquisition. This evening, if the Redevelopment Agency Board approves the proposed funding for the Project, the City Council must then adopt the Relocation Plan at its subsequent meeting. HIP retained Overland, Pacific & Cutler, Inc., an experienced relocation firm, to prepare the Relocation Plan (the Plan) and to provide all subsequent required relocation assistance for this Project. Pursuant to the Loan Agreement to be executed between HIP and the Redevelopment Agency, HIP will be responsible for providing all relocation benefits required by law. The project-specific Relocation Plan is incorporated as an exhibit to this report. PROJECT FINANCING The total cost of the Project is $3,692,310 of which acquisition costs are $3,120,000, rehabilitation costs are $295,000, and relocation costs are projected to be $181,000. The total project budget is attached as an exhibit to this report. Pursuant to the Loan Agreement, the City is providing a $1,800,000 loan that will be leveraged by the County's $540,000 in CDBG funding. The loan will be paid from Redevelopment Agency Housing funds which have been set aside in the Capital Improvement Project budget for the current year. The Redevelopment Agency's approval of the loan will enable HIP to secure conventional financing from Washington Mutual Bank. HIP is under obligation by the current owner to close escrow by May 17, 2007. The Redevelopment Agency loan will be secured by a deed of trust subordinate only to Washington Mutual's first deed of trust. The loan will accrue simple interest at a rate of three percent (3%). The loan will be payable in annual installments on a residual receipts basis. The entire outstanding balance of the loan together with accrued interest will be due and payable on the fifty-fifth (55th) anniversary of the origination date. Staff Report Subject: Loan Agreement with HIP Housing Development Corporation Page 3 Pursuant to the Loan Agreement and the Regulatory Agreement, the apartment units must be kept affordable for the term of the Regulatory Agreement as such may be extended. Extension of the loan terms may be approved by the Redevelopment Agency provided that 1) HIP is not in default of the loan terms; and 2) HIP executes an amendment to the Regulatory Agreement agreeing to extend the affordability controls for the duration of the extension. The fifty-five year rental restrictions contained in the Loan Agreement and Regulatory Agreement will allow the Agency to count the Project as units of new production for the purpose of meeting its housing production obligations, as required by the State of California and the Association of Bay Area Governments. The Redevelopment Agency funds will be expended exclusively for acquisition of the apartment complex. All other expenditures for rehabilitation and relocation will be undertaken by HIP with private and County CDBG funds. CONCLUSION The Redevelopment Agency Board Housing Sub-Committee reviewed the project on May 1, 2007 and recommended that the Redevelopment Agency Board approve the resolution authorizing execution of a Loan Agreement and related documents with HIP for a loan of up to $1.8 million. Approval of the loan will make it possible to preserve affordable rental units for low- and moderate- income working families in South San Francisco, reduce overcrowding and will ensure that the apartment units are well maintained in perpetuity and do not fall into disrepair. HIP will manage and maintain the units according to the City's housing standards and give occupancy preference for all of the units to residents from the City of South San Francisco. A Phase I analysis conducted by John Carver Consulting found that there are no environmental concerns associated with this property and that no additional environmental investigation is warranted at this time. If the Redevelopment Agency Board approves the execution of the Loan Agreement and related documents with HIP, the City Council will then approve the Relocation Plan at its subsequent meeting. By: I~(~ Marty VanDuyn Assistant Executive Director APproveL!z ' ct ) Ba M. Nag Executive Director Attachments: Resolution Exhibit A: Loan Agreement Exhibit B: Promissory Note Exhibit C: Deed of Trust Exhibit D: Regulatory Agreement Exhibit E: Subordination Agreement Exhibit F: Relocation Plan Exhibit G: Project Budget RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO APPROVING AND AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH HIP HOUSING DEVELOPMENT CORPORATION REGARDING THE DEVELOPMENT OF PROPERTY LOCATED AT 317-321 COMMERCIAL AVENUE, APPROVING FINANCING FOR THE PROJECT TO BE REHABILITATED ON THE PROPERTY, AND AUTHORIZING EXECUTION OF DOCUMENTS IN CONNECTION WITH SUCH FINANCING WHEREAS, the City Council of the City of South San Francisco ("City Council") originally approved and adopted the Redevelopment Plan for the Downtown/Central Redevelopment Project Area ("Project Area") by Ordinance No. 1056-89 adopted on July 12, 1989 (as subsequently amended, the "Redevelopment Plan"); WHEREAS, the Agency seeks development of certain real property located at 317- 321 Commercial Avenue near the Project Area in the city of South San Francisco (the "City") and known as San Mateo County Assessor's Parcel Nos. 012-333-120 and 012- 333-110 (the "Property") in accordance with the Redevelopment Plan; WHEREAS, HIP Housing Development Corporation, a nonprofit public benefit corporation ("Developer") intends to purchase the Property and rehabilitate 15 units of rental housing affordable to low income households; WHEREAS, the Project, the Property, and the terms and conditions for rehabilitation and financing of the Project are more particularly described in a proposed Construction and Permanent Loan Agreement (the "Loan Agreement"), copies of which have been provided to the Agency; WHEREAS, the proposed Agency financing for the Project includes a construction/permanent loan in the amount of$I,800,000 (the "Loan"); WHEREAS, Developer and Agency staff have negotiated the terms and conditions of the Loan Agreement addressing use and disbursement of the Loan proceeds; a Secured Promissory Note (the "Note") that provides for repayment of the Loan on a residual receipts basis; a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust") pursuant to which the Agency will be provided a security interest in the Property and the Project to secure repayment of the Loan; and an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement") which restrict rents in the Project to levels affordable to very low-income households for a period of 55 years; WHEREAS, Developer has obtained a commitment for financing for the Project (the "Senior Loan"), and the lender providing such financing (the "Lender") has asked 957345 1 the Agency to subordinate certain Agency documents as more particularly set forth in the proposed subordination agreement (the "Subordination Agreement") a copy of which is on file with the Agency Secretary; WHEREAS, the Lender has indicated that it is unwilling to provide financing for the Project without execution and recordation of the Subordination Agreement, and the Developer has indicated that it has been unable to find alternate sources that would enable it to finance the Project without such subordination; WHEREAS, Health and Safety Code Section 33334.14 permits subordination of redevelopment agency affordability restrictions provided that: (i) the agency makes a finding that alternative financing is not reasonably available on economically feasible terms without subordination, and (ii) the agency obtains written commitments to protect its investment in the event of a default; WHEREAS, the proposed Subordination Agreement provides the Agency with rights to receive notice and an extended period within which the Agency may cure defaults arising under the Senior Loan documents; WHEREAS, Health and Safety Code Section 33334.2 permits the Agency to use low-and-moderate income set aside funds outside a project area if the Agency and the City Council make a finding that the use will benefit the redevelopment project; WHEREAS, the Project will be located near the Project Area, and the Project will benefit the Downtown/Central Redevelopment Project by improving and increasing the community's supply of affordable housing; WHEREAS, the City Council made a finding that the Project will benefit the Downtown/Central Redevelopment Project by improving and increasing the community's supply of affordable housing; and WHEREAS, the City Council approved the relocation plan for the Project. NOW, THEREFORE BE IT RESOLVED that the Redevelopment Agency of the City of South San Francisco hereby: Section 1. Finds, based upon the foregoing Recitals, that the expenditure of low- and-moderate income set aside funds to partially finance the Project will be of benefit to the Downtown/Central Redevelopment Project because the Project is located near the Project Area and the Project will improve and increase the community's supply of affordable housing. Section 2. Approves the Loan Agreement and authorizes the Executive Director, or his designee to execute and deliver the Loan Agreement substantially in the form on file with the Agency Secretary. 957345 2 Section 3. Approves the provision of the Loan to Developer pursuant to the terms and conditions set forth in the Loan Agreement. Section 4. Approves the Promissory Note, the Deed of Trust, and the Regulatory Agreement, and authorizes the Executive Director or his designee to execute and deliver each such document to which the Agency is a party substantially in the form on file with the Agency Secretary. Section 5. Finds that without execution of the Subordination Agreement, an economically feasible alternative for financing the Project is not reasonably available and that the terms of the Subordination Agreement provide the Agency with reasonable means of protecting the Agency's investment in the Project in the event of default. Section 6. Authorizes the Agency Executive Director or his designee to execute the Subordination Agreement substantially in the form on file with the Agency Secretary. Section 7. Authorizes the Executive Director to execute and deliver such other instruments and take such other actions as necessary to carry out the intent of this Resolution. PASSED AND ADOPTED this following vote: day of , 2007, by the AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: Agency Secretary Chairperson APPROVED AS TO FORM: Agency Counsel 957345 3 EXHIBIT A CONSTRUCTION AND PERMANENT LOAN AGREEMENT by and between THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO and IDP HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION ,2007 HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 1 P.I CONSTRUCTION AND PERMANENT LOAN AGREEMENT This Construction and Permanent Loan Agreement (this "Loan Agreement") is made as of this day of , 2007 ("Effective Date"), by and between the Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic (the "Agency"), and HIP Housing Development Corporation, a California nonprofit public benefit corporation (the "Borrower"). Agency and Borrower are hereinafter collectively referred to as the "Parties." RECITALS A. The Agency wishes to promote the rehabilitation of affordable rental housing in the South San Francisco community and to provide a greater choice of housing opportunities for persons and families of low income. B. Borrower has purchased or intends to purchase that certain real property located at 317-321 Commercial Avenue in the City of South San Francisco, California (the "City"), as more particularly described in Exhibit A attached hereto and incorporated by reference herein (the "Property"), on which the Borrower will rehabilitate fifteen (15) units of rental housing affordable to low income households (the "Projectll). C. The Borrower has requested, and Agency has agreed, to provide a loan pursuant to the terms and conditions hereof for the purpose of partially financing the Project. D. The Loan will be funded by tax increment revenue set aside by the Agency for the purpose of increasing and improving the supply of low and moderate income housing pursuant to Section 33334.2 of the California Health and Safety Code (the "Housing Fund"). E. Expenditure of Housing Fund deposits pursuant to this Loan Agreement will serve the purposes of Health and Safety Code Section 33334.2, as well as the goals and objectives of the Redevelopment Plans, by improving and increasing the community's supply of affordable housing. NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, and representations, and in further consideration for the making of the Loan, the Borrower and the Agency hereby agree as follows: ARTICLE 1. DEFINITIONS The following terms have the meanings set forth in this section wherever used in this Loan Agreement and the attached Exhibits. HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Pennanent Loan AgreementI 3 P.2 1.1 "BUDGET" means that budget for the development of the Project attached as Exhibit B, which is hereby incorporated by reference into this Loan Agreement. 1.2 "DEED OF TRUST" is that deed of trust and assignment of rents to be recorded against the Property as security for the Loan substantially in the form attached hereto as Exhibit D. 1.3 "HIP" is Human Investment Project, a California nonprofit public benefit corporation and the parent corporation of Borrower. 1.4 "INSURANCE REQUIREMENTS" means the types and amounts of insurance required to be carried by the Borrower as set out in Exhibit F, which is hereby incorporated into this Loan Agreement by this reference. 1.5 "LOAN DOCUMENTS" means collectively this Loan Agreement, the Note, the Deed of Trust, and the Regulatory Agreement, as they may be amended, modified, or restated from time to time. 1.6 "AREA MEDIAN INCOME" means the area median income for San Mateo County, California, adjusted for household size, determined periodically by the California Department of Housing and Community Development ("HCD") as published in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). IfHCD ceases to make such determination, Area Median Income shall be the median income applicable to San Mateo County, with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development ("HUD") pursuant to the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City of South San Francisco that HUD may hereafter adopt in connection with such Act. 1.7 "NOTE" is that certain Secured Promissory Note executed by the Borrower in favor of the Agency evidencing the Loan substantially in the form attached hereto as Exhibit C. 1.8 "PLANS AND SPECIFICATIONS" means the plans and specifications for the rehabilitation of the Project approved by the Agency and any change orders approved by the Agency. 1.9 "REGULATORY AGREEMENT" means the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants to be executed by Borrower and the Agency and recorded against the Property substantially in the form attached as Exhibit E. ARTICLE 2. TERMS OF LOAN 2.1 LOAN AND NOTE. Agency agrees to loan to Borrower, and Borrower agrees to borrow from and repay to Agency, the sum of One Million Eight Hundred Thousand Dollars ($1,800,000) (the "Loan") upon the terms and conditions and for the purposes set forth in this Loan Agreement. The Loan shall be evidenced by the Note which shall be dated as of the HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 4 P.3 Effective Date and executed by Borrower substantially in the form attached hereto as Exhibit C. Without limiting the generality of the foregoing it is expressly understood by the Parties that Agency's obligation to fund the Loan is contingent upon Borrower's provision to the Agency of evidence reasonably satisfactory to the Agency that Borrower has received firm financing commitments and all permits and approvals necessary for the construction and permanent financing of the Project. Agency shall have the option to terminate this Loan Agreement, and shall have no obligation to fund the Loan if concurrently with the closing of the Loan Borrower does not close on the additional financing for the Project in an aggregate amount which, together with other sources of funding committed to Borrower is sufficient to fully fmance acquisition and rehabilitation of the Project. The Parties agree that Agency shall disburse the proceeds of the Loan ("Loan Proceeds") only for and to the extent necessary for the purposes set forth in Section 2.6. 2.2 INTEREST RATE; PAYMENT DATES; MATURITY DATE. Interest shall accrue at a rate equal to three percent (3%) simple interest per annum on the unpaid principal balance outstanding from time to time commencing on the date of initial disbursement of Loan Proceeds and continuing through the date that all indebtedness and other amounts payable under the Note and other Loan Documents are paid in full. The entire outstanding principal balance of the Loan together with interest accrued thereon and any other sums due under the Loan Documents shall be payable in full on the fifty-fifth (55th) anniversary of the Effective Date (the "Maturity Date"). EXTENSION OF MATURITY DATE. The Maturity Date may be extended for an additional twenty-five (25) years upon the written request of the Borrower to the Agency provided that: (i) the Borrower is not in default under the Note or any other Loan Document, and (ii) the Borrower executes an amendment to the Regulatory Agreement agreeing to extend the affordability controls contained therein for the duration of the extension. 2.3 REPAYMENT OF LOAN. The Loan shall be repaid as follows: A. The following definitions shall apply for the purposes of this Section 2.3: (1) "Annual Operating Costs" with respect to a particular calendar year shall mean the following costs reasonably and actually incurred for operation and maintenance of the Project: property taxes and assessments imposed on the Property; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on loans associated with the development of the Project; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of OCCupancy fees required for operation of the Project; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Project in an amount no more than $400 per unit per year or such greater amount as may be required by a physical needs assessment prepared by a third-party selected by Agency and prepared at HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Pennanent Loan Agreement 5 PA Developer's expense no less frequently than once every five years throughout the term of the Loan; cash deposited into an operating reserve; payment of any previously unpaid portion of the developer fee pursuant to an Agency-approved development budget; an annual asset management fee equal to five percent (5%) of annual Gross Revenue (defined below); routine maintenance expenses; site staff and property management expenses; extraordinary operating costs specifically approved in writing by the Agency; payments of deductibles in connection with casualty insurance claims not paid from reserves; the amount of uninsured losses actually replaced, repaired or restored, and not paid from reserves; and other ordinary and reasonable operating expenses approved in writing by the Agency and not listed above. Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses; any amount expended from a reserve account; and any capital cost with respect to the Project, as determined by a certified public accountant for the Project in accordance with generally accepted accounting principles. (2) "Gross Revenue" with respect to a particular calendar year shall mean all revenue, income, receipts, and other consideration actually received from operation and leasing ofthe Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; net proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance and not paid to senior lenders; the proceeds of casualty insurance not used to rebuild the Project and not paid to senior lenders; and condemnation awards for a taking of part or all of the Project for a temporary period not paid to senior lenders. Gross Revenue shall not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (3) "Agency's Share of Residual Receipts" shall mean seventy-six and nine-tenths percent (76.9%) of the Residual Receipts. (4) "Residual Receipts" shall mean for each calendar year during the term of the Loan, the amount by which Gross Revenue exceeds Annual Operating Expenses for the Project. Residual Receipts shall also include net cash proceeds realized from any refinancing of the Project, less fees and closing costs reasonably incurred in connection with such refinancing, repayment of the loan being refinanced, and any Agency-approved uses of the net cash proceeds of the refinancing. B. ANNUAL PAYMENTS. Commencing on June 1 of the year following the origination date of the Loan and on June 1 of each year thereafter for the term of the Loan, Borrower shall make repayments of the outstanding principal and accrued interest on the Loan equal to the Agency's Share of Residual Receipts. Borrower shall provide the Agency with any documentation reasonably requested by the Agency to substantiate Borrower's determination of Residual Receipts. HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 6 P.5 c. PAYMENT IN FULL. All principal and accrued interest on the Loan shall be due in full on the earlier to occur of (i) the date of any Event of Default (as defined in Section 6.1), or (ii) the Maturity Date as such may be extended pursuant to Section 2.2. 2.4 PREPA YMENT: ACCELERATION. 2.4.1 PREP A YMENT. Borrower shall have the right to prepay the Loan at any time and from time to time, without penalty or premium, provided that any prepayment of principal must be accompanied by interest accrued but unpaid to the date of prepayment. Prepayments shall be applied first to accrued but unpaid interest and then to principal. Any such prepayment shall have no effect upon Borrower's obligations under the Regulatory Agreement which shall survive for the full term of the Regulatory Agreement. 2.4.2 DUE ON SALE OR ENCUMBRANCE. Unless Agency agrees otherwise in writing, the entire unpaid principal balance and all interest and other sums accrued under the Note shall be due and payable upon the Transfer (as defined in Section 9.9) absent the prior written consent of Agency of all or any part of or interest in the Property except as otherwise permitted pursuant to Article 9. 2.6 USE OF LOAN PROCEEDS. Loan Proceeds may be used only for the purposes and in the amounts specified in the Budget attached as Exhibit B, as such may be amended by the Borrower with Agency's written approval. 2.7 SECURITY: SUBORDINATION. To secure its obligation to repay the Loan, Borrower shall execute and deliver the Deed of Trust, substantially in the form attached hereto as Exhibit D, and such Deed of Trust shall be recorded as a lien against the Property. Agency agrees that the Deed of Trust may be subordinated to the deed of trust for conventional financing pursuant to a subordination agreement provided that Agency's investment is protected consistent with California Health and Safety Code Section 33334.14 (a) (4). 2.8 CONDITIONS PRECEDENT TO DISBURSEMENT OF LOAN. The Agency shall disburse the Loan upon the satisfaction of the following conditions precedent: A. The Borrower has acquired (or is concurrently acquiring) the Property; B. There exists no Event of Default (as defined in Section 6.1) nor any act, failure, omission or condition that with the giving of notice or passage of time would constitute an Event of Default; and C. the Property; and The Deed of Trust and Regulatory Agreement have been recorded against D. The Borrower has executed and/or delivered to the Agency all documents, instruments, and policies required under the Loan Documents, including but not limited to the Deed of Trust, the Regulatory Agreement, and an ALTA Lender's policy of title insurance from a HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 7 P.6 title insurance company approved by the Agency in a form reasonably acceptable to the Agency; and E. The Borrower has provided to the Agency a certificate of insurance or copy of an insurance policy, which policy shall be satisfactory to the Agency, as required by Section 5.6 below; and F. The Agency has approved the Plans and Specifications. ARTICLE 3. AFFORDABLE UNITS; USE RESTRICTION 3.1 RECORDING REGULATORY AGREEMENT. Borrower and the Agency shall execute the Regulatory Agreement substantially in the form attached hereto as Exhibit E and the Borrower shall cause the Regulatory Agreement to be recorded in the Official Records of the County of San Mateo concurrently with recordation of the Deed of Trust and the closing of the Loan. 3.2 LOW INCOME UNITS. During the term of the Regulatory Agreement, Developer shall operate the Property and Project in accordance with the terms and conditions of the Regulatory Agreement, including without limitation the requirements that: (a) six (6) rental housing units shall be occupied by and available to households whose total gross household incomes are fifty percent (50%) or less of Median Income; and (b) nine (9) rental housing units shall be occupied by and available to households whose total gross household incomes are sixty percent (60%) or less of Median Income. ARTICLE 4. REPRESENTATIONS, WARRANTIES AND COVENANTS 4.1 Borrower makes the following representations, warranties and covenants: (a) LEGAL STATUS; AUTHORITY; OWNERSHIP. Borrower is a nonprofit public benefit corporation, duly organized, validly existing and in good standing under the laws of the State of California, has all requisite power and authority to own the Property, to develop and operate the Project, and to execute, deliver and perform its obligations under the Loan Documents. (b) NO VIOLATION. The execution of the Loan Documents and Borrower's performance thereunder does not and will not result in a breach of or constitute a default under any agreement, indenture or other instrument to which Borrower is a party or by which Borrower may be bound. (c) AUTHORIZATION. The Loan Documents to which Borrower is a party and the transactions contemplated thereby have each been dilly authorized by Borrower, and when executed and delivered will each constitute a valid and binding obligation of Borrower, enforceable in accordance with the respective terms thereof. HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 8 P.7 (d) LITIGATION. There are no pending or to Borrower's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Borrower or Borrower's development of the Project and ownership of the Property and the Improvements. (e) COMPLIANCE WITH LAWS. Borrower is in compliance in all material respects with all local, state and federal laws, rules, regulations, orders and decrees which are applicable to the Property or to Borrower in relation thereto ("Applicable Law") including without limitation, all environmental, health and safety and employment laws. (f) DISCLOSURE. No representation or warranty made by Borrower in this Loan Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading. There is no fact known to Borrower which has or might reasonably be anticipated to have a material adverse effect on the business, assets, financial condition of Borrower, or Borrower's ability to develop the Project which has not been disclosed to Agency in writing. ARTICLE 5. AFFIRMATIVE COVENANTS 5.1 USE OF FUNDS. Borrower covenants that it shall use the Loan Proceeds solely for purpose of financing the acquisition and rehabilitation of the Project in accordance with Section 2.6. 5.2 PUNCTUAL PAYMENT. Borrower covenants to punctually pay the principal balance of the Note and interest accrued thereon at the times and place and in the manner specified in the Note. 5.3 PAYMENT OF OTHER INDEBTEDNESS. Borrower covenants to punctually pay all charges, assessments, taxes and fees related to the Property or the Project improvements ("Improvements") and to punctually pay the principal and interest due on any other indebtedness related to the Property or the Project now or hereafter at any time owed by the Borrower to the Agency or any other lender. 5.4 ACCOUNTING RECORDS; PROPERTY INSPECTION. Borrower covenants to maintain accurate books and records in accordance with standard accounting principles consistently applied, and to permit the Agency, during business hours and upon reasonable notice to inspect, audit and examine such books and records with respect to the Project, the Property and the Loan and to inspect the Property during normal business hours upon reasonable notice. 5.5 COMPLIANCE WITH LAWS. Borrower covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project. Without limiting the generality of the foregoing, Borrower shall comply with all applicable requirements of state and local building codes and regulations, all applicable Environmental Laws, and all applicable statutes and regulations relating to accessibility for the disabled. HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 9 F.8 5.6 INSURANCE. Borrower shall maintain and keep in force at Borrower's expense, insurance coverage with respect to the Project and the Property in accordance with the requirements set forth in Exhibit F. 5.7 FACILITIES. Borrower shall keep the Property and the Improvements, and the personal property used in Borrower's operations in good repair and condition, and from time to time make necessary repairs, renewals and replacements thereto so that the Property and Improvements shall be preserved and maintained. 5.8 RELOCATION. Borrower shall ensure that all occupants of the Property receive all notices, benefits and assistance to which they are entitled in accordance with California Relocation Assistance Law (Government Code Section 7260 et seq.), all state and local regulations implementing such law, and all other applicable local, state and federal laws and regulations (collectively "Relocation Laws") relating to the displacement and relocation of eligible persons and business entities as defined in such Relocation Laws. Any and all costs incurred in connection with the temporary and/or permanent displacement and/or relocation of occupants of the Property, including without limitation payments to a relocation consultant, moving expense, and payments for temporary and permanent relocation benefits pursuant to Relocation Laws shall be paid by Borrower. Borrower shall indemnify, defend (with counsel approved by Agency) and hold harmless the Indemnitees (as defmed below) from and against any and all Liabilities (as defined below) arising in connection with the breach of Borrower's obligations set forth in this Section 5.8. 5.9 INDEMNIFICATION. Borrower shall indemnify, defend (with counsel reasonably acceptable to Agency), and hold harmless the Agency, the City, and their respective elected and appointed officials, officers, agents, and employees (collectively the Indemnitees"), from and against, and shall pay on demand, any and all losses, liabilities, damages, costs, claims, demands, penalties, fmes, orders, judgments, injunctive or other relief, expenses and charges (including attorneys' fees and expenses) (collectively "Liabilities") arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Borrower's covenants under the Loan Documents, (b) any failure of Borrower's representations and warranties to be true and correct in all material respects when made, (c) injury or death to persons or damage to property or other loss occurring on the Property, whether caused by the negligence or any other act or omission of Borrower or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, or (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, the Project, the Loan, the Loan Documents, or any transaction contemplated thereby, or any failure of Borrower to comply with all applicable state, federal and local laws and regulations, including without limitation, applicable provisions of the California Building Standards Code, Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto ("Prevailing Wage Laws"), and the Americans with Disabilities Act in connection with the construction or operation of the Project, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. It is further agreed that Agency does not, and shall not, waive any rights against Borrower which it may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or HIP Housing Development Corporation Construction and Permanent Loan Agreement 317-321 Commercial Avenue 955294v2 10 P.9 the deposit with Agency, of any of the insurance policies described in the Loan Documents. The representations, warranties and covenants contained in this Section shall survive the expiration or termination of this Loan Agreement, the making and repayment of the Loan, any release or reconveyance of the Deed of Trust, and any foreclosure proceeding, foreclosure sale, or delivery of a deed in lieu of foreclosure. 5.10 NOTICE TO AGENCY. Within three business days after any of the following shall occur, Borrower shall provide written notice thereof to Agency: (1) the occurrence of any Event of Default hereunder of which Borrower acquires knowledge; (2) any change in name, identity, legal structure, business location, or address of Borrower; (3) any uninsured or partially uninsured loss affecting the Property or the Improvements through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000); and (4) Borrower's receipt of a notice of default under any mortgage or other financing document affecting the Property or the Improvements. Borrower shall use best efforts to ensure that Agency shall receive timely notice of, and shall have a right to cure, any Borrower default under any financing document affecting the Property or the Improvements and that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Agency shall record a Request for Notice of Default and Sale. Borrower shall provide to Agency a copy of all notices of default that Borrower receives from the holder of any mortgage or other financing document affecting the Improvements or the Property. 5.11 TAXES AND OTHER LIABILITIES. Borrower shall pay and discharge when due any and all indebtedness, obligations, assessments, taxes, including federal and state payroll and income taxes which are the obligations of Borrower in relation to the Project, the Property, or the Improvements except those that Borrower may in good faith contest or as to which a bona fide dispute may arise, provided provision is make to the satisfaction of Agency for eventual payment thereof in the event that it is found that the same is an obligation of Borrower. 5.12 LITIGATION. Borrower shall provide written notice to Agency within three business days after Borrower acquires knowledge of any litigation pending or threatened against Borrower involving a claim exceeding Fifty Thousand Dollars ($50,000). 5.13 EXPENSES OF COLLECTION OR ENFORCEMENT. If at any time Borrower defaults under any provision of the Loan Documents, Borrower shall pay to the Agency in addition to any other sums that may be due to Agency, an amount equal to the costs and expenses (including without limitation, attorneys' fees and expenses) Agency incurs in connection with the collection, enforcement, or correction of the default, and such amounts shall be a part of the indebtedness secured by the Deed of Trust. 5.14 HAZARDOUS MATERIALS. 5.14.1 COVENANTS. Borrower shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept, stored or used in, on, or about the Property by Borrower, or the agents, employees, contractors or invitees of Borrower except for materials commonly used in construction activities similar to those related to the Project, or in the operation and maintenance of the Property and the Improvements, in each case in compliance HIP Housing Development Corporation 317-32] Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 11 P.lO with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Property. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Property and results in any contamination of the Property or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Property, Borrower shall promptly take all actions at Borrower's sole expense as are necessary to comply with all Environmental Laws (as defined below). "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 D.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 D.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 D.S.C. 6901; et seq.], the Federal Water Pollution Control Act [33 V.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Sc1fety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter- Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "SuperIien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmentaIlaw, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials (as defmed above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal oftoxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 12 P.II the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 V.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 V.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. 5.14.2 ENVIRONMENTAL INDEMNIFICATION. Borrower shall indemnify, defend (with counsel reasonably acceptable to Agency), and hold the Indemnitees harmless from and against Liabilities arising directly or indirectly in any manner connection with or as a result of the breach of Borrower's covenants set forth in Section 5.14.1 or the actual or alleged release or presence of any Hazardous Materials on, under, in or about the Property, whether known or unknown, foreseeable or unforeseeable, regardless of the source of such release or when such release occurred or such presence is discovered. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of such Hazardous Materials, all costs of determining whether the Property is in compliance with Environmental Laws, all costs associated with bringing the Property into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. The indemnity described in this Section shall survive the expiration or termination of this Loan Agreement, the making and repayment of the Loan, the release or reconveyance of the Deed of Trust, and any foreclosure proceeding, foreclosure sale or delivery of deed in lieu of foreclosure. 5.15 NON-DISCRIMINATION. Borrower covenants by and for itself and for its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, sex, sexual orientation, marital status, familial status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enj oyment of the Property, nor shall Borrower or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or Occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property. The Parties acknowledge that occupancy of the Project shall be limited to Fifty and Sixty Percent Households as described Section 2.3 of the Regulatory Agreement. 5.15.1 MANDATORY LANGUAGE IN ALL SUBSEQUENT DEEDS. LEASES AND CONTRACTS. All deeds, leases or contracts made or entered into by Borrower, its successors or assigns, as to any portion of the Property, the Improvements, or the Project, shall contain therein the following language: HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 13 P.12 (a) In Deeds: "Grantee herein covenants by and for itself, its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, disability, national origin or ancestry in the sale, lease, sublease, transfer, use, Occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases: "The lessee herein covenants by and for the lessee and lessee's heirs, personal representatives and assigns and all persons claiming under the lessee or through the lessee that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, disability, national origin or ancestry in the leasing, subleasing, transferring, use, Occupancy, tenure or enjoyment of the land herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased. " ( c) In Contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, disability, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment ofthe property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or Occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. " 5.16 PREVAILING WAGE POLICY. Borrower shall carry out and shall cause its contractors to carry out the construction of the Project in conformity with all applicable laws and regulations, including without limitation, all applicable federal and state labor laws and standards. To the extent applicable to the Project, Borrower and its subcontractors and agents, shall comply with Prevailing Wage Laws and shall be responsible for carrying out the requirements of such provisions. Borrower shall, and hereby agrees to indemnify, defend (with counsel approved by Agency), protect and hold harmless the Indemnitees from and against any and all Claims whether known or unknown, and which directly or indirectly, in whole or in part, are caused by, arise from, or HIP Housing Development Corporation 317-321 Commercial Avenue 9SS294v2 Construction and Permanent Loan Agreement 14 P.13 relate to, or are alleged to be caused by, arise from, or relate to, the payment or requirement of payment of prevailing wages or the requirement of competitive bidding in the construction of the Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Loan Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Agency, City or Borrower related to this Loan Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that Agency and City do not, and shall not, waive any rights against Borrower which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency or City, or Borrower's deposit with Agency of any of the insurance policies described in this Loan Agreement. 5.17 RESTRICTIONS ON CONVEYANCE, ENCUMBRANCE. Borrower shall comply with Article 8 hereof and Section 7.6 of the Deed of Trust pertaining to restrictions on the sale, transfer, encumbrance, and other conveyance of the Property, the Project, and interests therein and changes in identity of Borrower. ARTICLE 6. DEFAULT 6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall constitute an "Event of Default" under this Loan Agreement: A. The Borrower's failure to pay when due any sums payable under the Note and such failure continues for ten (10) days after Agency notifies Borrower thereof in writing. Article 8; B. A Transfer occurs, either voluntarily or involuntarily, in violation of C. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Lawn), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. D. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies ajudgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. HIP Housing Development Corporation 317-321 Commercial Avenue 9SS294v2 Construction and Penn anent Loan Agreement 15 P.14 E. If an event of default has been declared by the holder of any debt instrument secured by a mortgage or deed of trust on the Project or Borrower's interest in the Property and such holder exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents. F. If the Borrower fails to maintain insurance on the Property and the Project as required pursuant to the Loan Documents, and Borrower fails to cure such default within 10 days. G. Subject to Borrower's right to contest the following charges pursuant to the Loan Documents, if the Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within 10 days. H. If any representation or warranty contained in the Loan Documents or any certificate furnished in connection with the foregoing or in connection with any request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made. I. If the Borrower defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Article 6) contained in this Loan Agreement or in any other Loan Document, and unless such document specifies a shorter cure period for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which Agency shall have given written notice of the default to Borrower, provided that in the case of a nonmonetary default that is not susceptible of cure within thirty (30) days, an Event of Default shall not arise hereunder if Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default to completion with due diligence and in good faith, but in no event longer than 120 days from the receipt of notice of default. J. If an Event of Default shall have been declared under any other Loan Document, subject to the expiration of any applicable cure period set forth in such documents. ARTICLE 7. REMEDIES 7.1 REMEDIES AND RIGHTS UPON DEFAULT. Upon the occurrence of an Event of Default and the expiration of any applicable cure period, Agency shall have all remedies available to it under law or equity, including, but not limited to the following, and Agency may, at its election, without notice to or demand upon Borrower, except for notices or demands required by law or expressly required pursuant to the Loan Documents, exercise one or more of the following remedies: a) Accelerate and declare the balance ofthe Note and interest accrued thereon immediately due and payable; HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Pennanent Loan Agreement 16 P.15 b) Seek specific performance to enforce the terms of the Loan Documents; c) Foreclose on the Property pursuant to the Deed of Trust; d) Pursue any and all other remedies available under law to enforce the terms of the Loan Documents and Agency's rights thereunder. 7.2 REMEDIES CUMULATIVE. Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice any other remedy provided in any other Loan Document. The Agency may exercise from time to time any rights and remedies available to it under applicable law, in addition to, and not in lieu of, any rights and remedies expressly granted in this Loan Agreement or in any other instrument or notice, demand or legal process of any kind. ARTICLE 8. TRANSFERS 8.1 NO TRANSFER. Except for an assignment to an affiliate controlled by HIP or a partnership in which an affiliate controlled by HIP (or by an affiliate of HIP) is the general partner, the Borrower may not assign, transfer, or otherwise convey ("Transfer") its interests in the Property or its obligations under this Loan Agreement, the Regulatory Agreement, the Note, or the Deed of Trust without the prior written consent of the Agency, which consent shall not be unreasonably withheld. Absent such consent, the Borrower shall remain accountable for the performance of all such obligations under this Loan Agreement, the Regulatory Agreement, the Note, and the Deed of Trust. ARTICLE 9. GENERAL PROVISIONS 9.1 CONFLICTS OF INTEREST. No member, official, employee or agent of the Agency shall have any personal interest, direct or indirect, in this Loan Agreement nor shall any such member, official, employee or agent participate in any decision relating to the Loan Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested. 9.2 COUNTERP ARTS. This Loan Agreement may be executed in multiple counterparts each of which shall be an original and all of which taken together shall constitute one and the same instrument. 9.3 RECORDS. The Borrower shall be accountable to the Agency for all funds disbursed to the Borrower pursuant to this Loan Agreement. The Borrower agrees to maintain records that accurately and fully show the date, amount, purpose, and payee of all expenditures drawn from Loan funds, and to keep all invoices, receipts, and other documents related to expenditures from said Loan funds for not less than three (3) years after completion of the Project. HIP Housing Development Corporation 317-32] Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 17 P.16 9.4 NOTICES. Except as otherwise specified in this Loan Agreement, all notices to be sent pursuant to this Loan Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or (d) facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Ave. South San Francisco, California 94080 Attention: Executive Director Borrower: HIP Housing Development Corporation 364 South Railroad Ave San Mateo, CA 94401 Attention: Executive Director 9.5 ASSIGNMENT. This Loan Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. Notwithstanding the foregoing, Agency's obligation to make the Loan is personal to Borrower, and shall not be assignable by Borrower by operation of law or otherwise absent the express written consent of Agency, and any such assignment by operation of law or otherwise shall be void. 9.6 RELATIONSHIP OF PARTIES. The relationship of the Borrower and the Agency for this Project under this Loan Agreement is and at all times shall remain solely that of a debtor and a creditor, and shall not be construed as a joint venture or partnership. The Agency neither undertakes nor assumes any responsibility or duty to the Borrower (except as provided for herein) or any third party with respect to the Project, the Property, or the Loan. Except as the Agency may specify in writing, the Borrower shall have no authority to act as an agent of the Agency or to bind the Agency to any obligation. HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Pennanent Loan Agreement 18 P.17 9. 7 WAIVER. Any waiver by the Agency or the Borrower of any obligation in this Loan Agreement must be in writing. No waiver will be implied from any delay or failure by the Agency to take action on any breach or default of the Borrower or to pursue any remedy allowed under this Loan Agreement or under applicable law. Any extension of time granted to the Borrower to perform any obligation under the Loan Documents shall not operate as a waiver or release from any of its obligations under this Loan Agreement. Consent by the Agency to any act or omission by the Borrower shall not be construed as consent to any other or subsequent act or omission or to waive the requirement for the Agency's written consent to future waivers. 9.8 SURVIVAL. All representations made by Borrower herein and the provisions of Sections 5.8. 5.9. 5.14. 5.15. and 5.16 hereof shall survive the expiration or termination of this Loan Agreement, the making and repayment of the Loan, any release or reconveyance of the Deed of Trust, and any foreclosure proceeding, foreclosure sale, or delivery of a deed in lieu of foreclosure. The representations of Borrower made herein have been or will be relied upon by the Agency, notwithstanding any investigation made by the Agency or on its behalf. 9.9 INTEGRATION. This Loan Agreement, including Exhibits A through F. together with the other Loan Documents contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties. 9.10 AMENDMENTS AND MODIFICA nONS. Any amendments or modifications to this Loan Agreement must be in writing, executed by both the Borrower and the Agency. 9.11 TERM OF AGREEMENT. The term of this Loan Agreement shall commence on the Effective Date and remain in full force and effect until the Loan is fully repaid and all the obligations of the Borrower are discharged hereunder. 9.12 ATTORNEYS' FEES AND COSTS. In the event of an Event of Default or a legal or administrative action commenced to interpret or to enforce the terms of this Loan Agreement, the prevailing party in any such action shall be entitled to recover all reasonable attorneys' fees (which as to any party shall include the allocated reasonable costs for services of any party's in-house counsel) and costs in such action. 9.13 TIME. Time is of the essence in this Loan Agreement. 9.14 NO THIRD PARTY BENEFICIARIES. There shall be no third party beneficiaries to this Loan Agreement. In the event the Agency ceases to exist, all rights and obligations of the Agency under this Loan Agreement succeed to the City of South San Francisco. HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Pennanent Loan Agreement 19 P.18 9.15 SEVERABILITY. Every provision of this Loan Agreement is intended to be severable. If any provision of this Loan Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired. 9.16 FURTHER ASSURANCES. The Parties agree to execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Loan Agreement. 9.17 GOVERNING LAW: VENUE. This Loan Agreement shall in all respects be construed and enforced in accordance with laws of the State of California without regard to principles of conflicts of laws. The Parties consent to the jurisdiction of any federal or state court in the jurisdiction in which the Property is located (the "Property Jurisdiction"). Borrower agrees that any controversy arising under or in relation to this Loan Agreement or any other Loan Document shall be litigated exclusively in courts having jurisdiction in the Property Jurisdiction. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. SIGNATURES ON FOLLOWING PAGE HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 20 P.19 IN WITNESS WHEREOF, the parties hereby have executed this Loan Agreement as of the date fIrst above written. BORROWER: HIP Housing Development Corporation, a California nonprofIt public benefit corporation By: Its: APPROVED AS TO FORM: AGENCY: Steven T. Mattas, Agency Counsel Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic By: Barry M. Nagel, Executive Director HIP Housing Development Corporation 317-321 Commercial Avenue 955294v2 Construction and Permanent Loan Agreement 21 P.20 EXHIBIT A (ATTACH LEGAL DESCRIPTION OF THE PROPERTY) HIP Housing Development Corporation 317-321 Commercial Avenue Rehabilitation Construction and Permanent Loan Agreement A-I P.21 P.22 EXHIBIT B SECURED PROMISSORY NOTE $1,800,000 South San Francisco, California ,2007 FOR VALUE RECEIVED, the undersigned HIP Housing Development Corporation, a California nonprofit public benefit corporation ("Borrower"), hereby promises to pay to the order of the Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic ("Agency"), the principal sum of One Million Eight Hundred Thousand Dollars ($1,800,000.00) (the "Loan") or such lesser amount as is actually disbursed to Borrower by Agency. 1. Interest. This promissory note (this "Note") shall bear simple interest at the rate of three percent (3%) per annum on the principal amount outstanding from the date of this Note until paid. 2. Pavrnents. This Note shall be due and payable as set forth in Section 2.3 of the Loan Agreement by and between Borrower and Agency of even date herewith (the "Loan Agreement"). The Loan shall be repaid as follows: A. The following definitions shall apply for the purposes of this Section 2: (1) "Annual Operating Costs" with respect to a particular calendar year shall mean the following costs reasonably and actually incurred for operation and maintenance of the Project: property taxes and assessments imposed on the Property; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on loans associated with the development of the Project; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Project; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Project in an amount no more than $400 per unit per year or such greater amount as may be required by a physical needs assessment prepared by a third-party selected by Agency and prepared at Developer's expense no less frequently than once every five years throughout the term of the Loan; 955299v2 Ip.23 cash deposited into an operating reserve; payment of any previously unpaid portion of the developer fee pursuant to an Agency-approved development budget; an annual asset management fee equal to five percent (5%) of annual Gross Revenue (defmed below); routine maintenance expenses; site staff and property management expenses; extraordinary operating costs specifically approved in writing by the Agency; payments of deductibles in connection with casualty insurance claims not paid from reserves; the amount of uninsured losses actually replaced, repaired or restored, and not paid from reserves; and other ordinary and reasonable operating expenses approved in writing by the Agency and not listed above. Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses; any amount expended from a reserve account; and any capital cost with respect to the Project, as determined by a certified public accountant for the Project in accordance with generally accepted accounting principles. (2) "Gross Revenue" with respect to a particular calendar year shall mean all revenue, income, receipts, and other consideration actually received from operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; net proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance and not paid to senior lenders; the proceeds of casualty insurance not used to rebuild the Project and not paid to senior lenders; and condemnation awards for a taking of part or all of the Project for a temporary period not paid to senior lenders. Gross Revenue shall not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (3) "Agency's Share of Residual Receipts" shall mean seventy-six and nine- tenths percent (76.9%) of the Residual Receipts. (4) "Residual Receipts" shall mean for each calendar year during the term of the Loan, the amount by which Gross Revenue exceeds Annual Operating Expenses for the Project. Residual Receipts shall also include net cash proceeds realized from any refinancing of the Project, less fees and closing costs reasonably incurred in connection with such refinancing, repayment of the loan being refinanced, and any Agency-approved uses of the net cash proceeds of the refinancing. B. ANNUAL PAYMENTS. Commencing on June 1 ofthe year following completion of the Project, and on June 1 of each year thereafter for the term of the Loan, Borrower shall make repayments of the outstanding principal and accrued interest on the Loan equal to the Agency's Share of Residual Receipts. The Borrower shall provide the Agency with any documentation reasonably requested by the Agency to substantiate Borrower's determination of Residual Receipts. C. PAYMENT IN FULL. All principal and accrued interest on the Loan shall be due in full on the earlier to occur of (i) the date of any Event of Default (as 955299v2 ') P.24 defined in Section 8), or (ii) the Maturity Date as such may be extended pursuant to Section 4. 3. Deed of Trust. This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof executed by Borrower, as trustor, for the benefit of Agency and recorded against Borrower's fee simple interest in that certain real property located at 317-321 Commercial Avenue in South San Francisco, California (the "Property"). 4. Term Subject to Section 5 below, the principal amount of this Note shall be due and payable on the fifty-fifth (55th) anniversary of the date ofthis Note (the "Maturity Date"). 5. Extension of Maturity Date. The Maturity Date may be extended for an additional twenty-five (25) years upon the written request of the Borrower to the Agency provided that: (i) the Borrower is not in default under the Note or any other Loan Document, and (ii) the Borrower executes an amendment to the Regulatory Agreement agreeing to extend the affordability controls contained therein for the duration of the extension. 6. Manner of Payment. All payments of principal and interest on this Note shall be made to Agency at 400 Grand Avenue, P.O. Box 711, South San Francisco, California 94083 by certified check or such other place as Agency shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by Agency in writing. 7. Due on Sale;Transfer. The entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon the Transfer (as defined in Article 8 of the Loan Agreement) absent written consent of Agency, of all or any part of the Project or the Property or any interest therein other than a Transfer permitted without Agency consent pursuant to the Loan Agreement. Without limiting the generality of the foregoing, this Note shall not be assumable without Agency's prior written consent, which consent may be granted or denied in Agency's sole discretion. 8. Default. a) Any of the following shall constitute an event of default ("Event of Default") under this Note. 955299v2 3p.25 955299v2 (1) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after Agency notifies Borrower thereof in writing. (2) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (ItBankruptcy Law"), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (3) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its Issuance. (4) The occurrence of a Transfer in violation of Article 8 of the Loan Agreement (5) A default arises under any debt instrument secured by a mortgage or deed of trust on the Project or the Property and remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder. (6) Borrower fails to maintain insurance on the Property and the Project as required pursuant to the Loan Documents and Borrower fails to cure such default within 10 days. (7) Subject to Borrower's right to contest the following charges pursuant to the Loan Documents, if Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within 10 days. (8) If any representation or warranty contained in any Loan Document, or any certificate furnished in connection therewith, or in connection with II P.26 any request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made and continues to be materially adverse to the Agency or the City. (9) An Event of Default shall have been declared under any other Loan Document and remains uncured beyond the expiration or any applicable cure period. b) Upon the occurrence of an Event of a Default, at Agency's option, the Agency by written notice to Borrower, may declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance. c) If an Event of Default should occur and be continuing, Agency may pursue all rights and remedies available under this Note or as may otherwise be available to Agency under applicable law, equity, or the Loan Documents. 9. Waivers. a) Borrower expressly agrees that the term of this Note or the date of any payment due hereunder may be extended from time to time with Agency's written consent, and that Agency may accept further security or may release any security for this Note, all without in any way affecting the obligation of Borrower to repay the Note. b) To the maximum extent permitted by applicable law Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. c) The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever. 10. Non-Recourse. Agency's sole recourse in the event of a default by Borrower shall be to the Property, except in the event of ( a) fraud by Borrower, (b) any material misrepresentation made by Borrower to Agency in connection with the Loan, (c) misappropriation by Borrower of any rents, security deposits, or insurance or condemnation proceeds, or (d) commission of bad faith waste by Borrower. The foregoing provisions shall not prevent recourse to the collateral security for the Loan or constitute a waiver, release or discharge of or otherwise affect the obligation to pay, any indebtedness evidenced by this Note. 11. Miscellaneous Provisions. 955299v2 .::: P.27 a) All notices to Agency or Borrower shall be given in the manner and at the addresses set forth in the Loan Agreement, or to such addresses as Agency and Borrower may hereafter designate in accordance with said Loan Agreement. b) In the event of litigation arising from the enforcement of or a default under this Note, the non-prevailing party promises to pay all reasonable costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in such litigation. c) This Note may be amended only by an agreement in writing signed by Borrower and the Agency. d) This Note shall be governed by and construed in accordance with the laws of the State of California. e) The times for the performance of any obligations hereunder shall be strictly construed, time being of the essence. f) This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of Agency and its successors and permitted assigns. g) Any capitalized terms not otherwise defmed herein shall have the meaning ascribed to them in the Loan Agreement. SIGNATURE ON FOLLOWING PAGE 955299v2 6p.28 IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER: HIP Housing Development Corporation, a California nonprofit public benefit corporation By: Its: 955299v2 '7 P.29 P.30 EXillBIT C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Marty VanDuyn, Assistant City Manager No fee for recording pursuant to Government Code Section 27383 DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ( APN 0 11- 311-070 and 0 11- 311-11 0 THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of ,2007, ("Effective Date") by HIP Housing Development Corporation, a California nonprofit public benefit corporation ("Trustor") to First American Title Company, as trustee ("Trustee"), for the benefit of the Redevelopment Agency of the City of South San Francisco, a public body corporate and politic ("Beneficiary"). WHEREAS, Beneficiary and Trustor have entered into that certain Loan Agreement dated as of the date hereof (the "Loan Agreement") pursuant to which Beneficiary has loaned to Trustor the sum of One Million Eight Hundred Thousand Dollars ($1,800,000.00) (the "Loan"), and Trustor has issued to Beneficiary its Secured Promissory Note dated as of the date hereof ("Note") to secure repayment of the Loan; WHEREAS, Trustor owns a fee simple interest in that certain land located in San Mateo County, California and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Land"); and WHEREAS, as a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Property as hereinafter defined and in the Land to secure repayment of the Note and performance of Trustor's obligations under the Loan Agreement and under other Loan Documents (defined below). NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. 95530lv2 1p.31 1. Grant in Trust Trustor, in consideration of the foregoing and for the purposes of securing payment and performance of the Secured Obligations defined in Section 2, hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in the Land together with all of the following, whether presently owned or hereafter acquired: a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land ("Improvements"); b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances"); c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land (collectively, "Leases"), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, "Rents"); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds"); and f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues"); 95530lv2 "l P.32 g. All architectural, structural, and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, "Plans"); and h. All interests and rights in any private or governmental grants, subsidies, or loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing"). All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations"): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents (defined below); (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (vi) all modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether evidenced by new or additional documents; and (vii) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust. The Note, the Loan Agreement, this Deed of Trust, and the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement") dated as of the date hereof, executed by and between Trustor and Beneficiary and recorded substantially concurrently herewith are hereafter collectively referred to as the "Loan Documents." 3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon 95530lv2 3p.33 whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and! or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of the lessor under any Lease, shall not be liable in any manner for the Property, or the use, Occupancy, enjoyment or operation of any part of it , and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for any dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. 4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the flDee"), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute flproceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in such Property and Rents, without requiring any signature or further authorization by Trustor. Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall never be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the 955301v2 ~.34 real estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of(1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or Occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall never be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any fmancing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture fmancing statement and filing under the UCC, and covers property, goods and.equipment which are or are to become fixtures related to the Land and the'Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of San Mateo County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the DeC. This Deed of Trust shall also be effective as a fmancing statement covering minerals or the like (including oil and gas) and accounts subject to the DCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the DCC. The full name of the Trustor and the mailing address of the Trustor are set forth in Section 9.2 of this Deed of Trust. 7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties. 7.1 Ownership of Property. Trustor represents and warrants that (i) Trustor lawfully possesses and holds a fee simple interest in the Property; (ii) Trustor has good and marketable title to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary ("Permitted Encumbrances"), this Deed of Trust creates a valid first lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of any deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as 95530lv2 5 'P_:i t:) disclosed in writing to Beneficiary; and (vii) the correct address of Trustor's chief executive office is specified in Section 9.2. 7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Land that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Land or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or fu-tificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property. 7.3 Authority. Trustor further represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and ( c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor's ownership of the Property. 7.4 Payment and Performance of Secured Obli!!ations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Preservation and Maintenance of Property: Compliance with Laws. Trustor covenants that it shall use the proceeds of the Loan ("Loan Proceeds") solely for purpose of financing the Project in accordance with the Loan Documents. Trustor shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, Prevailing Wage Laws (as defined in Section 5.9 of the Loan 95530lv2 c 'P.36 Agreement), and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and Improvements solely for purposes authorized by the Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the Loan Documents. 7.6 Restrictions on Conveyance and Encumbrance: Acceleration. Except for a Transfer (as defined in Article 8 of the Loan Agreement) to an affiliate controlled by HIP or a partnership in which an affiliate controlled by HIP (or by an affiliate of HIP) is the general partner, it shall be an Event of Default hereunder if any Transfer of the Property, any part thereof, or interest therein occurs in violation of the requirements of the Loan Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8.1 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period. 7.7 Inspections~ Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subj ect to examination and inspection at any reasonable time by Beneficiary following two business days prior notice. 7.8 Charges. Liens. Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. 95530lv2 "'7 P.37 Trustor shall immediately discharge or cause to be discharged any lien on the Property (other than encumbrances approved by Beneficiary as of the date hereof in writing). Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, levy, charge or assessment so long as its validity is being actively contested in good faith and by appropriate actions and/or proceedings. 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 Insurance Coverage. Trustor shall cause to have in full force and effect during the term of the Loan the insurance listed in the Insurance Requirements, attached as Exhibit F. Such insurance shall name the Agency and the City as additional insureds and also provide for and protect the Agency and the City against incurring any legal cost in defending claims for alleged loss in connection with the Project. Tne limitation on the amount ofinsUfance shall not limit the responsibility of the Borrower to indemnify, defend or hold the Agency or the City harmless or pay damages on account of injury to persons or damage to property resulting from the Trustor's activities, or the activities of any other person or persons for which the Trustor or any of Trustor's agents are otherwise responsible, in connection with the Project. 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Materials to be brought upon, kept, stored or used in, on, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in the construction 955301v2 Q 'p.38 and operation of residential developments in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination ofthe Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws. Trustor hereby releases and waives any and all claims against Beneficiary for indemnity or contribution in the event that Trustor becomes liable for any cost or obligated to undertake any action pursuant to any Hazardous Material Claim or any Environmental Law, except to the extent that such claims arise from Beneficiary's negligence or willful misconduct. Except to the extent that such claims arise from Beneficiary's negligence or willful misconduct, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, "Indemnitees") harmless from and against any and all loss, claim, including administrative actions or claims, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims"), arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11, the breach of Trustor's representations and warranties set forth in Loan Agreement or otherwise arising in connection with the actual or alleged Release or presence of any Hazardous Materials on, under, in or about the Land, whether foreseeable or unforeseeable, regardless of the source of such Release or when such Release occurred or such presence is discovered. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: (i) payor satisfy any judgment or decree that may be entered against any Indemnitee or lndemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; (ii) reimburse lndemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and 955301v2 o "P.39 (iii) reimburse Indemnitees for any and all expenses, including without limitation out-of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding. Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any Loan Document; (ii) any extensions oftime for performance required by any Loan Document; (iii) any provision in any of the Loan Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the persona1liability of Trustor or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any Loan Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations. The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Loan Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust. Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions"), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ("Section 736") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. "Hazardous Material" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes 955301v2 1(\ 1'.40 without limitation (i) petroleum or oil or gas or any direct or indirect product or by- product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 V.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 V.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 V.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defmed above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 V.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.c. Section 1251], the Clean Air Act [42 D.S.C. Section 7401, et seq.], the California Vnderground Storage of Hazardous Substances Act 95530lv2 IIp.4 1 [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. 7 .12 Notice of Claims: Defense of Security: Reimbursement of Costs. (a) Notice of Claims. Within three business days after any of the following occur, Trustor shall provide written notice thereof to Beneficiary: (1) the occurrence of any Event of Default hereunder of which Trustor acquires knowledge; (2) any change in name, identity, legal structure, business location, or address of Trustor; or (3) any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Twenty Five Thousand Dollars ($25,000). Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof. (b) Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims. (c) Compensation: Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to payor reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including any rights or remedies afforded to Beneficiary or Trustee or both of them under Section 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure and any cost of evidence of title. (d) Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property. 95530lv2 'P.42 7.13 Indemnification. (a) Trustor shall indemnify, defend (with counsel selected by Beneficiary and reasonably acceptable to Trustor), and hold harmless the Indemnitees (as defined in Section 7.11) from and against, and shall pay on demand, any and all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor's covenants under any Loan Document, (b) any representation by Trustor in any Loan Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters solely caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust. (b) Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) Any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition ofthe Property; or (iv) Any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property, after an Event of Default, unless the loss is caused by the willful misconduct or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described above, and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary. 95530lv2 P.43 7.14 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 7.15 Release, Extension. Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations. 7.16 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been satisfied in full, and upon surrender of this Deed of Trust, the Loan Agreement and Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees, including attorneys' fees, of Trustee and all recordation fees related to such reconveyance. 7.17 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of Trust, suchjudgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7.17 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary 95530lv2 IpA 4 pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust. 8. Default and Remedies 8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of anyone or more of the following events: a. Beneficiary's declaration of an Event of Default under any Loan Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; C. If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.6 hereof or if any other Transfer occurs in violation of the Loan Documents; d. Trustor fails to maintain the insurance coverage required under the Loan Documents or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the time specified in Section 7.10; e. Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 10 days. f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other Loan Document proves to have been false or misleading in any material adverse respect when made; g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an 95530lv2 .PAS involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise anyone or more or all, of the remedies set forth in the any Loan Document, and any other remedy existing at law or in equity or by statute. All of the Beneficiary's rights and remedies shall be cumulative, and the exercise of anyone or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs of title evidence. (a) Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. (b) Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. (c)~. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this 955301v2 P.46 Deed of Trust. Such other things may include: taking and possessing all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfmished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attomey- in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. Regardless of any provision of this Deed of Trust, Beneficiary shall not be considered to have accepted any property other than cash or immediately available funds in satisfaction of any obligation of Trustor to Beneficiary, unless Beneficiary has given express written notice of Beneficiary's election of that remedy in accordance with UCC Section 9621, as it may be amended or recodified from time to time. (d) UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. (e) Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this instrument or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. (f) Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. 8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may 95530lv2 Ip.47 determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including cost of evidence of title and reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof, and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under any Loan Document, and ifin connection with such Event of Default, Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Loan Agreement and Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Loan Agreement and Note. At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: (a) First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to payor reimburse Beneficiary or Trustee under Section 7.12(c); and (b) Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 8.5 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under this Deed of Trust if the secured obligation had no acceleration provision; (b) Trustor cures all 95530lv2 lp.4 8 breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 8.6 Limitations of Power of Sale Notwithstanding anything to the contrary contained herein or in any documents secured by this deed of trust or contained in any subordination agreement, the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of foreclosure (collectively, "Foreclosure") with respect to the property encumbered by this deed of trust, the following rule contained in Section 42(h)( 6)(E)(ii) of the Internal Revenue Code of 1986, as amended, shall apply: For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the regulatory agreement with the California Tax: Credit Allocation Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. 9. Miscellaneous Provisions 9.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property. 9.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under the DeC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; 955301v2 Ip.49 c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Beneficiary: City of South San Francisco Redevelopment Agency 400 Grand Avenue South San Francisco, California 94080 Attention: Executive Director Trustor: HIP Housing Development Corporation 364 South Railroad Avenue San Mateo, CA 94401 Attention: Executive Director Trustee: Attention: Chief Title Officer 9.3 Successors and Assigns. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, and assigns of the Trustor, Beneficiary, and Trustee; provided however this Section 9.3 does not waive the provisions of Sections 7.6. 9.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of San Mateo County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 9.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 9.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction"). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any 95530lv2 21p.50 other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural. 9.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder or Trustee must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 9.8 Joint and Several Liability. If Trustor consists of more than one person, each shall be jointly and severally liable for the faithful performance of all of Trustor's obligations under this Deed of Trust. 9.9 Counterparts. This Deed of Trust may be executed in counterparts, each of which shall be an original and all of which taken together shall constitute one and the same agreement. 9.10 Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind. SIGNATURES ON FOLLOWING PAGE 955301v2 2p.51 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. HIP Housing Development Corporation, California nonprofit public benefit corporation By: Its: 955301v2 ~P.52 EXHIBIT A (Attach Legal Description) 95530lv2 23p. .Ii ~ STATE OF CALIFORNIA ) ) COUNTY OF SAN MATEO ) On ,20_ before me, the undersigned, personally appeared ( ( ) ) personally known to me 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. WITNESS my hand and official seal. Signature 95530lv2 2':P.54 P.SS EXIDBIT D RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Ave. P.O. Box 711 South San Francisco, California 94083 Attention: Marty VanDuyn, Assistant City Manager No fee for recording pursuant to Government Code Section 27383 AFFORDABLE HOUSING REGULA TORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into as of this _ day of , 2007 ("Effective Date"), by and between the Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic (the "Agency"), and HIP Housing Development Corporation, a California nonprofit public benefit corporation ("Borrower"). Agency and Borrower are hereinafter collectively referred to as the "Parties" RECITALS A. Borrower is the owner of the real property located at 317-321 Commercial Avenue in the City of South San Francisco (the "City") as more particularly described in Exhibit A attached hereto (the "Property"). B. Borrower intends to rehabilitate a fifteen (15) unit apartment building affordable to low income households on the Property (the "Project"). C. Pursuant to the loan agreement (the "Loan Agreement"), Agency has agreed to provide to Borrower a loan in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000) (the "Loan") in order to provide partial financing for the Project. The Loan is evidenced by a Secured Promissory Note (the "Note") executed by Borrower and dated as of the date hereof, and is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof and executed by Borrower for the benefit of Agency. The Deed of Trust will be recorded in the Official Records substantially concurrently herewith. F. As a condition to its agreement to provide the Loan to Borrower, Agency requires the Property to be subject to the terms, conditions and restrictions set forth herein. HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 1 P.56 G. The Parties have agreed to enter into and record this Agreement in order to satisfy the conditions described in the foregoing Recitals. The purpose of this Agreement is to regulate and restrict the occupancy and rents of the Project for the benefit of the Project occupants. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Borrower and Borrower's successors and assigns for the full term of this Agreement. THEREFORE, the Agency and the Borrower hereby agree as follows: ARTICLE 1. DEFINITIONS 1.1 Definitions. When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article 1. A. "Actual Household Size" shall mean the actual number of persons in the applicable household. R"Adjusted Income" shall mean the total anticipated annual income of all persons in a household, as calculated in accordance with 25 California Code of Regulations Section 6914 or pursuant to a successor state or federal housing program that utilizes a reasonably similar method of calculation of adjusted income. In the event that no such program exists, the Agency shall provide the Borrower with a reasonably similar method of calculation of adjusted income as provided in said Section 6914. C. "Permitted Household Size" shall mean a household based on the occupancy standards established by the San Mateo Housing Authority; provided however, that if the Project receives fmancing from a federal program that utilizes different occupancy standards, the federal program household occupancy standards shall be utilized. D."Fifty Percent Household" shall mean a household with an Adjusted Income which does not exceed fifty percent (50%) of Median Income, adjusted for Actual Household Size. E."Fifty Percent Units" shall mean the Units which, pursuant to Section 2.3 below, are required to be occupied by Fifty Percent Households. F."Sixty Percent Households" shall mean a household with an Adjusted Income which does not exceed sixty percent (60%) of the Median Income, adjusted for Actual Household Size. HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement ? P.57 G."Sixty Percent Units" shall mean the Units which, pursuant to Section 2.3 below, are required to be occupied by Sixty Percent Households. H."Median Income" means the area median income for San Mateo County, California, adjusted for household size, determined periodically by the California Department of Housing and Community Development ("HCD") as published in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). IfHCD ceases to make such determination, Median Income shall be the median income applicable to San Mateo County, with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development ("HUD") pursuant to the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City of South San Francisco that HUD may hereafter adopt in connection with such Act. 1. "Rent" shall mean the total of monthly payments by the Tenant of a Unit for the following: (1) use and occupancy of the Unit and land and associated facilities, including parking; (2) any separately charged fees or service charges assessed by the Borrower which are required of all Tenants, other than security deposits; (3) the cost of an adequate level of service for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service, cable television service or any other utility or service permitted to be excluded from the calculation of Rent pursuant to the terms of25 California Code of Regulations Section 6918; and (4) any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than the Borrower, and paid by the Tenant. J.''Tenant'' shall mean a qualified household occupying a Unit. the Project. K. "D nit" shall mean one of the fifteen (15) residential units comprising ARTICLE 2. AFFORDABILITY AND OCCUPANCY COVENANTS 2.1 Use and Affordabilitv Restrictions. Borrower hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the rehabilitation and operation of a IS-unit multifamily rental housing development in compliance with the requirements set forth herein. Borrower represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Borrower covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of Agency. Notwithstanding the foregoing or anything to the contrary contained herein, if the terms of financing for the Project require greater affordability restrictions than those imposed hereby, the requirements of such other financing shall prevail for the term thereof. HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 3 P.58 2.2 Affordability Requirements. For a term of fifty-five (55) years commencing upon the Effective Date of this Agreement, the Project shall be subject to the occupancy and rent requirements in Sections 2.3 and 2.4 of this Agreement. 2.2.1 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full term hereof regardless of (i) any sale, assignment, transfer, or conveyance of the Property or the Project or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or Note, or (iii) any reconveyance of the Deed of Trust, unless this Agreement is terminated earlier by Agency in a recorded writing. 2.2.2 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term specified in Section 2.2. 2.3 Occupancy Requirement. A. Fifty Percent Units. Six (6) Units shall be rented to and occupied by or, if vacant, available for occupancy by Fifty Percent Households. B. Sixty Percent Units. Nine (9) Units shall be rented to and occupied by or, if vacant, available for occupancy by Sixty Percent Households. C. City of South San Francisco. In order to ensure an adequate supply of low income housing within the City of South San Francisco for residents and employees of businesses within the City of South San Francisco, Borrower shall give a preference in the rental of the Units to eligible households that include at least one member who lives or works in the City of South San Francisco except to the extent inconsistent with state and federal fair housing laws. In the event there are fewer eligible persons available than there are Units, Units shall be made available to members of the general public. Borrower shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.4 Allowable Rent. A. Fifty Percent Rent. Subject to the provisions of Section 2.5 below, the Rent charged to Tenants of the Fifty Percent Units shall not exceed one-twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Median Income, adjusted for Permitted Household Size; provided however, that if the Actual Household Size is less than the Permitted Household Size, the rent shall be based on the Actual Household Size. B. Sixty Percent Rent. Subject to the provisions of Section 2.5 below, the Rent charged to Tenants ofthe Sixty Percent Units shall not exceed one-twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Median Income, adjusted for HIP Housing Development Corporation Regulatory Agreement 317-321 Commercial Avenue 955302v2 LI. P.59 Permitted Household Size; provided however, that if the Actual Household Size is less than the Permitted Household Size, the rent shall be based on the Actual Household Size. 2.5 Increased Income of Tenants. A. Increase from Fifty Percent to Sixty Percent. If, upon recertification of the income of a Tenant of a Fifty Percent Unit, the Borrower determines that a former Fifty Percent Household's Adjusted Income has increased and exceeds the qualifying income for a Fifty Percent Household set forth in Section 1.1, but does not exceed the maximum qualifying income for a Sixty Percent Household, then, upon expiration of the Tenant's lease: Unit; (i) Such Tenant's Unit shall be considered a Sixty Percent (ii) Such Tenant's Rent may be increased to a Sixty Percent Rent, upon sixty (60) days' written notice to the Tenant; and (iii) The Borrower shall rent the next available Unit to a Sixty Percent House.hold at Rent not exceeding the maximum Rent specified in Section 2.4(a) to comply with the requirements of Section 2.3(a) and Section 2A(a) above. B. Non-Qualifying Household. If, upon recertification of the income of a Tenant of a Unit, the Borrower determines that a former Fifty Percent Household or Sixty Percent Household has an Adjusted Income exceeding the maximum qualifying income fora Sixty Percent Household, such Tenant shall be permitted to continue occupying the Unit and upon expiration of the Tenant's lease and upon sixty (60) days written notice, the Rent may be increased to the lesser of one-twelfth of thirty percent (30%) of actual Adjusted Income of the Tenant, or fair market rent, and the Borrower shall rent the next available Unit to a Fifty Percent Household or a Sixty Percent Household, as applicable, to meet the requirements of Section 2.3(a) and 2.3(b) above. Notwithstanding the above, the Borrower may choose not to renew a Tenant's lease if the Tenant's household income exceeds eighty percent (80%) of Median Income. C. Upon termination of Occupancy of a Unit by a Tenant, such Unit shall be deemed to be continuously occupied by a household of the same income level (e.g., Fifty Percent Household or Sixty Percent Household) as the income level ofthe vacating Tenant, until such Unit is reoccupied, at which time the income character of the Unit (e.g., Fifty Percent Unit or Sixty Percent Unit) shall be redetermined. In any event, Borrower shall maintain the occupancy requirements set forth in Section 2.3 above. 2.6 Non-Discrimination. Borrower covenants for and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, sex, sexual orientation, marital status, familial status, ancestry, disability or national origin in the sale, lease, sublease, transfer, use, Occupancy, tenure or enjoyment of the Property or the Project, nor shall Borrower or any person claiming under or through Borrower establish HIP Housing Development Corporation Regulatory Agreement 317-321 Commercial Avenue 955302v2 5 P.60 or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Project. The foregoing covenant shall run with the land. All deeds, leases or contracts made or entered into by Borrower, its successors or assigns, as to any portion of the Property or the Project shall contain the following language: (a) In Deeds: "Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment ofthe property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases: "The lessee herein covenants by and for the lessee and lessee's heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." ( c) In Contracts "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy oftenants, lessee, subtenants, sublessees or vendees of the land." HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement F. P.61 ARTICLE 3. INCOME CERTIFICATION AND REPORTING 3.1 Income Certification. Borrower or Borrower's authorized agent shall obtain from each household prior to initial Occupancy of each Unit, and on every anniversary thereafter, a written certificate stating total gross household income in such format and with such supporting documentation as Agency may reasonably require. Borrower shall retain such certificates for not less than three (3) years, and upon Agency's request, shall provide copies of such certificates to Agency and make the originals available for Agency inspection. 3.2 Annual Report; Inspections. Borrower shall submit an annual report ("Annual Report") to the Agency in form satisfactory to Agency, together with a certification that the Project is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Project: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges; (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total household income of residents; (vii) documentation of source of household income; and (viii) the information required by Section 3.1. Upon Agency's request, Borrower shall include with the Annual Report, an income recertification for each household, documentation verifying tenant eligibility, and such additional information as Agency may reasonably request from time to time in order to show compliance with this Agreement. The Annual Report shall conform to the format requested by Agency; provided however, during such time that the Project is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of federal low-income housing tax credits or tax-exempt financing, Borrower may satisfy the requirements of this Section by providing Agency with a copy of compliance reports required in cOlmection with such financing. Borrower shall permit representatives of Agency to enter and inspect the Property and the Project during reasonable business hours in order to monitor compliance with this Agreement upon 24-hours advance notice of such visit to Borrower or to Borrower's management agent. ARTICLE 4. PROPERTY MANAGEMENT; REPAIR AND MAINTENANCE; MARKETING. 4.1 Management Responsibilities. Borrower shall be responsible for all management functions with respect to the Property and the Project, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 7 P.62 security. Except as Agency may otherwise agree in writing, Agency shall have no responsibility for management or maintenance of the Property or the Project. 4.2 Management Entity. Agency shall have the right to review and approve the qualifications of the management entity proposed by Borrower for the Project. The Agency hereby approves Borrower as the initial management entity for the Project. The contracting of management services to a management entity shall not relieve Borrower of its primary responsibility for proper performance of management duties. 4.3 Repair. Maintenance and Security. Throughout the term of this Agreement, Borrower shall at its own expense, maintain the Property and the Project in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Borrower agrees to maintain the Project and the Property (including without limitation, the residential units, common meeting rooms, common areas, landscaping, driveways and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Borrower shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Borrower shall provide adequate security services for occupants of the Project. 4.3.1 Agency's Right to Perform Maintenance. In the event that Borrower breaches any of the covenants contained in Section 4.3, and such default continues for a period often (10) days after written notice from Agency (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from Agency (with respect to landscaping, building improvements and general maintenance), then Agency, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by Agency in connection with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Borrower to Agency upon demand. All such sums remaining unpaid thirty (30) days following delivery of Agency's invoice therefor shall bear interest at the rate of 10% per annum. 4.4 Marketing and Management Plan. Not later than 180 calendar days following the Effective Date of this Agreement, Borrower shall submit for Agency review and approval, a plan for marketing and managing the Property ("Marketing and Management Plan"). The Marketing and Management Plan shall address in detail how Borrower plans to market the Units to prospective Fifty and Sixty Percent Households in accordance with fair housing laws and this Agreement, Borrower's tenant selection criteria, and how Borrower plans to certify the eligibility of Fifty and Sixty Percent Households. The Plan shall also describe the management team and shall address how the Borrower HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement R P.63 and the management entity plan to manage and maintain the Property and the Project. The Plan shall include the proposed management agreement and the form of rental agreement that Borrower proposes to enter into with Project tenants. Borrower shall abide by the terms of the Marketing and Management Plan in marketing, managing, and maintaining the Property and the Project, and throughout the term of this Agreement, shall submit proposed modifications to Agency for its review and approval. 4.5 Approval of Amendments. If Agency has not responded to any submission of the Management and Marketing Plan, the proposed management entity, or a proposed amendment or change to any of the foregoing within 30 days following Agency's receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by Agency. 4.6 Fees. Taxes. and Other Levies. Borrower shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies, including without limitation possessory interest taxes, if applicable, imposed by any public authority or utility company with respect to the Property or the Project, and shall pay such charges prior to delinquency. However, Borrower shall not be required to pay any such charge so long as (a) Borrower is contesting such charge in good faith and by appropriate proceedings, (b) Borrower maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Borrower immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. 4.7 Insurance Coverage. Borrower shall comply with the requirements set forth in Exhibit F of the Loan Agreement, and shall, at Borrower's expense, maintain in full force and effect insurance coverage as specified in Exhibit F of the Loan Agreement; provided however, during such time that lenders or low-income housing tax credit investors providing financing for the Project impose insurance requirements that are inconsistent with the requirements set forth in Exhibit F of the Loan Agreement, Borrower may satisfy the requirements of this Section by meeting the requirements of such lenders or investors. Notwithstanding the foregoing, throughout the term hereof, Borrower shall comply with the provisions of Exhibit F of the Loan Agreement pertaining to (i) provision to Agency of proof of insurance for the Project, (ii) naming of Agency and the City as additional insureds, and (iii) provision to Agency of notice of cancellation or reduction in coverage. 4.8 Property Damage or Destruction. If any part of the Project is damaged or destroyed, Borrower shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced within 120 days after the damage or loss occurs and shall be completed within one year thereafter, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. During such time that lenders or low-income housing tax credit investors providing financing for the Project impose requirements that differ from the requirements of this Section the requirements of such lenders and investors shall prevail. ARTICLE 5. TRANSFER AND ENCUMBRANCE HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 9 P.64 5.1 Restrictions on Transfer and Encumbrance. During the term ofthis Agreement, except for an assignment to an affiliate controlled by HIP or a partnership in which an affiliate controlled by HIP (or by an affiliate of HIP) is the general partner, the Borrower shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively "Transfer") of the whole or any part of the Property, the Proj ect, or the improvements, without the prior written consent of the Agency. 5.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to the Loan Agreement; (iii) the lease of individual residents to tenants for occupancy as their principal residence in accordance with this Agreement; or (iv) assignments creating security interests for the purpose of financing the acquisition, construction or permanent financing of the Project or the Property in accordance with the Loan Agreement, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest. In addition, Agency shall not withhold its consent to the sale, transfer or other disposition ofthe Project, in whole or in part, provided that (1) the Project is and shall continue to be operated in compliance with this Agreement; (2) the transferee expressly assumes all obligations of Borrower imposed by this Agreement; (3) the transferee executes all documents reasonably requested by the Agency with respect to the assumption of the Borrower's obligations under this Agreement, and upon Agency's request, delivers to the Agency an opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either (A) the transferee has at least three years' experience in the ownership, operation and management oflow-income rental housing projects of similar size to that of the Project, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in subclause (A). Consent to any proposed Transfer may be given by the Agency's Executive Director unless the Executive Director, in his or her discretion, refers the matter of approval to the Agency's governing board. If a proposed Transfer has not been approved by Agency in writing within thirty (30) days following Agency's receipt of written request by Borrower, it shall be deemed rejected. 5.3 Encumbrances. Borrower agrees to use best efforts to ensure that any deed of trust secured by the Project for the benefit of a lender other than Agency ("Third-Party Lender") shall contain each ofthe following provisions: (i) Third-Party Lender shall use its best efforts to provide to Agency a copy of any notice of default issued to Borrower concurrently with provision of such notice to Borrower (provided however, the failure to do so shall not impair such Third-Party Lender's rights and remedies); (ii) Agency shall have the reasonable right, but not the obligation, to cure any HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 10 'P.65 default by Borrower within the same period of time provided to Borrower for such cure extended by an additional 60 days; (iii) provided that Agency has cured any default under Third-Party Lender's deed of trust and other loan documents, Agency shall have the right to foreclose Agency's Deed of Trust and take title to the Project without acceleration of Third-Party Lender's debt; and (iv) Agency shall have the right to transfer the Project without acceleration of Third-Party Lender's debt to a nonprofit corporation or other entity which shall own and operate the Project as an affordable rental housing Project, subject to the prior written consent of the Third-Party Lender. Borrower agrees to provide to Agency a copy of any notice of default Borrower receives from any Third-Party Lender within three (3) business days following Borrower's receipt thereof. 5.4 Mortga~ee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Project or the Property, and the purchaser at any trustee's sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee's sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, Agency shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Project or the Property that such violation has occurred. ARTICLE 6. DEFAULTS AND REMEDIES 6.1 Events of Default. The occurrence of anyone or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) The occurrence of a Transfer in violation of Article 5 hereof. (b) Borrower's failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Borrower to cure such default within 10 days. (c) Subject to Borrower's right to contest the following charges, Borrower's failure to pay taxes or assessments due on the Property or the Proj ect or failure to pay any other charge that may result in a lien on the Property or the Project, and Borrower's failure to cure such default within 10 days. (d) Borrower's default in the performance of any term, provision or covenant under this Agreement or under any other Loan Document (as defined in the Loan Agreement) (other than an obligation enumerated in this Section 6.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non-monetary default following the date upon which Agency shall have given written notice ofthe default to Borrower, or if the nature of any such non-monetary default is such that it cannot be cured within 30 days, Borrower's failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 11 P.66 default with due diligence and in good faith, but in no event longer than 60 days from receipt of the notice of default. 6.2 Remedies. If within the applicable cure period, Borrower fails to cure a default or fails to commence to cure and diligently pursue completion of a cure, as applicable, or if a cure is not possible, Agency may proceed with any of the following remedies: A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; B. Pursuant to the Loan Documents, accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable; C. For violations of obligations with respect to rents for the Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the allowable rent pursuant to Section 2.4; D. Pursue any other remedy allowed at law or in equity. Each of the remedies provided herein is cumulative and not exclusive. The Agency may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement. ARTICLE 7. INDEMNITY 7.1 Indemnity. Borrower shall indemnify, defend (with counsel approved by Agency) and hold Agency, the City, and their respective elected and appointed officers, officials, employees, agents, and representatives (collectively, the "Indemnitees") harmless from and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs oflitigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims") arising directly or indirectly, in whole or in part, as a result of or in connection with Borrower's rehabilitation or management of the Property and the Project. Borrower's indemnification obligations under this Section 7.1 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 7.1 shall survive the expiration or earlier termination of this Agreement. It is further agreed that Agency does not and shall not waive any rights against Borrower that it may have by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or the deposit with Agency by Borrower, of any of the insurance policies described in this Agreement or the Loan Agreement. ARTICLE 8. MISCELLANEOUS HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 1;.67 8.1 Recordation: No Subordination. This Agreement shall be recorded in the Official Records of San Mateo County. Borrower hereby represents, warrants and covenants that with the exception of the Loan Documents and easements of record, absent the written consent of Agency, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Project. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Project in position superior to this Agreement, upon the request of Agency, Borrower hereby covenants and agrees to promptly undertake all action necessary to clear such matter from title or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 8.1, and to provide such evidence thereof as Agency may reasonably request. Agency agrees that this Agreement may be subordinated to the deed of trust for conventional financing by a bank or other financial institution pursuant to a subordination agreement provided that Agency is granted rights to notice and cure defaults under such subordination agreement. 8.2 Binding Upon Successors; Covenants to Run with the Land. Borrower hereby subjects its interest in the Property and the Project to the covenants and restrictions set forth in this Agreement. The Agency and Borrower hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Borrower and Agency, regardless of any sale, assignment, conveyance or transfer of the Property, the Project or any part thereof or interest therein. Any successor-in-interest to Borrower, including without limitation any purchaser, transferee or lessee of the Property or the Project (other than the tenants of the individual dwelling units within the Project) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, ground lease or other instrument affecting or conveying the Property or the Project or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, ground lease or other instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Borrower hereby covenants to obtain and deliver to Agency an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Borrower agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Project in favor of Agency. 8.3 No Waiver. Any waiver by Agency of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by Agency to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by Agency at any HIP Housing Development Corporation Regulatory Agreement 317-321 Commercial Avenue 955302v2 1 ~ P.68 time to require strict performance by Borrower of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach ofthe same or any other provision hereof or a relinquishment for the future of such election. 8.4 Amendments. This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of the County of San Mateo. 8.5 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Ave. South San Francisco, CA 94080 Attention: Executive Director Borrower: HIP Housing Development Corporation 364 South Railroad Avenue San Mateo, CA 94401 Attention: Executive Director 8.6 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement ]Ll P.69 8.7 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 8.8 Action bv the Agency. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the Agency is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the Agency Executive Director or by any person who shall have been designated by the Agency Executive Director, without further approval by the governing board of the Agency. 8.9 Non Liability of Agency and Agency Officials. Employees and Agents. No member, official, employee or agent of the Agency or the City shall be personally liable to Borrower or any successor in interest, in the event of any default or breach by the Agency, or for any amount of money which may become due to Owner or its successor or for any obligation of Agency under this Agreement. 8.10 Headings; Construction. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. 8.11 Time is of the Essence. Time is of the essence in the performance of this Agreement. 8.12 Governing Law. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 8.13 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action. 8.14 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. 8.15 Entire Agreement; Exhibits. This Agreement, together with the Loan Documents contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. The exhibits attached hereto are incorporated herein by this reference. 8.16 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGE HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 1:' P.70 IN WITNESS WHEREOF, the Agency and the Borrower have executed this Agreement by duly authorized representatives, all on the date first written above. BORROWER: HIP Housing Development Corporation, a California nonprofit public benefit corporation By: Its: ATTEST: AGENCY: Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic Agency Secretary APPROVED AS TO FORM: By: Steven T. Matias, Agency Counsel Barry M. Nagel, Executive Director SIGNATURES MUST BE NOTARIZED HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement lh 'P.71 HIP Housing Development Corporation 317-32] Commercial Avenue 955302v2 EXHIBIT A (Attach Legal Description) Regulatory Agreement Ip.72 STATE OF CALIFORNIA ) ) COUNTY OF SAN MATEO ) On ,20_ before me, the undersigned, personally appeared ( ( ) ) personally known to me 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. WITNESS my hand and official seal. Signature HIP Housing Development Corporation 317-321 Commercial Avenue 955302v2 Regulatory Agreement 1~.73 P.74 EXHIBIT E Recording requested by and when recorded mail to: Redevelopment Agency of the City of South San Francisco 400 Grand Ave South San Francisco, CA 94080 Attention: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE 996103,27383 SUBORDINATION AGREEMENT ~GENCYLOANTOBANKLO~ NOTICE: TillS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOlVIlNG SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS SUBORDINATION AGREEMENT is made as of the day of ,2007, by and among HIP Housing Development Corporation, a California nonprofit public benefit corporation ("Borrower"), the Redevelopment Agency of the City of South San Francisco ("Agency" and "Subordinate Lienholder"), and Washinton Mutual ("Bank" and "Senior Lienholder"). RECITALS A. The Borrower has or will execute a deed of trust (the "Agency Deed of Trust") in favor of the Agency which deed of trust will be recorded in the office of the County Recorder of San Mateo County, California (the "Recorder") concurrently herewith, and which will secure an indebtedness by the Borrower in favor of the Agency in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000) and which shall encumber the real property described in Exhibit.1\. attached hereto and incorporated herein by this reference (the "Property"). B. The Borrower has or will execute a deed of trust (the "Bank Deed of Trust") in favor of the Bank which deed of trust will be recorded in the office of the Recorder concurrently herewith, and which will secure an indebtedness by the Borrower in favor of the Bank in the amount of ($ ) and which shall encumber the Property. C. The Borrower and the Agency have or will also enter into a Regulatory Agreement containing covenants that affect the Property (the "Agency Regulatory Agreement"), will be recorded in the office of the Recorder concurrently herewith. 957147 P.75 D. The Agency Deed of Trust and the Agency Regulatory Agreement shall be referred to herein as the "Subordinate Lienholder Documents." D. The Borrower has or will execute a promissory note (the "Senior Lienholder Note") in the original principal amount not to exceed Dollars ($ ) in favor of Senior Lienholder (the "Senior Lienholder Loan") which will be secured by a deed of trust to be recorded in the office of the Recorder concurrently herewith (the "Senior Lienholder Deed of Trust"). The Senior Lienholder Note and the Senior Lienholder Deed of Trust and shall be referred to herein as the "Senior Lienholder Documents." E. It is a condition precedent to obtaining the Senior Lienholder Loan that the Senior Lienholder Documents shall unconditionally be and remain at all times liens or charges upon the Property, prior and superior to the liens or charges of the Subordinate Lienholder Documents. F. Senior Lienholder is willing to make said loan provided the Senior Lienholder Documents securing the same are liens or charges upon the Property prior and superior to the liens or charges of the Subordinate Lienholder Documents and provided that the Subordinate Lienholder will specifically and unconditionally subordinate the liens or charges of the Subordinate Lienholder Documents to the liens or charges of the Senior Lienholder Documents. G. It is to the mutual benefit of the parties herein that Senior Lienholder make such loan to the Borrower and the Subordinate Lienholder is willing that the Senior Lienholder Documents shall, when recorded, as applicable, constitute liens or charges upon the Property which are unconditionally prior and superior to the liens or charges of the Subordinate Lienholder Documents. In consideration of the mutual benefit accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Senior Lienholder to make the loan referred to, it is hereby declared, understood and agreed as follows: 1. The Senior Lienholder Documents and any modifications (other than further advances of principal or increases in the interest rate), renewals, or extensions thereof, shall unconditionally be and remain at all times liens or charges on the Property prior and superior to the liens or charges of the Subordinate Lienholder Documents. 2. That Senior Lienholder would not make its loan above described without this subordination agreement. 3. That with regard to the priority given to each deed of trust hereinbefore specifically described, this agreement shall be the sole and only agreement with regard to the subordination of the liens or charges of the Subordinate Lienholder Documents to the liens or charges of the Senior Lienholder Documents, and shall supersede and cancel any prior agreements as to such subordination including, but not limited to, those provisions, if any, 957147 P.76 contained in the Subordinate Lienholder Documents which provide for the subordination of the liens or charges thereof to another deed of trust or mortgage. 4. In the event of foreclosure on the Property, the Senior Lienholder Deed of Trust shall be prior and superior to the rights of the Agency. 5. Senior Lienholder declares, agrees and acknowledges that: a. Notice and Cure: (i) Subject to subparagraph (ii) below, and only as separate and independent covenant and not as a condition to the continued effectiveness of the covenants and agreements as set forth, each of Subordinate Lienholder and Senior Lienholder (each, a "Lender") agrees that it shall not complete a foreclosure sale of the Property, or any portion thereof, or record a deed-in-lieu of foreclosure with respect to the Property, or any portion-thereof, (each, a "Foreclosure Remedy") unless and until the other Lender ("Notice Party") has first been given ninety (90) days written notice of the default(s) or Event(s) of Default, giving rise to such Lender's right to complete such Foreclosure Remedy (a "Default Notice"), and the other Lender has failed, within such ninety (90) day period to cure such default(s) or Event(s) of Default; provided, however, that the Lender giving the Default Notice (the "Defaulted Lender") shall be entitled during such ninety (90) day period to continue to pursue all of its rights and remedies under its respective loan documents, including but not limited to acceleration of its note (subject to the de- acceleration provisions set forth below), commencement and pursuit of foreclosure (but not completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions contained therein), and/or any other loan document. All such notices shall be at the address noted below or at another address as each Lender may instruct the other Lender in writing from time to time. (ii) It is the express intent of the parties hereunder that any Defaulted Lender's failure to give the notice described in subparagraph (i) above for any reason whatsoever shall not (a) act to impair or waive any remedy or right of such Defaulted Lender under this Agreement or any other loan document of such Defaulted Lender (except only completion of the Foreclosure Remedy), or (h) subject such Defaulted Lender to any liability whatsoever to any Notice Party for any loss, cost, or expense any such Notice Party may incur as a result of the failure to provide such notice to such Notice Party, or as a result of such Event(s) of Default giving rise to such Defaulted Lender's right to complete such Foreclosure Remedy. Nothing contained in this subparagraph (ii) is intended to limit any Notice Party's rights to (1) injunctive relief to enforce the provisions of this Agreement, or (2) seek recovery of actual damages (excluding consequential damages) that are directly caused by completion of a Foreclosure Remedy without Notice Party receiving a thirty (30) day notice and opportunity to cure pursuant to California Civil Code Section 2924b or other applicable law. (iii) Unless expressly prohibited by law, each Lender agrees to record a "Request for Notice," or similar appropriate document requesting notice of any foreclosure sale, in the Official Records of the County in which the Property is located, 957147 P.77 and in the event a Defaulted Lender has failed to sooner provide notice to any Notice Party, the receipt of such notice of foreclosure sale by such Notice Party shall be deemed to be notice to the Notice Party as contemplated hereunder. Except as specifically provided herein, or otherwise agreed in writing, Defaulted Lender's failure to give any such notice for any reason shall not act to impair or waive any remedy or right of such Defaulted Lender under this Agreement or any of such Defaulted Lender's loan documents. (iv) With respect to the exercise of the cure rights provided above, the following shall apply: (1) Each Notice Party, whether Senior Lienholder or Subordinate Lienholder, shall have the right, but not the obligation, to elect to cure the noticed default(s) or Event(s) of Default (the "Noticed Defaults") by giving the Defaulted Lender written notice of its intention to cure the Noticed Defaults within the ninety (90) day cure period described above (the "Cure Period") and thereafter curing all Noticed Defaults within the Cure Period. (2) If a cure of all the Noticed Defaults is completed within the Cure Period, the Defaulted Lender will rescind any notice of default recorded and request dismissal of any receiver who has been appointed, after reimbursement of all of Defaulted Lender's costs, including, without limitation, reasonable attorneys' fees and costs. (3) Following the timely cure of all Noticed Defaults by a Notice Party, the Defaulted Lender will not exercise its right to accelerate (or will de-accelerate) the amounts due under the Defaulted Lender's loan documents by reason of the Noticed Defaults cured by such Notice Party; provicieci, however, that nothing herein shall be construed to waive or limit any of Defaulted Lender's rights or remedies as to any uncured Noticed Default, or any subsequent default by Owner. (4) Nothing in this Paragraph (iv) is intended to limit or modify any covenant, term, or condition contained in Senior Lienholder Documents or the Subordinate Lienholder Documents, including, without limitation, any covenant against creating or recording any liens or encumbrances against the Property without Senior Lienholder's or Subordinate Lienholder's prior written approval, as applicable, and any acceleration clause in the Senior Lienholder Documents or the Subordinate Documents. Nothing in this Paragraph (i) is intended to diminish the rights of Lenders pursuant to California Civil Code Section 2924b, or to diminish the rights of a junior lienholder to receive notice under applicable law. (v) If following the occurrence of a default under the Senior Lienholder Documents but prior to any foreclosure or deed in lieu of foreclosure under the Senior Lienholder Documents, Subordinate Lienholder takes title to or possession of the Property and cures all outstanding defaults under the Senior Lienholder Documents, Senior Lienholder hereby agrees not to exercise any rights Senior Lienholder may have under the Senior Lienholder Documents to declare a default and accelerate the Senior Lienholder Loan that arise solely as a result of the transfer of title or possession of the 957147 P.78 Property to Subordinate Lienholder (or, if Senior Lienholder has already accelerated the Senior Lienholder Loan, Senior Lienholder hereby agrees that Senior Lienholder will reinstate the Senior Lienholder Loan at that time) and Senior Lienholder shall permit the transfer of the entire Property to Subordinate Lienholder subject to the Senior Lienholder Documents if and only if each and all of the following conditions have been satisfied in Senior Lienholder's reasonable determination: (1) Subordinate Lienholder has executed the form of Assumption Agreement provided by Senior Lienholder; (2) Subordinate Lienholder cures any existing defaults under the Senior Lienholder Documents through escrow, and there exists no other event, which, with the giving of notice or the passage of time or both, would constitute an event of default under any of the Senior Lienholder Documents; and (3) Senior Lienholder receives a new Senior Lienholder's policy of title insurance or endorsement insuring the continued existing lien status of the Senior Lienholder Loan. In the event the above conditions are met, all existing terms of the Senior Lienholder Documents will remain in effect. The obligations of Senior Lienholder stated herein are expressly conditioned upon the assumption transaction being in compliance with the applicable law and regulations of all government agencies having jurisdiction over Senior Lienholder at the time of the transfer. The provisions of this Paragraph shall apply to the transfer of the Property to Subordinate Lienholder only and it shall not apply to any other or subsequent transfer to any other party. (vi) As required pursuant to Section 33334. 14(a)(4) of the California, Health and Safety Code, Subordinate Lienholder has determined that an economically feasible alternative method of financing, refmancing or assisting the project situated or to be situated on the Property, on substantially comparable terms and conditions to the Senior Lienholder Documents, without subordination, is not reasonably available. 6. The Agency declares, agrees and acknowledges that: a. It consents to and approves of all provisions of the Senior Lienholder Documents and any and all loan or escrow agreements between the Borrower and Senior Lienholder for the disbursement of the proceeds of Senior Lienholder's loan; b. Senior Lienholder in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Senior Lienholder represented that it will see to the application of such proceeds by the person or persons to whom Senior Lienholder disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; and c. It intentionally and unconditionally subordinates the liens or charges of the Subordinate Lienholder Documents in favor of the liens or charges upon the Property of the Senior Lienholder Documents and understands that in reliance upon, and in consideration of this subordination, specific loan and advances are being and will be made, and as part and parcel thereof, specific monetary and other obligations are being entered into which would not be made or entered into but for said reliance upon this subordination. 957147 P.79 7. This Subordination Agreement may be executed in counterparts, but all counterparts shall constitute but one and the same document. This Subordination Agreement shall inure to the benefit of the Senior Lienholder and its successors and assigns, and shall be binding upon the Agency and its successors and assigns. 8. Notice:~. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice is effective upon delivery; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (c) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (d) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first- class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day ifit is received after 5:00 p.m. recipient's time or on a nonbusiness day. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: Executive Director Senior Lender: Washinton Mutual Borrower: HIP Housing Development Corporation a California non-profit public benefit corporation 364 South Railroad Avenue San Mateo, CA 94401 Attention: Executive Director With a Copy to: 957147 P.80 IN WITNESS WHEREOF, the parties hereto have executed this Subordination Agreement this _ day of ,2007. NOTICE: TillS SUBORDINATION AGREEMENT CONTAINS A PROVISION WIllCH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. illP HOUSING DEVELOPMENT CORPORATION, a California non-profit Public Benefit Corporation REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO By: By: Executive Director Name: Executive Director ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: Agency Counsel [SIGNATURES MUST BE NOTARIZED] 957147 P.81 P.82 EXIDBIT F 317-321 Commercial Avenue RELOCATION PLAN South San Francisco, California PREPARED FOR IDP Housing 364 South Railroad Avenue San Mateo, CA 94401 By OVERLAND, PACIFIC & CUTLER, INC. 7901 OAKPORT STREET, STE. 4800 OAKLAND, CA 94621-2015 (510) 638-3081 March 2007 P.83 INTRODUCTION - - ';:ff~!~>~;;;,q~,l:'&;11~, \ '~A",% [,,""'/in 'x ~ /~ ~ \~; {~r~~it9~~~i, ~f~~ HIP Housing Development Corporation, an affiliate of Human Investment Project ("HIP Housing"), a non-profit housing organization was founded in 1972 to assist the disadvantaged and disabled locate housing within San Mateo County. HIP Housing provides homes to over 1,000 persons through the property it owns and manages, and through its Home Sharing, Self-Sufficiency and Home Equity Conversion Programs. HIP Housing, with financial assistance of the County of San Mateo and the Redevelopment Agency of the City of South San Francisco (lithe Agency"),intends to acquire and rehabilitate 317-321 Commercial Avenue, a residential property which includes 15 apartment units in the City of South San Francisco. HIP Housing proposes to secure funding from private bank funds and Community Development Block Grant (CDBG) funds from the County of San Mateo to maintain the property as affordable to low and very-low income tenants and to reduce overcrowding in the units. In total, the acquisition of the property may result in the permanent displacement of up to 4 residential households. Due to the public nature of the proposed financing for the acquisitions, the California Relocation Assistance and Real Property Acquisition Guidelines, California Code of Regulations, Title 25, Chapter 6 and the Uniform Relocation Assistance and Real Property Acquisition Policies Act are assumed to apply. The Project site is located at 317-321 Commercial Avenue, situated between Linden Avenue to the east and Maple Avenue to the west, and between First Lane and Second Lane in the City of South San Francisco and County of San Mateo. The site is four blocks from Grand Avenue, a main shopping district and has close access to the 101 Freeway and Airport Blvd. as illustrated on the Project Site Maps as shown in Attachment 1. There are 5 two-bedroom units and 10 one-bedroom units. South San Francisco, home to many biotech companies such as Genentech, occupies the basin and portions of the sides of a broad valley formed by the San Bruno Mountains on the north and the Coast Range on the west. Most of the valley faces adjacent San Francisco Bay. With a population of 61 ,824 as of 2006, the city is served by a new BART station which opened in June 2003. The surrounding neighborhood has a mix of residential uses with single family residences and multi-family units. The property is located less than a mile from the closest elementary school, less than 2 miles from a medical center, within close proximity to grocery stores, and approximately 21'2 miles from a major shopping center. The Project will be in conformance with the requirements of the US Department of Housing and Urban Development ("HUD"), the State of California Housing and Community Development Department ("HCD"), and the City of South San Francisco PREPARED By OVERLAND, PACIFIC & CUTLER,INC. Page 2 P.84 317 -321 COMMERCIAL AVE. RELOCA nON PLAN General Plan requirements. Overland, Pacific & Cutler, Inc. (OPC), an experienced relocation firm, has been selected to prepare this Relocation Plan (the 'Plan'), and will provide all subsequently required relocation assistance for this Project. In compliance with statutory requirements, the Plan has been prepared to evaluate the present circumstances and replacement housing and storage requirements of the current Project occupants. This Plan sets forth policies and procedures necessary to conform with statutes and regulations established by the US Code Title 42, Chapter 61 "Uniform Relocation Assistance and Real Property Acquisition Policies Act" of 1970 (URA) and as amended thereafter, and the California Relocation Assistance Law, California Government Code Section 7260 et seq (the "CRAL") and the California Relocation Assistance and Real Property Acquisition Guidelines, Title 25, California Code of Regulations, Chapter 6, Section 6000 et seq. (the "Guidelines") for residential displacements. With certain narrow exceptions, federal funds cannot be used for any displaced person who is an alien not lawfully present in the United States. A. METHODOLOGY AND ASSESSMENT OF NEEDS To obtain information necessary for the preparation of this Plan, personal interviews were conducted with the current occupants of the Project site during the week of March 12,2007. Inquiries made of the residential occupants included household size and composition, ages of occupant, rental and income information, length and type of occupancy, ethnicity, language first spoken in the home, disabilities/health problems, and preferences related to replacement housing and location. In addition, estoppel certificates dated October, 2006 and lease documentation were provided by the current building owner. It is noted that there have been changes to the household composition and current building tenancy since the time that the certificates were prepared. All information of a statistical nature supplied by the households was anecdotal and not validated by documentary evidence that otherwise would be required to comply with relocation qualifying criteria. Based on the information obtained from personal interviews, the following table describes some of the household occupants' characteristics and needs. All 15 units are currently occupied with overcrowding noted in 10 units. Of the 10 one- bedroom units, occupancy ranges from a low of 1 person to a maximum of 8 adults. In the two-bedroom units occupancy ranges from a single person household to a maximum of 7 persons. There are a variation of household composition with some families, some non-related adult members and some related and non-related members. PREPARED BY OVERLAND. PACIFIC & CUTLER, INC. Page 3 P.85 317-321COMMERCIAL AVE. RELOCATION PLAN Rents for the one-bedroom units vary from $1,195 to $1,295. The two-bedroom unit rents range from $1,295 to $1,595. Two households receive rental assistance in the form of Section 8 housing vouchers from the San Mateo County Housing Authority. There is one elderly household with the householder is age 62 or older. Spanish is the predominant language of the residents, although there are some bilingual residents and a few households speak English. moderate 8/0 $1195 4 no Spanish lower 4/0 $1195 2 no Spanish very low 5/2 $1595 2 3 no Spanish mod+ 4/0 $1225 2 no Spanish ext.low 2/2 $1195 2 no Spanish lower 6/0 $1495 2 3 no Spanish very low 4/0 $1495 2 2 no Spanish ext. low 1/0 $1250 yes English very low 5/1 $1295 3 no Spanish ext. low 1/0 $1495 2 1 yes English ext. low 3/0 $1295 1 no Spanish lower 4/0 $1195 2 no Spanish lower 4/1 $1295 2 no Spanish ext. low 3/2 $1245 2 no Spanish moderate 5/0 $1295 2 2 no Spanish As indicated in the previous Table, there are 10 households which are considered "overcrowded in units located at the property." The standard housing density utilized is two persons per bedroom and one person in a common living area for tenant occupied units. In the current Project, based on the local Housing Authority occupancy standards, HIP intends to establish an occupancy standard of two persons per bedroom and two persons in a common living area. If the family size is in excess of these standards, then families would be referred to housing with an additional PREPARED By OVERLAND, PACIFIC & CUTLER. INC. Page 4 P.86 317 -321 COMMERCIAL AVE. RELOCA nON PLAN bedroom(s). Based on these criteria, households occupying 1 one-bedroom unit and three two-bedroom units would be permanently displaced with the intent of accommodating some of the overcrowded one-bedroom households into available two- bedroom units on site. The majority of the Project's households reported income levels that fall within the area's "extremely low," "very low," and "lower" income categories with a couple in the "moderate" category and one household reported over "moderate" income. The 2006 income limits for the "extremely low", "very low", "lower" "median" and "moderate" income categories, as established by HUD for San Mateo County, are shown in Attachment 2. B. REPLACEMENT HOUSING RESOURCES One of the primary purposes of a Relocation Plan is to demonstrate the availability of comparable, affordable, decent, safe and sanitary housing prior to the displacement of residential occupants. A rental housing survey was made during the week of March 12,2007 to identify available comparable, decent, safe and sanitary units in proximity to the Project site. Based on the results of that survey, which is included as Attachment 3, 6 two-bedroom units and 9 three-bedroom available units were found to meet the potential needs of the households that will be permanently displaced. C. CONCURRENT DISPLACEMENT Based on the needs of the Project, there is no concurrent displacement which may impact upon the ability to relocate the Project occupants. D. TEMPORARY RELOCATION There is no anticipated need for temporary relocation. Should such a need arise, the Agency will respond appropriately, and in conformance with all applicable laws and requirements. E. PROGRAM ASSURANCES AND STANDARDS Adequate funds will be available to relocate the Project occupants. Pursuant to an agreement to be executed by and between HIP and the Agency, HIP will have responsibility for providing all relocation benefits by law. Relocation assistance services will be provided to ensure that displacement does not result in different or separate treatment of occupants based on race, color, religion, national origin, sex, marital status, familial status, disability or any other basis protected by the federal Fair Housing Amendments Act, the Americans with Disabilities Act, Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, the California Fair PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 5 P.87 Employment & Housing Act, and the Unruh Act, as well as any other arbitrary or unlawful discrimination. 317-321 COMMERCIAL AVE. RELOCATION PLAN The occupants will not be permanently displaced without 90 days advance written notice. Displacement of the residential occupants will not occur unless "comparable" replacement housing can be made available. "Comparable" housing includes standards such as: decent, safe, and sanitary, comparable as to the number of bedrooms, living space, and type and quality of construction of the acquired unit, but not lesser in rooms or living space than necessary to accommodate the displaced household; in an area that does not have unreasonable environmental conditions; not generally less desirable than the acquired unit with respect to location to schools, employment, health and medical facilities, and other public and commercial facilities and services; and within the financial means of the displaced household as defined in URA, CRAL and the Relocation Guidelines. Pursuant to the Guidelines, a second home shall be considered to be a dwelling only for the purposes of establishing eligibility for payment for moving and related expenses. The relocation program will conform with the standards and provisions set forth in the Uniform Relocation Act (46 U.S.C. S 4600 et seq.), its implementing regulations (49 C.F.R. Part 24) and all other applicable regulations and requirements. F. RELOCATION ASSISTANCE PROGRAM OPC staff is available to assist the displaced tenants in English or Spanish with questions about relocation and/or assistance in relocating. Relocation staff can be contacted toll-free at 1-(877) 972-8908 from 8:30 a.m. to 6:00 p.m Monday through Friday, and also available on-site by appointment. The Relocation Office is located at 7901 Oakport Street, Suite 4800, Oakland, CA. A comprehensive relocation assistance program, with technical and advisory assistance, will be provided to the tenants being displaced. Specific activities will include: 1. Distribution of informational statements. Attachment 4 and 5 contain a sample of the informational notices that will be given to the displaced occupants. 2. Timely referrals to replacement dwelling units as defined above and, if necessary, transportation will be provided to inspect potential replacement units. 3 Assistance with completion and filing of relocation claims and appeals forms, if necessary. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 6 P.88 317-321 COMMERCIAL AVE. RELOCATION PLAN G. RELOCATION BENEFIT CATEGORIES Benefits will be provided in accordance with URA, the CRAL, the Guidelines, and all other applicable regulations and requirements. Benefits will be paid upon submission of required claim forms and documentation in accordance with approved procedures. Appropriate benefits will be provided for the displacees as required by the above laws and requirements. 1. Residential Moving Expense Payments The subject household will be eligible to receive a payment for moving expenses. The payment will be made based upon either a fixed room count schedule or an invoice for actual reasonable moving expenses from a licensed professional mover. a) Fixed Payment - A fixed payment for moving expenses based on the number of rooms containing furniture or other personal property to be moved. The fixed moving payment will be based upon the most recent Federal Highway Administration schedule maintained by the California Department of Transportation, as indicated in Attachment 6. -OR- b) Actual Reasonable MovinQ Expense Payments - The displaced tenants may elect to have a licensed, professional mover perform the move; if so, Agency will pay for the actual cost of the move up to 50 miles and all reasonable charges for packing, unpacking, insurance, and utility connection charges. The payment will be made directly to the mover or as a reimbursement to the displaced tenants. 2. Rental Assistance/Down Payment Assistance Residential displacees are considered eligible for relocation assistance and benefits if they have established residency within the Project site for a minimum of 90 days prior to the "initiation of negotiations" and are eligible for both Rental Assistance and Moving Expense Payments. Commercial occupants are considered eligible for relocation assistance and benefits, if they lawfully occupied the subject property on the date of the "Initiation of Negotiations"; this date is defined as the date that the acquiring entity obtains funding approval. The anticipated date of "initiation of negotiations" for this Project is May 09, 2007. For residential displacees, except in the case of Last Resort Housing situations, as defined below, Rental Assistance Payments will be limited to a maximum of PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 7 P.89 317-321 COMMERCIAL AVE. RELOCATION PLAN $5,250 based upon the monthly housing need over a forty-two (42) month period. In addition, the tenants may opt to apply the amount to which they are entitled toward the purchase of a replacement unit. 3. Last Resort Housing Based on the survey results, it appears that an adequate number of "comparable replacement housing" units will be available at the time of displacement to meet the needs of the displaced tenants. "Last Resort Housing" payments are authorized by statute if affordable "comparable replacement housing" cannot be located for the displaced tenant household (i.e., housing renting for not more than 30% of the household's gross monthly income). In this case, payments may be made beyond the $5,250 statutory cap up to forty-two (42) months' worth of rental assistance. Any supplemental increment beyond $5,250 will be paid in installments or in a lump sum at the discretion of HIP. Those households that are moved "on-site" from a one-bedroom unit to a two-bedroom unit to accommodate occupancy. standards will be eligible to receive a residential moving expense benefit as outline above. Their rent will be limited to the lesser of 30% of the household income or 105% of their current rent for the first year. The one- bedroom units would rent for $1,125.00 and the two-bedroom units would rent for $1,495.00. H. PAYMENT OF RELOCATION BENEFITS Relocation benefit payments will be made expeditiously. Claims and supporting documentation for relocation benefits must be filed within eighteen (18) months from the date the claimants moves from the displacement property. Procedures for preparing and filing of claims and processing and delivering of payments are included in this Plan as Attachment 7. The affected households will not be displaced until "comparable" housing is located as defined above. Relocation staff will pre-inspect any replacement units to which referrals are made to verify that they meet all the standards of decent, safe, and sanitary as defined in Section 6008, Subdivision (d) of the Guidelines. I. EVICTION POLICY After acquisition of the property, the occupants will become tenants of Hip Housing. Pursuant to law, eviction is permissible only as a last resort and that relocation records PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 8 P.90 317-321COMMERCIAL AVE. RELOCATION PLAN must be documented to reflect the specific circumstances surrounding any eviction. Eviction will only take place in cases of nonpayment of rent, serious violation of the rental agreement, a dangerous or illegal act in the unit, or if the displacees refuse all reasonable offers to move. Eviction will not affect the eligibility of a person legally entitled to relocation benefits. J. APPEALS POLICY The appeals policy will follow the standards described in Section 6150 et seq. of the Guidelines. Briefly stated, the displaced tenants will have the right to ask for review when there is a complaint regarding any of their rights to relocation and relocation assistance, such as a determination as to eligibility, the amount of payment, or the failure to provide a comparable replacement housing referral. K. PROJECTED DATES OF DISPLACEMENT Relocation is expected to be completed on or about August 01,2007. L. ESTIMATED RELOCATION COSTS Pursuant to an agreement executed by and between HIP and the Agency, HIP will be responsible for providing all relocation benefits required by law. Any and all required financial assistance will be provided. The anticipated budget for relocation benefits and consultant fees is $150,000. PREPARED BrOVERLAND, PACIFIC & CUTLER,INC. Page 9 P.91 317-321COMMERCIAL AVE. RELOCATION PLAN TABLE OF ATTACHMENTS ;f ",~~,}ci~~~~t;~}~J;'RI;1 ~~ : ,. ~:~ *1/'0 y)tt0>tf:)fii;:U010L" Attachment 1: Project Site Maps Attachment 2: HUD Income Limits for San Mateo County - 2006 Attachment 3: Replacement Housing Survey Results Attachment 4: Sample Informational Statement - Residential Attachment 5: Sample Informational Statement - (Residential Spanish) Attachment 6: Residential Fixed Moving Payment Schedule Attachment 7: Relocation Payment Policy and Procedures for Relocation Payments and Assistance PREPARED BY OVERLAND, P ACIFlC & CUTLER, INC. Page 10 P.92 ~ ,< '::;."'"" { ~ -.,. i A TT ACHMENT 1: PROJECT SITE MAPS ' ' , ,,_ 7" \'<"~:'~1' Figure 1: Project Site Location Figure 2: Regional Location PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page II P.93 ATTACHMENT 2 HUD ANNUAL MEDIAN INCOME UIJ\(lj[rt~I(.Utllirl~ S M 'C ' T "',::_',;~~;\'1:t~~'!~;:~TIt AN Al EO OUN1'\ ')>,',,~;J~;{?", ","J,il~,~,~ The following figures are approved by the U. S. Department of Housing and Urban Development (H.U.D.) for use in the County of San Mateo to define and determine housing eligibility by income level. Two Person $27,150 $45,250 $50,900 $72,400 $81 ,450 $91,200 $102,600 Three Person Six Person $39,400 $42,100 $44,800 $65,600 $70,100 $74,650 $104,950 $112,200 $119,450 $132,200 $141,400 $150,500 Seven Person Eight Person Figures are per the Department of Housing and Community Development (California), Division of Housing Policy Development, February 2006 PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page I2 P.94 1 Bedroom 2 Bedroom 1 3 6 9 $1300- $1875 $1600-$2550 PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 13 P.9S Attachment 4: INFORMATIONAL STATEMENT FOR FAMILIES AND INDIVIDUALS .,.' I. GENERAL INFORMATION II. ASSISTANCE IN LOCATING A REPLACEMENT DWELLING m. MOVING BENEFITS IV. REPLACEMENT HOUSING PAYMENT - TENANTS AND CERTAIN OTHERS V. SECTION 8 TENANTS VI. QUALIFICATION FOR AND FILING OF RELOCATION CLAIMS VII. LAST RESORT HOUSING ASSISTANCE VIII. RENTAL AGREEMENT IX. APPEAL PROCEDURES - GRIEV ANCE X. TAX STATUS OF RELOCATION BENEFITS XI. LEGAL PRESENCE REQUIREMENT XlI. ADDITIONAL INFORMATION AND ASSISTANCE AVAILABLE I. GENERAL INFORMATION The building in which you now live is in an area to be improved by the HIP Housing ("HIP") with financial assistance from the City of South San Francisco Redevelopment Agency ("Agency") and the County of San Mateo. As the project schedule proceeds, it will be necessary for you to move from your dwelling. You will be notified in a timely manner as to the date by which you must move. Please read this infonnation as it will be helpful to you in determining your eligibility and the amount of your relocation benefits under the federal and/or state law. We suggest you save this informational statement for reference. HIP and the Agency have retained the services of Overland, Pacific & Cutler, Inc., a qualified professional relocation finn, to assist you. The finn is available to explain the program and benefits. Their address and telephone number is: (0;J<~:~; OVERLAND PACIFIC & CUT L E R, IN C. Overland, Pacific & Cutler, Inc. 7901 Oakport Street, Suite 4800 Oakland, CA 94621 Telephone: (877) 972-8908 Spanish speaking representatives are available. Si necesita esta informacion en Espaiiol, por favor llame a su representante. PLEASE DO NOT MOVE PREMATURELY. TIDS IS NOT A NOTICE TO VACATE YOUR DWELLING. However, if you desire to move sooner than required, you must contact your representative with Overland, Pacific & Cutler, Inc., so you will not jeopardize any benefits. This is a general infonnational brochure only, and is not intended to give a detailed description of either the law or regulations pertaining to the relocation assistance program for this project. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page J 4 P.96 Please continue to pay your rent to your current landlord, otherwise you may be evicted and jeopardize the relocation benefits to which you may be entitled to receive. Once IDP acquires the property, you will also be required to pay rent to IDP. II. ASSISTANCE IN LOCATING A REPLACEMENT DWELLING HIP, through its representatives, will assist you in locating a comparable replacement dwelling by providing referrals to appropriate and available housing units. You are encouraged to actively seek such housing yourself. When a suitable replacement dwelling unit has been found, your relocation consultant will carry out an inspection and advise you as to whether the dwelling unit meets decent, safe and sanitary housing requirements. A decent, safe and sanitary housing unit provides adequate space for its occupants, proper weatherproofing and sound heating, electrical and plumbing systems. Your new dwelling must pass inspection before relocation assistance payments can be authorized. III. MOVING BENEFITS If you must move as a result of displacement by the project, you will receive a payment to assist in moving your personal property. There are two types of moving payments. You have the option of selecting either one of the following types of moving payments: . A. Fixed Moving Payment A Fixed Moving Payment is based upon the number of rooms you occupy and whether or not you own your own furniture. The payment is based upon a schedule set forth below, and ranges, for example, from $400 for one furnished room to $2,150 for eight rooms in an unfurnished dwelling. (For details see the table below). Your relocation representative will inform you of the amount you are eligible to receive if you choose this type of payment. Occupant owns furniture 1 room $625.00 2 rooms $800.00 3 rooms $1,000.00 4 rooms $1,175.00 5 rooms $1,425.00 6 rooms $1,650.00 7 rooms $1,900.00 8 rooms $2,150.00 each additional room $225.00 Occupant does NOT own furniture 1 room $400.00 each additional room $65.00 If you select a fixed payment, you will be responsible for arranging for your own move and neither the Agency nor HIP will assume liability for any loss or damage of your personal property. PREPARED BY OVERLAND, PACIFIC & CUTLER,INC. Page I5 P.97 B. Actual Moving Expense (Professional Move) If you wish to engage the services of a licensed commercial mover, you may claim the ACTUAL cost of moving your personal property up to 50 miles. Your relocation representative will inform you of the number of competitive moving bids (if any) which may be required, and assist you in developing a scope of services for approval. IV. REPLACEMENT HOUSING PAYMENT - TENANTS AND CERTAIN OTHERS You may be eligible for a payment of up to $5,250 to assist you in renting or purchasing a comparable replacement dwelling. In order to qualify, you must either be a tenant who has occupied your present dwelling for at least 90 days prior to the "Initiation of Negotiations" as defined in the Relocation Plan. A. Rental Assistance If you qualify, and wish to rent your replacement dwelling, your rental assistance benefits will be based upon the difference over a 42 month period between the rent you must pay for a comparable replacement dwelling and the lesser of your current rent or 30% of your gross monthly household income. You will be required to provide your relocation representative with monthly rent and household income verification prior to the determination of your eligibility for this payment. -OR- B. Down-payment Assistance If you qualify, and wish to purchase a home as a replacement dwelling, you can apply up to the total amount of your rental assistance payment towards the down-payment and non-recurring incidental expenses. Your relocation representative will clarify procedures necessary to apply for this payment. VI. QUALIFICATION FOR AND FILING OF RELOCATION CLAIMS To qualify for a Replacement Housing Payment, you must rent or purchase and occupy a comparable replacement unit within one year from the later of the following: 1. For a tenant, the date you move from the displacement dwelling; 2. For an owner-occupant, the date you receive final payment for the displacement dwelling, or, in the case of condemnation, the date the full amount of estimated just compensation is deposited in court; or 3. The date comparable replacement dwellings are made available. All claims for relocation benefits must be filed with the Agency within 18 months from the date which you move. PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 16 P.98 VII. LAST RESORT HOUSING ASSISTANCE If comparable replacement dwellings are not available when you are required to move, or if replacement housing is not available within the monetary limits described above, you will be provided with Last Resort housing assistance to enable you to rent or purchase a replacement dwelling on a timely basis. Last Resort housing assistance is based on the individual circumstances of the displaced person. Your relocation representative will explain the process for determining whether or not you qualify for Last Resort assistance. If you are a tenant, and you choose to purchase rather than rent a comparable replacement dwelling, the entire amount of your rental assistance and last resort eligibility must be applied toward the down-payment of the home you intend to purchase. Vlll. RENTAL AGREEMENT As a result of HIP's purchase and rehabilitation of the property where you live, you may become a tenant of HIP. If this occurs, you will be asked to sign a rental agreement which will specify the monthly rent to be paid, when rent payments are due, where they are to be paid and other pertinent information. Except for the causes of eviction set forth below, no person lawfully occupying the property to be purchased will be required to move without having been provided with at least 90 days written notice. Eviction will be undertaken only in the event of one or more of the following infractions: A. Failure to pay rent; except in those cases where the failure to pay is due to the lessor's failure to keep the premises in habitable condition, is the result of harassment or retaliatory action or is the result of discontinuation or substantial interruption of services; B. Performance of dangerous illegal act in the unit; C. Material breach of the rental agreement and failure to correct breach within 30 days of notice; D. Maintenance of a nuisance and failure to abate within a reasonable time following notice; E. Refusal to accept one of a reasonable number of offers of replacement dwellings; or F. The eviction is required by State or local law and cannot be prevented by reasonable efforts on the part of the public entity. lX. APPEAL PROCEDURES - GRIEVANCE Any person aggrieved by a determination as to eligibility for a relocation payment, or the amount of a payment, may have his/her claim reviewed or reconsidered in accordance with the Agency's appeals procedure. Complete details on appeal procedures are available upon request from the Agency. X. TAX STATUS OF RELOCATION BENEFITS Relocation benefit payments are not considered as income for the purpose of the Internal Revenue Code of 1986 or the Personal Income Tax Law, Part 10 (commencing with Section 17001) of Division 2 of the PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 17 P.99 Revenue and Taxation Code, or the Bank and Corporation Tax law, Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code. XI. LAWFUL PRESENCE REQUIREMENT Pursuant to the Public Law 105-117 of 11-21-97, in order to be eligible to receive relocation benefits in federally-funded relocation projects, all members of the household to be displaced must provide information regarding their lawful presence in the United States. In federal projects, any member of the household who is not lawfully present in the United States or declines to provide this information, may be denied relocation benefits. Relocation benefits will be prorated to reflect the number of household members with certified lawful presence in the US. XII. ADDITIONAL INFORMATION AND ASSISTANCE AVAILABLE Those responsible for providing you with relocation assistance hope to assist you in every way possible to minimize the hardships involved in relocating to a new home. Your cooperation will be helpful and greatly appreciated. If you have any questions at any time during the process, please do not hesitate to contact your relocation representative. PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 18 P.I0D ATTACHMENT 5: FOLLETO INFORMATIVO PARA FAMILlAS E INDIVIDUOS . 1. INFORMACI N GENERAL 2. AYUDA PARA ENCONTRAR UNlOAD DE REEMPLAZO 3. BENEFICIOS DE MUDANZA 4. PAGO EN REEMPLAZO DE VIVIENDA - INQUILlNOS 5. INQUILlNOS CON SECCION 8 6. CALlFICACIONES PARA LLENAR RECLAMOS DE REUBICACION 7. PAGOS DE ULTIMO RECURSO 8. CONTRATO DE RENTA 9. PROCEDIMIENTOS DE APELACION-AGRAVIO 10. CONDICION DE IMPUESTOS SOBRE BENEFICIOS DE REUBICACION 11. REQUISITO DE PRESENCIA LEGAL 12. INFORMACION ADICIONAL Y ASISTENCIA DISPONIBLE I. INFORMACION GENERAL EI edificio en el que usted vive esta en una area que va a ser mejorada por HIP Housing ("HIP") con la ayuda financiera de la Agencia de Desarrollo de la Ciudad de South San Francisco ("Agencia") y el condado de San Mateo. De acuerdo a procedimiento de la agenda, sera necesario que usted se cambie de su residencia. Usted sera notificado(a) con suficiente tiempo sabre la fecha en que debera mudarse. Por favor lea esta informaci6n, sera de mucha ayuda para determinar su elegibilidad y la cantidad de sus beneficios de reubicaci6n. Le recomendamos que guarde esta informaci6n como referencia. HIP Y la Agencia han contratado 105 servicios de la compafHa Overland, Pacific & Cutler, Inc., una empresa profesional de reubicacion muy calificada para ayudarle. La empresa esta disponible para explicarle el programa y 105 beneficios. Su direcci6n y numero de telefono son: ~ / ;/~-;::::'\ (- -:.:-::" - '\ ,/// /) ~r~-::;:::::~ i,' _~/~ Jj,:;//(J;:-(~--= "'-~~~ - '-,..:"'--~ OVERLAND PACIFIC & CUTLER,INC. Overland, Pacific & Cutler, Inc. 7901 Oakport Street, Suite 4800 Oakland, California 94621 Telefono: (877) 972-8908 POR FAVOR NO SE MUDE ANTES DE TIEMPO. ESTA NO ES UNA NOTIFICACION PARA DESOCUPAR SU VIVIENDA. Simembargo, si usted desea mudarse antes de la fecha requerida, debera con su representante de Overland, Pacific & Cutler, Inc., para que no pierda ninguno de sus beneficios. Este es unicamente un folleto de informaci6n general y no tiene la intenci6n de proporcionar una descripci6n detallada ni de la ley ni de 105 reglamentos relacionados que pertenecen al programa de reubicaci6n de la Agencia. Por favor siga pagando su alquiler mensual al dueno de la propiedad en la cual usted vive de otra forma usted puede ser desalojado y pued perder los beneficios de reubicacion a los cuales usted tiene derecho a recibir. Una vez que HIP adquiera la propiedad, sera necesario que usted pague su alquiler a HIP. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 1 P.10l II. AYUDA PARA ENCONTRAR UNA UNlOAD DE REEMPLAZO HIP, a traves de sus representantes, Ie ayudaran a localizar una vivienda de reemplazo comparable proporcionandole listas de viviendas apropiadas y disponibles. Se Ie urge que usted se mantenga activamente buscando una vivienda de reemplazo. En cuanto encuentre una vivienda de reemplazo, su consultor de reubicacion hara una inspecci6n de la unidad para determinar si la unidad reune todos los requisitos de una vivienda que es decente, segura y limpia. Una unidad que es decente, segura e y limpia debe proveer cupo suficiente para sus ocupantes, esta a prueba de te todo tipo de clima y tiene sistemas adecuados de calefacci6n, plomerfa, y electricidad. Su vivienda de reemplazo debe pasar una inspecci6n antes de autorizar pagos de asistencia de reubicacion. III. MUDANZA Si tiene que mudarse como resultado que ha side desalojado por el proyecto, usted recibira un pago para asistirle con la mudanza de su propiedad personal. Hay dos formas de pagos de mudanza. Usted tiene la opcion de escoger uno de los tipos de pagos de mudanza siguientes: A. Pago Fijo de Mudanza Un Pago Fijo esta basado en el numero de cuartos que ocupa y si es duefio de los muebles o no. EI pago esta basado en una agenda aprobada por la Agencia, y sera de $325.00 por un cuarto amueblado hasta $1,750 por 8 cuartos con muebles. (Para detalle, yea la forma abajo). Su representantele informara lacantidad que recibira al ser elegible. . Ocupante Dueno de Muebles Ocupante no es Dueno de Muebles 1 cuarto $625.00 1 cuarto $400.00 2 cuartos $800.00 Gada Guarto Adicional $65.00 3 cuartos $1,000.00 4 cuartos $1,175.00 5 cuartos $1,425.00 6 cuartos $1,650.00 7 cuartos $1,900.00 8 cuartos $2,150.00 Gada Guarto AdicionaJ $225.00 Si usted escoge el pago fijo de mUdanza, sera responsable por organizar su propia mudanza y ni la Agencia 0 HIP asumira ninguna responsabilidad por perdidas 0 dafios de su propiedad personal. PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 2 P.l02 B. Gastos Actuales de Mudanza (Compafiia Profesional) Si usted decide contratar los servicios de una compania de mudanza comercial con Iicensia, usted puede reclamar el costo ACTUAL de mudar su propiedad personal hasta una distancia de 50 mill as. Su representante de reubicaci6n Ie informara del numero de presupuestos (si alguno) que se requieran, y Ie asistira en preparar un plan para que sea aprobado. IV. PAGO EN REEMPLAZO DE VIVIENDA -INQUILlNOS Usted puede ser elegible para un pago de hasta de $5,250.00 como ayuda para rentar 0 comprar una vivienda comparable. Para calificar, debe de habersido un inquilino que ha ocupado su vivienda actual por 10 menos de 90 dias, 0 un dueno-ocupante que ha vivido en la vivienda por no menos de 90 dias y no mas de 179 dias, antes de la primera oferta de la Agencia para comprar la propiedad. A. Asistencia de Renta Si usted califica y desea rentar su vivienda de reemplazo, sus beneficios se basarim en la diferencia sobre un periodo de cuarenta y dos (42) meses entre la renta que tiene que pagar por una vivienda comparable, y 10 menor de la renta actual 0 treinta porciento (30%) de los ingresos mensuales en bruto. Usted debera informar a su representante de su renta y sus ingresos mensuales antes de establecer suelegibilidad para el pago. -0- B. Asistencia de pago de Enganche Si usted califica y desea comprar su vivienda de remplazo, puede aplicar la cantidad total de su pago de asistencia de renta para un pago de enganche. Su representante de reubicaci6n Ie explicara los procedimientos necesarios para aplicar este pago. V. INQUILINOS CON SECCION 8 Cuando usted se mude, usted podrfa ser elegible para transferir su elegibilidad de Secci6n 8 a un lugar de reemplazo. Como se indica anteriormente, a usted se Ie proporcionaran servicios de consejerfa y otros servicios de asesorfa junto con beneficios de mudanza. Ademas, la Agencia cubrira el costo de cualquier deposito de seguridad requerido para arrendar una vivienda de reemplazo aprobada por Secci6n 8, y tam bien cubrira el costa de cualquier cargo por verificaci6n de credito. VI. CALlFICACIONES PARA LLENAR RECLAMOS DE REUBICACION Para calificar por un Pago de Remplazo de Vivienda, tiene que rentar 0 comprar una vivienda de reemplazo comparable durante un ano de 10 que ocurra despues de: 1. Para inquilino, la fecha que desocupo su vivienda, 2. Para duefio-ocupante, la fecha en que recibira pago final por su vivienda 0, en caso de un procedimiento de condenaci6n, la fecha del deposito de compensaci6n justa con la corte, 0 3. La fecha en la cual viviendad de reemplazo se Ie hizo disponible. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 3 P.l03 Todos los raclamos de raubicacion deban sar presentados ala Agencia dentro de dieciocho (18) meses de la techa en la cua! ustedse mudo. VII. PAGOS DE ULTIMO RECURSO Si viviendas de reemplazo comparable no estan disponibles cuando se tiene que mUdar, 0 si viviendas de reemplazo no estan disponibles dentro de los Iimites monetarios ya citados anteriormente, se Ie proveera asistencia de ultimo recurso para que pueda alquilar 0 comprar una vivienda de reempJazo dentro de un tiempo adecuado. Asistencia de ultimo recurso esta basad a en las circumstancias individuales del desplazado. Su representante de reubicacion Ie explicara el proceso para determinar si califica 0 no para asistencia de ultimo recurso. Si es inquilino y escoge comprar en vez de alquilar una vivienda de reemplazo comparable, la cantidad total de su asistencia de alquiler y efigibilidad de ultimo recurso debe de ser aplicada hacia la quota inicial de la casa que usted piensa comprar. VIII. CONTRATO DE ALQU/LER Como resultado de la compra de HIP y la rehabilitacion de la prop/edad donde usted vive, usted puede volverse un inquilino de HIP. S/ esto ocurre, se Ie pediraque firme un contrato de alquiler que especificara el alquiler mensual que debe de pagar, cuando Ie toea pagar su alquiler y donde debe de pagar y otra informacion pertinente. Excepto por las causas de desalojo dichas abajo, ninguna persona que legalm ente ocupa una propiedad que va a ser comprada es requerida a mudarse si no tiene una notiticac/on por escrito por 10 menos de 90 dias. DesaJojo es dado solamente por una 0 mas de las siguientes razones: A. Falla de no pagar renta, excepto en casos donde este es debido a la talta del dueno de no mantener los predios en una condicion habitable, 0 cuando 105 servicios basicos han sido discontinuados 0 interrumpidos por un largo plazo. B. La perpetracion de un hecho peligroso 0 i1egaJ en los predios. C. La falta de mantener los terminos del acuerdo de renta entre 30 dias de haber sido notificado. D. Continuar con un desorden publico, despues de haber sido notiflcado. E Despues de haber rec/bido una cantidad razonable de referencias a viviendas de reemplazo. F. Cuando Ja evicci6n es requerida por leyes estatales 0 locales y no puede ser evitada por medio de esfuerzos de la entidad publica. IX. PROCEDIM/ENTOS DE APELACI6N.AGRAV/0 Cualquier persona con una queja por una determinacion de eleg/bilidad en un pago de reubicac/on 0 de la cantidad de un pago, puede pedir que su reclamo sea revisado 0 reconsiderado de acuerdo con el procedimiento de apelaciones de la Agencia. Los detalles completos de apelaci6n y procedimientos estan disponibfes solicitandolos a la Agencia. X. CONDICI6N DE IMPUESTOS SOBRE BENEFICIOS DE REUBICACJ6N Pagos por beneficios de reub/caci6n no son considerados como ingreso para el proposito de impuestos del Internal Revenue Code de 19860 el Personal Income Tax Law, Parte 10 (comenzando con Section 17001) de Division 2 del Revenue and Taxation Code, 0 del Bank and Corporation Tax law, Part 11 (comenzando con Section 23001) de Division 2 del Revenue and Taxation Code. PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 4 P.l04 XI. REQUISITO DE PRESENCIA LEGAL De acuerdo a la Ley Publica 105-117 de 11-21-97, para poder ser elegible y recibir beneficios de reubicaci6n en proyectos de reubicaci6n con fondos federales, todos los miembros de la vivienda a ser desplazados deben de proporcionar informaci6n con relaci6n a su presencia legal en los Estados Unidos. En proyectos federales, cualquier miembro de la vivienda que no este legalmente presente en los Estados Unidos 0 rehuse proporcionar esta informaci6n, se Ie podrian negar beneficios de reubicaci6n. Los beneficios de Reubicaci6n seran calculados de acuerdo al numero de miembros de la familia con presencia legal certificada en los Estados Unidos. XII. INFORMACION ADICIONAL Y ASISTENCIA DISPONIBLE Los responsables de proveer asistencia de reubicaci6n esperan ayudarle en todas las formas posibles para minimizar la dificil tarea de reubicar a una nueva casa. Su cooperaci6n sera de mucha ayuda y gratamente apreciada. Si tiene preguntas durante el proceso, no dude en com unicarse con su representante de reubicaci6n. PREPARED BrOVERLAND, PACIFIC & CUTLER, INC. Page 5 P.I05 ATTACHl\1ENT 6: RESIDENTI~U FIXEDJNrt~)~_.~~~. PAYMENT SCblEDl.n.:.E ~: '," ;,~;~::/:}~~;~~v' Occupant owns furniture 1 room $625.00 2 rooms $800.00 3 rooms $1,000.00 4 rooms $1,175.00 5 rooms $1,425.00 6 rooms $1,650.00 7 rooms $1,900.00 8 rooms $2,150.00 each additional $225.00 Occupant does NOT own furniture 1 room $400.00 each additional room $65.00 P.l06 Claims and supporting documentation for relocation benefits must be filed within eighteen (18) months from the date the claimant moves from the acquired property. The procedure for the preparation and filing of claims and the processing and delivery of payments will be as follows: 1. Claimant(s) will provide all necessary documentation to substantiate eligibility for assistance. 2. Assistance amounts will be determined in accordance with the provisions of the URA and the California Relocation Law and Guidelines. 3. Required claim forms will be prepared by relocation personnel in conjunction with claimant(s). Signed claims and supporting documentation will be submitted by relocation personnel to the Agency. 4. The Agency and HIP will review and approve claims for payment or request additional information. 5. HIP will issue benefit checks which will be available for pick-up by Claimants, unless circumstances dictate otherwise. 6. Final payments will be issued after confirmation that the Project area premises have been completely vacated and actual residency at replacement unit is verified. 7. Receipts of payment will be obtained and maintained in the relocation case file. P.I07 ADDENDUM No.1 (IF NO COMMENTS ARE RECEIVED) As required by the California Relocation Assistance Law, the Relocation Plan was made available for review and written comments by the general public and the affected occupants for a period of 30-Days._May 4th, 2007 _marks the end of the 3D-day period for the submission of any written comments to the Relocation Plan. No comments were received by the Relocation Consultant, or the Agency. In the absence of any written comments, this Relocation Plan as presented is to be considered the Final Document to be adopted by the City of South San Francisco on _May 09,2007. P.108 P.I09 EXHIBIT G BUDGET 317-321 Commercial Avenue Acquisition and Rehabilitation January 10, 2006 Sources of Funds Total !First Mortgage W AMU 1,305,000 City of South San Francisco RDA 1,800,000 San Mateo County CDBG 540,000 Deferred Developer Fee 47,310 Total Sources 3,692,310 HIP Housing Development Corporation 317-321 Commercial Avenue B-1 P.IIO 3,120,000 10,879 295,148 o 1,500 4,500 5,750 181,010 1,125 72,398 3,692,310 Rehabilitation Construction and Permanent Loan Agreement AGENDA CITY COUNCIL CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIPAL SERVICE BUILDING COMMUNITY ROOM WEDNESDA Y, MAY 9, 2007 7:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Council business, we proceed as follows: The regular meetings of the City Council are held on the second and fourth Wednesday of each month at 7:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the City Council on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Council Chamber's and submit it to the City Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents the City Council from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. Whcn your name is called, please come to the podium, state your name and address (optional) for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The City Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Council action. RICHARD A. GARBARINO, SR Mayor PEDRO GONZALEZ Vice Mayor MARK N. ADDIEGO Councilman JOSEPH A. FERNEKES Councilman KARYLMATSUMOTO Councilwoman RICHARD BATT AGUA City Treasurer BARRY M. NAGEL City Manager STEVEN T. MATTAS City Attorney PLEASE SILENCE CELL PHONES AND PAGERS l-IEARING ASSISTANCE EQUIPMENT AVAILABLE FOR USE BY THE HEARING IMPAIRED AT CITY COUNCIL MEETINGS CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE INVOCATION PRESENTATIONS . Pacific Coast Farmers Market Association - Opening Day May 12, 2007 . Proclamation: Teacher Appreciation Week, May 6-12,2007; Recipient - Tom Coddington President, South San Francisco California Teachers Association; Mari Avila-Suarez President, South San Francisco PT A Council . Proclamation: Historic Preservation Month, May 2007; Recipient - Historic Preservation Commission Chair Cyrus Kon AGENDA REVIEW PUBLIC COMMENTS ITEMS FROM COUNCIL . Announcements . Committee Reports . Consideration/discussion of a resolution endorsing the adoption of the U.S. Mayors Climate Protection Program CONSENT CALENDAR 1. Motion to approve the minutes of April 19, 2007 2. Motion to confirm expense claims of May 9,2007 3. Resolution authorizing execution of a loan agreement and related documents with HIP Housing for acquisition of residential apartment building located at 317-321 Commercial Avenue and adopting Relocation Plan 4. Motion to approve recommendation from Parking Place Commission to approve an application to grant petitions filed for annexation into Parking District No.1 by Louis Poletti for property at 515 Airport Boulevard (APN: 012-177-030) 5. Resolution authorizing execution of the Program Supplemental Agreement with the State of California for the Grand Avenue Resurfacing Project 6. Resolution awarding construction contract to Mountain Cascade, Inc. for the Industrial Sewage Pumping Station No.4 Rehabilitation Project in the amount of $3,959,000 7. Resolution awarding construction management contract to Mendoza & Associates for Industrial Sewage Pumping Station No.4 in an amount not to exceed $400,000.00 REGULAR CITY COUNCIL MEETING AGENDA MAY 9, 2007 PAGE 2 ADMINISTRATIVE BUSINESS 8. Motion to accept the Aircraft Noise Insulation Project Phase XVIII as complete in accordance with the plans and specifications 9. Resolution accepting an increase in refuse collection rates effective July 1, 2007 as submitted by the South San Francisco Scavenger Company and amending the franchise agreement to approve an increase in the franchise fee 10. Report and transmittal of various year end financial reports and audit findings for FY 2006-07 11. Resolution approving emergency sewer replacement at 945 Airport Boulevard by Pacific Lines in the amount of$27,915.00 from the sewer enterprise fund 12. Resolution adopting the awarding of the construction contract for the Orange Memorial Park Recreation Building, Electrical System Package to ASF Electric of Daly City, in the amount of$557,289.00 13. Resolution approving an agreement with the City and County of San Francisco related to business license taxes CLOSED SESSION 14. Pursuant to Government Code section 54956.9(c), conference with legal counsel, pending litigation - one case COUNCIL COMMUNITY FORUM ADJOURNMENT REGULAR CITY COUNCIL MEETING AGENDA MAY 9, 2007 PAGE 3 - ~'t\\ s:!W "m 10 ~ ;... ~I ~ ~I v 0 ~~~" Staff Report AGENDA ITEM # 3 DATE: TO: FROM: SUBJECT: May 9,2007 Honorable Mayor and City Council Marty VanDuyn, Assistant City Manager ADOPTION OF A RELOCATION PLAN FOR THE ACQUISITION OF A RESIDENTIAL APARTMENT BUILDING LOCATED AT 317-321 COMMERCIAL BY HIP HOUSING DEVELOPMENT CORPORATION RECOMMENDATION It is recommended that the City Council adopt a Resolution approving the project-specific Relocation Plan for the acquisition of an apartment building located at 317-321 Commercial Avenue by HIP Housing Development Corporation. BACKGROUND/DISCUSSION In 2006, the Redevelopment Agency agreed to work with HIP Housing Development Corporation (HIP) to explore the acquisition of a fifteen (15) unit apartment building located at 317-321 Commercial Avenue that would be owned and managed by HIP (the Project). According to an appraisal conducted in 2006, the value of the property is $3.4 million. HIP signed an option to purchase the property for $3.12 million. Thus, the value of each of the units is $208,000 which is comparable to other residential acquisitions funded by the Agency during the last year. The Project will consist of 15 one-and two-bedroom rental units. The intent of the Project is to preserve the units, which are currently occupied by very low- and low-income households. Five apartments will be affordable to families earning less than 50% of median income and nine apartments will be affordable to families earning between 51 % and 60% of median income. The Project has a well-maintained design that includes tuck-under garages with storage for each unit and ample space for tandem parking off the street, security gates for access and a laundry room in a central courtyard. Because several of the units are overcrowded, the Project will require that some of the tenants be relocated to a unit more suitable for their family size. The County of San Mateo formally approved a $540,000 loan to HIP from County Community Development Block Grant (CDBG) funds for acquisition, seismic retrofit, general rehabilitation and relocation of existing tenants. HIP has also secured a $1,305,000 conventional loan from Washington Mutual Bank for the acquisition of this property. All funding sources are contingent upon the closing of each of the other sources of funding. The South San Francisco Redevelopment Agency's loan is the last component of the financing plan needing approval. Staff Report Subject: Adoption of a Relocation Plan for HIP Housing 317-321 Commercial Ave. Acquisition Page 2 Over ten years ago, the property participated in the City's Rental Rehabilitation Program and that loan has since been paid in full. During that time, and in subsequent years, the property underwent extensive rehabilitation. Although the property is in good structural condition and meets the City's building code requirements for seismic bracing, the County of San Mateo may require that the building undergo additional minor seismic retrofitting. City staff inspected the property and a building inspector retained by HIP inspected each unit finding that mostly cosmetic repairs are needed, such as repairs to the bathrooms, new kitchen counters and new windows. RELOCATION PLAN California Redevelopment Law (CRL) requires the governing body (City Council) to adopt a relocation plan that is tailored to the specific project (as distinguished from the general relocation plan adopted as part of a redevelopment plan). Additionally, CRL requires that the project- specific relocation plan be provided to all households that may be displaced at least 30 days prior to the governing body's consideration of the plan. Accordingly, all residents of the apartment complex received a copy of the Relocation Plan on April 3, 2007. Prior to that, all residents received initial notices regarding the potential acquisition of the building and their rights under the law with regard to relocation benefits. In this case, both federal and state relocation requirements apply as both funding sources are contemplated for the acquisition. This evening, if the Redevelopment Agency Board approved the proposed funding for the Project, the City Council must then adopt the Relocation Plan at its meeting. HIP retained Overland, Pacific & Cutler, Inc., an experienced relocation firm, to prepare the Relocation Plan (the Plan) and to provide all subsequent required relocation assistance for this Project. Pursuant to the Loan Agreement to be executed between HIP and the Redevelopment Agency, HIP will be responsible for providing all relocation benefits required by law. The project-specific Relocation Plan is incorporated as an exhibit to this report. PROJECT FINANCING The total cost of the Project is $3,692,310 of which acquisition costs are $3,120,000, rehabilitation costs are $295,000, and relocation costs are projected to be $181,000. The total project budget is attached as an exhibit to this report. Pursuant to the Loan Agreement, the City is providing a $1,800,000 loan that will be leveraged by the County's $540,000 in CDBG funding. The loan will be paid from Redevelopment Agency Housing funds which have been set aside in the Capital Improvement Project budget for the current year. The Redevelopment Agency's approval of the loan will enable HIP to secure conventional financing from Washington Mutual Bank. HIP is under obligation by the current owner to close escrow by May 17, 2007. The Redevelopment Agency loan will be secured by a deed of trust subordinate only to Washington Mutual's first deed of trust. The loan will accrue simple interest at a rate of three percent (3%). The loan will be payable in annual installments on a residual receipts basis. The entire outstanding balance of the loan together with accrued interest will be due and payable on the fifty-fifth (55th) anniversary of the origination date. Staff Report Subject: Adoption of a Relocation Plan for HIP Housing 317-321 Commercial Ave. Acquisition Page 3 Pursuant to the Loan Agreement and the Regulatory Agreement, the apartment units must be kept affordable for the term of the Regulatory Agreement as such may be extended. Extension of the loan terms may be approved by the Redevelopment Agency provided that 1) HIP is not in default of the loan terms; and 2) HIP executes an amendment to the Regulatory Agreement agreeing to extend the affordability controls for the duration of the extension. The fifty-five year rental restrictions contained in the Loan Agreement and Regulatory Agreement will allow the Agency to count the Project as units of new production for the purpose of meeting its housing production obligations, as required by the State of California and the Association of Bay Area Governments. The Redevelopment Agency funds will be expended exclusively for acquisition of the apartment complex. All other expenditures for rehabilitation and relocation will be undertaken by HIP with private and County CDBG funds. CONCLUSION The Redevelopment Agency Board Housing Sub-Committee reviewed the project on May 1,2007 and recommended that the Redevelopment Agency Board approve the resolution authorizing execution of a Loan Agreement and related documents with HIP for a loan of up to $1.8 million. Approval of the loan will make it possible to preserve affordable rental units for low- and moderate- income working families in South San Francisco, reduce overcrowding and will ensure that the apartment units are well maintained in perpetuity and do not fall into disrepair. HIP will manage and maintain the units according to the City's housing standards and give occupancy preference for all of the units to residents from the City of South San Francisco. A Phase I analysis conducted by John Carver Consulting found that there are no environmental concerns associated with this property and that no additional environmental investigation is warranted at this time. If the Redevelopment Agency Board approved the execution of the Loan Agreement and related documents with HIP at its meeting, it is recommended that the City Council approve the Relocation Plan per California Redevelopment Law. By: IJ~KM)~ Marty VanDuyn Assistant City Manager Attachments: Resolution Relocation Plan RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO APPROVING THE RELOCATION PLAN FOR THE REDEVELOPMENT PROJECT LOCATED AT 317-321 COMMERCIAL AVENUE WHEREAS, the City Council of the City of South San Francisco ("City Council") originally approved and adopted the Redevelopment Plan for the Downtown/Central Redevelopment Project Area ("Project Area") by Ordinance No. 1056-89 adopted on July 12, 1989 (as subsequently amended, the "Redevelopment Plan"); WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency") seeks rehabilitation of certain real property located at 317-321 Commercial A venue near the Project Area in the city of South San Francisco (the "City") and known as San Mateo County Assessor's Parcel Nos. 012-333-120 and 012-333-110 (the "Property") in accordance with the Redevelopment Plan; WHEREAS, HIP Housing Development Corporation, a nonprofit public benefit corporation ("Developer") intends to purchase the Property and rehabilitate 15 units of rental housing affordable to low income households (the "Project"); WHEREAS, the Agency staff and Developer have negotiated a loan agreement (the "Loan Agreement") pursuant to which the Agency will provide a $1,800,000 loan to Developer for partial financing ofthe Project; WHEREAS, the Agency has determined that six households will be permanently displaced as a result of the Project; WHEREAS, pursuant to the California Relocation Assistance and Real Property Acquisition Guidelines, Title 25, California Code of Regulations, Chapter 6, Section 6000 et seq. ("Relocation Guidelines"), the Agency must prepare a relocation plan and to submit it to the City Council for approval prior to undertaking or participating in any activity that will result in the displacement of persons; WHEREAS, pursuant to the Loan Agreement, Developer will be responsible for providing all relocation assistance and benefits required by state and federal relocation law; WHEREAS, Developer retained Overland, Pacific & Cutler, Inc, an experienced relocation firm, to prepare a relocation plan for the Project herein attached as Exhibit A (the "Relocation Plan"); WHEREAS, pursuant to the Relocation Guidelines, notice of the Relocation Plan must be provided to the occupants of the Property 30 days prior to submission ofthe 957401 1 Relocation Plan to City Council for approval; WHEREAS, all occupants of the Property received a copy of the Relocation Plan on April 3, 2007; WHEREAS, pursuant to the Relocation Guidelines, the Relocation Plan must be consistent with the City's housing element; WHEREAS, Health and Safety Code Section 33334.2 permits the Agency to use low-and-moderate income set aside funds outside a project area if the Agency and the City Council make a finding that the use will benefit the redevelopment project; and WHEREAS, the Project will be located near the Project Area, and the Project will benefit the Downtown/Central Redevelopment Project by improving and increasing the community's supply of affordable housing; NOW, THEREFORE BE IT RESOLVED that the City Council of the City of South San Francisco hereby: 1. Finds, based upon the foregoing Recitals, that the expenditure of low-and-moderate income set aside funds to partially finance the Project will be of benefit to the Downtown/Central Redevelopment Project because the Project is located near the Project Area and the Project will improve and increase the community's supply of affordable housing. 2. Finds that the Relocation Plan is consistent with the City's housing element. 3. Approves the Relocation Plan substantially in the form attached hereto as Exhibit A. PASSED AND ADOPTED this following vote: day of , 2007, by the AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: City Clerk Mayor 957401 2 APPROVED AS TO FORM: City Attorney 957401 3 317-321 Commercial Avenue RELOCATION PLAN South San Francisco, California PREPARED FOR HIP Housing 364 South Railroad Avenue San Mateo, CA 94401 By OVERLAND, P ACIFlC & CUTLER, INC. 7901 OAKPORT STREET, STE. 4800 OAKLAND, CA 94621-2015 (510) 638-3081 March 2007 P.l HIP Housing Development Corporation, an affiliate of Human Investment Project ("HIP Housing"), a non-profit housing organization was founded in 1972 to assist the disadvantaged and disabled locate housing within San Mateo County. HIP Housing provides homes to over 1,000 persons through the property it owns and manages, and through its Home Sharing, Self-Sufficiency and Home Equity Conversion Programs. HIP Housing, with financial assistance of the County of San Mateo and the Redevelopment Agency of the City of South San Francisco (lithe Agency"),intends to acquire and rehabilitate 317-321 Commercial Avenue, a residential property which includes 15 apartment units in the City of South San Francisco. HIP Housing proposes to secure funding from private bank funds and Community Development Block Grant (CDBG) funds from the County of San Mateo to maintain the property as affordable to low and very-low income tenants and to reduce overcrowding in the units. In total, the acquisition of the property may result in the permanent displacement of up to 4 residential households. Due to the public nature of the proposed financing for the acquisitions, the California Relocation Assistance and Real Property Acquisition Guidelines, California Code of Regulations, Title 25, Chapter 6 and the Uniform Relocation Assistance and Real Property Acquisition Policies Act are assumed to apply. The Project site is located at 317-321 Commercial Avenue, situated between Linden Avenue to the east and Maple Avenue to the west, and between First Lane and Second Lane in the City of South San Francisco and County of San Mateo. The site is four blocks from Grand Avenue, a main shopping district and has close access to the 101 Freeway and Airport Blvd. as illustrated on the Project Site Maps as shown in Attachment 1. There are 5 two-bedroom units and 10 one-bedroom units. South San Francisco, home to many biotech companies such as Genentech, occupies the basin and portions of the sides of a broad valley formed by the San Bruno Mountains on the north and the Coast Range on the west. Most of the valley faces adjacent San Francisco Bay. With a population of 61 ,824 as of 2006, the city is served by a new BART station which opened in June 2003. The surrounding neighborhood has a mix of residential uses with single family residences and multi-family units. The property is located Jess than a mile from the closest elementary school, less than 2 miles from a medical center, within close proximity to grocery stores, and approximately 21'2 miles from a major shopping center. The Project will be in conformance with the requirements of the US Department of Housing and Urban Development ("HUD"), the State of California Housing and Community Development Department ("HCD"), and the City of South San Francisco PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 2 P.2 317-321COMMERCIALAvE. RELOCATION PLAN General Plan requirements. Overland, Pacific & Cutler, Inc. (OPC), an experienced relocation firm, has been selected to prepare this Relocation Plan (the 'Plan'), and will provide all subsequently required relocation assistance for this Project. In compliance with statutory requirements, the Plan has been prepared to evaluate the present circumstances and replacement housing and storage requirements of the current Project occupants. This Plan sets forth policies and procedures necessary to conform with statutes and regulations established by the US Code Title 42, Chapter 61 "Uniform Relocation Assistance and Real Property Acquisition Policies Act" of 1970 (URA) and as amended thereafter, and the California Relocation Assistance Law, California Government Code Section 7260 et seq (the "CRAL") and the California Relocation Assistance and Real Property Acquisition Guidelines, Title 25, California Code of Regulations, Chapter 6, Section 6000 et seq. (the "Guidelines") for residential displacements. With certain narrow exceptions, federal funds cannot be used for any displaced person who is an alien not lawfully present in the United States. A. METHODOLOGY AND ASSESSMENT OF NEEDS To obtain information necessary for the preparation of this Plan, personal interviews were conducted with the current occupants of the Project site during the week of March 12, 2007. Inquiries made of the residential occupants included household size and composition, ages of occupant, rental and income information, length and type of occupancy, ethnicity, language first spoken in the home, disabilities/health problems, and preferences related to replacement housing and location. In addition, estoppel certificates dated October, 2006 and lease documentation were provided by the current building owner. It is noted that there have been changes to the household composition and current building tenancy since the time that the certificates were prepared. All information of a statistical nature supplied by the households was anecdotal and not validated by documentary evidence that otherwise would be required to comply with relocation qualifying criteria. Based on the information obtained from personal interviews, the following table describes some of the household occupants' characteristics and needs. All 15 units are currently occupied with overcrowding noted in 10 units. Of the 10 one- bedroom units, occupancy ranges from a low of 1 person to a maximum of 8 adults. In the two-bedroom units occupancy ranges from a single person household to a maximum of 7 persons. There are a variation of household composition with some families, some non-related adult members and some related and non-related members. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 3 P.3 317-321COMMERCIALAvE. RELOCATION PLAN Rents for the one-bedroom units vary from $1,195 to $1,295. The two-bedroom unit rents range from $1,295 to $1,595. Two households receive rental assistance in the form of Section 8 housing vouchers from the San Mateo County Housing Authority. There is one elderly household with the householder is age 62 or older. Spanish is the predominant language of the residents, although there are some bilingual residents and a few households speak English. . . Income f. Composition . Current Current' .. Bedrooms Elderlyl Language I Category AdultslChlldren Rent Bedrooms Needed Disabled moderate 8/0 $1195 1 4 no Spanish lower 4/0 $1195 1 2 no Spanish very low 5/2 $1595 2 3 no Spanish mod+ 4/0 $1225 1 2 no Spanish ext. low 2/2 $1195 1 2 no Spanish lower 6/0 $1495 2 3 no Spanish very low 4/0 $1495 2 2 no Spanish ext. low 1/0 $1250 1 1 yes English very low 5/1 $1295 1 3 no Spanish ext. low 1/0 $1495 2 1 yes English ext. low 3/0 $1295 1 1 no Spanish lower 4/0 $1195 1 2 no Spanish lower 4/1 $1295 1 2 no Spanish ext. low 3/2 $1245 1 2 no Spanish moderate 5/0 $1295 2 2 no Spanish As indicated in the previous Table, there are 10 households which are considered "overcrowded in units located at the property." The standard housing density utilized is two persons per bedroom and one person in a common living area for tenant occupied units. In the current Project, based on the local Housing Authority occupancy standards, HIP intends to establish an occupancy standard of two persons per bedroom and two persons in a common living area. If the family size is in excess of these standards, then families would be referred to housing with an additional PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 4 P.4 317-321COMMERCIAL AVE. RELOCATION PLAN bedroom(s). Based on these criteria, households occupying 1 one-bedroom unit and three two-bedroom units would be permanently displaced with the intent of accommodating some of the overcrowded one-bedroom households into available two- bedroom units on site. The majority of the Project's households reported income levels that fall within the area's "extremely low," "very low," and "lower" income categories with a couple in the "moderate" category and one household reported over "moderate" income. The 2006 income limits for the "extremely low", "very low", "lower" "median" and"moderate" income categories, as established by HUD for San Mateo County, are shown in Attachment 2. B. REPLACEMENT HOUSING RESOURCES One of the primary purposes of a Relocation Plan is to demonstrate the availability of comparable, affordable, decent, safe and sanitary housing prior to the displacement of residential occupants. A rental housing survey was made during the week of March 12, 2007 to identify available comparable, decent, safe and sanitary units in proximity to the Project site. Based on the results of that survey, which is included as Attachment 3, 6 two-bedroom units and 9 three-bedroom available units were found to meet the potential needs of the households that will be permanently displaced. C. CONCURRENT DISPLACEMENT Based on the needs of the Project, there is no concurrent displacement which may impact upon the ability to relocate the Project occupants. D. TEMPORARY RELOCATION There is no anticipated need for temporary relocation. Should such a need arise, the Agency will respond appropriately, and in conformance with all applicable laws and requirements. E. PROGRAM ASSURANCES AND STANDARDS Adequate funds will be available to relocate the Project occupants. Pursuant to an agreement to be executed by and between HIP and the Agency, HIP will have responsibility for providing all relocation benefits by law. Relocation assistance services will be provided to ensure that displacement does not result in different or separate treatment of occupants based on race, color, religion, national origin, sex, marital status, familial status, disability or any other basis protected by the federal Fair Housing Amendments Act, the Americans with Disabilities Act, Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, the California Fair PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 5 P.5 317 -321 COMMERCIAL AVE. RELOCA nON PLAN Employment & Housing Act, and the Unruh Act, as well as any other arbitrary or unlawful discrimination. The occupants will not be permanently displaced without 90 days advance written notice. Displacement of the residential occupants will not occur unless "comparable" replacement housing can be made available. "Comparable" housing includes standards such as: decent, safe, and sanitary, comparable as to the number of bedrooms, living space, and type and quality of construction of the acquired unit, but not lesser in rooms or living space than necessary to accommodate the displaced household; in an area that does not have unreasonable environmental conditions; not generally less desirable than the acquired unit with respect to location to schools, employment, health and medical facilities, and other public and commercial facilities and services; and within the financial means of the displaced household as defined in URA, CRAL and the Relocation Guidelines. Pursuant to the Guidelines, a second home shall be considered to be a dwelling only for the purposes of establishing eligibility for payment for moving and related expenses. The relocation program will conform with the standards and provisions set forth in the Uniform Relocation Act (46 U.S.C. S 4600 et seq.), its implementing regulations (49 C.F.R. Part 24) and all other applicable regulations and requirements. F. RELOCATION ASSISTANCE PROGRAM OPC staff is available to assist the displaced tenants in English or Spanish with questions about relocation and/or assistance in relocating. Relocation staff can be contacted toll-free at 1-(877) 972-8908 from 8:30 a.m. to 6:00 p.m Monday through Friday, and also available on-site by appointment. The Relocation Office is located at 7901 Oakport Street, Suite 4800, Oakland, CA. A comprehensive relocation assistance program, with technical and advisory assistance, will be provided to the tenants being displaced. Specific activities will include: 1. Distribution of informational statements. Attachment 4 and 5 contain a sample of the informational notices that will be given to the displaced occupants. 2. Timely referrals to replacement dwelling units as defined above and, if necessary, transportation will be provided to inspect potential replacement units. 3 Assistance with completion and filing of relocation claims and appeals forms, if necessary. PREPARED BY OVERLAND, P ACIFlC & CUTLER, INC. Page 6 P.6 317-321COMMERCIALAvE. RELOCATION PLAN G. RELOCATION BENEFIT CATEGORIES Benefits will be provided in accordance with URA, the CRAL, the Guidelines, and all other applicable regulations and requirements. Benefits will be paid upon submission of required claim forms and documentation in accordance with approved procedures. Appropriate benefits will be provided for the displacees as required by the above laws and requirements. 1. Residential MovinQ Expense Payments The subject household will be eligible to receive a payment for moving expenses. The payment will be made based upon either a fixed room count schedule or an invoice for actual reasonable moving expenses from a licensed professional mover. a) Fixed Payment - A fixed payment for moving expenses based on the number of rooms containing furniture or other personal property to be moved. The fixed moving payment will be based upon the most recent Federal Highway Administration schedule maintained by the California Department of Transportation, as indicated in Attachment 6. -OR- b) Actual Reasonable Movina Expense Payments - The displaced tenants may elect to have a licensed, professional mover perform the move; if so, Agency will pay for the actual cost of the move up to 50 miles and all reasonable charges for packing, unpacking, insurance, and utility connection charges. The payment will be made directly to the mover or as a reimbursement to the displaced tenants. 2. Rental Assistance/Down Payment Assistance Residential displacees are considered eligible for relocation assistance and benefits if they have established residency within the Project site for a minimum of 90 days prior to the "initiation of negotiations" and are eligible for both Rental Assistance and Moving Expense Payments. Commercial occupants are considered eligible for relocation assistance and benefits, if they lawfully occupied the subject property on the date of the "Initiation of Negotiations"; this date is defined as the date that the acquiring entity obtains funding approval. The anticipated date of "initiation of negotiations" for this Project is May 09, 2007. For residential displacees, except in the case of Last Resort Housing situations, as defined below, Rental Assistance Payments will be limited to a maximum of PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 7 P.7 317-321COMMERCIALAvE. RELOCATION PLAN $5,250 based upon the monthly housing need over a forty-two (42) month period. In addition, the tenants may opt to apply the amount to which they are entitled toward the purchase of a replacement unit. 3. Last Resort Housing Based on the survey results, it appears that an adequate number of "comparable replacement housing" units will be available at the time of displacement to meet the needs of the displaced tenants. "Last Resort Housing" payments are authorized by statute if affordable "comparable replacement housing" cannot be located for the displaced tenant household (Le., housing renting for not more than 30% of the household's gross monthly income). In this case, payments may be made beyond the $5,250 statutory cap up to forty-two (42) months' worth of rental assistance. Any supplemental increment beyond $5,250 will be paid in installments or in a lump sum at the discretion of HIP. Those households that are moved "on-site" from a one-bedroom unit to a two-bedroom unit to accommodate occupancy standards will be eligible to receive a residential moving expense benefit as outline above. Their rent will be limited to the lesser of 30% of the household income or 105% of their current rent for the first year. The one- bedroom units would rent for $1,125.00 and the two-bedroom units would rent for $1,495.00. H. PAYMENT OF RELOCATION BENEFITS Relocation benefit payments will be made expeditiously. Claims and supporting documentation for relocation benefits must be filed within eighteen (18) months from the date the claimants moves from the displacement property. Procedures for preparing and filing of claims and processing and delivering of payments are included in this Plan as Attachment 7. The affected households will not be displaced until "comparable" housing is located as defined above. Relocation staff will pre-inspect any replacement units to which referrals are made to verify that they meet all the standards of decent, safe, and sanitary as defined in Section 6008, Subdivision (d) of the Guidelines. I. EVICTION POLICY After acquisition of the property, the occupants will become tenants of Hip Housing. Pursuant to law, eviction is permissible only as a last resort and that relocation records PREPARED BY OVERLAND. PACIFIC & CUTLER,INC. Page 8 P.8 317 -321 COMMERCIAL AVE. RELOCATION PLAN must be documented to reflect the specific circumstances surrounding any eviction. Eviction will only take place in cases of nonpayment of rent, serious violation of the rental agreement, a dangerous or illegal act in the unit, or if the displacees refuse all reasonable offers to move. Eviction will not affect the eligibility of a person legally entitled to relocation benefits. J. APPEALS POLICY The appeals policy will follow the standards described in Section 6150 et seq. of the Guidelines. Briefly stated, the displaced tenants will have the right to ask for review when there is a complaint regarding any of their rights to relocation and relocation assistance, such as a determination as to eligibility, the amount of payment, or the failure to provide a comparable replacement housing referral. K. PROJECTED DATES OF DISPLACEMENT Relocation is expected to be completed on or about August 01,2007. L. ESTIMATED RELOCATION COSTS Pursuant to an agreement executed by and between HIP and the Agency, HIP will be responsible for providing all relocation benefits required by law. Any and all required financial assistance will be provided. The anticipated budget for relocation benefits and consultant fees is $150,000. PREPARED BrOVERLAND, PACIFIC & CUTLER, INC. Page 9 P.9 317 -321 COMMERCIAL AVE. RELOCATION PLAN Attachment 1: Project Site Maps Attachment 2: HUD Income Limits for San Mateo County - 2006 Attachment 3: Replacement Housing Survey Results Attachment 4: Sample Informational Statement - Residential Attachment 5: Sample Informational Statement - (Residential Spanish) Attachment 6: Residential Fixed Moving Payment Schedule Attachment 7: Relocation Payment Policy and Procedures for Relocation Payments and Assistance PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 10 P.10 Figure 1: Project Site Location Figure 2: Regional Location PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page II P.ll ~'---"'''--'"''._._'_~W''''''''''''''''',",,,,,,,,_ ~,_........--..... . ATTACHMENT 2 The following figures are approved by the U. S. Department of Housing and Urban Development (H.U.D.) for use in the County of San Mateo to define and determine housing eligibility by income level. Hue ANNUAL INCOME LIMITS BY CATEGORY -SAN MATEO COUNTY (2006) Area Four Person Median: $95,000. Family Extrem ely Very Low Lower Median Moderate Size Low Annual Annual Annual Annual Annual Income Income Income Income Income One Person $23,750 $39,600 $63,350 $66,500 $79,800 Two Person $27,150 $45,250 $72,400 $76,000 $91,200 Three Person $50,900 $81,450 $85,500 $102,600 $30,550 Four Person $33,950 $56,500 $90,500 $95,000 $114,000 Five Person $36,650 $61,050 $97,700 $102,600 $123,100 Six Person $39,400 $65,600 $104,950 $110,200 $132.200 Seven Person $42,100 $70,100 $112,200 $117,800 $141,400 Eight Person $44,800 $74,650 $119,450 $125,400 $150,500 Figures are per the Department of Housing and Community Development (California), Division of Housing Policy Development, February 2006 PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page I2 P.12 1 Bedroom 2 Bedroom 1 3 6 9 $1300- $1875 $1600-$2550 PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 13 P.13 Attachment 4: INFORMATIONAL STATEMENT FOR FAMILIES AND INDIVIDUALS 1. GENERAL INFORMATION n. ASSISTANCE IN LOCATING A REPLACEMENT DWELLING Ill. MOVING BENEFITS IV. REPLACEMENT HOUSING PAYMENT - TENANTS AND CERTAIN OTHERS V. SECTION 8 TENANTS VI. QUALIFICATION FOR AND FILING OF RELOCATION CLAIMS VII. LAST RESORT HOUSING ASSISTANCE VllI. RENTAL AGREEMENT IX. APPEAL PROCEDURES - GRIEVANCE x. TAX STATUS OF RELOCATION BENEFITS XI. LEGAL PRESENCE REQUIREMENT XIl. ADDmONAL INFORMATION AND ASSISTANCE A V All..ABLE I. GENERAL INFORMATION The building in which you now live is in an area to be improved by the HIP Housing ("HlP") with financial assistance from the City of South San Francisco Redevelopment Agency ("Agency") and the County of San Mateo. As the project schedule proceeds, it will be necessary for you to move from your dwelling. You will be notified in a timely manner as to the date by which you must move. Please read this information as it will be helpful to you in determining your eligIoility and the amount of your relocation benefits under the federal and/or state law. We suggest you save this informational statement for reference. HlP and the Agency have retained the services of Overland, Pacific & Cutler, Inc., a qualified professional relocation firm, to assist you. The firm is available to explain the program and benefits. Their address and telephone number is: /~~ ;:::=::::-,'" r/";"~ . ~~j , l~~) r;~ _/ \'::~~= OVERLAND PACIFIC & CUTLER,INC. Overland, Pacific & Cutler, Inc. 7901 Oakport Street, Suite 4800 Oakland, CA 94621 Telephone: (877) 972-8908 Spanish speaking representatives are available. Si necesita esta informacion en Espaiiol, por favor llame a su representante. PLEASE DO NOT MOVE PREMATURELY. THIS IS NOT A NOTICE TO VACATE YOUR DWELLING. However, if you desire to move sooner than required, you must contact your representative with Overland, Pacific & Cutler, Inc., so you will not jeopardize any benefits. This is a general informational brochure only, and is not intended to give a detailed description of either the law or regulations pertaining to the relocation assistance program for this project. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page I4 P.14 Please continue to pay your rent to your current landlord, otherwise you may be evicted and jeopardize the relocation benefits to which you may be entitled to receive. Once HlP acquires the property, you will also be required to pay rent to HIP. n. ASSISTANCE IN LOCATlNG A REPLACEMENT DWELLING IDP, through its representatives, will assist you in locating a comparable replacement dwelling by providing referrals to appropriate and available housing units. You are encouraged to actively seek such housing yourself. When a suitable replacement dwelling unit has been found, your relocation consultant will carry out an inspection and advise you as to whether the dwelling unit meets decent, safe and sanitary housing requirements. A decent, safe and sanitary housing unit provides adequate space for its occupants, proper weathe:rproofing and sound heating, electrical and plumbing systems. Your new dwelling must pass inspection before relocation assistance payments can be authorized. m. MOVING BENEFITS If you must move as a result of displacement by the project, you will receive a payment to assist in moving your personal property. There are two types of moving payments. You have the option of selecting either one of the following types of moving payments: A. Fixed Moving Payment A Fixed Moving Payment is based upon the number of rooms you occupy and whether or not you own your own furniture. The payment is based upon a schedule set forth below, and ranges, for example, from $400 for one furnished room to $2,150 for eight rooms in an unfurnished dwelling. (For details see the table below). Your relocation representative will inform you of the amount you are eligible to receive if you choose this type of payment. ~~~~~f~~ii~~~~'~~~~^.~'~~~.f~~~~~~~ii~L~~~i'" Occupant owns furniture Occupant does NOT own furniture 1 room $625.00 1 room $400.00 2 rooms $800.00 I each additional room $65.00 I 3 rooms $1,000.00 I 4 rooms $1,175.00 5 rooms $1,425.00 6 rooms $1,650.00 7 rooms $1,900.00 8 rooms $2,150.00 each additional room $225.00 If you select a fixed payment, you will be responsible for arranging for your own move and neither the Agency nor IDP will assume liability for any loss or damage of your personal property. PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. Page 15 P.lS B. Actual Moving Expense (professional Move) If you wish to engage the services of a licensed commercial mover, you may claim the ACTUAL cost of moving your personal property up to 50 miles, Your relocation representative will inform you of the number of competitive moving bids (if any) which may be required, and assist you in developing a scope of services for approval. IV. REPLACEMENT HOUSING PAYMENT - TENANTS AND CERTAIN OTHERS You may be eligible for a payment of up to $5,250 to assist you in renting or purchasing a comparable replacement dwelling. In order to qualify, you must either be a tenant who has occupied your present dwelling for at least 90 days prior to the "Initiation of Negotiations" as defined in the Relocation Plan. A. Rental Assistance If you qualify, and wish to rent your replacement dwelling, your rental assistance benefits will be based upon the difference over a 42 month period between the rent you must pay for a comparable replacement dwelling and the lesser of your current rent or 30% of your gross monthly household income. You will be required to provide your relocation representative with monthly rent and household income verification prior to the determination of your eligibility for this payment. -OR- B. Down-payrilent Assistance If you qualify, and wish to purchase a home as a replacement dwelling, you can apply up to the total amount of your rental assistance payment towards the down-payment and non-recurring incidental expenses. Your relocation representative will clarify procedures necessary to apply for this payment. VI. QUALIFICATION FOR AND Fll.ING OF RELOCATION CLAIMS To qualify for a Replacement Housing Payment, you must rent or purchase and occupy a comparable replacement unit within one year from the later of the following: 1. F or a tenant, the date you move from the displacement dwelling; 2. For an owner-occupant, the date you receive final payment for the displacement dwelling, or, in the case of condemnation, the date the full amount of estimated just compensation is deposited in court; or 3. The date comparable replacement dwellings are made available. All claims for relocation benefits must be :filed with the Agency within 18 months from the date which you move. PREPARED By OVERLAND, PACIFIC & CUTLER,INC. Page I6 P.16 VII. LAST RESORT HOUSING ASSISTANCE If comparable replacement dwellings are not available when you are required to move, or if replacement housing is not available within the monetary limits described above, you will be provided with Last Resort housing assistance to enable you to rent or purchase a replacement dwelling on a timely basis. Last Resort housing assistance is based on the individual circumstances of the displaced person. Your relocation representative will explain the process for determining whether or not you qualify for Last Resort assistance. If you are a tenant, and you choose to purchase rather than rent a comparable replacement dwelling, the entire amount of your rental assistance and last resort eligibility must be applied toward the down-payment ofthe home you intend to purchase. Vlll. RENTAL AGREEMENT As a result of HIP's purchase and rehabilitation of the property where you live, you may become a tenant of HIP. If this occurs, you will be asked to sign a rental agreement which will specify the monthly rent to be paid, when rent payments are due, where they are to be paid and other pertinent information. Except for the causes of eviction set forth below, no person lawfully occupying the property to be purchased will be required to move without having been provided with at least 90 days written notice. Eviction will be undertaken only in the event of one or more of the following infractions: A. Failure to pay rent; except in those cases where the failure to pay is due to the lessor's failure to keep the premises in habitable condition, is the result of harassment or retaliatory action or is the result of discontinuation or substantial interruption of services; B. Performance of dangerous illegal act in the unit; C. Material breach of the rental agreement and failure to correct breach within 30 days of notice; D. Maintenance of a nuisance and failure to abate within a reasonable time following notice; E. Refusal to accept one of a reasonable number of offers of replacement dwellings; or F. The eviction is required by State or local law and cannot be prevented by reasonable efforts on the part of the public entity. IX. APPEAL PROCEDURES - GRIEVANCE Any person aggrieved by a determination as to eligibility for a relocation payment, or the amount of a payment, may have hislher claim reviewed or reconsidered in accordance with the Agency's appeals procedure. Complete details on appeal procedures are available upon request from the Agency. X. TAX STATUS OF RELOCATION BENEFITS Relocation benefit payments are not considered as income for the purpose of the Internal Revenue Code of 1986 or the Personal Income Tax Law, Part 10 (commencing with Section 17001) of Division 2 of the PREPARED BY OVERLAND, P ACIFlC & CUTLER, INC. Page 17 P.17 Revenue and Taxation Code, or the Bank and Corporation Tax law, Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code. XI. LAWFUL PRESENCE REQUIREMENT Pursuant to the Public Law 105-117 of 11-21-97, in order to be eligible to receive relocation benefits in federally-funded relocation projects, all members of the household to be displaced must provide information regarding their lawful presence in the United States. In federal projects, any member of the household who is not lawfully present in the United States or declines to provide this information, may be denied relocation benefits. Relocation benefits will be prorated to reflect the number of household members with certified lawful presence in the US. XII. ADDITIONAL INFORMATION AND ASSISTANCE A V All..ABLE Those responsible for providing you with relocation assistance hope to assist you in every way possible to minimize the hardships involved in relocating to a new home. Your cooperation will be helpful and greatly appreciated. If you have any questions at any time during the process, please do not hesitate to contact your relocation representative. PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page I8 P.18 . 1. INFORMAC/ N GENERAL 2. AYUDA PARA ENCONTRAR UN/DAD DE REEMPLAZO 3. BENEF/C/OS DE MUDANZA 4. PAGO EN REEMPLAZO DE VIVIENDA _ /NQUILlNOS 5. INQU/UNOS CON SECCION 8 6. CALlF/CACIONES PARA LLENAR RECLAMOS DE REUB/CACION 7. PAGOS DE UL T/MO RECURSO 8. CONTRA TO DE RENT A 9. PROCED/M/ENTOS DE APELAC/ON-AGRAVIO 10. CONDICION DE IMPUESTOS SOBRE BENEFIC/OS DE REUB/CACION 11. REQUIS/TO DE PRESENCIA LEGAL 12. INFORMACION ADICIONAL Y ASISTENCIA DISPONIBLE I. INFORMACION GENERAL EI edificio en el que usted vive esta en una area que va a ser mejorada por HIP Housing ("HIP") con fa ayuda financiera de la Agencia de Desarrollo de la Ciudad de South San Francisco ("Agencia") y ef condado de San Mateo. De acuerdo a procedimiento de la agenda, sera necesario que usted se cambie de su residencia. Usted sera notificado(a) con suficiente tiempo sobre la fecha en que debera mudarse. Par favor lea esta informacion, sera de mucha ayuda para determinar su elegibi/idad y la cantidad de sus beneficios de reubicacion. Le recomendamos que guarde esta informacion como referencia. HIP y la Agencia han contratado los servicios de fa campania Overland, Pacific & Cutler, Inc., una empresa profesional de reubicacion muy calificada para ayudarle. La empresa esta disponible para explicarle el programa y los beneficios. Su direccion y numero de telefono son: Overland, Pacific & Cutler, Inc. 7901 Oakport Street, Suite 4800 Oakland, California 94621 Telefono: (877) 972-8908 POR FAVOR NO SE MUDE ANTES DE TIEMPO. ESTA NO ES UNA NOTlFICACION PARA DESOCUPAR SU VIVIENDA. Simembargo, si usted desea mudarse antes de la fecha requerida, debera con su representante de Overland, Pacitic & Cutler, Inc., para que no pierda ninguno de sus beneficios. Este es unicamente un folleto de informacion general y no tiene la intencion de proporcionar una descripcion detallada ni de la ley ni de los reglamentos relacionados que pertenecen af programa de reubicacion de la Agencia. Por favor siga pagando su alquiler mensual al dueno de la propiedad en la cual usted vive de otra forma usted puede ser desalojado y pued perder los beneficios de reubicacion a los cuales usted tiene derecho a recibir. Una vez que HIP adquiera la propiedad, sera necesario que usted pague su alquiler a HIP. PREPARED By OVERLAND, P ACIFlC & CUTLER,lNC. Page 1 P.19 II. AYUDA PARA ENCONTRAR UNA UNlOAD DE REEMPLAZO HIP, a traves de sus representantes, Ie ayudaran a localizar una vivienda de reemplazo comparable proporcionandole listas de viviendas apropiadas y disponibles. Se Ie urge que usted se mantenga activamente buscando una vivienda de reemplazo. En cuanto encuentre una vivienda de reemplazo, su consultor de reubicacion hars una inspecci6n de la unidad para determinar si la unidad reune todos los requisitos de una vivienda que es decente, segura y Iimpia. Una unidad que es decente, segura e y limpia debe proveer cupo suficiente para sus ocupantes, esta a prueba de te todo tipo de clima y tiene sistemas adecuados de calefacci6n, plomeria, y electricidad. Su vivienda de reemplazo debe pasar una inspecci6n antes de autorizar pagos de asistencia de reubicacion. III. MUDANZA Si tiene que mudarse como resultado que ha sido desalojado por el proyecto, usted recibira un pago para asistirle con la mudanza de su propiedad personal. Hay dos formas de pagos de mudanza. Usted tiene la opcion de escoger uno de los tipos de pagos de mudanza siguientes: A. Pago Fijo de Mudanza Un Pago Fijo ests basado en el numero de cuartos que ocupa y si as duefio de los muebles o no. EI pago esta basad 0 en una agenda aprobada por la Agencia, y sera de $325.00 por un cuarto amueblado hasta $1,750 por 8 cuartos con muebles. (Para detalle, yea la forma abajo). Su representante Ie informara la cantidad que recibira al ser elegible. . -..-~~~#IJa:pE:M,ueANv:-t{;:afff~~rii~_.. Ocupante Dueno de Muebles Ocupante no es Dueno de Muebles 1 cuarto $625.00 1 cuarto $400.00 2 cuartos $800.00 Cada Cuarto Adicional $65.00 3 cuartos $1,000.00 4 cuartos $1,175.00 5 cuartos $1,425.00 6 cuartos $1,650.00 7 cuartos $1,900.00 8 cuartos $2,150.00 Cada Cuarto Adicional $225.00 Si usted escoge el pago fijo de mudanza, sera responsable por organizar su propia mudanza y ni la Agencia 0 HIP asumira ninguna responsabilidad por perdidas 0 dafios de su propiedad personal. Page 2 PREPARED BY OVERLAND, PACIFIC & CUTLER, INC. P.20 B. Gastos Actuales de Mudanza (CompaiHa Profes/onal) Si usted decide contratar los servicios de una compania de mudanza comercial con ficens;a, usted puede reclamar el costo ACTUAL de mudar su propiedad personal hasta una distanc;a de 50 millas. Su representante de reubicaci6n Ie informara del numero de presupuestos (si a/guno) que se requieran, y Ie asistira en preparar un plan para que sea aprobado. IV. PAGO EN REEMPLAZO DE VfVIENDA -INQUfLINOS Usted puede ser elegible para un pago de hasta de $5,250.00 como ayuda para rentar 0 comprar una vivienda comparable. Para calificar, debe de haber side un inquilino que ha ocupado su vivienda actual por 10 menos de 90 dras, 0 un duefio-ocupante que ha vivido en la vivienda por no menos de 90 dras y no mas de 179 dras, antes de la primera oferta de la Agencia para comprar la propiedad. A. Asistencia de Renta Si usted califica y desea rentar su vivienda de reemplazo, sus beneficios se basaran en la diferencia sobre un periodo de cuarenta y dos (42) meses entre la renta que tiene que pagar por una vivienda comparable, y 10 menor de la renta actual 0 treinta porciento (30%) de los ingresos mensuales en bruto. Usted debera informer a su representante de su renta y sus ingresos mensuales antes de establecer su elegibilidad para el pago. -0- B. Asistencia de Pago de Enganche Si usted califica y desea comprar su vivienda de remplazo,puede aplicar la cantidad total de su pago de asistencia de renta para un pago de enganche, Su representante de reubicaci6n Ie explicara los procedirnientos necesarios para aplicar este pago. V. INQUILINOS CON SECCION 8 Cuando usted se mude, usted podria ser elegible para transferir su elegibilidad de Seccion 8 a un lugar de reemplazo. Como se indica anteriormente, a usted se Ie proporcionaran servicios de consejeria y otros servicios de asesoria junto con beneficios de mudanza. Ademas, la Agencia cubrira el costo de cualquier deposito de seguridad requerido para arrendar una vivienda de reemplazo aprobada por Seccion 8, ytam bien cubrira el costo de cualquier cargo por verificacion de credito. VI. CALlFICACIONES PARA LLENAR RECLAMOS DE REUBICACI6N Para calificar por un Pago de Remplazo de Vivienda, tiene que rentar 0 comprar una vivienda de reemplazo comparable durante un ano de 10 que ocurra despues de: 1. Para inquilino, la fecha que desocupo su vivienda, 2. Para dueno-ocupante, la fecha en que recibira pago final por su vivienda 0, en caso de un procedimiento de condenaci6n, la fecha del deposito de compensaci6n justa con la corte, 0 3. La fecha en la cual viviendad de reemplazo se Ie hizo disponible. PREPARED By OVERLAND, PACIFIC & CUTLER, INC. Page 3 P.2l Todos 105 reclamos de reubicaci6n deben ser presentados a la Agencia dentro de dleciocho (18) meses de la fecha en la cual ustedse mud6. VII. PAGOS DE ULTIMO RECURSO Si viviendas de reemplazo comparable no estan disponibles cuando se tiene que mudar, 0 si viviendas de reemplazo no estan disponibles dentro de 105 Iimltes monetarios ya citados anteriormente, se Ie proveera asistencia de ultimo recurso para que pueda alquilar 0 comprar una vivienda de reemplazo dentro de un tiempo adecuado. Asistencia de ultimo recurso esta basad a en las circumstancias individuales del desplazado. Su representante de reubicaci6n Ie explicara el proceso para determinar si califica 0 no para asistencia de ultimo recurso. Si es inquilino y escoge comprar en vez de alquilar una vivienda de reemplazo comparable, la cantidad total de su asistencia de alquiler y eligibilidad de ultimo recurso debe de ser aplicada hacia la quota inicial de la casa que usted piensa comprar. VIII. CONTRATO DE ALQUILER Como resultado de la compra de HIP y la rehabllitacion de la propiedad donde usted vive, usted puede volverse un inquilino de HIP. Si esto ocurre, se Ie pedira que firme un contrato de alquiler que especificara el alquiler mensual que debe de pagar, cuando Ie toca pagar su alquiler y donde debe de pagar y otra informacion pertinente. Excepto porlas causas de desalojo dichas abajo, ninguna persona que legalmente ocupa una propiedad que va a ser comprada es requerida a mudarse si no tiene una notificacion por escrito por 10 menos de 90 dlas. Desalojo es dado solamente por una 0 mas de las siguientes razones: A. Falla de no pagar renta, excepto en cas os donde este es debido a la falta del dueno de no mantener 105 predios en una condici6n habitable, 0 cuando los servicios basicos han side discontinuados 0 interrumpidos por un largo plazo. B. La perpetraci6n de un hecho peligroso 0 ilegal en 105 predios. C. La falta de mantener los terminos del acuerdo de renta entre 30 dlas de haber side notificado. D. Continuar con un desorden publico, despues de haber side notificado. E Despues de haberrecibido una cantidad razonable de referencias a viviendas de reemplazo. F. Cuando la evicci6n es requerida por leyes estatales 0 locales y no puede ser evitada por medio de esfuerzos de la entidad publica. IX. PROCEDIMIENTOS DE APELACION-AGRAVIO Cualquier persona con una queja por una determinaci6n de elegibilidad en un pago de reubicaci6n 0 de la cantidad de un pago, puede pedir que su reclamo sea revisado 0 reconsiderado de acuerdo con el procedimiento de apelaciones de la Agencia. Los detalles completos de apelaci6n y procedimientos estan disponibles solicitandolos a la Agencia. X. CONDICION DE IMPUESTOS SOBRE BENEFICIOS DE REUBICACION Pagos por beneficios de reubicaci6n no son considerados como ingreso para el proposito de impuestos del Internal Revenue Code de 1986 0 el Personal Income Tax Law, Parte 10 (comenzando con Section 17001) de Division 2 del Revenue and Taxation Code, 0 del Bank and Corporation Tax law, Part 11 (comenzando con Section 23001) de Division 2 del Revenue and Taxation Code. Page 4 PREPARED BY OVERLAND, P ACIFlC & CUTLER,INC. P.22 XI. REQUISITO DE PRESENCIA LEGAL De aeuerdo a la Ley Publica 105-117 de 11-21-97, para poder ser elegible y reeibir benefieios de reub/eaeion en proyeetos de reubieaeion con fondos federaJes, todos los miembros de la vivienda a ser desplazados deben de proporeionar informacion con relae/on a su presencia legal en los Estados Unidos. En proyeetos federales, eualquier miembro de la vivienda que no este legalmente presente en los Estados Unidos 0 rehuse proporeionar esta informacion, se Ie podrian negar benefieios de reubieaei6n. Los benefieios de Reubieaeion seran ealeulados de acuerdo af numero de miembros de la familia con presencia legal certificada en los Estados Unidos. XII. INFORMACION ADICIONAL Y ASISTENCIA DISPONIBLE Los responsables de proveer asistenela de reubieaei6n esperan ayudarle en todas las formas posibles para minimizar la diffcil tarea de reubiear a una nueva easa. Su eooperaei6n sera de mucha ayuda y gratamente apreeiada. Si tiene preguntas durante el proeeso, no dude en eomuniearse con su representante de reubicaei6n. PREPARED By 0 VERLAND, PACIFIC & CUTLER, INC. Page 5 P.23 :i'~~~~~~~:'i!1aJ~'~:Ll.~M9~1~'~4SC~"EP!~LES:'~.:f:lfJt41~O';~~'l~'(,l!~;c~i~~L.~~,n)~~~~~.. Occupant owns furniture Occupant does NOT own furniture 1 room $625.00 11 room $400.00 2 rooms $800.00 I each additional room $65.00 3 rooms $1,000.00 4 rooms $1,175.00 I 5 rooms $1,425.00 6 rooms $1,650.00 7 rooms $1,900.00 8 rooms $2,150.00 ' each additional $225.00 ! P.24 Claims and supporting documentation for relocation benefits must be filed within eighteen (18) months from the date the claimant moves from the acquired property. The procedure for the preparation and filing of claims and the processing and delivery of payments will be as follows: 1. Claimant(s) will provide all necessary documentation to substantiate eligibility for assistance. 2. Assistance amounts will be determined in accordance with the provisions of the URA and the California Relocation Law and Guidelines. 3. Required claim forms will be prepared by relocation personnel in conjunction with claimant(s). Signed claims and supporting documentation will be submitted by relocation personnel to the Agency. 4. The Agency and HIP will review and approve claims for payment or request additional information. 5. HIP will issue benefit checks which will be available for pick-up by Claimants, unless circumstances dictate otherwise. 6. Final payments will be issued after confirmation that the Project area premises have been completely vacated and actual residency at replacement unit is verified. 7. Receipts of payment will be obtained and maintained in the relocation case file. P.25 ADDENDUM No.1 (IF NO COMMENTS ARE RECEIVED) As required by the California Relocation Assistance Law, the Relocation Plan was made available for review and written comments by the general public and the affected occupants for a period of 30-Days._May 4th, 2007 _marks the end of the 30-day period for the submission of any written comments to the Relocation Plan. No comments were received by the Relocation Consultant, or the Agency. In the absence of any written comments, this Relocation Plan as presented is to be considered the Final Document to be adopted by the City of South San Francisco on _May 09,2007. P.26 (~.I Staff Report C4lIFO'P-~\~ AGENDA ITEM # 4 - DATE: May 9, 2007 TO: Honorable Mayor and City Council FROM: Marty VanDuyn, Assistant City Manager SUBJECT: Petition to Annex into Parking District 1 - Poletti Property, 515 Airport Boulevard (Assessor's Parcel No. 012-177-030) Applicant: Louis, Natalia and Richard Poletti RECOMMENDATION: It is recommended that the City Council, by motion, accept the recommendation of the Parking Place Commission and approve the subject annexation request. BACKGROUNDIDISCUSSION: A petition has been submitted by the Poletti family, owners of a parcel at 515 Airport Boulevard, to annex their property into the Downtown Parking District. The property is located approximately 75 feet north of the existing District boundary, as shown on the attached map. The 500 block of Airport Boulevard is characterized by older, quasi-industrial buildings with limited or no off-street parking, and metered parking along Cypress and Lux Avenues. City policies support conversion of these sites to commercial or mixed commerciallresidential use, but the ability to realize this change without demolition of the existing buildings is restricted by the City's off-street parking requirements. Inclusion in the Parking District affords a property owner the opportunity to apply to the Downtown Parking Commission for consideration of an exception to the standard parking requirements based on a finding that there is sufficient public parking in the vicinity to meet all or a portion of the required on-site parking. Although staffs preference would be to expand the District boundary to encompass all five properties along the block, the agreement of the affected property owner is needed. Staff has discussed potential annexation with two of the three other owners on the block, and while generally supportive, those owners have not elected to pursue annexation at this point. The necessary steps for expanding the Parking District are as follows: 1. Owner files a petition with the City Council. 2. The City Council accepts the petition and recommends an annexation fee (if any) to be paid by the property owner seeking inclusion. Staff Report To: Honorable Mayor and City Council RE: Parking District Annexation Petition Date: May 9, 2007 Page 2 3. The City Council forwards the petition and fee recommendation to the Parking Place Commission for its review and determination. 4. The Parking Place Commission approves or denies the petition, and approves or denies the City Council's recommendation regarding any annexation fee. 5. After approval by the Commission, the City Council may grant the petition. 6. The property is then added to the District when the annexation fee, if any, is paid. The City Council accepted the petitions at its meeting of April 11, 2007, recommended no annexation fee be assessed and forwarded the matter to the Parking Place Commission for consideration. The Parking Place Commission unanimously approved the petition at its April 25, 2007 meeting and recommended that the City Council grant the petition for annexation. CONCLUSION: Staff recommends that the City Council accept the recommendation of the Parking Place Commission and grant the petition. By: QLL Many V Duyn, / Assistant City Manager APProv~JN L(f-~ M.Nag City Manager BMN :MVD:sk ATTACHMENTS: Downtown Parking District Map Petition To 1 - OJ/l>2 q. rJ;U f - UUO~ APPLICATION FOR EXCEPTION FROM THE PARKING REQUIREMENTS WITHIN A PARKING DISTRICT, PURSUANT TO SSFMC SECTION 20.74.030 Uses in the Downtown Parking District may be granted an exception to the parking requirements with approval from the Parking Commission. Submit this completed application to the Director of Economic & Community Development, 400 Grand Avenue, South San Francisco along with five copies of a scaled site plan/floor plan of the proposed use on 8 1/2: x 11" paper. Please Print Name of Applicant: 9o\em Address of Applicant: ~\ cJt\ {,t V d ~ ~,~ E \ (' a Vll"\ '\. V~O RGCt \ 0 ~ SO\A-ih (~( ill ~hCiJc:O .~ \ U'\CHr d 90 \t fu. lo.it\s ~ \e t\i 1 \J:l~w~ \ ,it 90 \eth . . Address of Property Owner. 333 t \ Ct-i Vv\ ',nO l<Ct?t J I .sovt4{/f '-...<;;n ~v}LLYO Telephone No. of Applicant: ((; S-O) Se- q- 730e) Assessor's Parcel No.: 0 'd - \ 77-D~~t Address: 5 \ s: ~ I( ~ {-\ 600. \e LJ a v r:\ Proposed Use of Property: T', \ e... ~ho\...0,( DO\f\!\ ex V\d f-e.. ~V\. ~cl LA.-Sf S Size of Lot: drY. 7SJ- iJ-No. of Employees: :::L full time d- part time 0 Hours of Operation: 3, (Am - S- Pl--YI ~ S,. c~ c;;o+j- ~\.-m \re~Cl\\- Name of Property Owner. Amount of Floor Area of Proposed Use: square feet. Previous (or existing) Use: -ra6\A- Wr S'hop S ,y y 7 .t-/_ f\-u..+000clLA C..:t \I\..-tt; o\\u.s.s -'I v Number of legal parking spaces proposed on site: --8- Number of additional parking spaces proposed on site: -& Is a City parking lot located within 200' of subject property? Yes No X' If so, number of parking spaces existing: metered permit only Number of metered parking spaces directly abutting subject property: {) ;;( Amount of vacant land on site which could be improved for parking: * * * * * * * * * AFFIDAVIT * * * * * * * * * * * * * I declare that I am (CIRCLE ONE) the owner/lessee/attomey of the owner/or/a person with the power of attomey from the ownerl of the above property involved in this application, and that the foregoing is true and correct. Executed at 00,)..~ 5tAh Fr~~1if~~i~~edb+- day of \1\0\ \tU, 'd007 ,)6:- -;< \ckttr'd L~ ~D\e*~ P.P~R._~~~.,., NAM~ /?:;j / ;~~ /~ Reviewed by Planning Division (Initial) (Date) nm:parkgreq.frm l ~ 1m f=l~ ~ F -= L FI8 - II - a - - -I trrJ [ J _,~ ~ b ~ ~enue FJ [II] IT] :m ~rJc3 0:=.---= I - j ~ ~ t:='1 ~:c- ~ =.,1. l Lj ~I-- ~[ I -f-- I · - - H >< JI-- t-- ~_~ --l I--- r - ----1 _. 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Q) .., ~ -- :J CC C -- tn ...... .., -- n ...... ~'t1\ s~ ~~ ~~~ '4l~\~ Staff Report II AGENDA ITEM # 5 --- DATE: May 9, 2007 TO: FROM: SUBJECT: Honorable Mayor and City Council Marty Van Duyn, Assistant City Manager ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE MASTER AGREEMENT FOR FEDERAL-AID PROJECTS AND THE PROGRAM SUPPLEMENTAL AGREEMENT NO. OlO-N WITH THE STATE OF CALIFORNIA FOR THE GRAND A VENUE RESURFACING PROJECT. RECOMMENDATION It is recommended that the City Council adopt a resolution authorizing the City Manager to execute the Master Agreement for Federal-Aid Projects and the Program Supplemental Agreement No. 010-N with the State of California, for the Grand Avenue Resurfacing Project, Federal Project No. STPL-5177(019), Project No. ST-07-4. BACKGROUND/DISCUSSION The City of South San Francisco has obtained approval to receive Federal funds administered by the State of California Department of Transportation for the resurfacing of Grand Avenue from Chestnut Avenue to Spruce Avenue. The project has been advertised for construction and the bid opening for the project is scheduled for May 15, 2007. In order for the City to obtain reimbursement through Federal funds, the Master Agreement for Federal-Aid Projects and the Program Supplemental Agreement No. OlO-N has to be executed. These agreements would authorize the City to seek reimbursement from the State for up to $290,000 for this project. The proposed resolution would authorize the City Manager to sign these agreements on behalf of the City. FUNDING The disbursement of the Federal funds by the State of California Department of Transportation has been included in the budget for the Grand A venue Resurfacing Proj ect and has been included in the 2006 - 2007 Capitallmprovement Program. Staff Report Subject: ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE 1',1ASTER AGREEMENT FOR FEDERAL-AID PROJECTS AND THE PROGRAM SUPPLEMENTAL AGREEMENT NO. 01 O-N WITH THE STATE OF CALlFORNIA FOR THE GRAND A VE:NLJE RESURFACING PROJECT. Page 2 of2 CONCLUSION Approval ofthe resolution will authorize the City Manager to execute agreements with the State of California on behalf ofthe City. These agreements will allow the City to obtain reimbursement from the State of California Department of Transportation in the amount of $290,000 for the Grand Ave Resurfacing Proj ect. i1~~SJ APProvc~ L ~ g< arry M. Nagel City Manager By: Marty VanDuyn Assistant City Manager Attachment: Resolution Master Agreement (Administering Agency- State Agreement for Federal-Aid Projects) Program Supplemental No. OlO-N RRlrdJdc RESOLUTION NO. CITY COlJNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE MASTER AGREEMENT FOR FEDERAL-AID PROJECTS AND THE PROGRAM SUPPLEMENT AGREEMENT NO. OlO-N WITH THE ST ATE OF CALIFORNIA FOR THE GRAND A VE:NLJE RESURFACING PROJECT WHEREAS, staff recommends approval ofthe master agreement for federal-aid projects and the program supplement agreement no. OlO-N between the State of California Department of Transportation and the City of South San Francisco; and WHEREAS, the City of South San Francisco is eligible to receive Federal and/or State funding for certain Transportation projects, through the State of California Department of Transportation; and WHEREAS, master agreements, program supplemental agreements, fund exchange agreements and/or fund transfer agreements need to be executed with the State of California Department of Transportation before such funds can be claimed; and WHEREAS, the City of South San Francisco wishes to delegate authorization to execute these agreements and any amendments thereto to the City Manager to all master agreements, program supplement agreements, fund exchange agreements, fund transfer agreement and any amendments thereto with the State of California Department of Transportation. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Manager is hereby authorized to execute the Agreement on behalf ofthe City Council of the City of South San Francisco, subject to approval as to form by the City Attorney. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the 9th day of Mav, 2007 by the following vote: AYES: NOES: ABSTAIN : ABSENT: ATTEST: City Clerk MASTER AGREEMENT ADMINISTERING AGENCY-STATE AGREEMENT FOR FEDERAL-AID PROJECTS 04 City of South San Francisco District Administering Agency Agreement No. 04-5177R This AGREEMENT, is entered into effective this day of , 2007, by and between the City of South San Francisco, hereinafter referred to as IIADMINISTERING AGENCY,II and the State of California, acting by and through its Department of Transportation (Caltrans), hereinafter referred to as IISTATE, and together referred to as IIPARTIESII or individually as a "PARTY." RECITALS: 1. WHEREAS, the Congress of the United States has enacted the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 and subsequent Transportation Authorization Bills to fund transportation programs. These transportation programs include, but are not limited to, the Surface Transportation Program (STP), the Congestion Mitigation and Air Quality Improvement Program (CMAQ), the Transportation Enhancement Program (TE), Highway Safety Improvement Program (HSIP) and the Highway Bridge Program (HBP) (collectively the "PROGRAMSII); and 2. WHEREAS, the Legislature of the State of California has enacted legislation by which certain federal-aid funds may be made available for use on local transportation related projects of public entities qualified to act as recipients of these federal-aid funds in accordance with the intent of federal law; and 3. WHEREAS, before federal-funds will be made available for a specific program project, ADMINISTERING AGENCY and STATE are required to enter into an agreement to establish terms and conditions applicable to the ADMINISTERING AGENCY when receiving federal funds for a designated PROJECT facility and to the subsequent operation and maintenance of that completed facility. NOW, THEREFORE, the PARTIES agree as follows: Page 1 of 26 ARTICLE I - PROJECT ADMINISTRATION 1. This AGREEMENT shall have no force or effect with respect to any program project unless and until a project-specific Program Supplement to this AGREEMENT for federal-aid projects, hereinafter referred to as "PROGRAM SUPPLEMENT', has been fully executed by both STATE and ADMINISTERING AGENCY. 2. The term "PROJECT", as used herein, means that authorized transportation related project and related activities financed in part with federal-aid funds as more fully-described in an "Authorization/ Agreement Summary" or "Amendment/Modification Summary", herein referred to as "E-76" or "E-76 (AMOD)" document authorized by STATE or the Federal Highway Administration (FHWA). 3. The E-76/E-76(AMOD) shall designate the party responsible for implementing PROJECT, type of work and location of PROJECT. 4. The PROGRAM SUPPLEMENT sets out special covenants as a condition for the ADMINISTERING AGENCY to receive federal-aid funds from/through STATE for designated PROJECT. The PROGRAM SUPPLEMENT shall also show these Federal Funds that have been initially encumbered for PROJECT along with the matching funds to be provided by ADMINISTERING AGENCY and/or others. Execution of PROGRAM SUPPLEMENT by the PARTIES shall cause ADMINISTERING AGENCY to adopt all of the terms of this AGREEMENT as though fully set forth therein in the PROGRAM SUPPLEMENT. Unless otherwise expressly delegated in a resolution by the governing body of ADMINISTERING AGENCY, and with written concurrence by STATE, the PROGRAM SUPPLEMENT shall be approved and managed by the governing body of ADMINISTERING AGENCY. 5. ADMINISTERING AGENCY agrees to execute and return each project-specific PROGRAM SUPPLEMENT within ninety (90) days of receipt. The PARTIES agree that STATE may suspend future authorizations/obligations and invoice payments for anyon-going or future federal-aid project performed by ADMINISTERING AGENCY if any project-specific PROGRAM SUPPLEMENT is not returned within that ninety (90) day period unless otherwise agreed by STATE in writing. 6. ADMINISTERING AGENCY further agrees, as a condition to the release and payment of Federal Funds encumbered for the PROJECT described in each PROGRAM SUPPLEMENT, to comply with the terms and conditions of this AGREEMENT and all of the agreed-upon Special Covenants or Remarks incorporated within the PROGRAM SUPPLEMENT, and Cooperative/Contribution Agreement where appropriate, defining and identifying the nature of the specific PROJECT. 7. Federal, State and matching funds will not participate in PROJECT work performed in advance of the approval of the E-76 or E-76 (AMOD), unless otherwise stated in the executed project- specific PROGRAM SUPPLEMENT. ADMINISTERING AGENCY agrees that it will only proceed with the work authorized for that specific phase(s) on the project-specific E-76 or E-76 (AMOD). ADMINISTERING AGENCY further agrees to not proceed with future phases of PROJECT prior to receiving an E-76 (AMOD) from STATE for that phase(s) unless no Further Federal funds are Page 2 of 26 needed or for those tuture phase(s). 8. That PROJECT or portions thereof, must be included in a federally approved Federal Statewide Transportation Improvement Program (FSTIP) prior to ADMINISTERING AGENCY submitting the II Request for Authorization". 9. ADMINISTERING AGENCY shall conform to all State statutes, regulations and procedures (including those set forth in the Local Assistance Procedures Manual and the Local Assistance Program Guidelines, hereafter collectively referred to as "LOCAL ASSISTANCE PROCEDURES") relating to the federal-aid program, all Title 23 federal requirements, and all applicable federal laws, regulations, and policy and procedural or instructional memoranda, unless otherwise specifically waived as designated in the executed project-specific PROGRAM SUPPLEMENT. 10. If PROJECT is not on STATE-owned right of way, PROJECT shall be constructed in accordance with LOCAL ASSISTANCE PROCEDURES that describes minimum statewide design standards for local agency streets and roads. LOCAL ASSISTANCE PROCEDURES for projects off the National Highway System (NHS) allow STATE to accept either the ST A TE's minimum statewide design standards or the approved geometric design standards of ADMINISTERING AGENCY. Additionally, for projects off the NHS, STATE will accept ADMINISTERING AGENCY- approved standard specifications, standard plans, materials sampling and testing quality assurance programs that meet the conditions described in the then current LOCAL ASSISTANCE PROCEDURES. 11. If PROJECT involves work within or partially within STATE-owned right-of-way, that PROJECT shall also be subject to compliance with the policies, procedures and standards of the STATE Project Development Procedures Manual and Highway Design Manual and where appropriate, an executed cooperative agreement between STATE and ADMINISTERING AGENCY that outlines the PROJECT responsibilities and respective obligations of the PARTIES. ADMINISTERING AGENCY and its' contractors shall each obtain an encroachment permit through STATE prior to commencing any work within STATE rights of way or work which affects STATE facilities. 12. When PROJECT is not on the State Highway System but includes work to be performed by a railroad, the contract for such work shall be prepared by ADMINISTERING AGENCY or by STATE, as the PARTIES may hereafter agree. In either event, ADMINISTERING AGENCY shall enter into an agreement with the railroad providing for future maintenance of protective devices or other facilities installed under the contract. 13. If PROJECT is using STATE funds, the Department of General Services, Division of the State Architect, or its designee, shall review the contract PS&E for the construction of buildings, structures, sidewalks, curbs and related facilities for accessibility and usability. ADMINISTERING AGENCY shall not award a PROJECT construction contract for these types of improvements until the State Architect has issued written approval stating that the PROJECT plans and specifications comply with the provisions of sections 4450 and 4454 of the California Government Code, if applicable. Further requirements and guidance are provided in Title 24 of the California Code of Regulations. 14. ADMINISTERING AGENCY will advertise, award and administer PROJECT in accordance with the current LOCAL ASSISTANCE PROCEDURES unless otherwise stated in the executed Page 3 of 26 project-specific PROGRAM ~UPPU::MI::NI. 15. ADMINISTERING AGENCY shall provide or arrange for adequate supervision and inspection of each PROJECT. VI/hile consultants may perform supervision and inspection work for PROJECT with a fully qualified and licensed engineer, ADMINISTERING AGENCY shall provide a full-time employee to be in responsible charge of each PROJECT. 16. ADMINISTERING AGENCY shall submit PROJECT-specific contract award documents to STATE's District Local Assistance Engineer within sixty (60) days after contract award. A copy of the award documents shall also be included with the submittal of the first invoice for a construction contract by ADMINISTERING AGENCY to: Department of Transportation, Division of Accounting Local Programs Accounting Branch, MS #33, PO Box 942874, Sacramento, California 94274- 0001. 17. ADMINISTERING AGENCY shall submit the final report documents that collectively constitute a IIReport of Expenditures" within one hundred eighty (180) days of PROJECT completion. Failure by ADMINISTERING AGENCY to submit a "Report of Expenditures" within one hundred eighty( 180) days of project completion will result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance with the current LOCAL ASSISTANCE PROCEDURES. 18. ADMINISTERING AGENCY shall comply with: (i) section 504 of the Rehabilitation Act of 1973 which prohibits discrimination on the basis of disability in federally assisted programs; (ii) the Americans with Disabilities Act (ADA) of 1990 which prohibits discrimination on the basis of disability irrespective of funding; and (Hi) all applicable regulations and guidelines issued pursuant to both the Rehabilitation Act and the ADA. 19. The Congress of the United States, the Legislature of the State of California and the Governor of the State of California, each within their respective jurisdictions, have prescribed certain nondiscrimination requirements with respect to contract and other work financed with public funds. ADMINISTERING AGENCY agrees to comply with the requirements of the FAIR EMPLOYMENT PRACTICES ADDENDUM (Exhibit A attached hereto) and the NONDISCRIMINATION ASSURANCES (Exhibit B attached hereto). ADMINISTERING AGENCY further agrees that any agreement entered into by ADMINISTERING AGENCY with a third party for performance of PROJECT-related work shall incorporate Exhibits A and B (with third party's name replacing ADMINISTERING AGENCY) as essential parts of such agreement to be enforced by that third party as verified by ADMINISTERING AGENCY. Page 4 of 26 ARTICLE II - RIGHTS OF WAY 1. No contract for the construction of a federal-aid PROJECT shall be awarded until all necessary rights of way have been secured. Prior to the advertising for construction of PROJECT, ADMINISTERING AGENCY shall certify and, upon request, shall furnish STATE with evidence that all necessary rights of way are available for construction purposes or will be available by the time of award of the construction contract. 2. ADMINISTERING AGENCY agrees to indemnify and hold STATE harmless from any liability that may result in the event the right of way for a PROJECT, including, but not limited to, being clear as certified or if said right of way is found to contain hazardous materials requiring treatment or removal to remediate in accordance with Federal and State laws. The furnishing of right of way as provided for herein includes, in addition to all real property required for the PROJECT, title free and clear of obstructions and encumbrances affecting PROJECT and the payment, as required by applicable law, of relocation costs and damages to remainder real property not actually taken but injuriously affected by PROJECT. ADMINISTERING AGENCY shall pay, from its own non- matching funds, any costs which arise out of delays to the construction of PROJECT because utility facilities have not been timely removed or relocated, or because rights of way were not available to ADMINISTERING AGENCY for the orderly prosecution of PROJECT work. 3. Subject to STATE approval and such supervision as is required by LOCAL ASSISTANCE PROCEDURES over ADMINISTERING AGENCY's right of way acquisition procedures, ADMINISTERING AGENCY may claim reimbursement from Federal Funds for expenditures incurred in purchasing only the necessary rights of way needed for the PROJECT after crediting PROJECT with the fair market value of any excess property retained and not disposed of by ADMINISTERING AGENCY. 4. When real property rights are to be acquired by ADMINISTERING AGENCY for a PROJECT, said ADMINISTERING AGENCY must carry out that acquisition in compliance with all applicable State and Federal laws and regulations, in accordance with State procedures as published in State's current LOCAL ASSISTANCE PROCEDURES and STATE's Right-of-Way Manual, subject to STATE oversight to ensure that the completed work is acceptable under the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended. 5. Whether or not federal-aid is to be requested for right of way, should ADMINISTERING AGENCY, in acquiring right of way for PROJECT, displace an individual, family, business, farm operation, or non-profit organization, relocation payments and services will be provided as set forth in 49 CFR, Part 24. The public will be adequately informed of the relocation payments and services which will be available, and, to the greatest extent practicable, no person lawfully occupying real property shall be required to move from his/her dwelling or to move his/her business or farm operation without at least ninety (90) days written notice from ADMINISTERING AGENCY. ADMINISTERING AGENCY will provide STATE with specific assurances, on each portion of the PROJECT, that no person will be displaced until comparable decent, safe and sanitary replacement housing is available within a reasonable period of time prior to displacement, and that ADMINISTERING AGENCY's relocation program is realistic and adequate to provide Page 5 of 26 orderly, timely and ettlclent relocation ot r'HUJI=L.; 1- dlsplacea persons as provloeo In 4!:1 \.A-H, Part 24. 6. ADMINISTERING AGENCY shall, along with recording the deed or instrument evidencing title in the name of the ADMINISTERING AGENCY or their assignee, shail also record an Agreement Declaring Restrictive Covenants (ADRC) as a separate document incorporating the assurances included within Exhibits A and B and Appendices A, 8, C and 0 of the AGREEMENT, as appropriate. Page 6 of 26 ARTICLE 111- MAINTENANCE AND MANAGEMENT 1. ADMINISTERING AGENCY will maintain and operate the property acquired, developed, constructed, rehabilitated, or restored by PROJECT for its intended public use until such time as the parties might amend this AGREEMENT to otherwise provide. With the approval of STATE, ADMINISTERING AGENCY or its successors in interest in the PROJECT property may transfer this obligation and responsibility to maintain and operate PROJECT property for that intended public purpose to another public entity. 2. Upon ADMINISTERING AGENCY's acceptance of the completed federal-aid construction contract or upon contractor being relieved of the responsibility for maintaining and protecting PROJECT, ADMINISTERING AGENCY will be responsible for the maintenance, ownership, liability, and the expense thereof, for PROJECT in a manner satisfactory to the authorized representatives of STATE and FHWA and if PROJECT falls within the jurisdictional limits of another Agency or Agencies, it is the duty of ADMINISTERING AGENCY to facilitate a separate maintenance agreement(s) between itself and the other jurisdictional Agency or Agencies providing for the operation, maintenance, ownership and liability of PROJECT. Until those agreements are executed, ADMINISTERING AGENCY will be responsible for all PROJECT operations, maintenance, ownership and liability in a manner satisfactory to the authorized representatives of STATE and FHWA. If, within ninety (90) days after receipt of notice from STATE that a PROJECT, or any portion thereof, is not being properly operated and maintained and ADMINISTERING AGENCY has not satisfactorily remedied the conditions complained of, the approval of future federal-aid projects of ADMINISTERING AGENCY will be withheld until the PROJECT shall have been put in a condition of operation and maintenance satisfactory to STATE and FHWA. The provisions of this section shall not apply to a PROJECT that has been vacated through due process of law with STATE's concurrence. 3. PROJECT and its facilities shall be maintained by an adequate and well-trained staff of engineers and/or such other professionals and technicians as PROJECT reasonably requires. Said operations and maintenance staff may be employees of ADMINISTERING AGENCY, another unit of government, or a contractor under agreement with ADMINISTERING AGENCY. All maintenance will be performed at regular intervals or as required for efficient operation of the complete PROJECT improvements. Page 7 of 26 ARTICLE IV - FISCAL PROVISIONS 1. All contractual obligations of STATE are subject to the appropriation of resources by the Legislature and the allocation of resources by the California Transportation Commission (CTC). 2. STATE'S financial commitment of Federal Funds will occur only upon the execution of this AGREEMENT, the authorization of the project-specific E-76 or E-76 (AMOD), the execution of each project-specific PROGRAM SUPPLEMENT, and STATE's approved finance letter. 3. ADMINISTERING AGENCY may submit signed duplicate invoices in arrears for reimbursement of participating PROJECT costs on a monthly or quarterly progress basis once the project-specific PROGRAM SUPPLEMENT has been executed by STATE. 4. ADMINISTERING AGENCY agrees, as a minimum, to submit invoices at least once every six (6) months commencing after the funds are encumbered on either the project-specific PROGRAM SUPPLEMENT or through a project-specific finance letter approved by STATE. STATE reserves the right to suspend future authorizations/obligations, and invoice payments for anyon-going or future federal-aid project by ADMINISTERING AGENCY if PROJECT costs have not been invoiced by ADMINISTER!NG AGENCY for a six (6) month period 5. Invoices shall be submitted on ADMINISTERING AGENCY letterhead that includes the address of ADMINISTERING AGENCY and shall be formatted in accordance with LOCAL ASSISTANCE PROCEDURES. 6. Invoices must have at least one copy of supporting backup documentation for costs incurred and claimed for reimbursement by ADMINISTERING AGENCY. Acceptable backup documentation includes, but is not limited to, agency's progress payment to the contractors, copies of cancelled checks showing amounts made payable to vendors and contractors, and/or a computerized summary of PROJECT costs. 7. Payments to ADMINISTERING AGENCY can only be released by STATE as reimbursement of actual allowable PROJECT costs already incurred and paid for by ADMINISTERING AGENCY. 8. An Indirect Cost Rate Proposal and Central Service Cost Allocation Plan and related documentation are to be provided to STATE (Caltrans Audits & Investigations) annually for review and approval prior to ADMINISTERING AGENCY seeking reimbursement of indirect cost incurred within each fiscal year being claimed for federal reimbursement. 9. Once PROJECT has been awarded, STATE reserves the right to de-obligate any excess Federal Funds from the construction phase of PROJECT if the contract award amount is less than the obligated amount, as shown on the PROJECT E-76 or E-76 (AMOD). 1 O. STATE will withhold the greater of either two (2) percent of the total of all Federal Funds encumbered for each PROGRAM SUPPLEMENT or $40,000 until ADMINISTERING AGENCY submits the Final Report of Expenditures for each completed PROGRAM SUPPLEMENT PROJECT. Page 8 of 26 11. The estimated total cost of PROJECT, the amount of Federal Funds obligated, and the required matching funds may be adjusted by mutual consent of the PARTIES hereto with a finance letter, a detailed estimate, if required, and approved E-76 (AMOD). Federal-aid funding may be increased to cover PROJECT cost increases only if such funds are available and FHWA concurs with that increase. 12. When additional federal-aid funds are not available, ADMINISTERING AGENCY agrees that the payment of Federal Funds will be limited to the amounts authorized on the PROJECT specific E-76/ E-76 (AMOD) and agrees that any increases in PROJECT costs must be defrayed with ADMINISTERING AGENCY's own funds. 13. ADMINISTERING AGENCY shall use its own non-Federal Funds to finance the local share of eligible costs and all expenditures or contract items ruled ineligible for financing with Federal Funds. STATE shall make the determination of ADMINISTERING AGENCY's cost eligibility for federal fund financing of PROJECT costs. 14. ADMINISTERING AGENCY will reimburse STATE for STATE's share of costs for work performed by STATE at the request of ADMINISTERING AGENCY. STATE's costs shall include overhead assessments in accordance with section 8755.1 of the State Administrative Manual. 15. Federal and state funds allocated from the State Transportation Improvement Program (STIP) are subject to the timely use of funds provisions enacted by Senate Bill 45, approved in 1997, and subsequent STIP Guidelines and State procedures approved by the CTC and STATE. 16. Federal Funds encumbered for PROJECT are available for liquidation for a period of seven (7) years from the beginning of the State fiscal year the funds were appropriated in the State Budget. State funds encumbered for PROJECT are available for liquidation only for five (5) years from the beginning of the State fiscal year the funds were appropriated in the State Budget. Federal or state funds not liquidated within these periods will be reverted unless an Cooperative Work Agreement (CWA) is submitted by ADMINISTERING AGENCY and approved by the California Department of Finance (per Government Code section 16304). The exact date of fund reversion will be reflected in the STATE signed finance letter for PROJECT. 17. Payments to ADMINISTERING AGENCY for PROJECT-related travel and subsistence (per diem) expenses of ADMINISTERING AGENCY forces and its contractors and subcontractors claimed for reimbursement or as local match credit shall not exceed rates authorized to be paid rank and file STATE employees under current State Department of Personnel Administration (DPA) rules. If the rates invoiced by ADMINISTERING AGENCY are in excess of DPA rates, ADMINISTERING AGENCY is responsible for the cost difference, and any overpayments inadvertently paid by STATE shall be reimbursed to STATE by ADMINISTERING AGENCY on demand within thirty (30) days of such invoice. 18. ADMINISTERING AGENCY agrees to comply with Office of Management and Budget (OMB) Circular A-87, Cost Principles for State and Local Governments, and 49 CFR, Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. Page 9 of 26 19. ADMINISTERING AGENCY agrees, and will assure that its contractors and subcontractors will be obligated to agree that (a) Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual PROJECT cost items and (b) those parties shall comply with federal administrative procedures in accordance with 49 CFR, Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. Every sub-recipient receiving PROJECT funds as a contractor or sub-contractor under this AGREEMENT shall comply with Federal administrative procedures in accordance with 49 CFR, Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. 20. Any PROJECT costs for which ADMINISTERING AGENCY has received payment or credit that are determined by subsequent audit to be unallowable under OMS Circular A-87, 48 CFR, Chapter 1, Part 31 or 49 CFR, Part 18, are subject to repayment by ADMINISTERING AGENCY to STATE. Should ADMINISTERING AGENCY fail to reimburse moneys due STATE within thirty 30 days of demand, or within such other period as may be agreed in writing between the PARTIES hereto, STATE is authorized to intercept and withhold future payments due ADMINISTERING AGENCY from STATE or any third-party source, including but not limited to, the State Treasurer, the State Controller and the CTC. 21. Upon written demand by STATE, any overpayment to ADMINISTERING AGENCY of amounts invoiced to STATE shall be returned to STATE. 22. Should ADMINISTERING AGENCY fail to refund any moneys due STATE as provided hereunder or should ADMINISTERING AGENCY breach this AGREEMENT by failing to complete PROJECT without adequate justification and approval by STATE, then, within thirty 30 days of demand, or within such other period as may be agreed to in writing between the PARTIES, STATE, acting through the State Controller, the State Treasurer, or any other public entity or agency, may withhold or demand a transfer of an amount equal to the amount paid by or owed to STATE from future apportionments, or any other funds due ADMINISTERING AGENCY from the Highway Users Tax Fund or any other sources of funds, and/or may withhold approval of future ADMINISTERING AGENCY federal-aid projects. 23. Should ADMINISTERING AGENCY be declared to be in breach of this AGREEMENT or otherwise in default thereof by STATE, and if ADMINISTERING AGENCY is constituted as a joint powers authority, special district, or any other public entity not directly receiving funds through the State Controller, STATE is authorized to obtain reimbursement from whatever sources of funding are available, including the withholding or transfer of funds, pursuant to Article IV - 22, from those constituent entities comprising a joint powers authority or by bringing of an action against ADMINISTERING AGENCY or its constituent member entities, to recover all funds provided by STATE hereunder. 24. ADMINISTERING AGENCY acknowledges that the signatory party represents the ADMINISTERING AGENCY and further warrants that there is nothing within a Joint Powers Agreement, by which ADMINISTERING AGENCY was created, if any exists, that would restrict or otherwise limit STATE's ability to recover State funds improperly spent by ADMINISTERING AGENCY in contravention of the terms of this AGREEMENT. Page 10 of 26 ARTICLE V AUDITS, THIRD PARTY CONTRACTING, RECORDS RETENTION AND REPORTS 1. STATE reserves the right to conduct technical and financial audits of PROJECT work and records when determined to be necessary or appropriate and ADMINISTERING AGENCY agrees, and shall require its contractors and subcontractors to agree, to cooperate with STATE by making all appropriate and relevant PROJECT records available for audit and copying as required by paragraph three (3) of ARTICLE V. 2. ADMINISTERING AGENCY, its contractors and subcontractors shall establish and maintain an accounting system and records that properly accumulate and segregate incurred PROJECT costs and matching funds by line item for the PROJECT. The accounting system of ADMINISTERING AGENCY, its contractors and all subcontractors shall conform to Generally Accepted Accounting Principles, enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices sent to or paid by STATE. 3. For the purpose of determining compliance with Title 21, California Code of Regulations, Chapter 21, section 2500 et seq., when applicable, and other matters connected with the performance of ADMINISTERING AGENCY's contracts with third parties, ADMINISTERING AGENCY, ADMINISTERING AGENCY's contractors and subcontractors, and STATE shall each maintain and make available for inspection and audit all books, documents, papers, accounting records, and other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts. All of the above referenced parties shall make such AGREEMENT and PROGRAM SUPPLEMENT materials available at their respective offices at all reasonable times during the entire PROJECT period and for three (3) years from the date of final payment to ADMINISTERING AGENCY under any PROGRAM SUPPLEMENT. STATE, the California State Auditor, or any duly authorized representative of STATE or the United States, shall each have access to any books, records, and documents that are pertinent to a PROJECT for audits, examinations, excerpts, and transactions and ADMINISTERING AGENCY shall furnish copies thereof if requested. 4. ADMINISTERING AGENCY is required to have an audit in accordance with the Single Audit Act of OMB Circular A-133 if it receives a total of $500,000 or more in Federal Funds in a single fiscal year. The Federal Funds received under a PROGRAM SUPPLEMENT are a part of the Catalogue of Federal Domestic Assistance (CFDA) 20.205, Highway Planning and Research. 5. ADMINISTERING AGENCY agrees to include all PROGRAM SUPPLEMENTS adopting the terms of this AGREEMENT in the schedule of projects to be examined in ADMINISTERING AGENCY's annual audit and in the schedule of projects to be examined under its single audit prepared in accordance with OMB Circular A-133. 6. ADMINISTERING AGENCY shall not award a construction contract over $10,000 or other contracts over $25,000 (excluding professional service contracts of the type which are required to be procured in accordance with Government Code sections 4525 (d), (e) and (f) on the basis of a noncompetitive negotiation for work to be performed under this AGREEMENT without the prior written approval of STATE. Contracts awarded by ADMINISTERING AGENCY, if intended as local match credit, must meet the requirements set forth in this AGREEMENT regarding local match funds. Page 11 of 26 7. Any subcontract entered into by ADMINISTERI~JG AGENCY as a result of this AGREEMENT shall contain all of the provisions of ARTICLE IV, FISCAL PROVISiONS, and this ARTICLE V, AUDITS, THIRD-PARTY CONTRACTING RECORDS RETENTION AND REPORTS, and shall mandate that travel and per diem reimbursements and third-party contract reimbursements to subcontractors will be allowable as PROJECT costs only after those costs are incurred and paid for by the subcontractors. 8. To be eligible for local match credit, ADMINISTERING AGENCY must ensure that local match funds used for a PROJECT meet the fiscal provisions requirements outlined in ARTICLE IV in the same manner as required of all other PROJECT expenditures. 9. In addition to the above, the pre-award requirements of third-party contractor/consultants with ADMINISTERING AGENCY should be consistent with LOCAL ASSISTANCE PROCEDURES. Page 12 of 26 ARTICLE VI-FEDERAL LOBBYING ACT!VITIES CERTIFICATION 1. By execution of this AGREEMENT, ADMINISTERING AGENCY certifies, to the best of the signatory officer's knowledge and belief, that: A. No federal or state appropriated funds have been paid or will be paid, by or on behalf of ADMINISTERING AGENCY, to any person for influencing or attempting to influence an officer or employee of any STATE or federal agency, a member of the State Legislature or United States Congress, an officer or employee of the Legislature or Congress, or any employee of a Member of the Legislature or Congress in connection with the awarding of any STATE or federal contract, including this AGREEMENT, the making of any STATE or federal loan, the entering into of any cooperative contract, and the extension, continuation, renewal, amendment, or modification of any STATE or federal contract, grant, loan, or cooperative contract. B. If any funds other than federal appropriated funds have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any federal agency, a member of Congress, an officer or employee of Congress or an employee of a member of Congress in connection with this AGREEMENT, grant, local, or cooperative contract, ADMINISTERING AGENCY shall complete and submit Standard Form-LLL, "Disclosure Form to Rep Lobbying," in accordance with the form instructions. C. This certification is a material representation of fact upon which reliance was placed when this AGREEMENT and each PROGRAM SUPPLEMENT was or will be made or entered into. Submission of this certification is a prerequisite for making or entering into this AGREEMENT imposed by Section 1352, Title 31, United States Code. Any party who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. 2. ADMINISTERING AGENCY also agrees by signing this AGREEMENT that the language of this certification will be included in all lower tier sub-agreements which exceed $100,000 and that all such sub-recipients shall certify and disclose accordingly. Page 13 of 26 ARTICLE Vii - MISCELLANEOUS PROVISIONS 1. ADMINISTERING AGENCY agrees to use all State funds reimbursed hereunder only for transportation purposes that are in conformance with Articie XIX of the California State Constitution and the relevant Federal Regulations. 2. This AGREEMENT is subject to any additional restrictions, limitations, conditions, or any statute enacted by the State Legislature or adopted by the CTC that may affect the provisions, terms, or funding of this AGREEMENT in any manner. 3. ADMINISTERING AGENCY and the officers and employees of ADMINISTERING AGENCY, when engaged in the performance of this AGREEMENT, shall act in an independent capacity and not as officers, employees or agents of STATE or the federal government. 4. Each project-specific PROGRAM SUPPLEMENT shall separately establish the terms and funding limits for each described PROJECT funded under the AGREEMENT. No federal or state funds are obligated against this AGREEMENT. 5. ADMINISTERING AGENCY certifies that neither ADMINISTERING AGENCY nor its principals are suspended or debarred at the time of the execution of this AGREEMENT. ADMINISTERING AGENCY agrees that it will notify STATE immediately in the event a suspension or a debarment occurs after the execution of this AGREEMENT. 6. ADMINISTERING AGENCY warrants, by execution of this AGREEMENT, that no person or selling agency has been employed or retained to solicit or secure this AGREEMENT upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by ADMINISTERING AGENCY for the purpose of securing business. For breach or violation of this warranty, STATE has the right to annul this AGREEMENT without liability, pay only for the value of the work actually performed, or in ST A TE's discretion, to deduct from the price of consideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or contingent fee. 7. In accordance with Public Contract Code section 10296, ADMINISTERING AGENCY hereby certifies under penalty of perjury that no more than one final unappealable finding of contempt of court by a federal court has been issued against ADMINISTERING AGENCY within the immediate preceding two (2) year period because of ADMINISTERING AGENCY's failure to comply with an order of a federal court that orders ADMINISTERING AGENCY to comply with an order of the National Labor Relations Board. 8. ADMINISTERING AGENCY shall disclose any financial, business, or other relationship with STATE, FHWA or FTA that may have an impact upon the outcome of this AGREEMENT. ADMINISTERING AGENCY shall also list current contractors who may have a financial interest in the outcome of this AGREEMENT. 9. ADMINISTERING AGENCY hereby certifies that it does not now have nor shall it acquire any financial or business interest that would conflict with the performance of PROJECT under this Page 14 of 26 AGREEMENT. i O. ADMINISTERING AGENCY warrants that this AGREEMENT was not obtained or secured through rebates, kickbacks or other unlawful consideration either promised or paid to any STATE employee. For breach or violation of this warranty, STATE shall have the right, in its discretion, to terminate this AGREEMENT without liability, to pay only for the work actually performed, or to deduct from the PROGRAM SUPPLEMENT price or otherwise recover the full amount of such rebate, kickback, or other unlawful consideration. 11. Any dispute concerning a question of fact arising under this AGREEMENT that is not disposed of by agreement shall be decided by the STATE's Contract Officer who may consider any written or verbal evidence submitted by ADMINISTERING AGENCY. The decision of the Contract Officer, issued in writing, shall be conclusive and binding on the PARTIES on all questions of fact considered and determined by the Contract Officer. 12. Neither the pending of a dispute nor its consideration by the Contract Officer will excuse ADMINISTERING AGENCY from full and timely performance in accordance with the terms of this AGREEMENT. 13. Neither ADMINISTERING AGENCY nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by, under or in connection with any work, authority or jurisdiction arising under this AGREEMENT. It is understood and agreed that STATE shall fully defend, indemnify and save harmless the ADMINISTERING AGENCY and all of its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortuous, contractual, inverse condemnation and other theories or assertions of liability occurring by reason of anything done or omitted to be done by STATE under this AGREEMENT. 14. Neither STATE nor any officer or employee thereof shall be responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by ADMINISTERING AGENCY under, or in connection with, any work, authority or jurisdiction arising under this AGREEMENT. It is understood and agreed that ADMINISTERING AGENCY shall fully defend, indemnify and save harmless STATE and all of its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortuous, contractual, inverse condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to be done by ADMINISTERING AGENCY under this AGREEMENT. 15. STATE reserves the right to terminate funding for any PROJECT upon written notice to ADMINISTERING AGENCY in the event that ADMINISTERING AGENCY fails to proceed with PROJECT work in accordance with the project-specific PROGRAM SUPPLEMENT, the bonding requirements if applicable, or otherwise violates the conditions of this AGREEMENT and/or PROGRAM SUPPLEMENT, or the funding allocation such that substantial performance is significantly endangered. Page 15 of 26 16. No termination shall become effective if, within thirty (30) days after receipt of a Notice of Termination, ADMINISTERING AGENCY either cures the default involved or, if not reasonably susceptible of cure within said thirty (30) day period, ADMINiSTERING AGENCY proceeds thereafter to complete the cure in a manner and time line acceptable to STATE. Any such termination shall be accomplished by delivery to ADMINISTERING AGENCY of a Notice of Termination, which notice shall become effective not less than thirty (30) days after receipt, specifying the reason for the termination, the extent to which funding of work under this AGREEMENT is terminated and the date upon which such termination becomes effective, if beyond thirty (30) days after receipt. During the period before the effective termination date, ADMINISTERING AGENCY and STATE shall meet to attempt to resolve any dispute. In the event of such termination, STATE may proceed with the PROJECT work in a manner deemed proper by STATE. If STATE terminates funding for PROJECT with ADMINISTERING AGENCY, STATE shall pay ADMINISTERING AGENCY the sum due ADMINISTERING AGENCY under the PROGRAM SUPPLEMENT and/or STATE approved finance letter prior to termination, provided, however, ADMINISTERING AGENCY is not in default of the terms and conditions of this AGREEMENT or the project-specific PROGRAM SUPPLEMENT and that the cost of PROJECT completion to STATE shall first be deducted from any sum due ADMINISTERING AGENCY. 17. In case of inconsistency or conflicts with the terms of this AGREEMENT and that of a project- specific PROGRAM SUPPLEMENT, the terms stated in that PROGRAM SUPPLEMENT shall prevail over those in this AGREEMENT. 18. Without the written consent of STATE, this AGREEMENT is not assignable by .ADMINISTERING AGENCY either in whole or in part. 19. No alteration or variation of the terms of this AGREEMENT shall be valid unless made in writing and signed by the PARTIES, and no oral understanding or agreement not incorporated herein shall be binding on any of the PARTIES. IN WITNESS WHEREOF, the PARTIES have executed this AGREEMENT by their duly authorized officers. STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION City of South San Francisco By By Chief, Office of Project Implementation Division of Local Assistance City of South San Francisco Representative Name & Title (Authorized Governing Body Representative) Date Date Page 16 of 26 EXHIBIT A FAIR EMPLOYMENT PRACTICES ADDENDUM 1. In the performance of this Agreement, ADMINISTERING AGENCY will not discriminate against any employee for employment because of race, color, sex, sexual orientation, religion, ancestry or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave, pregnancy leave, or disability leave. ADMINISTERING AGENCY will take affirmative action to ensure that employees are treated during employment without regard to their race, sex, sexual orientation, color, religion, ancestry, or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave, pregnancy leave, or disability leave. Such action shall include, but not be limited to, the following: employment; upgrading; demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. ADMINISTERING AGENCY shall post in conspicuous places, available to employees for employment, notices to be provided by STATE setting forth the provisions of this Fair Employment section. 2. ADMINISTERING AGENCY, its contractor(s) and all subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 1290-0 et seq.), and the applicable regulations promulgated thereunder (California code of Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900(a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this AGREEMENT by reference and made a part hereof as if set forth in full. Each of the ADMINISTERING AGENCY'S contractors and all subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreements, as appropriate. 3. ADMINISTERING AGENCY shall include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts to perform work under this AGREEMENT. 4. ADMINISTERING AGENCY will permit access to the records of employment, employment advertisements, application forms, and other pertinent data and records by STATE, the State Fair Employment and Housing Commission, or any other agency of the State of California designated by STATE, for the purposes of investigation to ascertain compliance with the Fair Employment section of this Agreement. 5. Remedies for Willful Violation: (a) STATE may determine a willful violation of the Fair Employment provision to have occurred upon receipt of a final judgment to that effect from a court in an action to which ADMINISTERING AGENCY was a party, or upon receipt of a written notice from the Fair Employment and Housing Commission that it has investigated and determined that ADMINISTERING AGENCY has violated the Fair Employment Practices Act and had issued an order under Labor Code Section 1426 which has become final or has obtained an injunction under Labor Code Section 1429. Page 17 of 26 (b) For willful violation of this Fair Employment Provision, STATE shall have the right to terminate this Agreement either in whole or in part, and any loss or damage sustained by STATE in securing the goods or services thereunder shall be borne and paid for by ADMINISTERING AGENCY and by the surety under the performance bond, if any, and STATE may deduct from any moneys due or thereafter may become due to ADMINISTERING AGENCY, the difference between the price named in the Agreement and the actual cost thereof to STATE to cure ADMINISTERING AGENCY's breach of this Agreement. Page 18 of 26 EXHIBIT B NONDISCRIMINATION ASSURANCES ADMINISTERING AGENCY HEREBY AGREES THAT, as a condition to receiving any federal financial assistance from the STATE, acting for the U.S. Department of Transportation, it will comply with Title VI of the Civil Rights Act of 1964, 78 Stat. 252, 42 U.S.C. 2000d-42 U.S.C. 2000d-4 (hereinafter referred to as the ACT), and all requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, "Nondiscrimination in Federally-Assisted Programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964" (hereinafter referred to as the REGULATIONS), the Federal-aid Highway Act of 1973, and other pertinent directives, to the end that in accordance with the ACT, REGULATIONS, and other pertinent directives, no person in the United States shall, on the grounds of race, color, sex, national origin, religion, age or disability, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity for which ADMINISTERING AGENCY receives federal financial assistance from the Federal Department of Transportation. ADMINISTERING AGENCY HEREBY GIVES ASSURANCE THAT ADMINISTERING AGENCY will promptly take any measures necessary to effectuate this agreement. This assurance is required by subsection 21.7(a) (1) of the REGULATIONS. More specifically, and without limiting the above general assurance, ADMINISTERING AGENCY hereby gives the following specific assurances with respect to its federal-aid Program: 1. That ADMINISTERING AGENCY agrees that each "program" and each "facility" as defined in subsections 21.23 (e) and 21.23 (b) of the REGULATIONS, will be (with regard to a "programll) conducted, or will be (with regard to a "facility") operated in compliance with all requirements imposed by, or pursuant to, the REGULATIONS. 2. That ADMINISTERING AGENCY shall insert the following notification in all solicitations for bids for work or material subject to the REGULATIONS made in connection with the federal-aid Program and, in adapted form, in all proposals for negotiated agreements: ADMINISTERING AGENCY hereby notifies all bidders that it will affirmatively insure that in any agreement entered into pursuant to this advertisement, minority business enterprises will be afforded full opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, sex, national origin, religion, age, or disability in consideration for an award. 3. That ADMINISTERING AGENCY shall insert the clauses of Appendix A of this assurance in every agreement subject to the ACT and the REGULATIONS. 4. That the clauses of Appendix B of this Assurance shall be included as a covenant running with the land, in any deed effecting a transfer of real property, structures, or improvements thereon, or interest therein. Page 19 of 26 5. That where ADMINISTERING AGENCY receives federal financial assistance to construct a facility, or part of a facility, the Assurance shall extend to the entire facility and facilities operated in connection therewith. 6. That where ADMINISTERING AGENCY receives federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, the Assurance shall extend to rights to space on, over] or under such property. 7. That ADMINISTERING AGENCY shall include the appropriate clauses set forth in Appendix C and D of this Assurance, as a covenant running with the land, in any future deeds, leases, permits, licenses, and similar agreements entered into by the ADMINISTERING AGENCY with other parties: Appendix C; (a) for the subsequent transfer of real property acquired or improved under the federal-aid Program; and Appendix D; (b) for the construction or use of or access to space on, over, or under real property acquired, or improved under the federal-aid Program. 8. That this assurance obligates ADMINISTERING AGENCY for the period during which federal financial assistance is extended to the program, except where the federal financial assistance is to provide, or is in the form of, personal property or real property or interest therein, or structures, or improvements thereon, in which case the assurance obligates ADMINISTERING AGENCY or any transferee for the longer of the following periods: (a) the period during which the property is used for a purpose for which the federal financial assistance is extended, or for another purpose involving the provision of similar services or benefits; or (b) the period during which ADMINISTERING AGENCY retains ownership or possession of the property . 9. That ADMINISTERING AGENCY shall provide for such methods of administration for the program as are found by the U.S. Secretary of Transportation, or the official to whom he delegates specific authority, to give reasonable guarantee that ADMINISTERING AGENCY, other recipients, sub-grantees, applicants, sub-applicants, transferees, successors in interest, and other participants of federal financial assistance under such program will comply with all requirements imposed by, or pursuant to, the ACT, the REGULATIONS, this Assurance and the Agreement. 10. That ADMINISTERING AGENCY agrees that the United States and the State of California have a right to seek judicial enforcement with regard to any matter arising under the ACT, the REGULATIONS, and this Assurance. Page 20 of 26 11. ADMINISTERING AGENCY shall not discriminate on the basis of race, religion, age, disability, color, national origin or sex in the award and performance of any STATE assisted contract or in the administration on its DBE Program or the requirements of 49 CFR Part 26. ADMINISTERING AGENCY shall take all necessary and reasonable steps under 49 CFR Part 26 to ensure non discrimination in the award and administration of STATE assisted contracts. ADMINISTERING AGENCY'S DBE Race-Neutral Implementation Agreement is incorporated by reference in this AGREEMENT. Implementation of this program is a legal obligation and failure to carry out its terms shall be treated as a violation of this agreement. Upon notification to the recipient of its failure to carry out its approved DBE Race-Neutral Implementation Agreement, STATE may impose sanctions as provided for under 49 CFR Part 26 and may, in appropriate cases, refer the matter for enforcement under 18 USC 1001 and/or the Program Fraud Civil Remedies Act of 1985 (31 USC 3801 es seq.) THESE ASSURANCES are given in consideration of and for the purpose of obtaining any and all federal grants, loans, agreements, property, discounts or other federal financial assistance extended after the date hereof to ADMINISTERING AGENCY by STATE, acting for the U.S. Department of Transportation, and is binding on ADMINISTERING AGENCY, other recipients, subgrantees, applicants, sub-applicants, transferees, successors in interest and other participants in the federal-aid Highway Program. Page 21 of 26 APPEND!X A TO EXHIBIT B During the performance of this Agreement, ADMINISTERING AGENCY, for itself, its assignees and successors in interest (hereinafter collectively referred to as ADMINISTERING AGENCY) agrees as follows: (1) Compliance with Regulations: ADMINISTERING AGENCY shall comply with the regulations relative to nondiscrimination in federally assisted programs of the Department of Transportation, Title 49, Code of Federal Regulations, Part 21, as they may be amended from time to time, (hereinafter referred to as the REGULATIONS), which are herein incorporated by reference and made a part of this agreement. (2) Nondiscrimination: ADMINISTERING AGENCY, with regard to the work performed by it during the AGREEMENT, shall not discriminate on the grounds of race, color, sex, national origin, religion, age, or disability in the selection and retention of subwapplicants, including procurements of materials and leases of equipment. ADMINISTERING AGENCY shall not participate either directly or indirectly in the discrimination prohibited by Section 21.5 of the REGULATIONS, including employment practices when the agreement covers a program set forth in Appendix B of the REGULAT!ONS. (3) Solicitations for Sub-agreements, Including Procurements of Materials and Equipment: In all solicitations either by competitive bidding or negotiation made by ADMINISTERING AGENCY for work to be performed under a Sub-agreement, including procurements of materials or leases of equipment, each potential sub-applicant or supplier shall be notified by ADMINISTERING AGENCY of the ADMINISTERING AGENCY's obligations under this Agreement and the REGULATIONS relative to nondiscrimination on the grounds of race, color, or national origin. (4) Information and Reports: ADMINISTERING AGENCY shall provide all information and reports required by the REGULATIONS, or directives issued pursuant thereto, and shall permit access to ADMINISTERING AGENCY's books, records, accounts, other sources of information, and its facilities as may be determined by STATE or FHWA to be pertinent to ascertain compliance with such REGULATIONS or directives. Where any information required of ADMINISTERING AGENCY is in the exclusive possession of another who fails or refuses to furnish this information, ADMINISTERING AGENCY shall so certify to STATE or the FHWA as appropriate, and shall set forth what efforts ADMINISTERING AGENCY has made to obtain the information. (5) Sanctions for Noncompliance: In the event of ADMINISTERING AGENCY's noncompliance with the nondiscrimination provisions of this agreement, STATE shall impose such agreement sanctions as it or the FHWA may determine to be appropriate, including, but not limited to: (a) withholding of payments to ADMINISTERING AGENCY under the Agreement within a reasonable period of time, not to exceed 90 days; and/or (b) cancellation, termination or suspension of the Agreement, in whole or in part. Page 22 of 26 (6) Incorporation of Provisions: ADMINISTERING AGENCY shall include the provisions of paragraphs (1) through (6) in every sub-agreement, including procurements of materials and leases of equipment, unless exempt by the REGULATIONS, or directives issued pursuant thereto, ADMINISTERING AGENCY shall take such action with respect to any sub-agreement or procurement as STATE or FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance, provided, however, that, in the event ADMINISTERING AGENCY becomes involved in, or is threatened with, litigation with a sub-applicant or supplier as a result of such direction, ADMINISTERING AGENCY may request STATE enter into such litigation to protect the interests of STATE, and, in addition, ADMINISTERING AGENCY may request the United States to enter into such litigation to protect the interests of the United States. Page 23 of 26 APPENDIX B TO EXHIBIT B The following clauses shall be included in any and all deeds effecting or recording the transfer of PROJECT real property, structures or improvements thereon, or interest therein from the United States. (GRANTING CLAUSE) NOW, THEREFORE, the U.S. Department of Transportation, as authorized by law, and upon the condition that ADMINISTERING AGENCY will accept title to the lands and maintain the project constructed thereon, in accordance with Title 23, United States Code, the Regulations for the Administration of federal-aid for Highways and the policies and procedures prescribed by the Federal Highway Administration of the Department of Transportation and, also in accordance with and in compliance with the Regulations pertaining to and effectuating the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252; 42 U.S.C. 2000d to 2000d-4), does hereby remise, release, quitclaim and convey unto the ADMINISTERING AGENCY all the right, title, and interest of the U.S. Department of Transportation in, and to, said lands described in Exhibit "N' attached hereto and made a part hereof. (HABENDUM CLAUSE) TO HAVE AND TO HOLD said lands and interests therein unto ADMINISTERING AGENCY and its successors forever, subject, however, to the covenant, conditions, restrictions and reservations herein contained as follows, which will remain in effect for the period during which the real property or structures are used for a purpose for which federal financial assistance is extended or for another purpose involving the provision of similar services or benefits and shall be binding on ADMINISTERING AGENCY, its successors and assigns. ADMINISTERING AGENCY, in consideration of the conveyance of said lands and interests in lands, does hereby covenant and agree as a covenant running with the land for itself, its successors and assigns, (1) that no person shall on the grounds of race, color, sex, national origin, religion, age or disability, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination with regard to any facility located wholly or in part on, over, or under such lands hereby conveyed (;) (and) * (2) that ADMINISTERING AGENCY shall use the lands and interests in lands so conveyed, in compliance with all requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non-discrimination in federally-assisted programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended (;) and (3) that in the event of breach of any of the above-mentioned nondiscrimination conditions, the U.S. Department of Transportation shall have a right to re-enter said lands and faCilities on said land, and the above-described land and facilities shall thereon revert to and vest in and become the absolute property of the U.S. Department of Transportation and its assigns as such interest existed prior to this deed. * * Reverter clause and related language to be used only when it is determined that such a clause is Page 24 of 26 necessary In oraer 10 erreCtUa18 me purposes or Ime v I or me l"IVII tilgms AGI or I Cl04. APPENDIX C TO EXHIBIT B The following clauses shall be included in any and all deeds, licenses, leases, permits, or similar instruments entered into by ADMINISTERiNG AGENCY, pursuant to the provisions of Assurance 7(a) of Exhibit B. The grantee (licensee, lessee, permittee, etc., as appropriate) for himself, his heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree (in the case of deeds and leases add lias covenant running with the land") that in the event facilities are constructed, maintained, or otherwise operated on the said property described in this (deed, license, lease, permit, etc.) for a purpose for which a U.S. Department of Transportation program or activity is extended or for another purpose involving the provision of similar services or benefits, the (grantee, licensee, lessee, permittee, etc.), shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, U.S. Department of Transportation, Subtitle A, Office of Secretary, Part 21, Nondiscrimination in federally-assisted programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. (Include in licenses, leases, permits, etc.)* That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to terminate the (license, lease, permit etc.) and to re-enter and repossess said land and the facilities thereon, and hold the same as if said (license, lease, permit, etc.) had never been made or issued. (Include in deeds)* That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to re-enter said land and facilities thereon, and the above- described lands and facilities shall thereupon revert to and vest in and become the absolute property of ADMINISTERING AGENCY and its assigns. * Reverter clause and related language to be used only when it is determined that such a clause is necessary in order to effectuate the purposes of Title VI of the Civil Rights Act of 1964. Page 25 of 26 APPENDIX D TO EXHIBIT B The following shall be included in all deeds, licenses, ieases, permits, or similar agreements entered into by the ADMINISTERING AGENCY, pursuant to the provisions of Assurance 7 (b) of Exhibit B. The grantee (licensee, lessee, permittee, etc., as appropriate) for himself, his personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree (in the case of deeds, and leases add lias a covenant running with the land") that: (1) no person on the ground of race, color, sex, national origin, religion, age or disability, shall be excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in the use of said facilities; (2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the ground of race, color, sex, national origin, religion, age or disability shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; and (3) that the (grantee, licensee, lessee, permittee, etc.,) shall use the premises in compliance with the Regulations. (Include in licenses, leases, permits, etc.)* That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to terminate the (license, lease, permit, etc.) and to re-enter and repossess said land and the facilities thereon, and hold the same as if said (license, lease, permit, etc.) had never been made or issued. (Include in deeds)* That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to re-enter said land and facilities thereon, and the above. described lands and facilities shall thereupon revert to and vest in and become the absolute property of ADMINISTERING AGENCY, and its assigns. * Reverter clause and related language to be used only when it is determined that such a clause is necessary in order to effectuate the purposes of Title VI of the Civil Rights Act of 1964. Page 26 of 26 ROGRAM SUPPLEMENT NO. NOlO to DMINISTERING AGENCY-STATE AGREEMENT ~R FEDERAL-AID PROJECTS NO. 04-5l77R Date: March 29,2007 Location: 04-SM-0-SSF Proj ect Nu..-nher :STPL-5177(019) E.A. Nu:ml:>er:04-924488 lis Program Supplement hereby incorporates the Administering Agency-State Agreement for Federal Aid which was entered into :tween the Administering Agency and the State on / / and is subject to all the terms and conditions thereof. This Program Ipplement is executed in accordance with Article I of the aforementioned Master Agreement under authority of Resolution No. , approved by the Administering Agency on (See copy attached). le Administering Agency further stipulates that as a condition to the payment by State of any funds derived from sources noted :low obligated to this project, the Administering Agency accepts and will comply with the Special covenants or Remarks setforth I the following pages. . , . . I.; ~... ROJECT LOCATION: rand Ave between Chestnut Ave and Spruce Ave YPE OF WORK: Road Rehabilitation n ' LENGTH: o (MILES) ~ !:stimated Cost Federal Funds Matching Funds L230 $290,000.00 LOCAL OTHER $654,520.00 $364,520.00 $0.00 $0.00 ITY OF SOUTH SAN FRANCISCO STATE OF CALIFORNIA Department of. Transportation By By Chief, Office of Project Implementation Division of Local Assistance Date I.ttest Date Title : hereby certify upon my personal knowledge that budgeted funds are available for this encumbrance: Date 4.2.ol $290,000.00 :hapter Statutes Program Fund Source AMOUNT n 2006 2660-102-890 2006-2007 20.30.010.810 C 262040 892-F 290,000.00 Program Supplement 04-5177R-NOI0- ISTEA Page 1 of 3 -SM-O-SSF V:JIL:::IIL.VVI 'PL-5177(019) SPECIAL COVENANTS OR REP~KS 1. ADMINISTERING AGENCY agrees that it will only proceed with work authorized for specific phase(s) with an "Authorization to Proceed" and will not proceed tITith future phase(s) of this project prior to receiving an "Authorization to Proceed II from the STATE for that phase(s) unless no further State or Federal funds are needed for those future phase(s). . . _ _,. r- 2. ADystate a~~ ~ede~al funds that may have been encumbered for this project 'are only available for disbursement for a period of five (5) years and seven (7) years, respectively, from the start of the fiscal year(s) that those funds were appropriated within the State Budget Act. All project funds not liquidated within these periods will :t::evert.. unless an executed Cooperative Work Agreement,extending1these dates is requested and is approved by the Cali~6rnia Department of Finance per Government Code Section 16304.. The exact date of each fund reversion will be reflected in the approved finance letter(s) issued for this project. Notwithstanding the unliquidated sums of project specific State and Federal funding remaining and available to fund project work, any invoice for reimbursement that is not submitted to the Department on or before 60 days after that applicable fixed fund revers~on date will not be paid from that fiscal year's encumbered funds because all of these unexpended funds will be irrevocably reverted by the Department's Division of Accounting on that date. Pursuant to a directive from the State Controller's Office and the Department of Finance, the last date to submit invoices for reimbursed work in each fiscal year is May 15th in order for payment to be made out of those then current appropriations. Project work performed and invoiced after May 15th will be reimbursed,Qnly out of available funding that might be encumbered ~ I ". ... . in the sub~equent fiscal year, and then only when those funds are actually allocated and encumbered as authorized by the California Transportation Commission and the Department's Accounting Office. 3. The ADMINISTERING AGENCY will advertise, award and administer this project in accordance with the current published Local Assistance Procedures Manual. 4. Award information shall be submitted by the ADMINISTERING AGENCY Program Supplament04-5177R-N010- ISTEA Page 2 of 3 -SM-O-SSF V:JIL";/IL.VVI 'PL-5177(019) SPECIAL COVENANTS OR REr~s to the District Local Assistance Engineer within 60 days after the project contract award. A copy of the award package shall also be included with the submittal of the ADMINISTERING AGENCY's first invoice for the construction contract to: Department of Transportation P.i v,i;s'ion of, Accounting Local Programs' Accounting Branch, MS #33 P. O. Box 942874 Sacramento, CA 94274-0001. Failure to do so will cause a delay in the State processing invoices fo~ the corlstrubtion phase. Please refer to Section ., 15.7 "AWCl:J:d Package" of the Local Assistance Procedures Manual. 5. ADMINISTERING AGENCY agrees, as a minimum, to submit invoices, at least once every six months commencing after the funds are encumbered for each phase by the execution of this Project Program Supplement Agreement, or by STATE's approval of an applicable Finance Letter. STATE reserves the right to suspend future authorizations/obligations, and invoice payments for any on-going or future federal-aid project by ADMINISTERING AGENCY if PROJEC~ costs have not been invoiced by ADMINISTERING AGENCY for a six-month period. If no costs have been invoiced fora six-month period, ADMINISTERING AGENCY agrees to submit for each phase a written explanation of the absence of PROJECT activity along with target billing date and target billing amount. ADMINISTERING AGENCY agrees to submit the final report documents that collectively constitute a "Report of Expenditures" within one hundr7?eight~. (180) da~sof PROJECT completion. Failure of ADMINISTER:ING AGENCY to submit a "Final Report of Expenditures" within 180 days of PROJECT completion will result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance with the current Local Assistance Procedures Manual. Program Supplement04-5177R-N010- ISTEA Page 3 of 3 ~ {g (~I c;; t:i t'") v 0 ~l~~'~ Staff Report AGENDA ITEM # 6 I !I I I DATE: TO: FROM: SUBJECT: May 9,2007 Honorable Mayor and City Council Marty Van Duyn, Assistant City Manager ADOPT A RESOLUTION AWARDING THE CONSTRUCTION CONTRACT FOR THE INDUSTRIAL SEWAGE PUMPING STATION NO. 4 REHABILITATION PROJECT #0352, FILE # SS-05-1, BID NO. 2348 TO MOUNTAIN CASCADE, INC. RECOMMENDATION It is recommended that the City Council adopt a resolution awarding the construction contract for the Industrial Sewage Pumping Station No.4 Rehabilitation Project #0352, File #SS-05-1, Bid No. 2348 to Mountain Cascade, Inc. of Livermore, CA in the amount of $3,959,000. BACKGROUND/DISCUSSION This project is located at 249 Harbor Way and will expand the existing Industrial Sewage Pumping Station No.4. The expansion of this pump station would accommodate future increased flow for full build-out in the East of 1 01 including the expected flow from the Genentech Master Plan. The project includes the construction of a new larger building, installation of new pumps, removal of contaminated soil, installation of new electrical equipment/equipment pads and a new emergency generator. Since this project is essential to accommodate the development activity in the East of 101, the schedule was accelerated. Even though the cost for the design of this proj ect was fully funded by the East of 101 Sewer Impact Fee fund, there were not adequate accumulated funds to cover the cost of construction. Therefore, the Redevelopment Agency has agreed to advance the necessary funds to construct this project and will be paid back in the future with collected sewer impact fees as development occurs. On March 20, 2007 and on March 27, 2007, staff advertised the notice inviting sealed bids for this project. Staff opened bids on April 24, 2007 and six (6) bids were received. The lowest bidder is Mountain Cascade, Inc. of Livermore, CA. Below is the summary of the bids: Staff Report Subject: ADOPT A RESOLUTION A W ARDI}JG THE CONSTRUCTION CONTRACT FOR THE INDUSTRIAL SEW AGE PUMPING STATION NO.4 REHABILITATION PROJECT #0352, FILE # SS-05-1, BID NO. 2348 TO MOUNTAIN CASCADE, II-..JC. Page 2 of2 Engineer's Estimate: Bids: Mountain Cascade, Inc. of Livermore Anderson Pacific Eng. Const. Inc. of Santa Clara Proven Management Inc. of San Francisco JMB Construction of South San Francisco NTK Construction, Inc. of San Francisco McGuire & Hester of Oakland $3,591,700.00 $3,959,000.00 $4,297,500.00 $4,858,192.00 $4,889,000.00 $5,203,100.00 $5,385,100.00 Staff has verified the low bidder's current contractor's license with the California State Licensing Board to be of good standing, and has confirmed their references for previous construction experience similar to the subj ect proj ect. Mountain Cascade has also completed several pump station projects for the Santa Clara Valley Water District. FUNDING Shown below is the cost breakdown for the project budget: Mountain Cascasde, Inc. Bid Amount Wilsey Ham (Design Engineers) Construction Support Fee Contingency (10%) Construction Administration Total Project Budget $3,959,000.00 $ 200,000.00 $ 400,000.00 $ 80,000.00 $4,639,000.00 The project is included in the City of South San Francisco's 2006-2007 CIP. Sufficient Redevelopment Bond funds were budgeted to cover the proj ect costs as a loan, to be paid back by the East of 101 Sewer Impact Fee fund. CONCLUSION Approval ofthis project will allow the construction of an upgraded industrial sewage pumping station which would accommodate the future increased flows in the east of 101 area. Staff Report Subject: ADOPT A RESOLUTION AWARDING THE CONSTRUCTION CONTRACT FOR THE INDUSTRLL\L SEWAGE PUMPING STATION NO.4 REHABILITATION PROJECT #0352, FILE # SS-05-1, BID NO. 2348 TO MOUNTAIN CASCADE, INC. Page 3 of3 By: i011UJffi~) Marty Van Duyn Assistant City Manager APProve~-I ' C-p M. Nagel City Manager RR/sb/dc Attachment: Resolution Bid Summary RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AWARDING A CONSTRUCTION CONTRACT FOR INDUSTRIAL SEWAGE PUMPING ST A TION NO. 4 REHABILITATION, PROJECT #0352, FILE #SS-07-03, BID NO. 2348 TO MOUNTAIN CASCADE, INC. OF LNERMORE, CA, IN THE AMOUNT OF $3,959,000.00 WHEREAS, on April 13, 2007 and April 20, 2007, staff advertised the notice to invite sealed bids for the project; and WHEREAS, on April 25, 2007, staff received and opened six bids, and the lowest bidder was Mountain Cascade, Inc., in the amount of$3,959,000.00; and WHEREAS, staff recommends that the City Council award the construction contract to Mountain Cascade, Inc., in an amount not to exceed $3,959,000.00; and WHEREAS, this project is included in the City of South San Francisco's 2006-2007 Capital Improvement Project (CIP). Sufficient Redevelopment Bond funds were budgeted to cover the proj ect cost; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the Council hereby awards the construction contract for the Industrial Sewage Pumping Station No.4 Rehabilitation Project #0352, File #SS-07-3, Bid No 2348 to Mountain Cascade, Inc., of Livermore, CA in the amount not to exceed $3,959,000.00. 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I:<l c: c " :;' ~. 0:: c: ..., [ O;l c: ;; 3 ;; 3 t::I ~ ~ 5' " c ~ ~~ ~ S' ~~ Q. l'1 " "" 5' ~ ~- ~ 3' ~ " :z ..., :>:: (j o ~ c :l. ~. .... ~ mo z- oJ :;:J zo m'Tl m(f) ~O Zc Gl--l OI s;~ (f)z O'Tl Z;U )> Z o (fi o o z o c Ul ..., ;0 )> r Ul m ::E )> Gl m "'0 C :s: "'0 4'z ~G'l 3' ~ iil ~ -< 6 ;oz ~ Z c 0 it::.. ;0 m :I: )> m r= =i )> ..., 6 z "'0 ;0 o '- m o ..., a: 2l c ~' Ro f OJ o o )>"J -om ;JJZ rz tvGl ... - 0 tv)> 0--1 Sf1} - ~ ~ - ~~ o ("l HIt;; Ii ~ g ~l~r.~'~ Staff Report AGENDA ITEM # 7 DATE: TO: FROM: SUBJECT: May 9, 2007 City Council Marty Van Duyn, Assistant City Manager RESOLUTION AWARDING CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR THE INDUSTRIAL SEWAGE PUMPING STATION NO.4 REHABILITATION PROJECT RECOMMENDATION It is recommended the City Council adopt a resolution awarding the contract for construction management and inspection services to Mendoza and Associates for the Industrial Sewage Pumping Station No.4, in an amount not to exceed $400,000 and appropriate $480,000 from the East of 101 Sewer Impact Fee fund to the capital budget for these services. BACKGROUND/DISCUSSION On May 9,2007, the Redevelopment Agency Board is scheduled to award the construction contract for the Industrial Sewage Pumping Station No.4 Rehabilitation project to Mountain Cascade of .' South San Francisco. Included in the project budget is the construction management and inspection services fee. Through an RFP process, staff had previously selected three qualified construction management firms to provide construction management and inspection services necessary for the Wet Weather Program. The three companies selected were; Harris and Associates of Pleasanton, CA, CSG Consultants of San Mateo, CA and Mendoza and Associates of San Francisco, CA. Mendoza and Associates was selected for providing support for Pump Station No.4 due to their expertise in the construction and rehabilitation of sewage pump stations. Mendoza and Associates has performed the constructability review and is familiar with the complexity of this project. FUNDING The budget for this project has been allocated a "not to exceed" amount of$400,000 for construction management and inspection services. In order to fund this project, staff requests to appropriate $480,000 (which includes 20% contingency) from the East of 101 Sewer Impact Fee fund to the capital improvement budget for these services. Staff Report Subject: RESOLUTION A WARDING CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR THE INDUSTRIAL SEWAGE PUMPING STATION NO.4 REHABILITATION PROJECT Page 2 of2 CONCLUSION Approval of this construction management and inspection services contract with Mendoza and Associates will ensure the construction work is performed according to the approved plans/specifications and Cal OSHA requirements. !11 /l By: !V(O'vUL{)4/ ~~ Marty Van Duyn Assistant City Manager Approve ""- Barry M. Nagel City Manager RR/sb/dc Attachment: Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION A WARDING AN AGREEMENT FOR CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR THE INDUSTRIAL SEWAGE PUMPING STATION NO.4 REHABILITATION PROJECT TO MENDOZA AND ASSOCIATES IN AN A.t\10UNT NOT TO EXCEED $400,000.00 AND APPROPRIATING FUNDS FROM THE SEWER IMP ACT FEE FUND TO THE CAPITAL IMPROVEMENT BUDGET WHEREAS, staff recommends awarding a contract for construction management and inspection services for the Industrial Sewage Pumping Station No.4 Rehabilitation Project #0352, File #SS-05-l, Bid No. 2348 to Mendoza and Associates in an amount not to exceed $400,000.00; and WHEREAS, the City desires to utilize Mendoza and Associates for their expertise in the construction of sewer pump stations; and WHEREAS, staff recommends that the City Council appropriate $480,000 from the East of 101 Sewer Impact Fee fund to the Capital Improvement Program Budget for 2007-2008 to fund the construction management and inspection services; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the Council hereby awards the contract for construction management and inspection services to Mendoza and Associates of San Francisco, California, in an amount not to exceed $ 400,000.00. BE IT FURTHER RESOLVED that the City Council hereby appropriates $480,000 from the sewer impact fee fund to the capital budget to fund the construction management and inspection servIces. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the contract on behalf of the City of South San Francisco. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a _ meeting held on the day of , 2007 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk ~'t1\ 81# ~- "'.pc, ~ . ~~\ o n (:>-0 ~ t:. C') v 0 C4.lIFO~~\.~ Staff Report AGENDA ITEM # 8 DATE: TO: FROM: SUBJECT: May 9,2007 Honorable Mayor and City Council Marty Van Duyn, Assistant City Manager AIRCRAFT NOISE INSULATION PROGRAM PHASE XVIII - ACCEPTANCE OF CONSTRUCTION CONTRACT - G.E. CHEN CONSTRUCTION, INC. RECOMlVIENDA TION It is recommended that the City Council, by motion, accept the Aircraft Noise Insulation Project Phase XVIII construction project (G.E. Chen Construction, Inc.) as complete in accordance with the plans and specifications. BACKGROUND/DISCUSSION Phase XVIII ofthe Airport Noise Insulation Program has completed 688 dwelling units comprised of 283 multi family dwelling units ( apartments) and 405 single family dwelling units. Most of this work has occurred within the Brentwood & Avalon neighborhoods located within ANIP' s original 65-db footprint. In addition, 48 units on Village Way and 56 units on Camaritas Ave. (part ofthe expansion area) were also completed as part of this phase. All homes have been inspected by both City staff and our architectural consultant and certified as complete in accordance with the plans and specifications for this phase. Staff will be meeting with the ANIP subcommittee to discuss expenditure of the remaining funds. FUNDING The total construction cost for Phase XVIII was $5,445,760. Funding was provided by San Francisco International Airport (100%), in accordance with the Memorandum of Understanding between the City of South San Francisco and the San Francisco International Airport. CONCLUSION Acceptance ofthis construction project will allow staffto file a Notice of Completion and release the performance bond and the contractor retention after expiration of a 30 day Lien period. Staff Report Subject: Aircraft Noise Insulation Program Phase XVIII - Acceptance of ANIP Phase XVIII Construction Contract - G.B. Chen Construction, Inc. Page 2 of2 BY:~~ NIarty Van Duyn Assistant City Manager ! Approve(, RRIRD/rc - ~'ttl sM G (0 n i>-o - ~ ~ v 0 0tlIFOT.t~\.~ Staff Report AGENDA ITEM # 9 DATE: May 09, 2007 TO: The Honorable Mayor and City Council FROM: Jim Steele, Director of Finance SUBJECT: SCA VENGER COMP ANY RATE INCREASE FOR 2007-08 RECOMMENDATION: It is recommended that the City Council adopt a resolution accepting a 2.49 % increase in refuse collection rates effective July 1,2007 as submitted by the Scavenger Company of South San Francisco. BACKGROUNDIDISCUSSION: Rates The City Council approved a franchise agreement with the Scavenger Company of South San Francisco on July 9, 1997. The new agreement provided for no increase in rates in 1997 with the first increase to be calculated for implementation per Section 6.2 on July 1, 1998. Per the agreement, the Scavenger Company uses the Consumer Price Index for Urban Wage Earner and Clerical Workers as the standard for calculations. The maximum rates specified under this agreement shall be increased J ul y 1 st each year (beginning in year 1998, but excluding year 2000 and every third year thereafter, the agreement calls for a rate survey). Per the attached calculations, the increase over the 2007-2008 time period is 3.11 %. Using an 80% factor as stipulated in the franchise agreement, the percent of increase for July 1, 2007 is 2.49%. The Second Amendment to the Scavenger Agreement also stipulated that the rate increase also applies to the transport of sludge from the City's Treatment Plant. The Scavenger Company has notified the City in a timely fashion and included a copy of the anticipated rates for your information. Staff Report To: The Honorable Mayor and City Council Re: Scavenger Company Rate Increase for 2007-08 Date: May 09,2007 Page: 2 of 2 FISCAL IMPACT: Costs at the Water Quality Control Plant will increase approximately $17,000 annually due to the rate increase. CONCLUSION: Approval of the attached resolution is consistent with the terms of the City's franchise agreement with the Scavenger Company of South San Francisco. By: c~ JimVsteele Director of Finance , ~-~ " -, \ / " "-- ' \ APproVed~. ~ C t- Barry . Nagel City Manager ATTACHMENTS: Resolution Letter from Scavenger Company to City Manager dated March 30, 2007 Exhibit A - Rate Computation Consumer Price Index Exhibit B - Scavenger Company Proposed Fees JS/BN:ed RESOLUTION NO._ CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ACCEPTING AN INCREASE IN REFUSE COLLECTION AND DISPOSAL RATES EFFECTNE JULY 1, 2007 AS SUBMITI'ED BY THE SOUTH SAN FRANCISCO SCAVENGER COMPANY WHEREAS, the City Council approved a franchise agreement with the South San Francisco Scavenger Company on July 9, 1997; and WHEREAS, the franchise agreement established maximum rates for refuse services. The franchise agreement further allows for an annual inflationary adjustment to the rates per a specified formula; and WHEREAS, the South San Francisco Scavenger Company has submitted a request for an increase in refuse collection rates effective July 1, 2007. The Finance Department has reviewed the requested rate increase and determined that it is consistent with the formula in the franchise agreement; and WHEREAS, attached as Exhibit A is the South San Francisco Scavenger Company rate computation, and the requested resulting rates are attached as Exhibit B. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby authorizes an increase in refuse collection and disposal rates effective July 1,2007 as shown in Exhibit B. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of , 2007 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 830023-1 SOUTH SAN FRANCISCO Sc'. ).VENG JR - COM PAN Y, INC. - March 30, 2007 Mr. Barry Nagel, City Manager City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Dear Mr. Nagel, In accordance with the terms of Section 6.2 ofthe Franchise Agreement, please accept this letter as our Notice of Intent to adjust the current rates in South San Francisco. Weare applying for a rate adjustment equal to 80% of the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers, as published by the U.S. Bureau of Labor Statistics. The adjustment is equal to 2.49%. The calculation and a proposed rate schedule are attached for your review. As per the Franchise agreement, the rate adjustment would be effective as of July 1, 2007, if approved. Also, the Second Amendment to the Franchise Agreement, regarding the transport of sewage sludge, Section 5.9, states that the Tonnage Rate is also subject to the same percentage increase as the service rates referred to in Section 6.2. Therefore, the current rate of $47.46 per ton would increase to $48.64. Thank you for your consideration of these matters. If you have any questions, please contact me at (650) 589-4020 at your earliest convenience. We are, of course, available to meet with you to discuss these issues if you wish. rm , CFO th San Francisco Scavenger Company, Inc. PO Box 348 · 500 East Jamie Court · South San Francisco, CA 94083-0348 V: (650) 589-4020 · F: (650) 589-7385 · e: info@ssfscavenger.com · vveb: www.ssfscavenger.com Exhibit A South San Francisco Scavenger Co. City of South San Francisco Rate Computation March 31 , 2007 CPllndex February 2006 202.500 CPllndex February 2007 208.803 Numerical change 6.303 Percentage change 3.11% 180% of change 2.49%1 Index Used - Consumer Price Index Urban Wage Earners and Clerical Workers San Francisco-Oakland-San Jose, CA All Items 1982-84 = 100 U.S. Department of Labor Bureau of Labor Statistics Bureau of Labor Statistics Data www.bls.gov Advanced Search I A-Z Index BLS Home I Programs & Surveys I Get Detailed Statistics I Glossary I What's New I Find It! In DOL Change Output Options: From: 1997 Ii) include graphs NEW! Data extracted on: March 30, 2007 (12:32:29 PM) More Formatting Options..... Consumer Price Index - Urban Wage Earners and Clerical Workers Series Id: CWURA422SAO Not Seasonally Adjusted Area: San Francisco-Oakland-San Jose, CA Item: All items Base Period: 1982-84=100 Year Jan Feb Mar Apr May Jun Jut Aug Sep Oct Nov Dec Annual HAlH HAlF2 1997 154.1 155.0 156.2 156.7 156.8 157.0 157.5 158.1 158.6 159.5 159.5 159.4 157.4 156.0 158.8 1998 159.6 160.8 161. 7 162.7 163.4 163.7 161.8 160.5 163.1 1999 165.7 168.8 168.3 170.0 171.2 170.9 168.8 167.2 170.5 2000 172.6 174.9 175.2 177.8 179.3 180.2 176.3 173.9 178.7 2001 183.5 184.9 186.9 186.7 187.5 186.5 185.7 184.5 186.9 2002 186.8 188.8 189.1 189.3 190.0 189.6 188.8 188.0 189.6 2003 193.7 193.6 192.2 192.3 191.9 191.1 192.4 192.9 191.9 2004 194.1 194.7 195.4 195.0 196.4 195.9 195.0 194.4 195.7 2005 197.3 199.3 197.5 199.5 202.6 199.3 199.1 197.9 200.3 2006 I 202.5"'\ 204.9 205.2 206.7 206.2 205.6 204.9 203.7 206.1 2007 l 208.803 '-../ EH~...q!!f;l!1t:Jy....A.$k~..!;LQ!,I,g,s...t.iQ!l$ I Erg~_d.Q.m_QfJ...o.fQrm~j:JQ!:1....A~t I (:J",s1.Q...m~x...s.!Jrvg,y' Privacy &. Security Statement I Linkina to Our Site I Accessibility U.S. Bureau of Labor Statistics Postal Square Building 2 Massachusetts Ave., NE Washington, DC 20212.0001 Phone: (202) 691-5200 Fax-on-demand: (202) 691-5325 Do you have a Data auestion? Do you have a Technical (web) auestion? Do you have Qth.e.r"!;,,Q,IDJ!Le.nt1;? http:// data. bls.gov / cgi - bin! surveymost 3/30/2007 SOUTH SAN FRANCISCO SCAVENGER CO., INC. City of South San Francisco Proposed Fees for Refuse Service, Effective July 1,2007 Current Rates Residential Can Service: (per Month) Proposed change A. Service Level By Container Volume 20 Gallons 32 Gallons 64 Gallons 96 Gallons 128 Gallons or more $ 16.03 20.78 45.72 71.68 99.71 2.49% 2.49% Commercial Can Service 30 Gallons 32 Gallons 40 Gallons 45 Gallons 55 Gallons 18.70 19.95 24.94 28.05 34.29 2.49% Commercial Compactor Service Per Cubic Yard 38.28 2.49% Debris Box Service, Residential and Commercial Temporary lOne Time Use 5 Yard Mini-box 7 Yard 14 Yard 20 Yard 30 Yard 191.49 418.38 418.38 569.65 821.80 2.49% Regular I Permanent Service 7 Yard 14 Yard 20 Yard 30 Yard 352.98 352.98 504.25 756.38 Rental Charge (per day, over 7 days) 15.77 Overweight Charge Page 1 Exhibit B Proposed Maximum Rates 16.43 21.30 46.86 73.46 102.19 19.17 20.45 25.56 28.75 35.14 39.23 196.26 428.80 428.80 583.83 842.26 361.77 361.77 516.81 775.21 16.16 SOUTH SAN FRANCISCO SCAVENGER CO., INC. City of South San Francisco Proposed Fees for Refuse Service, Effective July 1,2007 Current Rates Content weight in excess of 3 tons, per ton 98.57 Proposed Maximum Rates 101.02 Commercial Bin Service A. Regular Pick-up B. On Call Pick-up, Per Yard 128.51 2.490% 131.71 192.69 197.49 289.07 296.27 385.42 395.02 481.80 493.80 578.12 592.52 22.27 22.82 1 - yard Container 2 - yard (Front End Loader Bin) 3 - yard (Front End Loader Bin) 4 - yard (Front End Loader Bin) 5 - yard (Front End Loader Bin) 6 - yard (Front End Loader Bin) Per Pick-up, Per Yard Plus Container Rental Per Month Rental Charges 1 - yard Container 2 - yard Container 3 - yard Container 4 - yard Container 5 - yard Container 6 - yard Container 33.67 34.51 36.53 37.44 39.22 40.20 42.07 43.12 47.68 48.87 50.57 51.83 47.46 48.64 Sludge Hauling Per Ton (Treatment Plant) Page 2 - ~'t\\ S:W Ii ~ . ~~\ (t ~l v 0 ~l~~ Staff Report AGENDA ITEM # 10 DATE: May 9,2007 TO: The Honorable Mayor and City Council FROM: Jim Steele, Finance Director SUBJECT: TRANSMITTAL OF ANNUAL FINANCIAL AND AUDIT REPORTS RECOMMENDATION: It is recommended that the City Council accept and file the attached Fiscal Year 05/06 Financial and External Auditor's Reports. BACKGROUND AND DISCUSSION: Our external Auditor's (Maze and Associates, Inc.) have required that staff formally transmit to Council annual financial statements and audit reports in an agendized public meeting. These reports will be submitted annually in future years. A list of the required reports and a summary of recommendations from Fiscal Year 05/06 audits are summarized below. Reports: · Comprehensive Annual Financial Report (Fiscal Year 05/06 CAFR was sent to the Council on January 19, 2007). · Redevelopment Agency (RDA) Financial Statements (Fiscal Year 05/06 report was sent to the Council April 11 , 2007). · Single Audit of the Community Development Block Grant Program (Completed by Maze Associates in March 2007) - submitted to the Budget Subcommittee, and attached to this report. · Internal Controls Memo - submitted to the Budget Subcommittee, and attached to this report. Audit Findings and Management Responses: Maze and Associates have issued their audit findings for Fiscal Year 05/06, and found that the City's financial statements fairly represent the City's financial position. They also found that there are no material (significant) internal control weaknesses. However, they did report several suggestions for improvements, which are reported below, and are contained in the attachments to this Staff Report. Staff Report Re: Transmittal of Annual Financial and Audit Reports Date: May 9,2007 Page 2 of 4 . INTERNAL CONTROLS MEMO (issued annually): Findings: Positive Pay In 2003, an $800 fraudulent check was created by an outsider and cashed against the City's checking account. Positive pay allows the City to electronically send a listing of disbursement amounts and payees to its bank when checks are issued. Checks not matching the register are rejected by the bank and the City is informed. This is an excellent mechanism to reduce the risk of fraud and is very cost beneficial. In addition, some banks offer a bank reconciliation service which could provide both segregation of duties and free up valuable City staff time. The City is currently banking with First National Bank (FNB) which we understand does not offer positive pay service. Most major national banks offer positive service for a small fee. We strongly suggest that the City utilize a bank that offers positive pay service. Management Response: FNB is now able to offer positive pay services. City staff is working with FNB programmers on an implementation plan and is reviewing the contractual terms. . REDEVELOPMENT AGENCY (RDA): Findings: 1. Finding 06-01: Low and Moderate Income Housing Fund Planning and Administrative Expenditures The Agency did not prepare a written determination showing that planning and administrative expenditures were necessary for the production, improvement or preservation of low and moderate income housing for the year ended June 30, 2006 as required by Health and Safety Code Section 33334.3(d). Management Response: A resolution for Fiscal Year's 05-06 and 06-07 was presented to the Agency Board on December 13, 2006 and will be incorporated in the budget adoption resolution in future years. Staff Report Re: Transmittal of Annual Financial and Audit Reports Date: May 9,2007 Page 3 of 4 2. Finding 06-02: The Agency did not submit blight progress and loan reports for the year ended June 30, 2005, as required by Health and Safety Code Section 33080.4 Management Response: We believe the annual HCD report that the Agency submits to the State Controller's Office satisfies this requirement. The report was included in the Staff Report to Council on April 11,2007. . SINGLE AUDIT (conducted annually to test compliance with Federal government reporting requirements for federal grants): Findings: 1. Finding 06-01: Community Development Block Grants, CFDA # 14.218 According to the grant compliance supplement, the City is required to file Federal Cash Transaction Report SF-272 on a quarterly basis. During the Fiscal Year 2006, the City did not file any reports with the US Department of Housing and Urban Development. The City should establish procedures in order to ensure all the required reports are submitted in a timely manner. Management Response: A procedure has been established and reports are being prepared for submission. The City intends to be fully compliant and timely with all future CDBG reporting requirements. 2. Finding 06-02: Community Development Block Grants, CFDA # 14.218 According to OMB No. 2506-0077, the City is required to file Integrated Disbursement and Information System Report C04PR26. The City did file the required report but did not reconcile the data reported on the report to the general ledger. The City should establish procedures to ensure all the reports are submitted in a timely manner and reconciled to the general ledger. Management Response: A procedure to ensure the Integrated Disbursement and Information System Report (C04PR26) is submitted in a timely manner and reconciles to the general ledger will be developed and implemented. Staff Report Re: Transmittal of Annual Financial and Audit Reports Date: May 9,2007 Page 4 of 4 CONCLUSION: Instituting the recommendations made by the City's external auditor (Maze) will result in further safeguards and compliance with audit requirements. By: Jim Ste Finance APProv~ Let) arry M. Nagel City Manager Attachments: Internal Controls Memo Single Audit Report JS/BN:ed CITY OF SOUTH SAN FRANCISCO MEMORANDUM ON INTERNAL CONTROL STRUCTURE FOR THE YEAR ENDED JUNE 30, 2006 -1- l MAZE & I ASSOCIATES To the City Council of the City of South San Francisco, California ACCOUNTANCY CORPORA nON 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 93G-0902 . FAX (925) 930-0135 maze@mazeassociates.com www.mazeassociates.com November 15, 2006 Under generally accepted auditing standards, auditors are encouraged to report various matters concerning an entity's internal control structure noted during an audit, and are required to report certain of those matters. Matters that are required to be reported are significant deficiencies in the design or the operation of the internal control structure that, in the auditor's judgment, could adversely affect the organization's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. As part of our audit of the financial statements of the City of South San Francisco for the year ended June 30, 2005, we considered the City's internal control structure in determining the scope of our audit procedures for the purpose of rendering an opinion on the financial statements. While our purpose was not to provide assurances on the internal control structure, certain matters came to our attention that we want to report to you. These matters, along with our recommendations, are described in the accompanying memorandum. A material weakness is a significant deficiency in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses as defined above. However, none of the matters described in the accompanying memorandum is believed to be a material weakness. The accompanying memorandum on internal control structure is intended solely for the use of management and the Council. This restriction is not intended to limit the distribution of this letter and the accompanying memorandum which, upon acceptance by the Council, are a matter of public record. To the extent that the Council intends to rely upon this letter and the accompanying memorandum, such reliance should take into account the limited basis on which our recommendations were developed, as described above, and the limitations inherent in the internal control structure. In addition, the Council should understand that the criteria used by us in considering the internal control structure could differ significantly from the criteria the Council may be using for its purpose. We wish to express our appreciation for the courtesies and cooperation extended to our representatives during the course of their work. We would be pleased to discuss these recommendations in greater detail or otherwise assist in their implementation. Very truly yours, 'fMu ; ~v1a;te7 A Professional - 2 - wation CITY OF SOUTH SAN FRANCISCO MEMORANDUM ON INTERNAL CONTROL STRUCTURE Positive Pay In 2003, an $800 fraudulent check was created by an outsider and cashed against the City's checking account. The fraudulent check was detected within a month and the bank refunded the money to the City. City staff spent considerable time dealing with this issue. This incident could be avoided if City's checking account were on positive pay. Although the amount of the check involved was small, the amount could have been much larger. Positive pay allows the City to electronically send a listing of disbursement amounts and payees to its bank when checks are issued. Checks not matching the register are rejected by the bank and the City is infoffi1ed. This is an excellent mechanism to reduce the risk of fraud and is very cost beneficial. In addition, some banks also offer a bank reconciliation service which could provide both segregation of duties and free up valuable City staff time. The City is currently banking with First National Bank which we understand does not offer positive pay service. Most major national banks offer positive service for a small fee. We strongly suggest that the City utilize a bank that offers positive pay service. -3- J J J J ] ] ] ] ] ] CITY OF SOUTH SAN FRANCISCO SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2006 ] ] ] ] ] ] ] ] ] -4- .J J CITY OF SOUTH SAN FRANCISCO ] SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2006 J TABLE OF CONTENTS J Page Schedule of Findings and Questioned Costs.............................................................................. 1 ] Section I - Summary of Auditor's Results ....................................................................... 1 ] Section II - Financial Statement Findings ....................................................................... 3 Section ill-Federal Award Findings and Questioned Costs ......................................... 3 ] Section IV - Status of Prior Year Findings and Questioned Costs ..................................................................................................,4 ] Schedule of Expenditures of Federal Awards............................................................................ 5 ] Notes to Schedule of Expenditures of Federal Awards ............................................................. 6 1 ... Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ................................ 7 1 Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133 ..................................................................... 9 1 1 I I I 1 - 5- ] ] ] ] ] ] ] ] ] ] ] ] ] ] 'MAZE & ASSOCIATES ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant HiIJ, California 94523 (925) 930-0902 . FAX (925) 930-0135 SCHEDULE OF FINDINGS AND QUESTIONED COSTS maze@mazeassociates.com www.mazeassociates.com We are required by the Office of Management and Budget Circular A-l33, Audits of States, Local Governments and Non-profit Organizations, to present an overview of the Single Audit which is presented below. We have audited the basic financial statements of the City of South San Francisco, California, for the year ended June 30, 2006 and have issued our unqualified report thereon dated November 15,2006. These basic financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these basic financial statements based on oW" audit. We conducted our audit in accordance with generally accepted auditing standards in the United States of America; Government Auditing Standards, issued by the Comptroller General of the United States and the Office of Management and Budget Circular A-l33, Audits of States, Local Govemments and Non profit Organizations. We performed a Single Audit as requested by the City to comply with the provisions of the Single Audit Act as amended in 1996 and OMB A-l33. Section I-Summarv of Auditor's Results Financial Statements Type of auditor's report issued: Unqualified Internal control over financial reporting: . Material weakness(es) identified? x no yes . Reportable conditions(s) identified that are not considered to be material weaknesses? none reported x yes Noncompliance material to financial statements noted? x no yes A Professional Corporation 1 - 6- ] ] j J ] J ... Federal Awards Type of auditor's report issued on compliance for major programs: Internal control over major programs: . Material weakness(es) identified? . Reportable condition(s) identified that are Dot considered to be material weaknesses Any audit fmdings disclosed that are required to be reported in accordance with section 510(a) ofOMB Circular A-133? J Identification of major programs: J I J '.1 J J J .., .J I 1 ~1 1 =J: 1 l' .1 .:t. I . ~_.i! ] CFDA Number(s): 14.218 Dollar threshold used to distinguish, between Type A Bl1d type B programs: Auditee qualified as low-risk auditee? Unqualified yes x no , none reported no Name of Federal Program or Cluster x yes Community Development Block Grant $300,000 x yes yes no x -7- ~ J ] '] " j ] " 1 .J '~ .J J ') j "1 J ] "1 J ] ] ] ] ]l :l!- ] ~ Section II - Financial Statement Findin!!s Our audit did not disclose any reportable conditions, or material weaknesses or instances of noncompliance material to the basic financial statements. However, we did communicate other matters to City Council in our separate Memorandum on Internal Controls dated November 15, 2006. Section III - Federal Award Findin2"s and Questioned Costs Current Year Findings and Questioned Costs Our audit did disclose findings or questioned costs required to be reported in accordance with OMB Circular A-133. Finding 06-1: Community Development Block Grants, CFDA # 14.218 According to the grant compliance supplement, the City is required to file Federal Cash Transaction Report (SF-272) on a quarterly basis. During the fiscal year 2006 the City did not file any report to the U.S. Department of Housing and Urban Development. The City should establish procedures in order to ensure all the required reports are submitted timely. Management Response: A procedure to ensure the quarterly Federal Casb Transaction RepOlt (SF-272) is submitted timely will be developed and implemented by the next reporting quarter. In addition, our staff is coordinating with a HUD representative to submit reports from prior years that have not been submitted. The City intends to be fully compliant and timely with all future CDBG reporting requirements. Finding 06-2: Community Development Block Grants, CFDA # 14.218 According to OMB No. 2506-0077, the City is required to file Integrated Disbursement and Information System Report C04PR26. The City did file C04PR26 in the fiscal year but the City did not reconcile tbe data reported on the report to general ledger. The City should establish procedures to ensure all the reports are submitted timely and reconciled to the general ledger. Management Response: A procedure to ensure the Integrated Disbursement and Infonnation System Report (C04PR26) is submitted timely and reconcile to the General Ledger will be developed and implemented. -8- ] :] ] ] ] '.1 , l} '] '] ':1 '] "] '] ] J JI J ] ] Section IV - Status of Prior Year Findine:s and Questioned Costs Programs Affected: the State Water Resource Control Board Loan Program (CFDA# 66.458) This finding was the same as in prior year. The loan agreement governing the State Water Resource Control Board Loan Program states that the City must submit status reports on the progress of the construction no less frequently than quarterly during construction of the project. The City has not s'u~mitted any reports to the State. Current Status: The quarterly reporting requirement was implemented in December 2005. (Copies can be provided upon request. ) -9- CITY OF SOUTH SAN FRANCISCO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2006 PASS-THROUGH ENTITY IDENTIFYING NUMBER j] ] ] FEDERAL GRANTOR I PASS THROUGH CONTROL / PROGRAM TITLE PROGRAM EXPENDITURES U.S. Department of Housing and Urban Development: Community Development Block Grants, * Entitlement Grants 14.218 N/A Loan program 14.218 N/A Pass-through from City of Daly City 14.218 N/A Total U.S. Department of Housing and Urban Development ] ] "1 J ] U.S. Department of Education: Library Services and Technology Act Pass-through from State Department of California J J Total U.S. Department of Education J U.S. Department of Health and Human Services: Pass-through CA Department of Aging Special Programs for Aging - Title ill, Part B Grants for Supportive Services and S~uior Centers Special Programs for Aging - Title m, Part C Nutrition Services J FEDERAL CFDA NUMBER 45.310 45.310 45.310 45.310 45.310 N/A 40-6423 40-6473 40-6514 40-6550 93.044 N/A Total U.S. Department of Health and Human Services 93.045 N/A 'l j U.S. Department of Homeland Security: Disaster Recovery Pass-through from State Department of Emergency Services Assistance to Fire Fighters Grants Public Assistance ] 97.044 97.036 N/A N/A J Total U.S. Department of Homeland Security Total Expenditures of Federal Awards ] * Major program as defined by OMB Circular A-133 ] J J 1 -10- , $403,600 176,186 26,500 606,286 18,651 27,403 58,300 2,881 7,997 115,232 48,602 68,128 116,730 273,113 122,878 395,991 $1,234,239 ] ]] ] ] ] 11 J ] ] 'J J J ] l J n u J ] CITY OF SOUTH SAN FRANCISCO NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note i-Reporting Entity The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City and its component units as disclosed in the notes to the Basic Financial Statements. Note 2-Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the fmancial statements, regardless of the measmement focus applied. All governmental funds and agency funds are accounted for using the modified accrual basis of accounting. All proprietary funds are accounted for using tbe accrual basis of accounting. Expenditures of Federal Awards reported on the Schedule are recognized wben incurred. Note 3-Direct and Indirect (pass-Through) FederalAwards Federal awards may be granted directly to the City by a federal granting agency or may be granted to other government agencies which pass-through federal awards to the City. The Schedule includes both of these types Federal award programs when they occur. - 11- n MAZE & TI ASSOCIATES J] ~ .1 ~ u D ~ n u 1 :J ACCOUNTANCY CORPORA nON 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902' FAX (925) 930-0135 maze@mazeassociates.com www.mazeassociates.com REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARJJS Honorable Mayor and City Council City of South San Francisco, California We have audited the basic fmancial statements of the City of South San Francisco as of and for the year ended June 30,2006, and have issued our report thereon dated November 15,2006. We conducted our audit in accordance with generally accepted auditing standards in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Intemal Control over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to provide an opinion on the internal control over flllancial reporting. Our consideration of the internal control over fmancial reporting would not necessarily disclose all matters in the internal control over fmancial reporting that might be material weaknesses. A material wealmess is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the fmancial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of performing their assigned functions. We noted no matters involving the internal control over fmancial reporting and its operation that we consider to be material weaknesses. However, we did communicate other matters to City Council in our separate Memorandum on Internal Controls dated November 15, 2006. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standard. A Professic _ i -2 _oration -..... _~'~.....~.~~:~ ._.__":'::~~:-"~L",,~~~~~.I~~~~~";'lr~,~~~~y..~.;~~~~~\ This repOlt is intended solely for the information and use of the City Council, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. '/M-;,e ~ ~~ November 15, 2006 -13- I:IIO ...' r' <_ ilt/j#' ~ ~ ~ ~, !) ::"-~'_~_~;~~~g.,~~. b.!t~f~~''''-:~~~'~~':':'':~:-:~.':'~'~~~-~~~-~--'''' . .' ".._'_'__.. . ~~~:: MAZE & ASSOCIATES ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902 . FAX (925) 930-0135 maze@mazeassociates.com www.mazeassociates.com , REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Honorable Mayor and City Council City of South San Francisco, California Compliance We have audited the compliance of the City of South San Francisco with the types of compliance requirements described in the U.S. Office of Management and Budget COMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2006. The City's major federal programs are identified in Section I - Summary of Auditor's Results included on the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. ' We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditi71g Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organ.izations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about wbether noncompliance with tbe types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of South San Francisco's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, the City complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2006. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in Section III - Federal Award Findings and Questioned Costs. -14- ^ o..._~__...:__ lntemal Control over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test'and report on the internal control over compliance in accordance with OMB Circular A-l33. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the nonnal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, the business type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2006, and have issued our report thereon dated November 15, 2006. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying schedule of expenditures of federal awards is pre$ented for the purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements talcen as a whole. This report is intended solely for the information and use of the City Council, management, and Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than the specified parties. ~2e- ~ ~cA~ February 22, 2007 , n -15- .-'-,: " I" ~'t\\ s~ ~s (0 (') >- - t:l n v 0 c.,'IFO?-~~ Staff Report AGENDA ITEM # 11 DATE: May 9, 2007 TO: The Honorable Mayor and City Council FROM: Terry White, Director of Public Works SUBJECT: EMERGENCY SEWER PIPE REPAIR PROJECT NO.71-13235-0750 - 945 AIRPORT RECOMMENDATION: It is recommended that the City Council, adopt a resolution, approving a contract with Pacific Liners ofVacaville, California, in the amount of$27,915 to perform an emergency sewer pipe repair. BACKGROUND/DISCUSSION: The main sewer trunk line on Airport Boulevard became plugged. Staff performed a video inspection of the sewer line along Airport Boulevard from Chapman Avenue to 200 feet south shows that a portion of this line was completely missing and needed to be rehabilitated before a complete failure occurred. The Department of Public Works considered several options to repair the sewer line, including trenching, but due to a 24 inch gas line and a high voltage electrical adjacent the sewer, it was decided that the safest way to repair the line was to install a line liner. The Department contacted a specialty contractor, Pacific Liners of Vacaville, California. Pacific Liners visited the site and after video inspection of the line, provided the City an estimate of $26,140. Staff has worked with Pacific Liners on other sewer rehabilitation projects and the unit rates for this project are comparable to their previous projects. Due to the emergency nature of the repair, Pacific Liners was authorized by the Department of Public Works to install a liner and the work was completed on April 11, 2007, at a cost of$27,915. Pacific Liners also did a post installation video inspection of the sewer lines to confirm completion and proper alignment. FUNDING This project will be funded from the City of South San Francisco's 2006-2007 Capital Improvement Program (71-13235-0750) Miscellaneous Sewer Repair Project. Staff Report Project: Sewer Pipe Lining Project Project no. 71-13235-0750 Page 2 CONCLUSION Emergency repair to the sewer line was necessary to insure sewage flows properly to the Water Quality Control Plant and to avoid nearby utility and building damage. Attachments: Resolution G:\PROJECTS\PW Sewer Rehab,\awardstaffreport,doc /"-" APproved~'" 'f.'~, ; \ ' '1---- " . Nagel City Manager RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE CONTRACT TO PACIFIC LINERS FOR THE SEWER PIPE LINING PROJECT WHEREAS, staff recommends approving a contract with Pacific Liners of Vacaville, California, for the emergency sewer pipe repair in the amount of $27,915; and WHEREAS, due to the emergency nature of the repair, Pacific Liners was authorized by the Department of Public Works to install a liner along Airport Boulevard from Chapman Avenue to 200 feet south; and WHEREAS, this work was completed April 2007; and WHEREAS, funding for this project is included in the City of South San Francisco's 2006/07 Capital Improvement Program (71-13235-0750). NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of South San Francisco that the City Council hereby approves the contract with Pacific Liners ofVacaville, California, for the emergency Sewer Pipe Repair Project. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the day of 2007 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk - ~'t\\ S,1N S B:. . ~~ (~ ~) ~ ~ v c ~l~#' Staff Report AGENDA ITEM # 12 DATE: TO: FROM: SUBJECT: May 9,2007 Honorable Mayor and City Council Marty VanDuyn, Assistant City Manager ADOPT A RESOLUTION TO A WARD THE CONSTRUCTION CONTRACT FOR THE ORANGE MEMORIAL P ARK RECREATION BUILDING PROJECT, ELECTRICAL SYSTEM PACKAGE, BID NO. 2458 TO A.S.F. ELECTRIC, INC. OF DALY CITY, CA IN THE AMOUNT OF $557,289. RECOMMENDATION It is recommended that the City Council adopt a resolution awarding the construction contract for the Orange Memorial Park Recreation Building, Electrical System Package, Bid No. 2458 to A.S.F. Electric, Inc. of Daly City, CA in the amount of $557,289. BACKGROUND/DISCUSSION On March 14, 2007, the City Council awarded the multi-prime construction contracts for the Orange Memorial Park Recreation Building project. The multi-prime construction bid award did not include the electrical system package. In an effort to manage costs, Staff revised the scope of work and the project specifications for the electrical system bid package. On April 2, and on April 9, 2007, staff advertised the notice inviting sealed bids for this project. Staff opened bids on May 2,2007 and one (1) bid was received. The low bidder is A.S.F. Electric, Inc. of Daly City, CA. Below is the summary of the base bids: Engineer's Estimate: Bids: A.S.F. Electric, Inc. $470,000 $557,289 Staff verified the low bidder's current contractor's license with the California State Licensing Board to be of good standing, and confirmed their references for past construction projects similar to the subject project. A.S.F. Electric also is a member of the San Mateo County Electrical Workers Union. Staff Report Subject: ADOPT A RESOLUTION TO AWARD THE CONSTRUCTION CONTRACT FOR THE ORANGE MEMORIAL PARK RECREATION BUILDING PROJECT, ELECTRICAL SYSTEM PACKAGE, BID NO. 2458 TO A.S.F. ELECTRIC, lNe. OF DALY CITY, CA IN THE AMOUNT OF $557,289. Page 2 of2 FUNDING This portion of work was included in the project budget for the Orange Memorial Park Recreation Building project approved on March 14, 2007 and is included in the 2006 - 2007 Capital Improvement Program. CONCLUSION Approval ofthe resolution will complete the construction award for all the multi-prime contracts for the Orange Memorial Park Recreation Building and should prevent possible delays to the schedule for completion of construction. Approved: Bt~~ City Manager ~ RR/rd/rc Attachment: Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AWARDING A CONSTRUCTION CONTRACT FOR ORANGE MEMORIAL PARK RECREATION BUILDING PROJECT, ELECTRICAL SYSTEM PACKAGE, BID NO. 2458 TO A.S.F. ELECTRIC, INC. OF DALY CITY, CA IN THE AMOUNT OF $557,289. WHEREAS, on April 02, 2007 and April 09, 2007, staff advertised the notice to invite sealed bids for the project; and WHEREAS, on May 02,2007 staff received and opened one bid, and the lowest bidder was A.S.F. Electric, Inc. in the amount of$557,289; and WHEREAS, staff recommends that the City Council award the construction contract to A.S.F. Electric, Inc. in an amount not to exceed $557,289; and WHEREAS, this project is included in the City of South San Francisco's 2006-2007 Capital Improvement Project (CIP). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby awards the construction contract for the Orange Memorial Park Recreation Building Project, Electrical System Package to A.S.F. Electric, Inc. of Daly City, CA in the amount not to exceed $557,289. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the Agreement on behalf of the City Council of the City of South San Francisco, subj ect to approval as to form by the City Attorney. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _day of , 2007 by the following vote: AYES: NOES: ABSTAIN; ABSENT: ATTEST: City Clerk