Lakeport City Council Agenda Packet

AGENDA
JOINT MEETING OF THE LAKEPORT CITY COUNCIL, THE LAKEPORT REDEVELOPMENT SUCCESSOR AGENCY, AND THE CITY OF LAKEPORT MUNICIPAL SEWER DISTRICT
Tuesday, September 17, 2013 City Council Chambers, 225 Park Street, Lakeport, California 95453
I. II. III. CALL TO ORDER & ROLL CALL: PLEDGE OF ALLEGIANCE: ACCEPTANCE OF AGENDA: Urgency Items: Move to accept agenda as posted, or move to add or delete items. To add item, Council is required to make a majority decision that an urgency exists (as defined in the Brown Act) and a 2/3rds determination that the need to take action arose subsequent to the Agenda being posted.
The following Consent Agenda items are expected to be routine and noncontroversial. They will be acted upon by the Council at one time without any discussion. Any Council Member may request that any item be removed from the Consent Agenda for discussion under the regular Agenda. Removed items will be considered following the Consent Calendar portion of this agenda.
Any person may speak for three (3) minutes on any agenda item; however, total public input per item is not to exceed 15 minutes, extended at the discretion of the City Council. This rule does not apply to public hearings. Non-timed items may be taken up at any unspecified time.
6:00 p.m.
IV.
CONSENT AGENDA:
A. B. C. D. E. F. G. V.
Ordinances: Warrants: Minutes: Building Permit Report Conflict of Interest Policy City Manager Contract Recognized Obligation Payment Schedule 13-14B Citizen Input:
Waive reading except by title, of any ordinances under consideration at this meeting for either introduction or passage per Government Code Section 36934. Approve warrant register from August 21, 2013, and September 6, 2013. Approve minutes of the regular City Council meeting of September 3, 2013. Review and file Building Permit Reports from August 2013. Adopt a revised Conflict of Interest policy for the City of Lakeport. Approve revisions to the Agreement for Services with City Manager Margaret Silveira. Approve Redevelopment Successor Agency Recognized Obligation Payment Schedule (ROPS) 13-14B.
Any person may speak for 3 minutes about any subject within the authority of the City Council, provided that the subject is not already on tonights agenda. Persons wishing to address the City Council are required to complete a Citizens Input form and submit it to the City Clerk prior to the meeting being called to order. While not required, please state your name and address for the record. NOTE: Per Government Code 54954.3(a), the City Council cannot take action or express a consensus of approval or disapproval on any public comments regarding matters which do not appear on the printed agenda.
PUBLIC PRESENTATIONS/REQUESTS: A.
B.
POST Executive Certificate
Presentation of POST Executive Certificate to Police Chief Brad Rasmussen by Karen Lozito, Senior Law Enforcement Consultant with the Commission on Peace Officer Standards and Training (POST). Introduce new employee in the Police Department.
C. VI. A.
Introduction of New Employee City Attorney 1. Senior Mobile Home Rent Control Initiative
COUNCIL BUSINESS: Receive and review the Interim City Attorneys report required under Elections Code section 9212 on the Senior Mobile Home Rent Control Initiative; and either adopt a resolution to place the measure on the ballot or provide staff further direction. Adopt a resolution authorizing the execution and delivery of a Loan Agreement to refinance outstanding side fund obligations of the City to the California Public Employees Retirement System, and direct the filing of a Judicial Validation Action with respect thereto and providing other matters relating thereto.
B.
Finance Director 1. Pension Side Fund
City Council Agenda of September 17, 2013
Page 2
C.
Planning Services Manager 1. Mobile Catering Time Limit Waiver Consideration of an Application for a Time Limit Waiver submitted by the HeyHot Dog mobile catering business requesting approval to do business at one location beyond the two-hour limit.
VII. VIII.
CITY COUNCIL COMMUNICATIONS: A. Miscellaneous Reports, if any: Adjourn ADJOURNMENT:
Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the City Clerks Office at 225 Park Street, Lakeport, California, during normal business hours. Such documents are also available on the City of Lakeports website, www.cityoflakeport.com, subject to staffs ability to post the documents before the meeting.
In compliance with the Americans with Disabilities Act, the City of Lakeport will make available to members of the public any special assistance necessary to participate in this meeting. The public should contact the City Clerks Office at (707) 263-5615 to make such a request. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.
_______________________________________ Hilary Britton, Acting Deputy City Clerk
LAKEPORT CITY COUNCIL REGULAR MEETING Tuesday, September 3, 2013

CLOSED SESSION: I. CALL TO ORDER & ROLL CALL: REPORT OUT OF CLOSED SESSION: Mayor Engstrom adjourned the meeting to Closed Session at 5:30 p.m., to discuss: 1. Conference with Legal Counsel; Anticipated Litigation (Government Code 54956.9) Number of Potential Cases: 2 Mayor Engstrom called the regular meeting of the City Council of the City of Lakeport to order at 6:00 p.m. with Council Members Mattina, Parlet, Scheel and Spillman present. The Mayor reported that the Council had voted to accept a settlement agreement with the County of Lake regarding property tax administration fees by a 5-0 vote. A copy of the settlement agreement is available for public inspection upon request. There was no reportable action taken on the second closed session item. The Pledge of Allegiance was led by Chief Rasmussen. A motion was made by Council Member Scheel, seconded by Council Member Parlet, and unanimously carried by voice vote to accept the agenda as presented. There were no urgency items. Waive reading except by title, of any ordinances under consideration at this meeting for either introduction or passage per Government Code Section 36934. Approve minutes of the regular City Council meeting of August 20, 2013. Acting City Clerk Buendia requested to pull the minutes of the August 20, 2013 Council meeting, and stated two (2) corrections to the minutes. Council Member Mattina made a motion, seconded by Council member Parlet, and unanimously carried by voice vote to approve the consent calendar with the amendments to the minutes. There was no citizen input. Melissa Fulton and Jim Magliulo of the Lake County Chamber of Commerce presented of a $3463.82 donation to the City of Lakeport to defray costs of the Annual Fourth of July Fireworks Display at Library Park. Council Member Spillman thanked City Manager Silveira, Neal Silveira, and Dan Buffalo for assistance in setting up for the Taste of Lakeport event. He also thanked Chief Rasmussen for his assistance in setting up a new neighborhood watch program. Council Member Mattina attended the LAFCO conference and got to know several Lake County commissioners better, as well as meeting County Supervisors from neighboring counties. There was much talk about water conservation. She also attended the Taste of Lakeport event. Council Member Parlet volunteered to sit on the advisory committee related to vending in the Westside Community Park. Council Member Scheel reported the meeting of the Solid Waste Task Force for the county has been moved. The LTA Board meets next Wednesday. He will miss the September 17, 2013 Council meeting. Chief Rasmussen reported on a home invasion robbery during which a witness fired shots at the suspects. He also announced the hiring of a new Police Officer
MINUTES
II. III.
PLEDGE OF ALLEGIANCE: ACCEPTANCE OF AGENDA: Urgency Items:
IV.
CONSENT AGENDA: A. B. Ordinances: Minutes: Vote on Consent Agenda:
V.
PUBLIC PRESENTATIONS/REQUESTS: A. B. Citizen Input: Lake County Chamber of Commerce:
VI.
CITY COUNCIL COMMUNICATIONS: A. Miscellaneous Reports, if any:
City Council Minutes of September 3, 2013
Page 2
within the next week. City Engineer Harter reported that the computer server is up and running except for his email account. He also reported on progress on the bike lane on Lakeshore Blvd. Public Works Director Brannigan reported on the progress made on the Hartley Street paving project. Mayor Engstrom reported that the Clearlake Advisory Committee will meet twice this month to work on the Committees quarterly report to the Lake County Board of Supervisors. VII. ADJOURNMENT: Mayor Engstrom adjourned the meeting at 6:20 p.m. APPROVED BY:
___________________________________________ THOMAS ENGSTROM, Mayor ATTEST:
_______________________________________ KELLY BUENDIA, Acting City Clerk
City Council City of Lakeport Municipal Sewer District Lakeport Redevelopment Successor Agency
CITY OF LAKEPORT
STAFF REPORT
RE: Building Permit Report SUBMITTED BY: Community Development Department PURPOSE OF REPORT: Information only Discussion Action Item MEETING DATE: 09/17/2013
WHAT IS BEING ASKED OF THE CITY COUNCIL/AGENCY/BOARD: The Council is being asked to review the Building Permit Report for informational purposes only. SUMMARY: Attached is a copy of the August building permit log and pending permits. The following are totals for Fiscal Year 2013/2014 for the Building Department: Number of Permits Construction Value Permit Revenue SUGGESTED MOTIONS: Receive and file monthly Building Permit Report for August 2013. Attachments: Monthly Building Permit Report for August 2013 34 $980,414.89 $ 11,986.97
Meeting Date: 09/17/2013
Page 1
Agenda Item #IV.D.
City Council Lakeport Redevelopment Successor Agency City of Lakeport Municipal Sewer District
CITY OF LAKEPORT
STAFF REPORT
RE: Conflict of Interest Code SUBMITTED BY: Kelly Buendia, Acting City Clerk PURPOSE OF REPORT: Information only Discussion Action Item MEETING DATE: 09/17/2013
WHAT IS BEING ASKED OF THE CITY COUNCIL/AGENCY/BOARD: The City of Lakeport City Council, the City of Lakeport Municipal Sewer District (CLMSD) and the City of Lakeport Redevelopment Successor Agency are asked to adopt a revised Conflict of Interest Code. BACKGROUND: The Political Reform Act, Government Code Section 81000, requires state and local government agencies to adopt and promulgate Conflict of Interest Codes. The code designates positions required to file a Statement of Economic Interests, Form 700, and assigns disclosure categories specifying the types of interests to be reported. The Form 700 is a public document intended to alert public officials and the public to the types of financial interest that may create a conflict of interest. The Political Reform Act also requires every government agency to amend its conflict of interest code when changed circumstances necessitate an amendment and review its conflict of interest code biennially to determine if changed circumstances require an amended to the conflict of interest code. DISCUSSION: After review of the City of Lakeport Conflict of Interest code, staff has determined that the code requires a small number of non-substantive amendments. First, there are two positions that require deletion as they are no longer used: Utilities Director and Economic Development Director. The duties of those positions have been absorbed by other positions already designated in the code. Second, with the dissolution of the Redevelopment Agency, the City Council now sits as the Redevelopment Successor Agency and this change has been noted. Finally, since its formation in 1991, the City Council has sat as the board of the City of Lakeport Municipal Sewer District; as such this designation should be included in the Conflict of Interest Code. The existing code is presented in both strikethrough format and a finalized version for adoption. All three agencies are asked to adopt the code. OPTIONS: The Council could reject the changes or request additional changes to the Conflict of Interest Code. FISCAL IMPACT: None Comments: SUGGESTED MOTIONS:
Meeting Date: 09/17/2013 Page 1 Agenda Item #IV.E.
Account Number:
Move to approve a Resolution amending and adopting an updated Conflict of Interest Code. Attachments: Conflict of Interest Code Revised 09/03/2013 with Strikethrough Resolution _____(2013) Amending and Adopting an Updated Conflict of Interest Code
Page 2
Agenda Item #IV.E.
ATTACHMENT 1
Formatted: Centered Formatted: English (United States) Formatted: Header distance from edge: 0.25"
Conflict of Interest Code

City of Lakeport, City of Lakeport Municipal Sewer District, City of Lakeport Redevelopment Successor Agency
Purpose
The Political Reform Act (Government Code Section 81000, et seq.) requires state and local agencies to adopt and promulgate conflict of interest codes.
Incorporation of Section 18730 of the California Code of Regulations

The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs., Section 18730) that contains the terms of a standard conflict of interest code and may be incorporated by reference in an agencys code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached appendices designating positions and establishing disclosure requirements shall constitute the conflict of interest code of the City of Lakeport.
Filing
Individuals holding designated positions shall file their statements with the City Clerk, who shall be the filing officer for the City of Lakeport, the City of Lakeport Municipal Sewer District, and the City of Lakeport Redevelopment Successor Agency and who shall retain the statements and make the statements available for public inspection and reproduction pursuant to Government Code Section 81008.
Government Code Section 87200 Filers

The following positions are not covered by this code because they must file under Government Code Section 87200 and, therefore, are listed for informational purposes only: City Council Members Planning Commissioners City Manager City Attorney City Treasurer Officials who manage public investments Individuals holding the above-listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their
Formatted: Doc ID
1
120329.2
Conflict of Interest Code adopted 12/21/2010 revised 09/03/2013
ATTACHMENT 1 position has been categorized incorrectly. The Fair Political Practices Commission makes the final determination whether a position is covered by Government Code Section 87200.
Formatted: Centered Formatted: English (United States)
Formatted: Doc ID
2
120329.2
ATTACHMENT 1
Exhibit A
Designated Employees
A designated employee is an officer, employee, member or consultant of an agency whose position is designated in the code because the position entails the making or participation in the making of governmental decisions which may foreseeably have a material effect on any financial interest. Making a governmental decision means the person (1) votes on a matter; (2) appoints a person; (3) obligates or commits his or her agency to any course of action; or (4) enters into any contractual agreement on behalf of his or her agency. Participating in making of a decision means the person (1) negotiates, without significant substantive review, with a governmental entity or private person regarding the decision; or (2) advises or makes recommendations to the decision-maker by conducting research or an investigation, preparing or presenting a report, analysis or opinion which requires the exercise of judgment on the part of the employee and the employee is attempting to influence the decision.
Designated Employee
Administrative Services Director Building Official City Clerk City Engineer Community Development Director Economic Development Manager Finance Director Housing Specialist Planning Services Manager Police Chief Public Works Director Utilities Director ClearCity of Lakeport Municipal Sewer District (CLMSD) Board Members Redevelopment Board Members Redevelopment Successor Agency Board Members Consultants who making (not just recommend) governmental decisions, such as whether to approve a rate, rule, or regulation, whether to issue, deny, suspend, or revoke any permit, license, application, certificate or similar authorization, adopt or grant City approval to plan, design, report, study, or adopt or grant City approval of policies, standards, or guidelines for 1 the City or any subdivision thereof. Consultants who act in a staff capacity with the City and in that capacity perform the same or substantially the same or substantially all the same duties for the City that would otherwise be performed by an individual holding a designated position in the Citys Conflict of Interest Code
Disclosure Categories
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Same level as the comparable designated position identified elsewhere in the Code
Consultants are included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation: The City Manager may determine in writing that a particular consultant, although a designated position, is hired to perform a range of duties that is limited in scope and thus is not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultants duties and, based upon that description, a statement of the extent of disclosure requirements. The City Managers determination is a public record and shall be retained for public inspection in the same manner and location as this conflict of interest code (Government Code Section 81008). Formatted: Doc ID 120329.2
ATTACHMENT 1
Exhibit B
Individuals holding designated positions must report their interests according to their assigned disclosure category(ies).
Category 1
Designated employees in Category 1 must report all interests in real property located within the jurisdiction of the City of Lakeport or within two miles of the boundaries of the City of Lakeport or within two miles of any land owned or used by the City of Lakeport. For the purposes of disclosure only, an interest in real property does not include the principal residence of the filer. Category A filers must also report all interests in investments, business positions in business entities and sources of income, including gifts, loans, and travel payments from all sources.
Category 2
Designated employees in Category 2 must report all interests in real property located within the jurisdiction of the City of Lakeport or within two miles of the boundaries of the City of Lakeport or within two miles of any land owned or used by the City of Lakeport.
Category 3
Designated employees in Category 3 must report all interests in business positions in business entities and sources of income, including gifts, loans, and travel payments from sources that provide services, supplies, materials, machinery, or equipment of the type utilized by the City of Lakeport.
Category 4
Designated employees in Category 4 must report all investments in business entities and all sources of personal and business entity income, including loans, gifts, and travel payments from sources that provide services, supplies, materials, machinery, or equipment of the type utilized by the designated positions division or department.
Category 5
Designated employees in Category 5 must report all investments in business entities and all sources of personal and business entity income, including loans, gifts, and travel payments, from sources that filed a claim against the agency during the previous two years or have a claim pending.
Category 6
Designated employees in Category 6 must report all investments in business entities and all sources of personal and business entity income, including loans, gifts, and travel payments from sources of the type to request an entitlement to use agency property or facilities, including, but not limited to a license, utility permit, or station vendor permit.
Formatted: Doc ID
4
120329.2
ATTACHMENT 2
RESOLUTION NO. XXXX (2013)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKEPORT, THE SUCCESSOR AGENCY TO THE LAKEPORT REDEVELOPMENT AGENCY, AND THE BOARD OF THE CITY OF LAKEPORT MUNICIPAL SEWER DISTRICT AMENDING AND ADOPTING AN UPDATED CONFLICT OF INTEREST CODE
WHEREAS, Government Code section 87300 of the Political Reform Act, requires state and local government agencies to adopt and promulgate Conflict of Interest Codes; and WHEREAS, the Fair Political Practices Commission has adopted a regulation, title 2, section 18730 of the California Code of Regulations, which contains the terms of a standard Conflict of Interest Code that can be incorporated by reference and will be amended to conform to amendments of the Political Reform Act; WHEREAS, the Conflict of Interest Code designates positions required to file a Statement of Economic Interests, Form 700, and assigns disclosure categories specifying the types of interests to be reported; and WHEREAS, the Political Reform Act also requires every government agency to amend its Conflict of Interest Code when changed circumstances necessitate an amendment and review its Conflict of Interest Code biennially to determine if changed circumstances require an amendment to the Conflict of Interest Code; and WHEREAS, staff has recommended non-substantive amendments to the Conflict of Interest Code adopted December 21, 2010 based on changed circumstances; and WHEREAS, under Assembly Bill 1484, as modified ABx1 26, the Successor Agency to the City of Lakeport Redevelopment Agency is a separate legal entity from the City that formed the former Redevelopment Agency; and WHEREAS, the City of Lakeport Municipal Sewer District is also a separate legal entity from the City. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lakeport, the Successor Agency to the Lakeport Redevelopment Agency, and the Board of the City of Lakeport Municipal Sewer District hereby adopts the Conflict of Interest Code attached as Exhibit A, and; THIS RESOLUTION was passed by the City Council of the City of Lakeport in its capacity as such and as the Board of the Successor Agency to the Lakeport Redevelopment Agency, and the Board of the City of Lakeport Municipal Sewer District at a special meeting thereof on the 17th day of September, 2013, by the following vote:
120632.1
ATTACHMENT 2
AYES: NOES: ABSTAINING: ABSENT: _________________________________ THOMAS ENGSTROM, Mayor ATTEST: _______________________________ KELLY BUENDIA, Acting City Clerk
120632.1
ATTACHMENT 2
Conflict of Interest Code

City of Lakeport, City of Lakeport Municipal Sewer District, City of Lakeport Redevelopment Successor Agency
Purpose
The Political Reform Act (Government Code Section 81000, et seq.) requires state and local agencies to adopt and promulgate conflict of interest codes.
Incorporation of Section 18730 of the California Code of Regulations
The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs., Section 18730) that contains the terms of a standard conflict of interest code and may be incorporated by reference in an agencys code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached appendices designating positions and establishing disclosure requirements shall constitute the conflict of interest code of the City of Lakeport.
Filing
Individuals holding designated positions shall file their statements with the City Clerk, who shall be the filing officer for the City of Lakeport, the City of Lakeport Municipal Sewer District, and the City of Lakeport Redevelopment Successor Agency and who shall retain the statements and make the statements available for public inspection and reproduction pursuant to Government Code Section 81008.
Government Code Section 87200 Filers
The following positions are not covered by this code because they must file under Government Code Section 87200 and, therefore, are listed for informational purposes only: City Council Members Planning Commissioners City Manager City Attorney City Treasurer Officials who manage public investments Individuals holding the above-listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their
1
120329.2
Conflict of Interest Code revised 09/03/2013
ATTACHMENT 2
position has been categorized incorrectly. The Fair Political Practices Commission makes the final determination whether a position is covered by Government Code Section 87200.
2
120329.2
Exhibit A
Designated Employees
A designated employee is an officer, employee, member or consultant of an agency whose position is designated in the code because the position entails the making or participation in the making of governmental decisions which may foreseeably have a material effect on any financial interest. Making a governmental decision means the person (1) votes on a matter; (2) appoints a person; (3) obligates or commits his or her agency to any course of action; or (4) enters into any contractual agreement on behalf of his or her agency. Participating in making of a decision means the person (1) negotiates, without significant substantive review, with a governmental entity or private person regarding the decision; or (2) advises or makes recommendations to the decision-maker by conducting research or an investigation, preparing or presenting a report, analysis or opinion which requires the exercise of judgment on the part of the employee and the employee is attempting to influence the decision.
Designated Employee
Administrative Services Director Building Official City Clerk City Engineer Community Development Director Finance Director Housing Specialist Planning Services Manager Police Chief Public Works Director City of Lakeport Municipal Sewer District (CLMSD) Board Members Redevelopment Successor Agency Board Members Consultants who making (not just recommend) governmental decisions, such as whether to approve a rate, rule, or regulation, whether to issue, deny, suspend, or revoke any permit, license, application, certificate or similar authorization, adopt or grant City approval to plan, design, report, study, or adopt or grant City approval of policies, standards, or guidelines for 1 the City or any subdivision thereof. Consultants who act in a staff capacity with the City and in that capacity perform the same or substantially the same or substantially all the same duties for the City that would otherwise be performed by an individual holding a designated position in the Citys Conflict of Interest Code
1 1 1 1 1 1 1 1 1 1 1 1 1
Same level as the comparable designated position identified elsewhere in the Code
Consultants are included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation:
The City Manager may determine in writing that a particular consultant, although a designated position, is hired to perform a range of duties that is limited in scope and thus is not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultants duties and, based upon that description, a statement of the extent of disclosure requirements. The City Managers determination is a public record and shall be retained for public inspection in the same manner and location as this conflict of interest code (Government Code Section 81008). 120329.2
Exhibit B
ATTACHMENT 2
Individuals holding designated positions must report their interests according to their assigned disclosure category(ies).
Category 1
Designated employees in Category 1 must report all interests in real property located within the jurisdiction of the City of Lakeport or within two miles of the boundaries of the City of Lakeport or within two miles of any land owned or used by the City of Lakeport. For the purposes of disclosure only, an interest in real property does not include the principal residence of the filer. Category A filers must also report all interests in investments, business positions in business entities and sources of income, including gifts, loans, and travel payments from all sources.
Category 2
Designated employees in Category 2 must report all interests in real property located within the jurisdiction of the City of Lakeport or within two miles of the boundaries of the City of Lakeport or within two miles of any land owned or used by the City of Lakeport.
Category 3
Designated employees in Category 3 must report all interests in business positions in business entities and sources of income, including gifts, loans, and travel payments from sources that provide services, supplies, materials, machinery, or equipment of the type utilized by the City of Lakeport.
Category 4
Designated employees in Category 4 must report all investments in business entities and all sources of personal and business entity income, including loans, gifts, and travel payments from sources that provide services, supplies, materials, machinery, or equipment of the type utilized by the designated positions division or department.
Category 5
Designated employees in Category 5 must report all investments in business entities and all sources of personal and business entity income, including loans, gifts, and travel payments, from sources that filed a claim against the agency during the previous two years or have a claim pending.
Category 6
Designated employees in Category 6 must report all investments in business entities and all sources of personal and business entity income, including loans, gifts, and travel payments from sources of the type to request an entitlement to use agency property or facilities, including, but not limited to a license, utility permit, or station vendor permit.
4
120329.2
CITY OF LAKEPORT
STAFF REPORT
RE: Revisions to Agreement for Services with Margaret Silveira SUBMITTED BY: Kelly Buendia, Administrative Services Director PURPOSE OF REPORT: Information only Discussion Action Item MEETING DATE: 09/17/2013
WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD: The City Council is asked to approve revisions to the Agreement for Services with Margaret Silveira. BACKGROUND: While reviewing another matter, staff discovered clerical errors in the Agreement for Services with City Manager, Margaret Silveira that was approved November 6, 2012 and amended November 27, 2012. DISCUSSION: Section 3 of the agreement contains terms related to the termination or extended term of Silveira. Specifically, subsections B through E deal with the Silveira's right to severance pay in case of a termination or a resignation suggested by the City Council. There are also clauses specifying when and how a termination can take place. Subsection F addresses termination for specific reasons (for cause) such as malfeasance, dishonesty, insubordination, etc. In the case of a "for cause" termination, subsection F is designed to limit the rights of Silveira, including any entitlement to severance pay. Attached is the agreement in strikethrough format, to better understand the clerical errors and the requested correction. The revised agreement also incorporates the language from the amendment dated November 27, 2012 for one cohesive document. OPTIONS: FISCAL IMPACT: None $ Account Number: Comments: SUGGESTED MOTIONS: Move to approve revisions to the Agreement for Services with Margaret Silveira Attachments: 1. Agreement for Services dated November 6, 2012 and amended November 27, 2012 2. Corrected Agreement for Services with Margaret Silveira
Page 1
Agenda Item #IV.F.
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 2
Formatted: Centered
AGREEMENT FOR SERVICES BETWEEN THE CITY OF LAKEPORT AND MARGARET SILVEIRA
This Agreement for Services, dated November 6, 2012 and revised September 17, 2013, is between the City Council of the City of Lakeport (City Council) and Margaret Silveira( Silveira) for services to be performed by Silveira in the at will position of City Manager. 1. DUTIES
Silveira shall perform the functions and duties specified in Section 2.10 et seq. of the Lakeport Municipal Code and other legally permissible and proper duties and functions as the City Council shall from time to time assign. 2. TERM
A. The services to be provided by Silveira are extended from the effective date of this Agreement and will continue through May 30, 2016. B. Nothing in this document shall prevent, limit, or otherwise interfere with the right of the City Council to terminate the services of Silveira at any time, subject to the provisions of Section 3. C. Nothing in this document shall prevent, limit or otherwise interfere with Silverias right to resign at any time from her position with City, subject to the provisions of Section 3. 3. TERMINATION/EXTENDED TERM
A. In the event Silveiras employment contract is not extended by the City Council past May 30, 2016, Silveira shall be paid for any unused sick or vacation time and her remaining salary due through May 30, 2016, or her termination date, and the employer/employee relationship between the parties shall automatically expire of its own accord without further liability to either party. B. In the event Silveira is terminated by the City Council prior to May 30, 2016, and during such time Silveira is willing to perform her duties under this Agreement, the City shall, at Silveriass option: (1) Pay Silveira six (6) months compensation, excluding all other benefits except for her accrued paid leave and the required offer of COBRA benefits. At the option of the City Council she may continue on the payroll or receive a lump sum, except that all accrued leave will be paid at the time of separation without the accrual of health, vacation, or other benefits during said period;. or
(2) Provide six (6) months notice to Silveira during which time Silveira shall retain her position, perform all City Manager duties, including receipt of full salary and benefits. At the end of the six-month period, she will then separate from City service with no further liability to City except for any accrued but unpaid compensation or benefits and the required offer of COBRA benefits. C. In the event at any time during the course of this Agreement Silveira resigns following a suggestion, whether formal or informal, by the City Council that she resign, then, in that event, Silveira may, at her option, be deemed terminated at the date of such resignation within the meaning and context of the severance pay provision. D. Consideration of Silveriass termination by the City Council may not occur within ninety (90) days after a General Municipal Election or Special Election wherein a new member or members are elected to the City Council. Any decision to terminate or not renew the Agreement shall be made in closed session and confirmed in a public meeting. E. Silveira may choose to resign her office instead of being terminated if a decision by the City Council to terminate has been made in closed session. In such an event, the public announcement as provided for in paragraph 3(E) will note Silveira has resigned and the provision 3(C) remains applicable. F. In the event that termination is the result of an illegal act by Silveria, including but not limited to the acts described in F(1) through F(5) below, the provisions of paragraphs, 3(C) (B) through 3(F) (E) shall not be applicable, unless otherwise determined by the City Council: (1) Malfeasance, dishonesty for personal gain, or moral turpitude, willful or corrupt misconduct or conviction of any felony; supplies; (2) (3) Willfully causing damage to public property or willfully wasting public Specific acts or conduct which brings scandal or disrepute to the City;
(4) Insubordination, which shall mean the willful refusal to obey lawful directions of the City Council; or (5) 4. SALARY The City Council will establish the initial salary for the City Manager by including same in the annual salary resolution. This initial annual salary for the City Manager position shall be the sum of $115,000 payable in bi-monthly installments. If her contract is not renewed then Silveira is free to seek other employment, and Council shall have no further obligation to Silveira except for payment of any accrued salary and/or paid leave that is due her. Annual
Agreement for Services Page 2
Absence without leave.
salary adjustments shall be based on her annual evaluations and be established as a percentage increase of her current salary or such other benefits as the parties may chose to negotiate. 5. BENEFITS The City Manager shall be entitled to the following City benefits: A. Cal PERS retirement at the 2.5% @ 55 formula with Silveira paying the full employee share of the retirement contribution and City paying the full Employer share. B. Sick time accrued at the rate of one (1) day per month and vacation time at the rate of twenty (20) days per year per existing City policy. Vacation days may be accrued up to 400 hours and will accrue per standard City policy. C. Two (2) weeks annual paid administrative leave with one week to be used with one week available to be cashed out within each fiscal year. D. E. A car allowance of $400.00 per month. A cell phone stipend of $60.00 per month
F. The City Manager shall be entitled to REMIF sponsored Health Insurance at the single rate with 76 % paid by City and 24 % paid by the employee. All other insurance benefits (life, disability, dental and vision) shall remain 100% paid by City per existing city policy. 6. PERFORMANCE EVALUATIONS
The City Council shall review and evaluate the annual performance of the City Manager by May 30 of each year. Such review and evaluation shall be in accordance with the specific criteria developed by the City Council in consultation with the City Attorney and Silveira. The City Council may provide Silveira with their written comments and will discuss the review with Silveria, at the choice of either the City Council or the City Manager. Annual salary adjustments shall be based on her evaluation and be established as a percentage increase of her current salary or such other benefits as the parties may chose to negotiate. 7. INDEMNIFICATION
The City Council shall defend, hold harmless, and indemnify Silveira against any tort, professional liability claim, or demand, or civil rights or other legal action, arising out of any act, event or omission occurring in the performance of Silveiras professional duties as City Manager, except to the extent that her actions are the result of gross negligence or willful misconduct. The City Council will defend, compromise, or settle any such claim or suit, as appropriate, and pay the amount of any settlement or judgment rendered thereon. This indemnification shall extend beyond termination of employment or other expiration of this Agreement, to provide full and complete protection to Silveira for acts undertaken or
Agreement for Services Page 3
committed by Silveira in her capacity as City Manager, regardless of whether receipt of notice or filing of any claim or lawsuit occurs during or following her employment with the City. The provisions of California State law may limit the extent of defense or indemnification. 8. PROFESSIONAL DEVELOPMENT
City Council agrees to budget for and pay reasonable professional dues, subscriptions, courses, institutes, seminars, and travel and subsistence expenses of Silveira for participation in professional activities required by law or necessary to continue her professional development including her annual ICMA dues. Participation in conferences sponsored by entities such as the California League of Cities, REMIF, and such other, state, regional and local government groups and committees in which participation is beneficial to the City of Lakeport to her profession is encouraged, and City agrees to budget and pay for reasonable travel, cell phone, and other reasonable expenses incurred in the performance of the job functions of City Manager. 9. BINDING AGREEMENT
The Agreement reflects the complete Agreement between the parties. The Agreement shall be binding and inure to the benefit of the heirs of the estate of Margaret Silveria. 10. NOTICE
Notices required pursuant to this Agreement shall be given by personal service upon the party to be notified or by delivery of same to the custody of the United States Postal Service, or its lawful successor, postage prepaid and addressed as follows: CITY OF LAKEPORT City of Lakeport Attention: City Clerk 225 Park Street Lakeport, CA 95453 EMPLOYEE Margaret Silveira P. O. Box 1133 Lakeport, CA 95453 11. INTERPRETATION OF AGREEMENT
Should interpretation of this Agreement or any portion thereof be necessary, it is deemed that this Agreement was prepared by the parties jointly and equally, and shall not be interpreted against either party on the ground that the party prepared the Agreement or caused it to be prepared. 12. AMENDMENTS; WAIVERS
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This Agreement may not be amended except by an instrument in writing, signed by each of the parties. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision whether or not similar, nor shall any such waiver constitute a continuing or subsequent waiver of the same provision. No waiver shall be binding, unless executed in writing by the party making the waiver. 13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument. An authenticated facsimile signature shall be deemed equal to an original. 14. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the parties considering the subject matter hereof and all prior agreements or understandings, oral or written, are hereby merged herein. This Agreement shall not be amended in any way except by a writing expressly purporting to be such an amendment, signed, and acknowledged by both of the parties thereto. 15. SEVERABILITY
If any provision of this Agreement, or its application to any person, place or circumstance, is held by an arbitrator or a court of competent jurisdiction to be invalid, unenforceable, or void, such provision shall be enforced to the greatest extent permitted by law, and the remainder of this Agreement, and such provision as applied to other persons, places and circumstances, shall remain in full force and effect. 16. GOVERNING LAW; VENUE
This Agreement shall be construed under and governed exclusively by the laws of the State of California, and venue shall lie exclusively in Lake County, California. The signatures of the parties below indicate that each has read and understood the Agreement and will abide by the terms stated herein. The parties have executed this Agreement on the dates noted. CITY COUNCIL OF THE CITY OF LAKEPORT ATTEST: __________________________________ JANEL M. CHAPMAN, City Clerk ___________________________________ STACEY MATTINA, Mayor Dated: _____________________________
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____________________________________ MARGARET SILVEIRA, City Manager Dated: _____________________________
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CITY OF LAKEPORT
STAFF REPORT
RE: Report on the Impact of the Senior Mobile Home Rent Control Initiative SUBMITTED BY: David J. Ruderman, Interim City Attorney Matthew T. Summers, Assistant Interim City Attorney PURPOSE OF REPORT: Information only Discussion Action Item MEETING DATE: 9/17/2013
WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD: Receive and review this report under Elections Code section 9212 on the senior mobile home rent control initiative and either adopt a resolution to place the measure on the ballot or provide staff further direction as set forth below. The City Council requested this legal analysis of the initiative under Elections Code section 9212 at its regular meeting on August 20, 2013. We understand the proponents goal is to adopt mobile home rent control to protect indigent senior citizens living on fixed incomes from fluctuations in the mobile home rental market. This report does not comment on the policy reasons weighing in favor of or against passage of this initiative, or whether or not circumstances exist in Lakeport that would or would not justify mobile home rent control for seniors. Instead, this report analyzes the legal implications of the initiative as drafted and certified by the Registrar of Voters. We conclude that the initiative is likely to be litigated if adopted and that a court will likely invalidate the initiative because it: (1) constitutes a regulatory taking; and (2) is preempted by state law. The Citys mobile home park owners have expressed an interest in litigating if the initiative is adopted. The options before the City Council are to: Adopt the initiative as an ordinance; Place it on the next regularly-scheduled general election ballot in November 2014; Seek declaratory and injunctive relief from the Citys duties enumerated above (i.e., adopt or place it on the ballot) on the basis that the initiative is plainly illegal, under the theory of Widders v. Furchtenicht (2008) 167 Cal.App.4th 769, either before or after placing it on the ballot; or Refuse to place the initiative on the ballot and defend the Citys refusal if the proponent brings a lawsuit seeking to force the City to enact the initiative or place it on the ballot.
The Council must take one of these actions within 10 days of receipt of this report. Although we conclude the initiative suffers from several legal defects and is likely to be struck down if challenged, it is the City Councils decision on how to proceed.
Meeting Date: 09/17/2013 Page 1 Agenda Item # VI.A.
BACKGROUND: The initiative seeks to impose rent control on mobile home parks in the City in which 80 percent or more of mobile homes are occupied by at least one person aged 65 or older. If a park meets this threshold, the initiative resets rents to those in effect on January 1, 2012 for each mobile home space. The initiatives stated purpose is to ensure a reasonable rate of return on park owners investments while also protecting the right of seniors to maintain their standard of living. The initiative provides definitions for several terms, though not all defined terms are used within the initiatives provisions. Once a mobile home park qualifies a senior mobile home park under the 80 percent threshold, the initiative prohibits rent increases in these parks unless there is an increase in Social Security benefits. It limits rent increases to the percentage by which Social Security benefits increase. The initiative further provides that if Social Security benefits decrease, rents will not decrease, though if Social Security benefits later increase, then the rents may not rise until the previous benefit level is restored. The initiative also prohibits rent increases if a new tenant takes possession of a mobile home due to a prior tenant leaving due to illness, incapacity, death, or sale. The initiative allows an owner of a senior mobile home park to pass through the costs of capital improvements to the park, but only if a majority of the occupants of the affected spaces consent. It provides that, if 50 percent of the spaces subject to rent control, or 50 spaces, whichever is less, sign a petition objecting to the pass-through, then the proposed pass-through must be submitted to arbitration. Park owners are also allowed to pass government-mandated expenses through to residents without the consent of the tenants. However, as with capital improvement pass-through, if 50 percent of the spaces subject to rent control, or 50 spaces, whichever is less, sign a petition objecting to the pass-through, an arbitrator must decide whether the expense is pass-through of the government mandated expense is allowed. Finally, the initiative contains some exemptions to its rent control provisions. It exempts leases over twelve months in duration, mobile home spaces constructed after 1991, and mobile homes which are not the tenants principal residence. It also provides that every new mobile home space lease which exceeds 12 months in duration must include a notice that the leases duration exempts the lease from rent control. The initiative provides that a violation of any of its provisions by anyone other than a City officer or employee constitutes a misdemeanor. DISCUSSION: INITIATIVE LIKELY CONSTITUTES A REGULATORY TAKING OF PROPERTY. The initiative would reset rental rates for mobile home spaces in senior mobile home parks back to the rates in effect on January 1, 2012. However, rent control exceeds a Citys police power and constitutes a regulatory taking of property when there is insufficient evidence to demonstrate the rental rates then in effect reasonably reflected general market conditions of comparable properties. (See Concord Communities, L.P. v. City of Concord (2001) 91 Cal.App.4th 1407, 14141415 [question is whether the base date rents can reasonably be deemed to reflect general market conditions].) Here, the initiative offers limited evidence on the reasonableness of the January 1, 2012 base rent date and therefore likely constitutes an unconstitutional taking of private property. The initiative proponents letter accompanying his Notice of Intent to Circulate Petition provides some evidence that the rates in effect on January 1, 2012 were a fair base rent, but only for a single mobile home park. A court will likely find evidence from a single park is insufficient to establish that the January 1, 2012 base rent necessarily reflects general market conditions. Instead, a court will likely require specific evidence of the values of comparable mobile home parks with similar amenities, the costs incurred by park owners, and the returns comparable parks actually receive. The court may also consider the returns received on like investments involving similar risks, with similar capital expenditures and tax benefits. (Id. at 1416 [Court overturned base rents established by ordinance for two mobile home parks where base rates were
significantly below market rate].) Without such additional evidence to support the base rent date, the owners of affected mobile home parks will likely prevail in a challenge that the initiative exceeds the Citys police power and constitutes a regulatory taking by depriving them of a portion of the economic value of their property. The initiative also likely constitutes a regulatory taking because it fails to provide park owners an administrative process by which they can seek approval for rent increases if necessary to maintain a reasonable rate of return or in light of unique or extraordinary circumstances. Although the initiative allows automatic rent increases tied to increases in Social Security benefits, this alone is likely insufficient. To survive a regulatory takings challenge, a mobile home rent control ordinance must provide park owners with a reasonable rate of return on their investment. (See MHC Financing Limited Partnership Two v. City of Santee (2005) 125 Cal.App.4th 1372, 1396, citing Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 172-173 [a rent control ordinance is facially unconstitutional if it does not provide a fair and adequate procedure for obtaining discretionary rent increases.].) It is unlikely a court would find automatic rent increases based on Social Security benefits alone will necessarily provide park owners with a reasonable return on their investment since a cost of living adjustment is not necessarily tied to the factors that establish a park owners reasonable return. Nor does an automatic increase allow for rent increases in unusual circumstances. For instance, in Apartment Association of Greater L.A. v. Santa Monica Rent Control Board (1994) 24 Cal.App.4th 1730, the court considered a regulation that allowed landowners who purchased regulated properties before the city imposed rent control to seek an adjustment in the base rental rate to reflect unique circumstances, but denied that right to post-rent-control purchasers. (Ibid.) The court found that this regulation could have unconstitutional results and stayed its enforcement. (Id. at p. 1739.) Here, the initiative lacks any administrative mechanism for either category of park owners to seek an adjustment in the base rental rate. (Ibid. [Rent control regulations can have a confiscatory effect if no rent adjustment mechanism is provided, and a regulation may be invalid on its face when its terms will not permit those who administer it to avoid confiscatory results in its application to the complaining parties.].) To avoid the potential for a regulatory taking, a mobile home rent control ordinance must include an administrative process by which the park owners may seek to increase rents at other times. An example of such an administrative process that has withstood constitutional challenge is the procedure used in the City of Carson. (Carson Mun. Code, Art. IV, Ch. 7, 4704 [allowing rent increases after a park owners application and a public hearing, if the Mobile home Park Rental Review Board finds that the increase protects Homeowners from excessive rent increases and allows a fair return on investment to the Park Owner.]; Carson Mobilehome Park Owners Association v. City of Carson (1983) 35 Cal.3d 184, 194195 [upholding Carsons rent control ordinance against a facial challenge].) Although it may be possible to create a legislative fix for this shortcoming through passage by the City Council of an administrative hearing procedure, any such process would be costly to administer. Administrative costs are often borne by a fee on park owners, part of which may be passed through to tenants. (See Santa Rosa Mun. Code, 6-66.160 [administrative costs paid by annual rent stabilization administration fee levied on park owners by number of spaces, 50% of which may be passed through to tenants].) The precise cost to fund the administrative review and hearings required to comport with due process cannot be accurately estimated at this time given the uncertainty regarding its precise scope and frequency of potential use. However, because the initiative at issue here lacks this necessary administrative procedure to allow park owners to apply for discretionary rent increases based on their rate of return or other exceptional circumstances, it is likely facially unconstitutional. INITIATIVE IS LIKELY PREEMPTED BY STATE STATUTES. A court will also likely find the initiative is preempted by state statutes governing mobile homes. Preemption occurs when an otherwise valid local law conflicts with state law and is thereby void. Under Civil Code section 798.45, which incorporates the definition of new construction from Civil Code section 798.7, mobile home spaces constructed and initially available for rent after January 1, 1990 are exempt from any rent control ordinance. The initiative,
however, only exempts any spaces initially available since January 1, 1991, leaving those initially available from January 1 to December 31, 1990 subject to rent control, though state statute requires they not be. This provision is therefore likely preempted by state law and therefore void. The initiatives requirement that leases in excess of twelve months include a notice that the lease is exempt from the protections of rent control, together with that exemption for these long-term leases, likely duplicates state law. Civil Code section 798.17 provides an exemption from rent control for mobile home space leases lasting longer than twelve months, but only if park owners provide a detailed, specified notice and comply with requirements governing the leases execution, including a 72 hour refund period. By providing for notice and an exemption for long-term leases, without fully complying with the statutory requirements under the Civil Code, the initiatives provisions in this regard conflict with section 798.17 and may be void. INITIATIVE WILL LIKELY REQUIRE COURT INTERVENTION TO INTERPRET. The initiative also uses terms, both defined and non-defined, in a manner that makes them reasonably susceptible to different interpretations. These ambiguities will likely lead to enforcement problems and disputes concerning their application that would require court intervention to settle. For instance, the language the initiative uses to identify which mobile home parks qualify as senior parks is ambiguous. The initiative defines manufactured home resident as a person entitled to occupy a manufactured home under a lease agreement, which the initiative also refers to as a resident or tenant. However, when describing which parks constitute a senior park subject to rent control, the initiative at one point requires at least one inhabitant of 80% of the mobile homes is over 65 years of age, but another requires at least one tenant 65 years of age or older. It is therefore unclear whether only one occupant of the mobile home need to 65 to count the mobile home toward the 80 percent, or whether the senior citizen need be on a lease agreement to count. In parks that are near the 80 percent threshold, park owners and tenants will likely find this a contentious issue. The initiative also arguably applies the limitation on rent increases to Social Security increases to all mobile home parks in the City, as opposed to only senior mobile home parks, because this section is not expressly limited to senior mobile home parks. 1 However, the provision establishing the base rent date is expressly limited to senior mobile home parks. 2 This may indicate an intent to limit rental rate increases for all mobile home parks in the City, while only rolling rental rates back to those in effect on January 1, 2012 for senior mobile home parks. The sections governing pass-throughs of capital costs and government-mandated expenses are similarly ambiguous and raise additional questions. These sections refer to residents, tenants, homeowners, and also to spaces. It is unclear whether the right to seek arbitration of these pass-throughs is held by the owner of the affected mobile home, a non-owner tenant or resident, or to an inhabitant of a mobile home. Moreover, the initiative provides the right to arbitration for spaces subject to rent control in a park, which raises a more fundamental ambiguity: In a park that qualifies under the initiative as a senior mobile home park, are all spaces covered by rent control, or only those that seniors occupy? In other words, would the one home owned by a 35 year-old mother of two school-age children in a senior mobile home park receive the benefit of rent control or not? The lack of provisions for even this basic aspect of the initiative highlights the difficulty of interpretation and likelihood of litigation as a result. INITIATIVE POTENTIALLY VIOLATES EQUAL PROTECTION. The initiative may also be potentially invalid by violating equal protection guaranteed by our Constitution under a class of one theory. A class of one violation occurs when (1) a party is treated differently from other similarly situated persons, (2) the difference in treatment was intentional, and (3) there is no rational basis for the difference in treatment. (Village of Willowbrook v. Olech (2000) 528 U.S. 562, 564.) Unlike the other problems this report identifies, a
This section provides: Rental increases shall not be allowed unless there is an increase in Social Security Benefits, and only by the percentage of that increase. 2 This section provides: Any rental increase in senior mobile home parks made after January 1, 2012, shall be rolled back to the rate which was in effect on January 1, 2012. (emphasis added.)
1
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Agenda Item # VI.A.
class of one claim is a challenge to the initiative as applied and is not necessarily apparent on its face. It therefore likely could only be raised if the voters adopt the initiative. Based on the information provided the City Council at the August 20, 2013 regular meeting, it is possible that there is only one mobile home park that would be affected by the passage of the initiativethe same park in which the proponent resides. That park owner would be the only owner in the City affected by the initiative. The intent to treat that park differently from the other mobile home parks could be evidenced from the purpose and text of the initiative, as well as the choice of an 80 percent threshold, one high enough to exclude all other parks. Although the proponents may be able to show a rational basis for this distinction, it is unclear why seniors living in parks where they are not vast majority of residents are less in need of rent control than those surrounded by mainly other seniors. A court could find the 80 percent threshold arbitrary and strike down the initiative as violating the park owners equal protection rights. OPTIONS: The County Registrar of Voters has certified that the proposed initiative bears sufficient valid signatures to trigger the City Councils obligation to either: 1. 2. Adopt the ordinance as presented, without change (Elec. Code 9215, subd. (a)); or Present the ordinance for consideration to the voters at the next upcoming general municipal election (Elec. Code 9215, subd. (b)). Under Lakeport Municipal Code section 1.04.010, the Citys general elections are held on the same day as the Statewide General Election, which is the first Tuesday after the first Monday in November of each evennumbered year, or November 4, 2014. (Elec. Code, 1200.)
Alternatively, case law establishes a few other options a City may take when confronted with an initiative that is plainly illegal: 3. Seek declaratory and injunctive relief from the duty to place the initiative on the ballot based on the initiatives invalidity under the theory of Widders v. Furchtenicht (2008) 167 Cal.App.4th 769, 779 (Ojai City Attorney could seek judicial relief from duty to prepare title and summary of plainly invalid initiative). Place the initiative on the ballot for voter consideration, but refuse to defend the initiative if a pre-election challenge is brought against it. (City of Burbank v. Burbank-Glendale-Pasadena Airport Authority (2003) 113 Cal.App.4th 465, 482483 [City is not required to defend initiative measure].) Although the Burbank case and recent Proposition 8 cases suggest that a city can refuse to defend or even seek a court determination of an initiatives validity once adopted, it is generally considered the duty of a city to defend any initiative adopted by the voters. Prior to adoption, however, it is unlikely that the City is required to do so, as it is not yet a legislative act of the City. Decline to either adopt the ordinance or place it on the ballot, and instead force the initiatives proponents to bring suit to require the City to present it to the voters. (See deBottari v. City Council (1985) 171 Cal.App.3d 1204, 12081210 [City refused to place referendum on ballot or to repeal challenged ordinance, Court upheld this action upon finding referendum would be patently invalid].)
4.
5.
The Council must adopt the proposed ordinance, place it on the ballot, or else seek judicial relief under one of the options above, within 10 days of receipt of this report. (Elec. Code 9215, subd. (c).)
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FISCAL IMPACT: None See Comments Account Number: Comments: Costs for placing the initiative on the ballot for the next general municipal election are estimated at less than $10,000. If the initiative is passed by the voters, the City will likely spend tens of thousands of dollars to defend the initiative against a legal challenge from park owners. SUGGESTED MOTIONS: Move to receive and file this report under Elections Code section 9212 and further adopt a resolution directing the City Clerk to include the initiative on the ballot when calling the next general municipal election and instructing the City Clerk to submit further resolutions as necessary to place initiative on ballot. 1. Notice of Intent to Circulate & Initiative Attachments: 2. Resolution directing the City Clerk to include initiative on the ballot in next general municipal election
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Agenda Item # VI.A.
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 2
RESOLUTION NO. ____ (2013)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKEPORT DIRECTING THE CITY CLERK TO INCLUDE AN INITIATIVE MEASURE ENTITLED, SENIOR MOBILE HOME RENT CONTROL INITIATIVE ON THE BALLOT WHEN CALLING THE NEXT REGULAR MUNICIPAL ELECTION
WHEREAS, on December 20, 2012, the City Clerk received a Notice of Intent to Circulate Petition for an initiative entitled Senior Mobile Home Rent Control; and WHEREAS, on January 3, 2013, the City Attorney prepared a ballot title and summary for the Senior Mobile Home Rent Control Initiative; and WHEREAS, on July 1, 2013, the City Clerk received signed petitions for the Senior Mobile Home Rent Control Initiative; and WHEREAS, on July 23, 2013, the Lake County Registrar of Voters reviewed the Senior Mobile Home Rent Control Initiative and confirmed the number of verified signatures meets the number of signatures required by law for submission to the electorate; and WHEREAS, pursuant to Elections Code sections 9215 and 1405, Council directs that the Senior Mobile Home Rent Control Initiative be submitted to the voters at the general municipal election on November 4, 2014; and NOW, THEREFORE, BE IT RESOLVED THAT: SECTION 1. Pursuant to Elections Code sections 9215, subdivision (b) and 1405, subdivision (b), the City Clerk is ordered to include on the ballot when calling the next general municipal election the Senior Mobile Home Rent Control Initiative, the text of which is attached hereto as Exhibit A. SECTION 2. The City Clerk is further ordered to provide the City Council with all resolutions necessary to call the next general municipal election and place the Senior Mobile Home Rent Control Initiative on that ballot, including but not limited to resolutions concerning the ballot title and label, impartial analysis, and rebuttal arguments. SECTION 3. The City Clerk shall cause the Senior Mobile Home Rent Control measure to be printed and to provide a copy of the measure to any voter upon request. This resolution was considered and adopted by the City Council for the City of Lakeport at a regular meeting held on September 17, 2013, by the following vote: AYES: NOES: ABSTAINING: ABSENT:
120630.2
_________________________________ THOMAS ENGSTROM, Mayor ATTEST: _______________________________ KELLY BUENDIA, Acting City Clerk
Resolution No. ____ (2013)

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City Council Lakeport Redevelopment Successor Agency City of Lakeport Municipal Sewer District
CITY OF LAKEPORT
STAFF REPORT
RE: Consider a Resolution Authorizing the Execution and Delivery of a Loan Agreement to Refinance Outstanding Side Fund Obligations of the City to CALPERS, and Directing the Filing of a Judicial Validation Action SUBMITTED BY: Daniel Buffalo, Finance Director PURPOSE OF REPORT: Information only Discussion Action Item MEETING DATE: 9/17/2013
WHAT IS BEING ASKED OF THE CITY COUNCIL/AGENCY/BOARD: Staff recommends that the City Council adopt Resolution No. ____ (2013) authorizing the execution and delivery of a Loan Agreement to refinance outstanding side fund obligations of the City to the California Public Employees Retirement System, directing the filing of a Judicial Validation Action with respect thereto and providing other matters relating thereto. BACKGROUND: The City is a presently contracting member of the California Public Employees Retirement System (PERS), and under its contract with PERS the City is obligated to make certain payments to PERS in respect of (a) retired public safety employees and (b) retired miscellaneous employees, each under the Side Fund program of PERS which amortizes such obligations over a fixed period of time (collectively, the PERS Side Fund Obligations). CalPERS combines the retirement plans for all public agencies with small plans (less than 100 employees like Lakeports safety and miscellaneous plans) and has created for each member agency a so-called Side Fund to amortize each agencys unfunded liability over a fixed term (Miscellaneous term ends 2022, and Safety term ends 2021) at a fixed interest rate (currently 7.50%). DISCUSSION: The City has an opportunity to reduce the annual cost to the general fund, water and sewer enterprise funds for its CalPERS Side Fund Obligations. If the City chooses to use this opportunity, it would accept a taxable loan from a financial institution (the Bank) of the Citys choice at a later date pursuant to terms and conditions of a Loan Agreement between the Bank and the City (the Loan Agreement), with an aggregate principal component in an amount not-to-exceed $2,400,000 designated the City of Lakeport, Series 2013 Refunding Loan Obligation (2013 CalPERS Refunding Project) (the Loan), a copy of which is attached to this report and is on file with the City Clerk. ESTIMATED SAVINGS Based on current taxable interest rates in the marketplace for a 9-year maturity (4.25%), we estimate that the City could potentially save $210K over through 2022 (see Attachment 2). On a present value (todays dollars) basis, that equates to $173K, or 7.36% of the refunded UAAL amount. On an annual basis, this
Meeting Date: 09/17/2013 Page 1 Agenda Item #VI.B.
equates to $24K of savings each year through 2021, and $13.5K in 2022. These figures assume that the City structures the new loan to mimic the same payment schedule of its current loan with CalPERS and take the savings on a uniform basis each year. The City also has other structuring options (such as taking the savings upfront, modifying the maturity, etc) that it, along with the assistance of its Financial Advisor, will evaluate prior to the execution of this refinancing. A structure will be chosen based upon maximizing the savings to the City, while creating an optimal payment schedule that works within the Citys budgetary needs. RISKS TO SAVINGS Changes in Market/Interest Rates: The savings numbers estimated above are based on current market interest rates. Given that the terms of the loan will not be secured until a few months from now, actual interest rates will not be known until that time. Higher rates would lower the expected savings, while lower rates could increase them. The City will be setting a minimum savings target that they would like to obtain, and will not execute the refinancing unless those terms are met. Change in CalPERS Actuarial Asssumption: The 7.50% interest rate that CalPERs uses in its calculations of the annual cost to amortize the PERS Side Fund Obligations can be changed unilaterally by the CalPERS board (although such changes occur rarely, and only after exhaustive actuarial and investment analysis). Specifically, it is possible at some point over the next 9 years (the amortization period for the Citys Side Funds) that the CalPERS board could lower its 7.50% actuarial earnings assumption. Such a reduction would reduce the cash flow savings realized by the City through the issuance of Loan. If the CalPERs earnings assumption were lowered to a level approximating the interest rate on the Citys Loan, cash flow savings would be eliminated. Staff has conferred with a past State-appointed actuarial firm (Bartel Associates), and has been told that such a reduction in rate is unlikely, and that if a reduction does take place, it will most likely be a minor (for example, .25%) reduction, which only would impact savings minimally (about $3,200 annually under the uniform savings scenario). LOAN REPAYMENT The Loan will be secured by approximately (i) 65% general fund revenues, (ii) 16% water enterprise revenues, and (iii) 19% wastewater enterprise fund revenues. We arrived at the allocations based on the average contributions made to CalPERS by each fund over the past five years (see Attachment 3). Under current municipal market conditions, estimated annual debt service on the Loan would be significantly less than the annual payments presently scheduled to be paid to CalPERS for this same purpose as described in the savings section above. The amortization period on the Loan could be the same as the amortization period used by CalPERS for the Side Fund. It could also be shorter or longer depending on the cash flow needs of the City and the cost savings preference of the Council. The proposed transaction would refinance an existing obligation to take advantage of low bond market rates. It would not change the benefits owed to existing or prior City employees. Expenses associated with the execution and delivery of the Loan will be paid from Loan proceeds and are contingent on the Loan being executed and delivered by the City. See Attachment 4 for a breakdown of associated transaction costs. The parameters established for the sale of the Loan are as follows: 1. 2. 3. 4. The principal amount of the Loan will not exceed $2.4 million. The interest rate on the Loan will not exceed 5.10%. Net present value savings will not be less than 3%. The total costs of issuance will not exceed $80 thousand (see Attachment 4).
Page 2 Agenda Item #VI.B.
SUBJECT RESOLUTION The subject Resolution appoints p2 Capital Advisers as Financial Advisers to the City and The Weist Law Firm as Bond Counsel to the City for this refinancing. Both firms will be available to review with the Council the solicitation and selection process, the documents included with this Agenda item, provide a report on other necessary Council actions and the anticipated sequence of events should the Council decide to move ahead with this Refunding. The subject Resolution being recommended for adoption essentially authorizes and approves the form of Loan Agreement necessary to provide for the successful execution and delivery of the proposed Loan. The Loan Agreement provides for all of the terms and conditions of the proposed Loan to the City from the Bank (to be determined), secured by the Bonds, including, but not limited to, closing conditions, prepayment provisions, and the pledge of revenues (being comprised of (i) 65% general fund revenues, (ii) 16% water enterprise revenues, and (iii) 19% wastewater enterprise fund revenues) commensurate with the scheduled debt service on the Loan. The Resolution also authorizes Bond Counsel, with the assistance of the City Attorney, to perform a validation procedure in the local Superior Court. This involves filing a court action to publicly notice the Citys intention to execute and deliver the Loan Agreement to refund the existing PERS Side Fund Obligations. If there is no challenge, the validation is ratified by the Superior Court typically within 90 days of its filing. The validation is necessary to affirm Bond Counsels position that the Loan is exempt from the Constitutional Debt Limit because the proceeds are being used to refinance a pre-existing obligation imposed by law FISCAL IMPACT The Loan will bear interest at a rate that is presently expected to be less than 5.10%, taking the place of the PERS Side Fund Obligations which presently bear interest at a rate of 7.5%. The Loan will be paid on a fully amortizing basis likely matching the presently existing amortization period of the PERS Side Fund Obligations. As noted above, the estimated annual payments made by the City are expected to be about $24K lower through 2021, and $13.5K lower in 2022. For 2013/14, this annual loan payment is estimated to be about $300K (compared to the $324K under the CalPERS loan terms). The total costs of issuance are fully contingent, and are not expected to exceed $80k. These costs have already been factored into the estimated savings figures. ESTIMATED SCHEDULE 9/17 9/18 October 12/3 12/5 12/11 Council approval of bond documents and validation process Validation action filed in Superior Court Finalize credit package; engage potential investors Distribute official bidding package to potential investors Receive investor bids and select lowest interest rate bidder; contract signed Closing; funds wired to CalPERS to pay-off full UAAL
Note: Timing dependent on validation action completion OPTIONS: 1. Approve and authorize the execution and delivery of the attached Loan Agreement to refinance outstanding side fund obligations of the City to the California Public Employees Retirement System,
Meeting Date: 09/17/2013 Page 3 Agenda Item #VI.B.
directing the filing of a judicial validation action with respect thereto and providing other matters relating thereto. 2. Do not approve but provide direction to staff. FISCAL IMPACT: None Number: $Estimated net present value savings to the City of $173,000 Account
SUGGESTED MOTIONS: Approve and authorize the City Manager to execute the attached Loan Agreement and associated resolution to refinance outstanding side fund obligations of the City to the California Public Employees Retirement System, and direct the filing of a judicial validation action with respect thereto and providing other matters relating thereto. Attachments: Attachment 1: Draft Loan Agreement Attachment 2: Refinancing Analysis Attachment 3: Fund Salary Share Analysis Attachment 4: Detail Cost of Issuance (Transaction Cost Summary) Attachment 5: Authorizing Resolution
Page 4
Agenda Item #VI.B.
ATTACHMENT 1
SERIES 2013 REFUNDING LOAN AGREEMENT
By and Between
CITY OF LAKEPORT
And
___________________________
Dated as of December 1, 2013
Relating to the
$__________ CITY OF LAKEPORT SERIES 2013 REFUNDING LOAN OBLIGATION (2013 CALPERS REFUNDING PROJECT)
ATTACHMENT 1
TABLE OF CONTENTS Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICABILITY Section 1.1. Section 1.2. Section 1.3. Section 1.4. Section 1.5. Section 1.6. Definitions...................................................................................................................2 Benefits of Loan Agreement Limited to Parties .........................................................7 Successor Is Deemed Included in all References to Predecessor ...............................7 Waiver of Personal Liability .......................................................................................7 Article and Section Headings, Gender and References ..............................................7 Partial Invalidity..........................................................................................................7 ARTICLE II REPRESENTATIONS OF THE DISTRICT Section 2.1. Representations, Covenants and Warranties of the City .............................................8 Section 2.2. Representations, Covenants and Warranties of the Bank ...........................................9 ARTICLE III TERMS OF THE LOAN AND LINE OF CREDIT Section 3.1. Obligation to Make Loan; Amount of Loan; Term ..................................................11 Section 3.2. Application of Loan Proceeds ...................................................................................11 Section 3.3. Application of Costs of Issuance Set-Aside Moneys ................................................11 Section 3.4. Optional Prepayment ................................................................................................11 Section 3.5. Execution of the Loan ...............................................................................................11 Section 3.6. Validity of the Loan Agreement ...............................................................................12 Section 3.7. Assignment by the Bank ............................................................................................12 Section 3.8. Closing Conditions.....................................................................................................12 Section 3.9. Events Permitting Bank to Terminate ........................................................................13 ARTICLE IV SECURITY Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Security for the Loan ................................................................................................14 Loan Repayments......................................................................................................14 Loan Repayment Fund; Allocations .........................................................................14 Special Obligation of the City; Obligations Absolute ..............................................15 Reduction upon Partial Prepayment..........................................................................15 Rate on Overdue Loan Payments ..............................................................................15 ARTICLE V COVENANTS OF THE DISTRICT Section 5.1. Section 5.2. Section 5.3. Section 5.4. Section 5.5. Punctual Payment......................................................................................................16 Budget and Appropriation of Debt Service; Certification to Bank...........................16 Books and Accounts; Financial Statements; Additional Information.......................16 Protection of Security and Rights of Owners ...........................................................16 Further Assurances....................................................................................................16
ATTACHMENT 1
TABLE OF CONTENTS (continued) Page
Section 5.6. Information to Bank ..................................................................................................16 Section 5.7. Obligation of the City ...............................................................................................17 Section 5.8. Certain Financial Covenants of the City ...................................................................17 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES Section 6.1. Events of Default and Remedies ...............................................................................17 Section 6.2. No Remedy Exclusive...............................................................................................19 Section 6.3. Non-Waiver...............................................................................................................19 ARTICLE VII NOTICES; JUDICIAL REFEREE Section 7.1. Notices ......................................................................................................................19 Section 7.2. Judicial Referee .........................................................................................................20 ARTICLE VIII AMENDMENTS; DISCHARGE; GENERAL AUTHORIZATION; EFFECTIVE DATE Section 8.1. Section 8.2. Section 8.3. Section 8.4. Section 8.5. Section 8.6. Section 8.7. Section 8.8. Section 8.9.
EXHIBIT A EXHIBIT B EXHIBIT C
Amendments Permitted .............................................................................................21 Discharge of Loan Agreement ..................................................................................21 General Authorization ...............................................................................................22 Binding Effect ...........................................................................................................23 Severability ...............................................................................................................23 Further Assurances and Corrective Instruments .......................................................23 Applicable Law .........................................................................................................23 Captions ....................................................................................................................23 Execution in Counterparts.........................................................................................23
Loan Payment Schedule ............................................................................................ A-1 Form of RequisitionCosts of Issuance Fund ......................................................... B-1 Form of Annual City Certificate Regarding Budget and Appropriation................... C-1
ATTACHMENT 1
LOAN AGREEMENT THIS SERIES 2013 REFUNDING LOAN AGREEMENT, (this Loan Agreement), dated for convenience as of December 1, 2013, is by and between __________________, a corporation duly organized and existing under the laws of the State of _________, with all right and authority to conduct business in the State of California (the Bank), and the CITY OF LAKEPORT, a municipal corporation and general law city duly organized and existing under the laws of the State of California (the City); W I T N E S S E T H: WHEREAS, the City is a contracting member of the California Public Employees Retirement System (PERS), and under its contract with PERS (the PERS Contract) the City is obligated to make certain payments to PERS in respect of (a) retired public safety employees and (b) retired miscellaneous employees, each under the Side Fund program of PERS which amortizes such obligations over a fixed period of time (the PERS Side Fund Obligations); and WHEREAS, The PERS Contract was first effective _______ 1, 19__ and was thereafter amended several times, including the most recent Amendment to Contract, effective ______ __, 20__. WHEREAS, the City has determined to authorize the execution and delivery of this Loan Agreement in an aggregate principal amount necessary to aid in (i) refunding the PERS Side Fund Obligations, and (ii) paying the associated costs of issuance; and WHEREAS, for the purposes set forth herein, the Bank has proposed to make a taxable loan, hereby designated the City of Lakeport, Series 2013 Refunding Loan Obligation (2013 CALPERS Refunding Project (the Loan) to the City pursuant to terms and conditions of this Loan Agreement, as authorized under a Resolution adopted by the City Council (the Council) of the City on September 17, 2013; and WHEREAS, the Council, after due investigation and deliberation, has determined that it is in the public interests of the City at this time to provide for the refunding and defeasance of the Prior Obligations (the Refunding); and WHEREAS, the principal of and interest and redemption premium (if any) on the Loan, and any bonds or other obligations issued on a parity therewith as provided herein, are payable from any source of legally available funds of the City, including amounts on deposit in the general fund, and a certain percentage share of water and wastewater revenues, as set forth herein; and WHEREAS, the City is authorized under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with section 53570 of said Code (the Bond Law), to enter into this Loan Agreement as evidence of indebtedness for the purpose of refunding certain outstanding indebtedness of the City, including the PERS Side Fund Obligations; and WHEREAS, in order to provide for the execution and delivery of this Loan Agreement, to establish and declare the terms and conditions upon which the Loan is to be made and secured, and to
ATTACHMENT 1
secure the payment of the principal thereof, premium (if any) and interest thereon, the City has authorized the execution and delivery of this Loan Agreement; and WHEREAS, the Loan Agreement has been determined to be a legal, valid and binding obligation of the City by judgment of the Lake County Superior Court rendered on _________, 2013 in County of Lake v. All Persons Interested, etc., Case No._________. WHEREAS, all things necessary to make the Loan when issued, executed and delivered, the valid and binding obligation of the City, and to constitute this Loan Agreement as a valid pledge of the general revenues herein pledged to the payment of the principal of, prepayment premium, if any, and interest on the Loan have been done and performed, as required by law, and the City is now fully authorized to enter into this Loan Agreement, subject to the terms hereof; NOW, THEREFORE, THIS LOAN AGREEMENT WITNESSETH, that in order to secure the payment of the principal of and the interest and premium (if any) on the Loan at any time Outstanding under this Loan Agreement, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Loan is premised, and in consideration of the premises and of the mutual covenants herein contained and of the making of the Loan by the Bank, and for other valuable considerations, the receipt whereof is hereby acknowledged, the City does hereby covenant and agree, for the benefit of the Bank from time to time of the Loan, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICABILITY Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Accountant means any firm of independent certified public accountants selected by the City in its sole discretion. Annual Loan Repayments means the Loan Repayments payable on Loan during any Fiscal Year. Authorized Representative means the Citys Mayor, Mayor Pro Tem, City Manager or Finance Director, or any other person designated as an Authorized Representative of the City by a Certificate of the City signed by its Mayor, Mayor Pro Tem or City Manager and filed with the City and the Bank. Bank means (a) initially, _________________, an ___________ corporation, or (b) any assignee or transferee of any right, title or interest of the Loan, including the right, title and interest in this Loan Agreement and other amounts due hereunder.
LOAN AGREEMENT 2
ATTACHMENT 1
Bond Counsel means The Weist Law Firm, or another firm of nationally-recognized attorneys experienced in the issuance of obligations the interest on which is excludable from gross income under Section 103 of the Code. Bond Law means the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code, as in effect on the Closing Date or as thereafter amended.
Business Day means any day other than (a) a Saturday or Sunday or a day on which banking institutions in the State or the State of New York are authorized to close or (b) a day on which the New York Stock Exchange is closed.
Certificate, Request and Requisition of the City means a written certificate, request or requisition signed in the name of the City by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. City means the City of Lakeport, a municipal corporation and general law city duly organized and existing under and by virtue of the laws of the State of California. City Share means the obligation of the City under this Loan Agreement to pay sixty-five percent (65%) of all Loan Payments from Gross Revenues, as set forth herein and in Exhibit A hereto. City Council or Council means the City Council of the City. Code means the Internal Revenue Code of 1986, as amended. Each reference to a section of the Code herein shall be deemed to include the United States Treasury regulations, including temporary and proposed regulations relating to each such section that are applicable to the Parity Obligations or the use of the proceeds thereof. Costs of Issuance means all expenses incurred in connection with the authori zation, execution and delivery of this Loan Agreement and Loan and the application of the proceeds of the Loan, including but not limited to all compensation, fees and expenses (including but not limited to fees and expenses for legal counsel) of the City, compensation to Bond Counsel and any financial consultants, insurance premiums, rating agency fees, other legal fees and expenses, filing and recording costs, costs of preparation and reproduction of documents and costs of printing. Costs of Issuance Fund means the fund by that name established and maintained pursuant to Section 3.7 hereof Closing Date means the date on which the Loan is funded by the Bank. Default Rate means the rate of interest then borne by the Loan plus _.00% per annum. Event of Default means an event described in Section 6.1 hereof. Federal Securities means: (a) any direct general non-callable obligations of the United States of America, including obligations issued or held in book entry form on the books of the LOAN AGREEMENT 3
ATTACHMENT 1
Department of the Treasury of the United States of America; and (b) any obligations the timely payment of principal of and interest on which are fully guaranteed by the United States of America or which are secured by obligations described in the preceding clause (a). Fiscal Year means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the City, as applicable, as its official fiscal year period. Funded Debt means all outstanding liabilities of the City for borrowed money and other interest-bearing liabilities, including current and long term debt and the stated amount of any letter of credit (other than a letter of credit that is cash secured) issued for the account of the City. Generally Accepted Accounting Principles means the generally accepted accounting principles as presented and recommended by the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor. Gross Revenues means all revenues, moneys, accounts receivable, contractual rights to payment, and other rights to payment of whatever kind legally available to pay Loan Repayments on the Loan to the extent of the City Share. Independent Certified Public Accountant means any certified public accountant or firm of certified public accountants appointed and paid by the City, and who, or each of whom: (a) (b) is in fact independent and not under domination of the City; does not have any substantial interest, direct or indirect, in the City; and
(c) is not connected with the City as an officer or employee of the City but who may be regularly retained to make annual or other audits of the books of or reports to the City. Independent Financial Consultant means a financial consultant qualified in the field of municipal finance, appointed and paid by the City, and who: (1) member thereof; is in fact independent and not under the domination of the City or any
(2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and (3) is not connected with the City as an officer or employee of the City or any member thereof, but may be regularly retained to audit the accounting records of and make reports thereon to the City. (4) is not a customer or patron of the City, nor currently on the waiting list.
Interest Component means the portion of each Loan Repayment of designated as Interest Component, as such is set forth on Exhibit A hereto.
LOAN AGREEMENT 4
ATTACHMENT 1
Loan means the City of Lakeport, Series 2013 Refunding Loan Obligation (2013 CalPERS Refunding Project), made pursuant to this Loan Agreement. Loan Agreement means this Loan Agreement between the Bank and the City, as modified or amended or supplemented from time to time pursuant to the provisions hereof. Loan Proceeds means the $__________ amount received by the City from the Bank. Loan Payment Date or Payment Date means May 1 and November 1 in each year, commencing May 1, 2014 and continuing to and including the date on which the Loan Payments have been paid in full. Loan Repayments means all payments required to be paid by the City, as such is set forth on Exhibit A hereto, on each Loan Payment Date pursuant to Section 4.2, and including any prepayment thereof pursuant to Section 3.4 or 3.5 hereof. Loan Repayment Fund means the fund by that name established and maintained pursuant to Section 4.2 hereof. Miscellaneous Employees Plan means the obligation of the City to make payments pursuant to the PERS Contract with respect to certain of the Citys miscellaneous employees. Permitted Investments means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein: (a) Federal Securities;
(b) Any direct or indirect obligations of an agency or department of the United States of America whose obligations represent the full faith and credit of the United States of America, or which are rated A or better by S&P. (c) Interest-bearing deposit accounts (including certificates of deposit) in federal or State chartered savings and loan associations or in federal or State of California banks (including the Trustee), provide that: (i) the unsecured obligations of such commercial bank or savings and loan association are rated A or better by S&P; or (ii) such deposits are fully insured by the Federal Deposit Insurance Corporation. (d) Commercial paper rated in the highest short-term rating category by S&P.
(e) Federal funds or bankers acceptances with a maximum term of one year of any bank with an unsecured, uninsured and unguaranteed obligation rating in the highest rating category of S&P. (f) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating in the highest rating category of S&P (such funds may include funds for which the Bank, its affiliates, parent or subsidiaries provide investment advisory or other management services).
LOAN AGREEMENT 5
ATTACHMENT 1
(g) Obligations the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are either (a) rated A or better by S&P, or (b) fully secured as to the payment of principal and interest by Federal Securities. (h) Bonds or notes issued by any state or municipality which are rated by S&P in one of the two highest rating categories assigned by S&P. (i) Any investment agreement with, or guaranteed by, a financial institution the long-term unsecured obligations or the claims paying ability of which are rated A or better by S&P at the time of initial investment. (j) The Local Agency Investment Fund of the State of California, created under Section 16429.1 of the California Government Code, to the extent the City is authorized to register such investment in its name. PERS or CalPERS means the California State Public Employees Retirement System. PERS Contract means the contract, as amended from time to time, entered into by the City and PERS pursuant to the Retirement Law obligating the City to make contributions to PERS in exchange for PERS providing retirement benefits to certain City employees. PERS Side Fund Obligations means the obligation of the City under the Retirement Law and the PERS Contract to make payments to PERS with respect to benefits accruing to retired public safety employees and certain other employees of the City under the Public Safety Employees Plan and the Miscellaneous Employees Plan. Public Safety Employees Plan means the obligation of the City to make payments pursuant to the PERS Contract with respect to the Citys public safety employees. Principal Component means the portion of each Loan Payment or Line of Credit Payment designated as Principal Component, as such is set forth on Exhibit A hereto. Registration Books means the records maintained by the City pursuant to Section 2.06 for the registration and transfer of ownership of the Loan. Resolution means the Resolution No. ______, adopted by the City Council on September 17, 2013, authorizing the execution and delivery of this Loan Agreement, and otherwise providing for the execution and delivery of the Loan and all other documents and certificates necessary to effectuate the Refunding. State means the State of California. Term or Term of this Loan Agreement means the time during which this Loan Agreement is in effect, as provided in Section 3.1 hereof. Wastewater Enterprise means, collectively, the entire wastewater collection, treatment and disposal system now owned or operated by the City, including, but not limited to, any and all properties and assets, real and personal, tangible and intangible, of the City, now or hereafter existing, used or pertaining to the collection, disposal or reuse of wastewater, including sewage treatment plants, outfall, force mains, pumping stations, ejector stations, pipes, valves, machinery and LOAN AGREEMENT 6
ATTACHMENT 1
all other appurtenances necessary, useful or convenient for the collection, treatment, purification or disposal of sewage, and any necessary lands, rights of way and other real or personal property useful in connection therewith, together with all additions, betterments, extension and improvements to such facilities or any part thereof hereafter acquired or constructed. Wastewater Enterprise Maintenance and Operation Costs means the reasonable and necessary costs paid or incurred by the Participant for maintaining and operating the Wastewater Enterprise, determined in accordance with Generally Accepted Accounting Principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the Wastewater Enterprise in good repair and working order, and including all administrative costs of the City that are charged directly or apportioned to the operation of the Wastewater Enterprise, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums (including payments required to be paid into any self-insurance funds), and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms hereof or of any resolution authorizing the issuance of any Parity Obligations or of such Parity Obligations, such as compensation, reimbursement and indemnification of the the trustee for any such Parity Obligations and fees and expenses of Independent Certified Public Accountants; but excluding in all cases (i) debt service payable on obligations incurred by the City with respect to the Wastewater Enterprise, (ii) costs of capital additions, replacements, betterments, extensions or improvements which under Generally Accepted Accounting Principles are chargeable to a capital account, and (iii) depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles. Wastewater Net Revenues means, for any period, all of the Wastewater Revenues during such period less all of the Wastewater Enterprise Maintenance and Operation Costs during such period. Wastewater Revenues means all gross income and revenue received or receivable by the City from the ownership and operation of the Wastewater Enterprise, calculated in accordance with Generally Accepted Accounting Principles, including all rates, fees and charges (including connection fees) received by the City for Wastewater Enterprises services and all other income and revenue howsoever derived by the City from the Wastewater Enterprise or arising from the Wastewater Enterprise; provided, however, that (i) any specific charges levied for the express purpose of reimbursing others for all or a portion of the cost of the acquisition or construction of specific wastewater facilities, (ii) grants that are designated by the grantor for a specific wastewater purpose and are therefore not available for other purposes, (iii) customers wastewater related deposits or any other wastewater related deposits subject to refund until such deposits have become the property of the City, (iv) the proceeds of any ad valorem property taxes, and (v) the proceeds of any special assessments or special taxes levied upon real property within any improvement City served by the City for the purpose of paying special assessment bonds or special tax obligations of the City relating to the Wastewater Enterprise, are not Wastewater Revenues and are not subject to the lien hereof. Wastewater Share means the obligation of the Wastewater Enterprise under this Loan Agreement to pay nineteen percent (19%) of all Loan Payments from Wastewater Net Revenues, as set forth herein and in Exhibit A hereto. Water Enterprise means, collectively, the entire water collection, storage, treatment, transmission and distribution system now owned or operated by the City, and all other properties, LOAN AGREEMENT 7
ATTACHMENT 1
structures or works hereafter acquired and constructed by the City and determined to be a part of the Water Enterprise, including all facilities, works, properties, structures and assets, real and personal, tangible and intangible, of the City, now or hereafter existing, used or pertaining to the collection, storage, treatment, transmission and distribution of potable and non-potable water, including all contractual rights to water supplies, transmission capacity supply, easements, rights-of-way and other works, property or structures necessary or convenient for such facilities, together with all additions, betterments, extension and improvements to such facilities or any part thereof hereafter acquired or constructed. Water Enterprise Maintenance and Operation Costs means the reasonable and necessary costs and expenses paid by the City for maintaining and operating the Water Enterprise, as determined in accordance with Generally Accepted Accounting Principles, including but not limited to (a) costs of acquisition of water, including all associated treatment and delivery costs, to be used by the Water Enterprise, (b) costs of electricity and other forms of energy supplied to the Water Enterprise, (c) the reasonable expenses of management and repair and other costs and expenses necessary to maintain and preserve the Water Enterprise in good repair and working order, (d) the reasonable administrative costs of the City attributable to the operation and maintenance of the Water Enterprise, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums, and (e) all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms hereof or of any resolution authorizing the issuance of any Parity Obligations or of such Parity Obligations, such as compensation, reimbursement and indemnification of the trustee for any such Parity Obligations and fees and expenses of Independent Certified Public Accountants and independent engineers, but in all cases excluding (i) debt service payable on obligations incurred by the City with respect to the Water Enterprise, (ii) depreciation, replacement and obsolescence charges or reserves therefor, and (iii) amortization of intangibles or other bookkeeping entries of a similar nature. Water Net Revenues means, for any period, all of the Water Revenues during such period less all of the Water Enterprise Maintenance and Operation Costs during such period. Water Revenues means all gross income and revenue received or receivable by the City from the ownership and operation of the Water Enterprise, calculated in accordance with Generally Accepted Accounting Principles, including all rates, fees and charges (including transfer and exchange fees, any water stand-by or water availability charges and assessments) received by the City for Water Enterprises services and all other income and revenue howsoever derived by the City from the Water Enterprise or arising from the Water Enterprise; provided, however, that (i) any specific charges levied for the express purpose of reimbursing others for all or a portion of the cost of the acquisition or construction of specific water facilities, (ii) grants that are designated by the grantor for a specific water purpose and are therefore not available for other purposes, (iii) customers water related deposits or any other water related deposits subject to refund until such deposits have become the property of the City, (iv) the proceeds of any ad valorem property taxes, and (v) the proceeds of any special assessments or special taxes levied upon real property within any improvement City served by the City for the purpose of paying special assessment bonds or special tax obligations of the City relating to the Water Enterprise, are not Water Revenues and are not subject to the lien hereof. Water Share means the obligation of the Water Enterprise under this Loan Agreement to pay sixteen percent (16%) of all Loan Payments from Water Net Revenues, as set forth herein and in Exhibit A hereto. LOAN AGREEMENT 8
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Section 1.2 Benefits of Loan Agreement Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the City and the Bank any right, remedy or claim under or pursuant hereto. Any agreement or covenant required herein to be performed by or on behalf of the City shall be for the sole and exclusive benefit of the Bank. Section 1.3 Successor Is Deemed Included in all References to Predecessor . Whenever the City is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the City, and all agreements and covenants required hereby to be performed by or on behalf of the City shall bind and inure to the benefit of the successors thereof whether so expressed or not. Section 1.4 Waiver of Personal Liability. No member of the Council and no officer, agent, or employee of the City, or of any department or agency thereof, shall be individually or personally liable for the payment of the principal of or interest on the Loan, but nothing contained herein shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or hereby. Section 1.5 Article and Section Headings, Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. Words of any gender shall be deemed and construed to include all genders. All references herein to Articles, Sections and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words hereby, herein, hereof, hereto, herewith and other words of similar import refer to the Loan Agreement as a whole and not to any particular article, section, subdivision or clause hereof. Section 1.6 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the City shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof or the Loan; but the Bank shall retain all the rights and benefits accorded to it under any applicable provisions of law. The Council hereby declares that it would have adopted this Loan Agreement and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
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ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.1 Representations, Covenants and Warranties of the City. represents, covenants and warrants to the Bank as follows: The City
(a) The City is municipal corporation and general law city duly organized and existing under and pursuant to the laws of the State of California. (b) The City has full legal right, power and authority pursuant to the laws of the State of California and otherwise to enter into this Loan Agreement and to enter into the transactions contemplated by and to carry out its obligations under this Loan Agreement, and all obligations contemplated herein. (c) The City Council has duly authorized the execution and delivery of this Loan Agreement, and the corresponding making of the Loan. (d) The Citys comprehensive annual financial report for the period ended June 30, 2012, presents fairly the financial condition of the City as of the date hereof and the results of operation for the period covered thereby. Except as has been disclosed to the Bank, there has been no change in the financial condition of the City or the Enterprise since June 30, 2012, that will in the reasonable opinion of the City materially impair its ability to perform its obligations under this Loan Agreement. All information provided by the City to the Bank with respect to the financial performance of the City is accurate in all material respects as of its respective date and does not omit any information necessary to make the information provided not misleading. (e) As currently conducted, the Citys activities with respect to City operations are in all material respects in compliance with all applicable laws, administrative regulations of the State of California and of the United States and any agency or instrumentality of either, and any judgment or decree to which the City is subject. (f) The City has never non-appropriated or defaulted under any of its payment or performance obligations or covenants, either with respect to any prior obligation of the same general nature as the Loan, or under any of its bonds, notes, or other obligations of indebtedness for which its revenues or general credit are pledged. (g) Neither the execution and delivery of this Loan Agreement, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby, conflicts with or results in a material breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the City is now a party or by which the City is bound or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrances whatsoever upon any of the property or assets of the City, other than as set forth herein. (h) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body pending or, to the knowledge of the City, threatened against or affecting the or the assets, properties or operations of the City or affecting the corporate existence of the City or the titles of its officers to their respective offices or seeking to LOAN AGREEMENT 10
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prohibit, restrain or enjoin the entering into of this Loan Agreement, or in any way contesting or affecting the transactions contemplated hereby or the validity or enforceability of this Loan Agreement, or contesting the powers of the City or any authority for the execution and delivery of this Loan Agreement which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Loan Agreement or upon the financial condition, assets properties or operations of the City, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, educational or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Loan Agreement or the financial conditions, assets, properties or operations of the City. (i) This Loan Agreement constitutes the legal, valid and binding obligation of the City enforceable against the City in accordance with its terms. (j) No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Loan Agreement, or the consummation of any transaction herein contemplated, except as have been obtained or made and as are in full force and effect. (k) This Loan Agreement has been determined to be the legal, valid and binding obligation of the City by judgment of the Lake County Superior Court rendered on ________, 2013 in County of Lake v. All Persons Interested, etc., Case No.______. (l) The City council has determined that the Interest Components of the Loan Repayments will be subject to federal income taxation. Section 2.2 Representations, Covenants and Warranties of the Bank. represents, covenants and warrants to the City as follows: The Bank
(a) The Bank is ___________________________, duly organized and existing under the laws of the State of _________, and is authorized to enter into this Loan Agreement and to perform its obligations hereunder and thereunder. (b) The representatives of the Bank executing this Loan Agreement are authorized to execute the same under official action taken by the governing body of the Bank. (c) This Loan Agreement has been duly authorized, executed and delivered by the Bank and constitutes the legal, valid and binding obligation of the Bank, enforceable against the Bank in accordance with its terms. (d) Neither the execution and delivery of this Loan Agreement, nor the fulfillment of or compliance with the terms and conditions hereof and thereof, nor the consummation of the transactions contemplated hereby and thereby, to the knowledge of the Banks authorized representative executing this Loan Agreement, conflicts with or results in a material breach of the terms, conditions or provisions of any restriction or any applicable agreement or instrument to which the Bank is now a party or by which the Bank is bound, or constitutes a default under any of the
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foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Bank. (e) To the knowledge of the Banks authorized representative executing this Loan Agreement, no consent or approval of any trustee or holder of any indebtedness of the Bank, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Loan Agreement or the consummation of any transaction herein or therein contemplated, except as have been obtained or made and as are in full force and effect. (f) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, educational or other governmental authority pending or, to the knowledge of the Bank after reasonable investigation, threatened against or affecting the Bank or the assets, properties or operations of the Bank which, if determined adversely to the Bank or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Loan Agreement, and the Bank is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, educational or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Loan Agreement. (g) The Bank does hereby represent for the benefit of the City, that:
(i) The Bank has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in this Loan Agreement. (ii) The Bank is not entering into this Loan Agreement for more than one account or with a view to assigning this Loan Agreement. (iii) The Bank (i) has made an independent investigation of the merits and risks involved with making the Loan pursuant to this Loan Agreement and such other matters in connection therewith that it has deemed appropriate for its decision to make the Loan; and (ii) as part of such investigation and as deemed appropriate for its decision to make the Loan, the Bank has been supplied with, or has had access to, the City's financial statements and such other information, and has had the opportunity to ask questions and receive answers from representatives of the City concerning the City, its operations, its financial condition.
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ARTICLE III TERMS OF THE LOAN Section 3.1 Obligation to Make Loan; Amount of Loan; Term. The Bank hereby agrees to lend to the City, and the City hereby agrees to borrow from the Bank, the amount of $__________ under the terms and provisions set forth in this Loan Agreement. The Loan shall be made by the Bank to the City in immediately available funds on the Closing Date. The purpose of the Loan shall be to provide for the (a) refunding of the PERS Side Fund Obligations in accordance with the terms and conditions hereof, and (b) paying the associated Costs of Issuance. The Term of this Loan Agreement shall commence on the Closing Date, and shall end on the date on which the Loan shall be paid in full or provision for such payment shall be made as provided herein. Section 3.2 Application of Loan Proceeds. The City hereby instructs the Bank (to which instruction the Bank hereby assents) to set-aside a portion of the Loan Proceeds in the approximate amount of $__________ (the COI Set-Aside Moneys) for the payment of Costs of Issuance on behalf of the City as provided in Section 3.3. The City hereby instructs the Bank (to which the Bank also assents) to wire the amount of (i) $_______________ directly to PERS, in accordance with written instructions from the City, in satisfaction of the Citys obligations under the PERS Contract with respect to the Public Safety Employees Plan PERS Side Fund Obligations, and (ii) $______________ directly to PERS, in accordance with written instructions from the City, in satisfaction of the Citys obligations under the PERS Contract with respect to the Miscellaneous Employees Plan PERS Side Fund Obligations. Section 3.3 Application of Costs of Issuance Set-Aside Moneys. The COI Set-Aside Moneys held by the Bank on behalf of the City pursuant to Section 3.2 shall be used by the Bank to pay the Costs of Issuance upon submission of sequentially numbered written Requisitions of the City, substantially in the form attached hereto as Exhibit D. Upon the Request of the City, but in no event later than two (2) days after the execution and delivery of the Loan, all amounts remaining in the Costs of Issuance Fund shall be transferred by the Bank to the City for deposit in the Loan Repayment Fund. Section 3.4 Optional Prepayment. The Principal Components of the Loan maturing on or before _______ 1, 20__, are not subject to optional redemption prior to their respective stated maturity dates. At its option, and upon thirty (30) days notice to the Bank, the City may prepay the Principal Components of the Loan maturing on or after ______ 1, 20__, in whole or in part in integral multiples of $___,000, on any date on or after ______ 1, 20__, at a prepayment price equal to the principal amount thereof, together with the premium set forth below (expressed as a percentage of the total principal amount prepaid), and accrued interest to the date fixed for prepayment: Date of Prepayment Premium
Section 3.5 Execution of the Loan Agreement. The execution of this Loan Agreement by an Authorized Representative shall constitute conclusive evidence of such officers and the Boards approval hereof, including any changes, insertions, revisions, corrections, or amendments as may have been made hereto. LOAN AGREEMENT 13
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Section 3.6 Validity of the Loan Agreement. It is hereby found and determined that this Loan Agreement is being executed and delivered pursuant to the Constitution and statutes of the State of California. Section 3.7 Assignment by the Bank. The Banks right, title and interest in and to this Loan Agreement and all proceeds, with prior written notice to the City, may be assigned and reassigned in whole to one or more assignees or subassignees by Bank, without the necessity of obtaining the consent of City; provided, that any such assignee or subassignee represents that (i) such assignee or subassignee has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment, (ii) such assignee or subassignee understands that none of the Loan Agreement, the Line of Credit, or the Loan will be registered under the Securities Act of 1933, (iii) such assignee or subassignee is either an accredited investor within the meaning of Regulation D under the Securities Act o f 1933, or a qualified institutional buyer within the meaning of Rule 144A, and (iv) it is the present intention of such purchaser to acquire such interest (A) for investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 1933. Section 3.8 Closing Conditions. The Bank has entered into this Loan Agreement in reliance upon the representations and warranties of the City contained in this Loan Agreement and to be contained in the documents and instruments to be delivered on the Closing Date and upon the performance by the City of the obligations of the City pursuant to this Loan Agreement at or prior to the Closing Date. Accordingly, the obligation of Bank to consummate the Loan and execute this Loan Agreement is subject to the fulfillment to the reasonable satisfaction of the Bank of the following conditions: (a) The representations and warranties of the City contained in this Loan Agreement shall be true, complete and correct on the Closing Date. (b) All representations, warranties and covenants made herein, and in certificates or other instruments delivered pursuant hereto or in connection herewith, shall be deemed to have been relied upon by the Bank notwithstanding any investigation heretofore or hereafter made by the Bank or on their behalf. (c) On the Closing Date, the Resolution and this Loan Agreement shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Bank. (d) On the Closing Date, the City will have adopted and there will be in full force and effect such resolutions as in the opinion of Bond Counsel and counsel to the Bank shall be necessary in connection with the transactions contemplated by this Loan Agreement, and all necessary action of the City relating to the issuance of the Loan will have been taken, will be in full force and effect and will not have been amended, modified or supplemented, except as may have been agreed to in writing by the Bank. (e) documents: (i) the approving opinions, dated the Closing Date and addressed to the Bank, of Bond Counsel in form and content satisfactory to the Bank and its counsel, that the Loan LOAN AGREEMENT 14 At or prior to the Closing Date, the Bank will have received the following
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Agreement has been duly authorized, executed and delivered by the City and is a legal, valid and binding obligation of the City, enforceable in accordance with its terms, subject to customary exceptions for bankruptcy and judicial discretion. (ii) a certificate or certificates, dated the date of the Closing and signed on behalf of the City by an Authorized Representative, to the effect that (I) the representations and warranties contained in this Loan Agreement are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of the Closing; (II) no litigation of any nature is then pending or, to his or her knowledge, threatened, seeking to restrain or enjoin the issuance and delivery of the Loan or the levy or collection of revenues to pay the principal thereof and interest thereon, questioning the proceedings and authority by which such pledge is made, affecting the validity of the Loan or contesting the existence or boundaries of the City or the title of the present officers to their respective offices; (III) no authority or proceedings for the issuance of the Loan has been repealed, revoked or rescinded and no petition or petitions to revoke or alter the authorization to issue the Loan has been filed with or received by the City; and (IV) the City has complied with all the agreements and covenants and satisfied all the conditions on its part to be performed or satisfied at or prior to, and to the extent possible before, the Closing Date. (iii) a certified copy of the Resolution; (iv) the items required by the Resolution as conditions for execution and delivery of the Loan; (v) Evidence satisfactory to the Bank that the Side Fund Obligations have been fully repaid to PERS and are satisfied and discharged; (vi) a non-arbitrage tax certificate of the City, in form and substance satisfactory to Bond Counsel; and (vii) such additional legal opinions, certificates, instruments and other documents as the Bank or its counsel may reasonably request to evidence the truth and accuracy, as of the date of this Loan Agreement and as of the Closing Date, of the representations, warranties, agreements and covenants of the City contained herein and the due performance or satisfaction by the City at or prior to the Closing Date of all agreements then to be performed and all conditions then to be satisfied by the City. (f) The Bank has not become aware of any information not previously known to the Bank affecting the City or the financing contemplated by this Loan Agreement or the TaxExempt Loan Agreement that, in the Banks reasonable judgment, is inconsistent in a material and adverse manner with any such information disclosed to the Bank prior to the Closing Date. Section 3.9 Events Permitting Bank to Terminate. The Bank may terminate its obligations under this Loan Agreement before the Closing Date if any of the following occurs: (a) any legislative, executive or regulatory action (including the introduction of legislation) or any court decision that, in the judgment of the Bank, casts sufficient doubt on the legality of this Loan Agreement so as to materially impair the marketability or to materially reduce the value of the this Loan Agreement; or LOAN AGREEMENT 15
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(b) any action by the Securities and Exchange Commission or a court that would require registration of the this Loan Agreement under the Securities Act of 1933 or would adversely affect the exemption from qualification of this Loan Agreement under the Trust Indenture Act of 1939. ARTICLE IV SECURITY AND REPAYMENT OF LOAN Section 4.1 Security for the Loan. The Loan is secured by a first pledge of (i) all of the Gross Revenues of the City, to the extent of the City Share, (ii) all of the Water Net Revenues to the extent of the Water Share, and (iii) all of the Wastewater Net Revenues to the extent of the Wastewater Share. Such pledge does and shall constitute a lien on the (i) Gross Revenues for the payment of the principal component and interest component of the Loan Repayments, to the extent of the City Share, (ii) Water Net Revenues for the payment of the principal component and interest component of the Loan Repayments, to the extent of the Water Share, and (iii) Wastewater Net Revenues for the payment of the principal component and interest component of the Loan Repayments, to the extent of the Wastewater Share, and premium, (if any), in accordance with the terms hereof, provided that such pledge and lien shall not hinder or prohibit the issuance of Tax Revenue Anticipation Notes (TRANs) by the City nor hinder or prohibit the use of tax revenues to secure such TRANs. The City shall be obligated to satisfy its obligations with respect to the Loan from (i) Gross Revenues to the extent of the City Share, (ii) Water Net Revenues to the extent of the Water Share, and (iii) Wastewater Net Revenues to the extent of the Wastewater Share. The obligations of the City under the Loan, including the obligation to make all Loan Repayments when due and the obligation of the City to make the deposits required hereunder for the security of the Loan, are obligations of the City imposed by law and are absolute and unconditional, without any right of set-off or counterclaim. The Loan does not constitute an obligation of the City for which the City is obligated to levy any form of taxation. Neither the Loan nor the obligations of the City to make Loan Repayments constitute an indebtedness of the City, the State of California, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. This Loan Agreement constitutes a contract between the City and the Bank and the covenants and agreements herein set forth to be performed by the City are for the equal and proportionate benefit, security and protection of Bank. Section 4.2 Loan Repayments. The City hereby agrees to repay the Loan in the aggregate principal amount of $__________ together with interest (calculated at the rate of _______ and _____ Hundredths Percent (_.__%) on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof, payable in semiannual Loan Repayments in the respective amounts and on the respective Loan Payment Dates specified in Exhibit A hereto, and by this reference made a part hereof. The City will pay the Loan Repayments by wire transfer to the Bank in accordance with the written wire transfer instructions delivered by the Bank to the City on or before the Closing Date (which instructions may be changed from time to time by the Bank upon written notice to the City):
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Section 4.3 Loan Repayment Fund; Allocations. There is hereby established a separate fund to be known as the Loan Repayment Fund which shall be held by the City in trust for the benefit of the Bank. The City will hold the Loan Repayment Fund for the uses and purposes set forth herein. The City will transfer an amount of legally available (i) Gross Revenues to the extent of the City Share, (ii) Water Net Revenues to the extent of the Water Share, and (iii) Wastewater Net Revenues to the extent of the Wastewater Share in the following amounts at the following times, for deposit in the following respective special accounts within the Loan Repayment Fund, which accounts are hereby established with the City with respect to the Loan, in the following order of priority: (a) Interest Account. On or before the 5th Business Day preceding each date on which interest on the Loan is due and payable, the City will deposit in the Interest Account an amount which, when added to the amount then on deposit in the Interest Account, equals the aggregate amount of the interest coming due and payable on the Loan on that date. The City will apply amounts in the Interest Account solely for the purpose of paying the Interest Components on the Loan when due and payable. (b) Principal Account. On or before the 5th Business Day preceding each date on which principal of the Loan is due and payable at maturity, the City will deposit in the Principal Account an amount which, when added to the amount then on deposit in the Principal Account, equals the amount of principal coming due and payable on that date on the outstanding Loan. The City will apply amounts in the Principal Account solely for the purpose of paying the Principal Components of the Loan when due and payable. Section 4.4 Special Obligation of the City; Obligations Absolute. The obligations of the City under the Loan and this Loan Agreement, including the obligation to make all payments of principal and redemption price of and interest on the Loan when due and the obligation of the City to make the deposits required hereunder for the security of the Loan, are obligations of the City imposed by law and are absolute and unconditional, without any right of set-off or counterclaim. Until such time as all of the Loan Repayments shall have been fully paid or prepaid, the City (a) will not suspend or discontinue payment of any Loan Payments, (b) will perform and observe all other agreements contained in this Loan Agreement, and (c) will not terminate this Loan Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the City property, sale of the City property, the taking by eminent domain of title to or temporary use of any component of City property, commercial frustration of purpose, any change in the tax or other laws of the United States of America or the State or any political subdivision of either thereof or any failure of the Bank to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Loan Agreement. Section 4.5 Reduction upon Partial Prepayment. In the event the City prepays less than all of the remaining Principal Components of the Loan Payments pursuant to Sections 3.4 LOAN AGREEMENT 17
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hereof, the amount of such prepayment shall be applied by the Bank to the outstanding Principal Components on a pro-rata basis. Section 4.6 Rate on Overdue Loan Payments. In the event the City should fail to make any of the Loan Payments or Line in Section 4.2 hereof on or before the due date therefor, the Loan Payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid and the City agrees to pay the same with interest thereon, to the extent permitted by law, from the date thereof at the Default Rate. ARTICLE V COVENANTS OF THE DISTRICT Section 5.1 Punctual Payment. The City shall punctually pay or cause to be paid the principal and redemption price and interest to become due in respect of the Loan in strict conformity with the terms of this Loan Agreement. The City shall faithfully observe and perform all of the conditions, covenants and requirements of this Loan Agreement, and will not rescind this Loan Agreement for any cause or reason. Section 5.2 Budget and Appropriation of Debt Service; Certification to Bank. The City covenants to take such action as may be necessary to include in each of its annual budgets the payments required to be made by the City under Section 4.02, and to make the necessary annual appropriations for all such payments. If any payment of Loan Repayments requires the adoption by the City of a supplemental budget or appropriation, the City will promptly adopt the same. The covenants on the part of the City herein contained constitute duties imposed by law and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Loan Agreement agreed to be carried out and performed by the City. Promptly following the adoption of an annual budget which includes the appropriations required by this Section, but in any event not later than September 30 in each Fiscal Year, the City shall execute and deliver to the Bank a Certificate of the City in substantially the form attached hereto as Appendix C, which shall evidence the compliance by the City with the covenants set forth in this Section 5.2 with respect to such Fiscal Year. Section 5.3 Books and Accounts; Financial Statements; Additional Information. The City will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City. Such books of record and accounts shall at all times during business hours be subject, upon prior written request, to the reasonable inspection of the Bank (who has no duty to inspect), or its representatives authorized in writing. So long as any of the Loan is unpaid, the City will cause to be prepared annually, within 240 days after the close of each Fiscal Year, complete audited financial statements with respect to such Fiscal Year, as of the end of such Fiscal Year. Section 5.4 Protection of Security and Rights of Owners. The City shall preserve and protect the security of the Loan and the rights of the Bank. From and after the date of issuance of the Loan, the City shall not contest the validity or enforceability of the Loan or this Loan Agreement. LOAN AGREEMENT 18
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Section 5.5 Further Assurances. The City shall adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Loan Agreement, and for the better assuring and confirming unto the Bank the rights and benefits provided in this Loan Agreement. Section 5.6 Information to Bank. The City shall provide the following items to the Bank, in each case in an electronic format which is acceptable to the Bank and otherwise in form and detail satisfactory to the Bank: (a) (b) (c) (d) audited annual financial statements of the City pursuant to Section 5.3 within the time required therefor; internally prepared semi-annual statements of the City; and annual budgets pursuant to Section 5.2 within the time required therefore; and such additional information as the Bank shall reasonably request from time to time pursuant to written notice to the City.
Section 5.7 Obligation of the City. The City shall be obligated, to the extent permitted by law, to satisfy its obligations under the Loan from any money lawfully available in any fund of the City, and the City shall be obligated to transfer from any money lawfully available in any such fund amounts necessary to make such payments to the Bank to pay the Loan Repayments, or if applicable, prepayment price of the Loan on the applicable Loan Payment Date. Section 5.8 Certain Financial Covenants of the City. So long as the Loan is Outstanding and unpaid, the City shall seek such appropriations such that at all times the City maintains (a) a ratio of (i) Funded Debt to (ii) net assets of the City not to exceed __:1, and (b) a ratio of (i) Gross Revenues minus expenses (excluding from expenses interest expense, depreciation and amortization) of the City for each Fiscal Year to (ii) Annual Loan Repayments for such Fiscal Year of not less than ____:1.
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES Section 6.1 (a) Events of Default and Remedies. Events of Default. The following shall be Events of Default hereunder:
(1) Failure by the City to pay any Loan Repayment or other payment required hereunder within 15 days after the date on which such Loan Repayment became due and payable. (2) Failure by the City to observe and perform any covenant, condition or agreement on its part contained herein, other than in clause (1) of this subsection, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Bank; provided, however, if in the reasonable opinion of the City the LOAN AGREEMENT 19
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failure stated in the notice can be corrected, but not within such thirty (30) day period, the Bank shall not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such thirty (30) day period and diligently pursued until the default is corrected. (3) Institution of any proceeding under the United States Bankruptcy Code or any federal or state bankruptcy, insolvency, or similar law or any law providing for the appointment of a receiver, liquidator, trustee, or similar official of the City or of all or substantially all of its assets, by or with the consent of the City, or institution of any such proceeding without its consent that is not permanently stayed or dismissed within sixty days, or agreement by the City with the Citys creditors to effect a composition or extension of time to pay the Citys debts, or request by the City for a reorganization or to effect a plan of reorganization, or for a readjustment of the Citys debts, or a general or any assignment by the City for the benefit of the Citys creditors. (4) Any statement, representation or warranty made by the City in or pursuant to this Loan Agreement or its execution, delivery or performance proves to have been false, incorrect, misleading, or breached in any material respect on the date made, and is continuing for a period of thirty (30) days after written notice specifying such misrepresentation or breach and requesting that it be remedied has been given to the City by the Bank; provided, however, that the Bank and the City may agree that action by the City to cure such failure may be extended beyond such thirty-day period. (5) This Loan Agreement or any material provision of this Loan Agreement shall at any time for any reason cease to be the legal, valid and binding obligation of the City or shall cease to be in full force and effect, or shall be declared to be unenforceable, invalid or void, or the validity or enforceability thereof shall be contested by the City, or the City shall renounce the same or deny that it has any further liability hereunder. (6) Dissolution, termination of existence or insolvency of the City.
(7) Any court of competent jurisdiction with jurisdiction to rule on the validity of any provision of this Loan Agreement shall find or rule that this Loan Agreement is not valid or not binding on the City (b) Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the Bank shall have the right, at its option upon notice to the City, to declare the unpaid aggregate Principal Components of the Loan or Line of Credit, and the interest accrued thereon, to be immediately due and payable, whereupon the same shall immediately become due and payable. The provisions of the preceding clause (a) are subject to the condition that if, at any time after the Principal Components of the unpaid Loan Repayments have been so declared due and payable under the preceding clause (a), and before any judgment or decree for the payment of the moneys due have been obtained or entered, the City deposits with the Bank a sum sufficient to pay all Principal Components of the Loan Repayments which became due and payable prior to such declaration and all matured Interest Components (if any) of the Loan Repayments, with interest on such overdue principal and interest components calculated at the Default Rate, and a sum sufficient to pay all reasonable costs and expenses incurred by the Bank in the exercise of its rights and remedies hereunder, and any and all other defaults known to the Bank (other than in the payment of the principal and interest components of the Loan Repayments due and payable solely by reason of such LOAN AGREEMENT 20
ATTACHMENT 1
declaration) have been made good, then, and in every such case, the Bank shall, by written notice to the City, rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. The Bank shall also have the right, at its option and without any further demand or notice, to (i) apply to and obtain from any court of competent jurisdiction such decree or order as may be necessary to require officials of the City to appropriate Gross Revenues sufficient to meet all requirements of this Loan Agreement, and (ii) take whatever action at law or in equity as may appear necessary or desirable to collect the Loan Repayments then due or thereafter to become due during the Term of this Loan Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Loan Agreement. Section 6.2 No Remedy Exclusive.
No remedy herein conferred upon or reserved to the Bank is exclusive, and every such remedy is cumulative and in addition to every other remedy given under this Loan Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default impairs any such right or power or operates as a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Bank to exercise any remedy reserved to it in this Article VI it is not necessary to give any notice, other than such notice as may be required in this Article VI or by law. Section 6.3 Non-Waiver. Nothing in this article or in any other provision hereof, or in the Loan, shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal of and interest on the Loan to the Bank when due, as herein provided, out of the Gross Revenues herein pledged for such payment, or shall affect or impair the right of the Bank, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied in this Loan Agreement. A waiver of any default or breach of duty or contract by the Bank shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Bank to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Bank by law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Bank. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Bank, the City and the Bank shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
ARTICLE VII NOTICES; JUDICIAL REFEREE Section 7.1 Notices. All notices, certificates or other communications hereunder shall be in writing and shall be deemed to have been properly given on the earlier of (i) when delivered in LOAN AGREEMENT 21
ATTACHMENT 1
person, (ii) the third Business Day following deposit in the United States Mail, with adequate postage, and sent by registered or certified mail, with return receipt requested to the appropriate party at the address set forth below, or (iii) the first Business Day following deposit with Federal Express, Express Mail or other overnight delivery service for next day delivery, addressed to the appropriate party at the address set forth below. If to the City: City of Lakeport 225 Park Street Lakeport, CA 95453 Attention: City Manager Fax: (707) _________ If to the Bank: __________ Bank ________________ ________________ Attention: ___________ Fax: ____________ Judicial Referee.
Section 7.2
(a) Judicial Referee. The Bank and the City hereby agree: (i) each proceeding or hearing based upon or arising out of, directly or indirectly, this Loan Agreement or any document related thereto, any dealings between the City and the Bank related to the subject matter of this Loan Agreement or any related transactions, and/or the relationship that is being established between the City and the Bank (hereinafter, a Claim) shall be determined by a consensual general judicial Referee (the Referee) pursuant to the provisions of Section 638 et seq. of the California Code of Civil Procedure, as such statutes may be amended or modified from time to time; (ii) upon a written request, or upon an appropriate motion by either the Bank or the City, as applicable, any pending action relating to any Claim and every Claim shall be heard by a single Referee (as defined below) who shall then try all issues (including any and all questions of law and questions of fact relating thereto), and issue findings of fact and conclusions of law and report a statement of decision. The Referees statement of decision will constitute the conclusive determination of the Claim. The Bank and the City agree that the Referee shall have the power to issue all legal and equitable relief appropriate under the circumstances before the Referee; (iii) the Bank and the City shall promptly and diligently cooperate with one another, as applicable, and the Referee, and shall perform such acts as may be necessary to obtain prompt and expeditious resolution of all Claims in accordance with the terms of this Section 7.2; (iv) either the Bank or the City, as applicable, may file the Referees findings, conclusions and statement with the clerk or judge of any appropriate court, file a motion to confirm the Referees report and have judgment entered thereon if the report is deemed incomplete by such court, the Referee may be required to complete the report and resubmit it; (v) the Bank and the City, as applicable, will each have such rights to assert such objections as are set forth in Section 638 et seq. of the California Code of Civil Procedure; and (vi) all proceedings shall be closed to the public and confidential, and all records relating to the Referee shall be permanently sealed when the order thereon becomes final. (b) Selection of Referee; Powers. The parties to the Referee proceeding shall select a single neutral referee (the Referee), who shall be a ret ired judge or justice of the courts of the State of California, or a federal court judge, in each case, with at least ten (10) years of judicial LOAN AGREEMENT 22
ATTACHMENT 1
experience in civil matters. The Referee shall be appointed in accordance with Section 638 of the California Code of Civil Procedure (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts). If within ten (10) days after the request or motion for the Referee, the parties to the Referee proceeding cannot agree upon a Referee, then any party to such proceeding may request or move that the Referee be appointed by the Presiding Judge of the Lake County Superior Court, or of the U.S. City Court for the Eastern City of California. The Referee shall determine all issues relating to the applicability, interpretation, legality and enforceability of this Section 7.2. (c) Provisional Remedies and Self Help. No provision of this Section 7.2 shall limit the right of either the Bank or the City, as the case may be, to (i) exercise such self-help remedies as might otherwise be available under applicable law, or (ii) ) obtain or oppose provisional or ancillary remedies, including without limitation injunctive relief, writs of possession, the appointment of a receiver, and/or additional or supplementary remedies from a court of competent jurisdiction before, after, or during the pendency of any Referee. The exercise of, or opposition to, any such remedy does not waive the right of the Bank or the City to the Referee pursuant to this Section 7.2(c). (d) Costs and Fees. Promptly following the selection of the Referee, the parties to such Referee proceeding shall each advance equal portions of the estimated fees and costs of the Referee. In the statement of decision issued by the Referee, the Referee shall award costs, including reasonable attorneys fees, to the prevailing party, if any, and may order the Referees fees to be paid or shared by the parties to such Referee proceeding in such manner as the Referee deems just.
ARTICLE VIII AMENDMENTS; DISCHARGE; GENERAL AUTHORIZATION; EFFECTIVE DATE Section 8.1 Amendments Permitted.
(a) This Loan Agreement and the rights and obligations of the City and of the Bank may be modified or amended at any time by a written supplemental agreement entered into by the City and the Bank. (b) From and after the time any supplemental agreement becomes effective pursuant to this Article, this Loan Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties, and obligations under this Loan Agreement and the Bank shall thereafter be determined, exercised, and enforced hereunder subject in all respects to such modification and amendments, and all the terms and conditions of any such supplemental agreement shall be deemed to be part of the terms and conditions of this Loan Agreement for any and all purposes. Section 8.2 Discharge of Loan Agreement.
(a) If the City shall pay or cause to be paid or there shall otherwise be paid to the Bank all of the principal of and the interest and the prepayment premium, if any, on this Loan Agreement at the times and in the manner stipulated herein, then all agreements, covenants and other
LOAN AGREEMENT 23
ATTACHMENT 1
obligations of the City to the Bank hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. (b) This Loan Agreement shall be deemed to have been paid within the meaning and with the effect expressed in subsection (a) of this section if (1) in case this Loan Agreement is to be prepaid on any date prior to its final principal payment date, the City shall have mailed a notice of prepayment to the Bank, (2) there shall have been deposited with the Bank or an escrow agent either money in an amount that shall be sufficient or Federal Securities, the interest on and principal of which when paid will provide money that, together with the money, if any, deposited with the Bank or such escrow agent at the same time, shall be sufficient to pay when due the interest to become due on this Loan Agreement on and prior to the final principal payment date or prepayment date thereof, as the case may be, and the principal of and prepayment premiums, if any, on this Loan Agreement on and prior to the final principal payment date or the prepayment date thereof, as the case may be, and (3) if this Loan Agreement is not subject to prepayment within the next succeeding sixty (60) days, the City shall have mailed a notice to the Bank that the deposit required by clause (2) above has been made with the Bank or such escrow agent and that this Loan Agreement is deemed to have been paid in accordance with this section and stating the principal payment dates or prepayment date, as the case may be, upon which money is to be available for the payment of the principal of and prepayment premiums, if any, on this Loan Agreement. (c) Pursuant to Section 8.2 (b), the money or securities so to be deposited or held may include money or securities held by the City in the funds and accounts established pursuant to this Loan Agreement, and shall be: (i) lawful money of the United States of America in an amount equal to the principal amount of such Principal Components and all unpaid interest thereon to maturity, except that, in the case of Principal Components which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Section 3.4 or provision satisfactory to the Bank shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such Principal Components and all unpaid interest thereon to the redemption date; or (ii) Defeasance Obligations, the principal of and interest on which when due will, in the written opinion of an Independent Accountant filed with the City and the Bank, provide money sufficient to pay the Principal Components of and Interest Components and premium (if any) on the Loan to be paid or redeemed, as such Principal Components, Interest Components and premium become due, provided that in the case of Principal Components which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Section 3.4 or provision satisfactory to the Bank shall have been made for the giving of such notice; provided, in each case, that (i) the City shall have irrevocably instructed (by the terms of this Loan Agreement) that such money shall be applied to the payment of such Principal Components, Interest Components and premium (if any) with respect to such Loan, and (ii) the City shall have delivered to the Bank an opinion of Bond Counsel to the effect that such Principal Components of the Loan have been discharged in accordance with this Loan Agreement (which opinion may rely upon and assume the accuracy of the Independent Accountants opinion referred to above).
LOAN AGREEMENT 24
ATTACHMENT 1
Section 8.3 General Authorization. The Authorized Representatives of the City, and each of them individually, are hereby authorized and directed, for and in the name of and on behalf of the City, to execute and deliver any and all documents, to do any and all things and take any and all actions that may be necessary or advisable, in their discretion, in order to consummate the financing and to effect the purposes of this Loan Agreement. All actions heretofore taken by officers, employees, and agents of the City that are in conformity with the purposes and intent of this Loan Agreement are hereby approved, confirmed, and ratified. Section 8.4 Binding Effect. This Loan Agreement shall inure to the benefit of and shall be binding upon the Bank and the City and their respective successors and assigns. Section 8.5 Severability. In the event any provision of this Loan Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 8.6 Further Assurances and Corrective Instruments. The Bank and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the expressed intention of this Loan Agreement. Section 8.7 Applicable Law. This Loan Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 8.8 Captions. The captions or headings in this Loan Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Loan Agreement. Section 8.9 Execution in Counterparts. This Loan Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
**** **** **** *
LOAN AGREEMENT 25
ATTACHMENT 1
IN WITNESS WHEREOF, the Bank has caused this Loan Agreement to be executed in its corporate name by its duly authorized officer; and the City has caused this Loan Agreement to be executed in its name by its duly authorized officer, as of the date first above written. ___________________, an ____________ Corporation By Authorized Officer
CITY OF LAKEPORT By Authorized Officer
LOAN AGREEMENT 26
ATTACHMENT 1
EXHIBIT A LOAN PAYMENT SCHEDULE $__________ CITY OF LAKEPORT SERIES 2013 REFUNDING LOAN OBLIGATION (2013 CALPERS REFUNDING PROJECT) Loan Payment Date Principal Component Interest Component Total Loan Payment
A-1
ATTACHMENT 1
EXHIBIT B FORM OF REQUISITION FOR DISBURSEMENT FOR COSTS OF ISSUANCE FUND $__________ CITY OF LAKEPORT SERIES 2013 REFUNDING LOAN OBLIGATION (2013 CALPERS REFUNDING PROJECT) The undersigned, as City Manager of the City of Lakeport (the City), in connection with the issuance, sale and delivery by the City of the above-captioned $__________ aggregate principal amount of the City of Lakeport, Series 2013 Refunding Loan Obligation (2013 CalPERS Refunding Project) (the Loan), issued in accordance with the Loan Agreement, dated as of December 1, 2013 (the Loan Agreement), by and between the City and the _______________ (the Bank), does hereby certify that: (i) the undersigned is a duly Authorized Representative (as defined in the Loan Agreement) with authority to act on behalf of the City as necessary in connection with issuance and delivery of the Loan, and as such, is authorized to disburse money for the payment of Costs of Issuance for the Loan (the Costs of Issuance), which moneys have been set aside by the Bank for such purpose (the Set Aside Funds); (ii) an obligation in the not-to-exceed amount stated for each of the payees set forth on Exhibit A has been properly incurred under and pursuant to the Loan Agreement and each such obligation is a proper Costs of Issuance; (iii) that pursuant to the Loan Agreement, the undersigned, on behalf of the City, hereby requests the Bank to disburse Set Aside Funds to the payees set forth on Exhibit A attached hereto, upon receipt of an invoice, an amount not to exceed the sum set forth opposite each such payee, for the purpose identified therein; and (iv) all payments shall be made by check or wire transfer in accordance with the payment instructions set forth in Exhibit A attached hereto or in invoices submitted in accordance herewith, and the Bank may rely on such payment instructions as though given by the City, with no duty to investigate or inquire as to the authenticity of the invoice or the payment instructions contained therein. Dated: December __, 2013 CITY OF LAKEPORT
By:
B-1
ATTACHMENT 1
EXHIBIT B
FORM OF ANNUAL CITY CERTIFICATION REGARDING BUDGET AND APPROPRIATION OF DEBT SERVICE
The undersigned hereby states and certifies that: (i) I am the duly appointed, qualified and acting ______________ of the City of Lakeport, a municipal corporation and general law city duly organized and existing under and by virtue of the laws of the State of California (the City), and as such, I am familiar with the facts herein certified and am authorized and qualified to certify the same; (ii) the City has previously issued its City of Lakeport Series 2013 Refunding Loan Obligation (2013 CalPERS Refunding Project) in the aggregate principal amount of $_______________ (the Loan) under a Loan Agreement dated as December 1, 2013 (the Loan Agreement), between the City and ________________ (the Bank); (iii) during the fiscal year commencing July 1, 20__ (the Ensuing Fiscal Year), the aggregate amount of principal and interest coming due on the Loan is $_______; (iv) on _________, 20__, the City Council of the City duly adopted its Resolution No. ______ at a meeting which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting at the time of adoption, adopting a budget for the City (the Adopted Budget) with respect to the Ensuing Fiscal Year; (v) pursuant to the Adopted Budget, the City has budgeted the payment of principal and interest coming due during the Ensuing Fiscal Year on the Loan; and (vi) attached hereto is an extract from the Adopted Budget showing a line item for payment of principal and interest coming due during the Ensuing Fiscal Year on the Loan. Capitalized terms used herein and not otherwise defined have the meanings given them in the Loan Agreement. Dated: CITY OF LAKEPORT
By:___________________ Name: Title:
C-1
ATTACHMENT 2 CITY OF LAKEPORTCalPERS Pension Debt

Refinancing Background, Options, Process and Schedule
Executive Summary
The City of Lakeport can save significant money in pension costs by refinancing its CalPERSSide Funds(Miscellaneous&SafetyPlans)unfundedaccruedactuarial liability (UAAL)obligation o $210,137insavingsover9years;$23Kperyear o Intodaysdollars,thisequatesto$173KofPVsavings(7.36%ofrefundedUAAL) Savings can also be taken upfront; $180K in FY 2013/14 or the new payments canbeuniformlystructuredforfuturebudgetpredictability(seebottomofpage)
Background
CityofLakeportcurrentlyhastwoCalPERSSideFundplans:MiscellaneousandSafety Citymakestwotypesofpensionpaymentseachyear: o 1)NormalCost&2)amortizationoftheUAAL CityofLakeportFY2013/14PensionPayments Miscellaneous Safety Normal Paymenton Normal Paymenton Cost(NC) UAAL Cost(NC) UAAL $185,636 $161,201 $91,880 $162,728 TotalFY2013/14Payments:$277,516forNC;$323,929forUAAL EstimatedtotalUAALforMiscellaneousPlan(June30,2013):$1,186,000 o Amortizedover9years@7.50%;CalPersassumesannualpaymentgrowthof3.00% EstimatedtotalUAALforSafetyPlan(June30,2013):$1,086,284 o Amortizedover8years@7.50%;CalPersassumesannualpaymentgrowthof3.00% TotalUAALof$2.27MM;1styearpayment:$324K(growsto$398KinFY2018/19) OPTIONSFORPAYINGOFFUAAL (1) Continue paying into Side Fund (cost: 7.50%); (2) Payoff using available cash (forego current reinvestment return/reduce reserves); or (3) Refinance with a new loan (Pension ObligationBondPOB)atalower interestrate (assumption:4.25%)
Savings Analysis
The debt service on the POBs can be structured to meet a variety of goals, including: (a) levelsavingseachyearmirroringCalPERS3.00%paymentgrowth;(b)takesavingsinearly years;or(c)levelpaymentstocreateamorepredictablefuturebudgetpaymentstream.
Option2 UpfrontSavings POBDS Savings 143,499 180,430 333,647 0 343,656 0 353,965 0 364,585 0 375,522 0 386,788 0 398,392 0 204,204 0 0 0 2,904,258 180,430 2022 4.25% 180,430 20,048 180,430 173,075 7.36% Option3 LevelDS5Year POBDS Savings 528,177 204,248 528,177 194,530 528,177 184,521 528,177 174,212 528,177 163,592 0 375,522 0 386,788 0 398,392 0 204,204 0 0 2,640,886 443,802 2018 4.00% 204,248 49,311 443,802 201,616 8.57% Option4 LevelDS7Year POBDS Savings 393,207 69,278 393,207 59,560 393,207 49,551 393,207 39,242 393,207 28,622 393,207 17,685 393,207 6,419 0 398,392 0 204,204 0 0 2,752,447 332,241 2020 4.10% 69,278 36,916 332,241 190,105 8.08% Option5 LevelDS10Year POBDS Savings 294,246 29,683 294,246 39,401 294,246 49,410 294,246 59,719 294,246 70,339 294,246 81,276 294,246 92,542 294,246 104,146 294,246 90,042 294,246 294,246 2,942,460 142,228 2023 4.30% 29,683 14,223 142,228 167,313 7.12%
Fiscal Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total
UAAL Payment 323,929 333,647 343,656 353,965 364,585 375,522 386,788 398,392 204,204 0 3,084,688
Option1Uniform "ApplestoApples" POBDS Savings 299,350 24,579 309,068 24,579 319,077 24,579 329,386 24,579 340,006 24,579 350,943 24,579 362,209 24,579 373,813 24,579 190,700 13,504 0 0 2,874,551 210,137 2022 4.25% 24,579 23,349 210,137 173,075 7.36%
Maturity: InterestRate: 1stYearSavings: Avg.AnnualSavings: CumulativeSavings: NPV$: September6, 2013 NPV %:
ATTACHMENT 2 CITY OF LAKEPORT CalPERS Pension Debt

Refinancing Background, Options, Process and Schedule
Savings Analysis (contd)
600,000 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
CurrentUAALPaymentsvs.POBDebtServiceOptions
UAALPayment(7.50%DiscountRate) UAALPayment(7.25%DiscountRate) Option1:UniformSavingsDebtService Option2:UpfrontSavingsDebtService Option3:LevelDS5Year Option4:LevelDS7Year Option5LevelDS10Year
POB Risk
1. FutureReductionofCalPERSDiscount Rate:AfterGreatRecessionsmajorinvestment losses, CalPERS recently reduced the rate to 7.50% from 7.75%. Recent CalPERS investmentreturnshavereturnedmost,butnotallofpreviouslosses. o Even assuming a further reduction to 7.25%, there is still significant savings from issuingaPOB(seereddottedlineabove) Savingsreducedbyabout$3,190annually(7.36%PV6.36%)
POB Mechanics
Before a POB
Normal Cost $
After a POB
Normal Cost $ Debt Payment
Cal PERS Fire

UAAL 7.50% UAAL Payment
City of Lakeport
Cal PERS Fire

UAAL 7.50% Bond Proceeds Pay Off UAAL
City of Lakeport
Bond Proceeds
POB 4.25%
Next Steps and Estimated Schedule
1. CouncilApprovalandBeginValidationProcess o AllPOBsrequiredtogothroughcourtstovalidatetransactionanddocuments ValidationactionfiledinsuperiorcourtofLakeCounty(75to85dayprocess) o Over125+POBvalidationshavebeenheldinCA(allsuccessfulatlocallevel)
ESTIMATEDSCHEDULE Date Item 8/26 Kickoffmeeting;conceptualapprovaloffinancingplan 9/2 Draftbonddocumentscirculated 9/17 Councilapprovalofbonddocumentsandvalidationprocess 9/18 ValidationactionfiledinSuperiorCourt October Finalizecreditpackage;engagepotentialinvestors 12/3 Distributeofficialbiddingpackagetopotentialinvestors 12/5 Receiveinvestorbidsandselectlowestinterestratebidder;contractsigned Closing;fundswiredtoCalPERStopayofffullUAAL 12/11 Note:Timingdependentonvalidationactioncompletion
September6,2013
ATTACHMENT 3
City of Lakeport PERS Side Fund Analysis Fund Salary Share Fiscal Year 2012-13 Fund General Fund Water Sewer Total General Fund Water Sewer Total General Fund Water Sewer Total General Fund Water Sewer Total General Fund Water Sewer Total Salaries 848,572 448,584 488,839 1,785,995 910,526 419,840 418,770 1,749,136 982,703 404,484 461,737 1,848,924 914,494 425,874 561,126 1,901,494 896,430 453,107 555,366 1,904,903 Misc Percent Share 47.51% 25.12% 27.37% 100.00% 52.06% 24.00% 23.94% 100.00% 53.15% 21.88% 24.97% 100.00% 48.09% 22.40% 29.51% 100.00% 47.06% 23.79% 29.15% 100.00% Salaries 722,064 722,064 728,519 728,519 858,120 858,120 875,621 875,621 799,184 799,184 Safety Percent Share 100.00% 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% 100.00% Salaries 1,570,636 448,584 488,839 2,508,059 1,639,045 419,840 418,770 2,477,655 1,840,823 404,484 461,737 2,707,044 1,790,115 425,874 561,126 2,777,115 1,695,614 453,107 555,366 2,704,087 Total Percent Share 62.62% 17.89% 19.49% 100.00% 66.15% 16.95% 16.90% 100.00% 68.00% 14.94% 17.06% 100.00% 64.46% 15.34% 20.21% 100.00% 62.71% 16.76% 20.54% 100.00%
2011-12
2010-11
2009-10
2008-09
Average 5-year share of total salaries General fund: 64.79% Water: 16.37% Sewer: 18.84% Total: 100.00%
\\SERVER02\Data\Users\dbuffalo\Special Projects\CalPERS\Side Fund Refi\Fund Proration Schedule
9/6/2013
Report #3
$2,526,750 City of Lakeport Private Placement (Bank) Refinancing (SIDE FUNDS)
ATTACHMENT 4
Detail Costs Of Issuance

Dated 07/01/2013 | Delivered 07/01/2013
COSTS OF ISSUANCE DETAIL

Placement Agent Bank Counsel Financial Advisor Bond Counsel Miscellaneous TOTAL $12,000.00 $10,000.00 $20,000.00 $35,000.00 $3,000.00 $80,000.00
2013 Refinancing (Lakepor | Issue Summary | 7/12/2013 | 10:27 AM
ATTACHMENT 5
RESOLUTION NO. _____ (2013) A RESOLUTION OF CITY COUNCIL OF THE CITY OF LAKEPORT AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT TO REFINANCE OUTSTANDING SIDE FUND OBLIGATIONS OF THE CITY TO THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM, DIRECTING THE FILING OF A JUDICIAL VALIDATION ACTION WITH RESPECT THERETO AND PROVIDING OTHER MATTERS RELATING THERETO WHEREAS, the City of Lakeport (the City) is a contracting member of the California Public Employees' Retirement System (PERS), and under its contract with PERS the City is obligated to make certain payments to PERS in respect of (a) retired public safety employees and (b) retired miscellaneous employees, each under the Side Fund program of PERS which amortizes such obligations over a fixed period of time (collectively, the PERS Side Fund Obligations); and WHEREAS, the City Council, after due investigation and deliberation, has determined that it is in the public interests of the City at this time to provide for the refinancing of the PERS Side Fund Obligations and thereby realize savings in respect of the PERS Side Fund Obligations (the Refunding); and WHEREAS, the City is authorized under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the Bond Law), to enter into loan agreements for the purpose of refunding certain outstanding obligations of the City, including the PERS Side Fund Obligations; and WHEREAS, for the purpose of providing financing for the Refunding, the City proposed to accept a taxable loan from a financial institution (the Bank) of the Citys choice at a latter date pursuant to terms and conditions of a Loan Agreement, dated as of December 1, 2013, by and between the Bank and the City (the Loan Agreement), with an aggregate principal component in an amount not-to-exceed $_________, designated the City of Lakeport, Series 2013 Refunding Loan Obligation (2013 CalPERS Refunding Project) (the Loan), a copy of which has been presented at this meeting and is on file with the City Clerk; and WHEREAS, pursuant to the Loan Agreement, the City will make loan payments (the Loan Payments) from its general fund revenues, sufficient in amount to pay back the debt service on Loan from the Bank, as more particularly set forth in the Loan Agreement; and WHEREAS, the City Council wishes at this time to approve the form of and authorize the execution and delivery of the Loan Agreement, and to approve official actions relating to the delivery of the Loan Agreement; and WHEREAS, the execution and delivery of the Loan Agreement by the City is subject, however, to a prior judicial determination of the validity of the Loan Agreement and the City Council also wishes at this time to authorize the institution of judicial proceedings to determine the validity of the Loan Agreement; and
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WHEREAS, the City Council, with the aid of its staff, has reviewed the form of Loan Agreement, which is on file with the City Clerk, and the Council wishes at this time to approve the foregoing document as being within the public interests of the City; and WHEREAS, in order to efficiently accomplish the execution and delivery of the Loan and the Loan Agreement, the City desires to appoint p2 Capital Advisors as Financial Advisor and The Weist Law Firm as Bond Counsel to provide the necessary professional services in connection therewith; and WHEREAS, the City Council wishes at this time to authorize all actions and proceedings relating to the procurement of the Notes, the execution and delivery of the Loan Agreement, and the corresponding acquisition and construction of each Project; and WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of such financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeport, as follows: Section 1. The foregoing Findings are adopted as findings of the City Council as though set forth fully herein. Section 2. The Mayor, Mayor Pro Tem, City Manager, Finance Director, City Clerk and any other person authorized by the Council to act on behalf of the City shall each be an Authorized Representative of the City for the purposes of structuring and providing for the execution of the Loan Agreement and the corresponding issuance and delivery of the Loan, as well as the Refunding of the PERS Side Fund Obligations, and are hereby authorized, jointly and severally, for and in the name of and on behalf of the City, to execute and deliver any and all documents and certificates that may be required to be executed in connection with the execution and delivery of the Loan, as well as the Refunding of the PERS Side Fund Obligations, and to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which the Council has intended with the adoption of this Resolution. Section 3. The Council hereby approves the Loan Agreement in substantially the form on file with the City Clerk, together with any additions thereto or changes therein (including, but not limited to, the final rate and amount of the Loan, the final debt service payment schedule, and prepayment and parity bond provisions), provided that the principal amount of the Loan pursuant to the Loan Agreement shall not exceed $_________, and that the projected net present value savings with respect to the PERS Side Fund Obligations is at least 3.00%, as determined by staff upon the advice of its Financial Advisor. Any Authorized Representative of the City is hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal of the City to, the final form of the Loan Agreement for and in the name and on behalf of the City, and the execution thereof shall be conclusive evidence of the Councils approval of any such
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additions and changes. The Council hereby authorizes the delivery and performance of the Loan Agreement. Section 4. The City Council hereby appoints The Weist Law Firm as Bond Counsel, and p2 Capital Advisors as Financial Advisor in connection with the financing described in this Resolution. An Authorized Representative is authorized and directed to execute an agreement with each of such firms in the respective forms on file with the City Clerk. As provided in such agreements compensation payable to Financial Advisor and Bond Counsel is entirely contingent upon the successful completion of the financing proceedings and shall be paid from a portion of the proceeds of the Loan pursuant to the Costs of Issuance set forth in the Loan Agreement, which is approved herein. Section 5. The City Council hereby determines that interest payable pursuant to the Loan Agreement will be subject to federal income taxation, and that the provisions of Section 5900 et seq. of the California Government Code (the Taxable Bond Act) apply to the Loan Agreement. The City may take any action and exercise any power permitted to be taken by it under the Taxable Bond Act in connection with the execution and delivery of the Loan Agreement. Section 6. The execution and delivery of the Loan Agreement to the Bank is subject to a prior judicial determination of the validity of the Loan Agreement and related matters and the City Council hereby authorizes the filing of an action to determine the validity of the Loan Agreement and related matters in the Superior Court of Lake County, under the provisions of Sections 860 et seq. of the Code of Civil Procedure of the State of California. The Weist Law Firm, as bond counsel to the City, is hereby directed, in concert with the City Attorney, to prepare and cause to be filed and prosecuted to completion all proceedings required for the judicial validation of the Loan Agreement and related matters. Section 7. The Mayor, Mayor Pro Tem, City Manager, Finance Director, City Clerk and all other officers of the City are each authorized and directed in the name and on behalf of the City to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by this Resolution and the Loan Agreement. Whenever any officer of the City is authorized to execute or countersign any document or take any action contemplated by this Resolution and the Loan Agreement, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 8. The Council hereby finds and determines that it has taken all of the foregoing actions, and made all of the foregoing findings, in full compliance with the law, and that all prior proceedings taken with respect to the Refunding were duly considered, and are hereby considered valid and in conformity with the requirements of law. Section 9. This Resolution shall take effect from and after the date of its passage and adoption.
Passed and adopted at a Regular Meeting of the City Council of the City of Lakeport held on the 17th day of September, 2013 by the following vote:
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AYES: NOES: ABSTAINING: ABSENT: APPROVED: ____________________________ THOMAS ENGSTROM, Mayor ATTEST:
______________________________ KELLY BUENDIA, Deputy City Clerk/Acting Secretary
CERTIFICATE STATE OF CALIFORNIA COUNTY OF LAKE CITY OF LAKEPORT ) ) ss. )
I, Kelly Buendia, Deputy City Clerk of the City of Lakeport, do hereby certify the foregoing Resolution of the City Council of the City of Lakeport was duly passed and adopted at a Regular Meeting of the City Council held on September 17, 2013. DATED: September 17, 2013 _______________________ KELLY BUENDIA, Deputy City Clerk
CITY OF LAKEPORT
STAFF REPORT
RE: Application for Time Limit Waiver for a Mobile Catering Business (HeyHot Dog) SUBMITTED BY: Andrew Britton, Planning Services Manager PURPOSE OF REPORT: Information only Discussion Action Item MEETING DATE: 9-17-2013
WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD: Consideration of an application for a time limit waiver from a mobile catering business owner requesting approval to do business at one location beyond the two-hour limit. BACKGROUND: The City Council approved several revisions to the Citys Mobile Catering regulations (Municipal Code Chapter 5.20) in July 2013. The approved revisions included an increase of the location time limit from one hour to two hours and the establishment of an application process and criteria for consideration of a waiver from the standard time limit. DISCUSSION: The owner of the HeyHot Dog mobile catering business has submitted an application for a time limit waiver in accordance with the revised regulations. The application package is attached to this staff report and includes a completed application, a written statement addressing the time limit waiver criteria set forth in the revised regulations, a site map identifying the proposed location of the hot dog cart, a letter from a local surveyor confirming that the hot dog cart will be located approximately 180 feet from the nearest restaurant, and a copy of the applicants current County of Lake Environmental Health Division permit. The application materials indicate the applicant is seeking approval of a time limit waiver to do business for extended periods on the west side of North Main Street to the north of Second Street. The submitted site map indicates the hot dog cart will be located approximately 80 feet north of the corner of Second and North Main Streets. The letter provided by the local surveyor indicates the cart will be located in the vicinity of the second light pole on the west side of North Main. The application indicates that the proposed days and hours of operation at this location are Monday through Saturday, from 9:00 a.m. to 6:00 p.m. The applicant verbally indicated that it is unlikely that he will operate during those hours on a regular basis; however, he is seeking approval for those hours to provide flexibility if needed. The revised mobile catering regulations state that applications for a time waiver are subject to approval by the City Council and the decision is to be based on the applicants conformance with the criteria and findings set forth in Municipal Code Section 5.20.040 A.1.b. These criteria and findings are set forth below along with the responses contained in the applicants submitted statement. There are special circumstances applicable to the applicants mobile catering business which creates an unusual hardship in terms of the ability to comply with the standard two hour time limit.
Page 1 Agenda Item #VI.C.
Meeting Date: September 17, 2013
Applicants response: The hot dog cart is considered a mobile unit in the sense that we can trailer it to a location and set it up. Although it has three wheels and can be easily pushed, we do not believe the front wheel was designed to move so frequently over such rough terrain (city street). We just feel it beat up the cart so badly. Preserving the cart from such wear and tear is the main reason we would like to stay in this location. From a purely business standpoint, it would be great to be able to build the business from the one location so people always know where to find us. The approval of the time limit waiver will not be detrimental to the public health, safety or welfare or injurious to the property where the mobile catering activities take place or to other properties or businesses in the vicinity. Applicants response: Currently, in that location, we have not posed any public health or safety risks and will continue to conduct our business up to all codes. We keep the surrounding area very condensed and neat. We sweep the street each day as well as the sidewalk and bus stop. We pick up and discard all trash in the park and on the whole block before and after each day. We also make sure to put a cone designating where the parking spot ends. We put the cart on one end of a parking spot and cone off the other end. An extended-hours mobile catering business activity shall be located a minimum of 120 feet from the building corner or property line of the nearest permanent restaurant, whichever is closer. Applicants response: The specific spot we are asking for is 180 feet from the nearest restaurant which is Chopsticks. Please see attached (map). Notice of the pending time limit waiver application was provided to the City Police Department for their input. The Police Department suggested via email that the hot dog cart should be located just to the south of the second light pole so that a vehicle can park between the bus stop red zone on the north end of the block and the hot dog cart. If the hot dog cart is parked directly in front of the light pole, there is insufficient room for a car to park between the cart and the bus stop zone. It appears that two additional vehicles may be able to park on the south side of the cart if it is located slightly south of the light pole. The Police Department also requested that the owner not keep any ancillary equipment or materials on the ground in the vicinity of the cart. This issue is addressed in the revised mobile catering regulations: Equipment, supplies and materials associated with a mobile catering business shall be stored on or within the mobile business unit. No ancillary equipment, supplies or materials shall be displayed in the immediate vicinity of the mobile business unit. (LMC Section 5.20.045 C.) The Police Department also suggested that the vehicle used to tow the hot dog cart be parked in a different location than North Main Street. This suggestion has been incorporated into a proposed condition of approval set forth in the Options section below. Notice of the proposed application was also provided to the County of Lake Public Services Department as the County owns and maintains Museum Park. The applicant regularly utilizes Museum Park as a seating area while waiting for customers. The City received an email response from Caroline Chavez, department director, indicating that the County has no objections or concerns regarding the vendor who has been there. OPTIONS: 1. Approve the requested time limit waiver and allow the applicant to operate at the proposed location Monday through Saturday between the hours of 9:00 a.m. to 6:00 p.m. subject to the following conditions of approval: a. The applicant shall comply with all applicable regulations for mobile catering businesses set forth in Chapter 5.20 of the Lakeport Municipal Code.
Meeting Date: September 17, 2013 Page 2 Agenda Item #VI.C.
b. When possible, the applicant shall locate the hot dog cart slightly south of the 2nd light pole to allow adequate parking area for a vehicle between the cart and the bus stop red zone. c. The applicant shall not park the hot dog cart's tow vehicle on Main Street or other areas designated for two-hour parking if the vehicle will be parked for more than two hours. d. The applicant shall agree to modify the days and or times of the business operation if problems related to the time limit extension are noted by City or County staff. Approval of the time limit waiver is based on the finding that the request is in conformance with the waiver criteria set forth in Lakeport Municipal Code Section 5.20.040 A.1.b. 2. Approve the requested time limit waiver subject to additional or modified conditions of approval than those set forth in Option 1. 3. Deny the time limit waiver request based on the finding that it does not adequately meet the waiver criteria and findings set forth in Lakeport Municipal Code Section 5.20.040 A.1.b. FISCAL IMPACT: None $ Account Number: Comments: SUGGESTED MOTIONS: Motion to approve the time limit waiver request as set forth in Option 1 of the staff report. Direct staff to prepare a Project Conditions Agreement which incorporates the conditions of approval set forth in Option 1 and to provide the agreement to the applicant for signature. Attachments: 1. HeyHot Dog Time Limit Waiver Application Package
Meeting Date: September 17, 2013
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Agenda Item #VI.C.
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AGENDA

POST Executive Certificate

Finance Director 1. Pension Side Fund

City Council Agenda of September 17, 2013

CITY COUNCIL COMMUNICATIONS: A. Miscellaneous Reports, if any: Adjourn ADJOURNMENT:

_______________________________________ Hilary Britton, Acting Deputy City Clerk

LAKEPORT CITY COUNCIL REGULAR MEETING Tuesday, September 3, 2013

PLEDGE OF ALLEGIANCE: ACCEPTANCE OF AGENDA: Urgency Items:

CONSENT AGENDA: A. B. Ordinances: Minutes: Vote on Consent Agenda:

PUBLIC PRESENTATIONS/REQUESTS: A. B. Citizen Input: Lake County Chamber of Commerce:

CITY COUNCIL COMMUNICATIONS: A. Miscellaneous Reports, if any:

City Council Minutes of September 3, 2013

___________________________________________ THOMAS ENGSTROM, Mayor ATTEST:

_______________________________________ KELLY BUENDIA, Acting City Clerk

Meeting Date: 09/17/2013

Agenda Item #IV.D.

Meeting Date: 09/17/2013

Agenda Item #IV.E.

Conflict of Interest Code

Incorporation of Section 18730 of the California Code of Regulations

Government Code Section 87200 Filers

Conflict of Interest Code adopted 12/21/2010 revised 09/03/2013

Formatted: Centered Formatted: English (United States)

Conflict of Interest Code adopted 12/21/2010 revised 09/03/2013

Formatted: Centered Formatted: English (United States)

Formatted: Centered Formatted: English (United States)

Conflict of Interest Code adopted 12/21/2010 revised 09/03/2013

RESOLUTION NO. XXXX (2013)

Conflict of Interest Code

Conflict of Interest Code revised 09/03/2013

Conflict of Interest Code revised 09/03/2013

Conflict of Interest Code revised 09/03/2013

Meeting Date: 09/17/2013

Agenda Item #IV.F.

Absence without leave.

Agreement for Services

Agreement for Services

____________________________________ MARGARET SILVEIRA, City Manager Dated: _____________________________

Agreement for Services

Meeting Date: 09/17/2013

Agenda Item # VI.A.

Meeting Date: 09/17/2013

Agenda Item # VI.A.

Meeting Date: 09/17/2013

Agenda Item # VI.A.

RESOLUTION NO. ____ (2013)

Resolution No. ____ (2013)

Meeting Date: 09/17/2013

Meeting Date: 09/17/2013

Agenda Item #VI.B.

SERIES 2013 REFUNDING LOAN AGREEMENT

Dated as of December 1, 2013

**** **** **** *

CITY OF LAKEPORT By Authorized Officer

By:___________________ Name: Title:

ATTACHMENT 2 CITY OF LAKEPORTCalPERS Pension Debt

Maturity: InterestRate: 1stYearSavings: Avg.AnnualSavings: CumulativeSavings: NPV$: September6, 2013 NPV %:

ATTACHMENT 2 CITY OF LAKEPORT CalPERS Pension Debt

Cal PERS Fire

Cal PERS Fire

Next Steps and Estimated Schedule

1. CouncilApprovalandBeginValidationProcess o AllPOBsrequiredtogothroughcourtstovalidatetransactionanddocuments ValidationactionfiledinsuperiorcourtofLakeCounty(75to85dayprocess) o Over125+POBvalidationshavebeenheldinCA(allsuccessfulatlocallevel)

\\SERVER02\Data\Users\dbuffalo\Special Projects\CalPERS\Side Fund Refi\Fund Proration Schedule

________ MARGARET SILVEIRA, City Manager Dated: _

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