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Item 4.2 - Approval of Property Assessed Clean Energy (PACE) Programs - Expanding Program ParticipationOF POW�y c�Y9fN THE coJ City of Poway COUNCIL AGENDA REPORT DATE: TO: FROM: INITIATED BY: SUBJECT: Summary: September 2, 2014 APPROVED N APPROVED AS AMENDED ❑ (SEE MINUTES) DENIED ❑ REMOVED ❑ CONTINUED Resolution No. i q - 0 Sz- ., 1q-0r3 Honorable Mayor and Members of the City Uouncii Daniel Singer, City Manager 50,d. Leah Browder, Director of Public Works% Eric Heidemann, Public Works Administrator Property Assessed Clean Energy (PACE) Programs — Expanding Program Participation Several Property Assessed Clean Energy (PACE) programs have requested that the City take the necessary steps to allow the programs to operate within the city boundaries. These programs offer property owners a financing option for qualifying renewable energy, energy and water efficiency and electric vehicle charging infrastructure projects through the PACE program adopted by the California Legislature. Authorization to implement the program requires adoption of several Resolutions and agreements, but should have minimal ongoing impact on staff resources and no fiscal impact on the City of Poway. However, it is important that consumers are aware these are not City programs. Rather, City staff, in response to interested property owners and in light of several other cities allowing these programs, now recommends the City allow use of its taxing authority, as permitted by law, for property owners to access these financing programs. As with any undertaking of this type, consumers are responsible for performing their own due diligence, carefully comparing available options and completing their own analysis to understand what they are undertaking and determine how best to proceed for their individual circumstances. Recommended Action: It is recommended that the City Council: 1. Adopt the Resolution to participate in the California Home Energy Renovation Opportunity (HERO) PACE program, join the Western Riverside Council of Governments as an Associate Member, and authorize the City Manager to execute all necessary program documents and agreements; 2. Adopt the Resolution to participate in the Figtree Program and authorize the City Manager to execute all necessary program documents and agreements; and 3. Adopt the Resolution approving Associate Membership in the California Enterprise Development Authority (CEDA); 4. Authorize the Mayor to execute the Agreement and any other documents required to join CEDA as an Associate Member; and 1 of 75 September 2, 2014 Item # 4.2 Property Assessed Clean Energy (PACE) Programs — Expanding Program Participation September 2, 2014 Page 2 5. Authorize the City Manager to execute the Indemnification Agreement between Renewable Funding LLC in regard to the CaliforniaFIRST program. Background: Before 2008, interested consumers could finance energy efficiency projects through a variety of familiar methods: • Cash • Home Equity Line of Credit (Loan) • Solar Lease • Power Purchase Agreement • Personal loan with third party (e.g. installation firms) With the goal of stimulating increased energy efficiency and use of alternative energy sources by home, business and industrial property owners, several states enacted laws to permit establishment of Property Assessed Clean Energy (PACE) programs, providing an additional financing option. PACE programs provide a mechanism for property owners to finance energy efficiency, water efficiency, and other renewable energy projects on existing residential and commercial structures, utilizing their property as collateral, through a special tax assessment on the property. The contractual assessments are recorded as a lien (in most cases a priority lien) against the subject property, entered in the County roll and collected through the property owner's tax bill at the same time and in the same manner as traditional property assessments. The property tax assessment provides financing for these types of improvements without requiring a down payment or payment of the full or partial upfront capital cost of the improvement. In 2008, AB 811 was enacted in California and established parameters for PACE programs to finance alternative energy sources or greater energy efficiencies for property owners. Later, AB 474 was enacted to expand the scope of AB 811 programs to include water efficiency improvements. In 2012, SB 555 amended the Community Facilities District Law to allow the formation of community facilities districts to finance energy efficiency, water conservation and renewable energy improvements on private property. On January 5, 2010, the City Council approved the City of Poway's participation in CaliforniaFIRST, a statewide AB 811 PACE program offered through California Statewide Communities Development Authority (CSCDA). In doing so, the City joined a large number of other cities and counties throughout California in approving this program sponsored by California Communities, a Joint Powers Authority established by the League of California Cities and the California Association of Counties. Federal Housing Finance Agency (FHFA) Concerns and Impacts FHFA is an independent federal agency which supervises and regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. Together these enterprises own or 2 of 75 September 2, 2014 Item # 4.2 Property Assessed Clean Energy (PACE) Programs — Expanding Program Participation September 2, 2014 Page 3 guarantee more than $5 trillion in residential mortgages. In July 2010, the FHFA issued a statement raising concerns regarding PACE programs. FHFA's primary concerns were related to the first -lien position offered through the PACE programs and the potential effects that position could have on mortgages, either owned or guaranteed by Fannie Mae and Freddie Mac. In a follow -up to its July statement, the FHFA issued a February 2011 directive that prohibited Fannie Mae and Freddie Mac from purchasing mortgage loans secured by properties with outstanding first -lien PACE obligations and required them to undertake other steps necessary to "protect their safe and sound operations from these first -lien PACE programs." As a result of the FHFA's reaction to PACE programs with priority -lien components, most PACE programs stalled and, after some time, only moved forward with commercial projects that were not impacted by the FHFA issues. The program initially joined by the City of Poway (CaliforniaFIRST) fell into this category and was not processing residential PACE projects as a result. The actions taken by the FHFA resulted in lawsuits filed by several plaintiffs, including the State of California, in four federal courts. In March 2013, the U.S. Court of Appeals for the Ninth Circuit found that the FHFA's actions could not be challenged in court. Findings: HERO, Figtree and Ygrene have approached City staff requesting that the City take actions necessary to allow establishment of their programs within the city boundaries. Because Ygrene uses the SB 555 legislation and requires the City to form and administer a Community Facilities District involving significant staff time and expense, that program option is not recommended at this time. Approval of tonight's recommended actions would allow property owners within Poway's city limits the option to finance renewable energy, energy and water efficiency and electric vehicle charging infrastructure projects through the PACE program adopted by the California Legislature. Property owners who wish to participate will finance the installed improvements through either WRCOG, CEDA or Renewable Funding, LLC depending on which PACE program the property owner selects. Program summaries are included as Attachments A, B and C. Financing is secured by a voluntary contractual assessment levied on the owner's property, with no recourse to the City. Participation in the program is 100% voluntary and property owners who wish to participate in the program agree to repay the amount borrowed through a voluntary contractual assessment collected together with their annual property taxes. This financing is available for eligible improvement on both residential (generally accommodated by the HERO program at this time and the CaliforniaFIRST program as of September 2014) and commercial properties (generally accommodated at this time by both the Figtree and CaliforniaFIRST programs). 3 of 75 September 2, 2014 Item # 4.2 Property Assessed Clean Energy (PACE) Programs — Expanding Program Participation September 2, 2014 Page 4 To help mitigate concerns from the FHFA, Governor Jerry Brown included a proposal in the FY 2013 -2014 state budget authorizing the California Alternative Energy and Advanced Transportation Financing Authority to establish a PACE Loss Reserve Program through Senate Bill 96. This program was specifically designed to address FHFA concerns through the use of a reserve fund that would reimburse residential PACE programs for costs associated with keeping mortgage interests whole in the event of a foreclosure or forced sale. The Loss Reserve Program will compensate mortgage lenders for losses resulting from the existence of a PACE lien in a foreclosure or forced sale. Claims will be paid from the reserve to the PACE program and may be used as a reimbursement to that program. PACE programs will pay a small administrative fee based on loan volume to help sustain this program. Governor Brown has allocated $10 million for the implementation of this program in the 2013 -2014 state budget. The PACE Loss Reserve Program was officially launched in March and is currently active. Tonight's recommended actions take the necessary steps to expand the City's existing PACE program participation contingent on PACE Programs being enrolled in the PACE Loss Reserve Program. Additionally, to be an authorized PACE program in Poway, the lender is required to provide full and understandable disclosures to program applicants. These disclosures include the possibility that participation may trigger acceleration of an existing mortgage and that the participant may be required to prepay the contractual assessments and all associated fees and penalties upon the refinancing or sale of the property. Conclusion: Staff has been involved in tracking the development of PACE programs since 2008. Currently, Poway property owners can access PACE financing opportunities through the CaliforniaFIRST Program. Until recently, CaliforniaFIRST has not provided a residential component, due to the position of the FHFA. Instead, this PACE program focused on commercial and industrial projects. CaliforniaFIRST anticipates relaunching its residential program component in September 2014 and that aspect of the program would be available to Poway property owners immediately. Tonight's action would make another commercial option, Figtree, immediately available to property owners. Figtree also anticipates launching a residential program before the end of this calendar year. Additionally, tonight's action would make available to Poway property owners the residential option of HERO, after its judicial validation that HERO anticipates will be completed before the end of the calendar year. It should be noted that the PACE program implementation process for each of these companies includes a judicial validation component. Judicial validation affirms the soundness of a particular PACE program. Under this process, a lawsuit is filed in superior court asking the court to evaluate and rule on the constitutionality and legality of the program and its district. A successful judicial validation provides both a higher 4 of 75 September 2, 2014 Item # 4.2 Property Assessed Clean Energy (PACE) Programs – Expanding Program Participation September 2, 2014 Page 5 level of protection from legal challenges and certainty to government entities, program administrators, and potential or actual capital investors. Both CaliforniaFIRST and Figtree completed successful judicial validation processes as part of initial overall program formation meaning that these programs will be immediately available to Poway property owners upon Council action. HERO undertakes judicial validation quarterly including all new members for that quarter. Should Council accept tonight's recommendations, the City of Poway would be included in HERO's next quarterly validation. The FHFA has maintained a passive opposition to the concept of PACE programs that include a priority -lien component. However, in light of the establishment of the California Loss Reserve Program, the widespread growth of the HERO residential PACE program throughout the state, and the additional requirements the City has imposed on PACE companies, staff is recommending the City expand the PACE options available to Poway property owners. The City Attorney has reviewed the required agreements and resolutions as well as the process required to participate in these programs. Fiscal Impact: Because this is not a City program, there will be no ongoing direct fiscal impact to the City. Costs to date have been indirect associated with tracking this issue, coordinating with program providers, and preparing materials for consideration by the City Council. Environmental Review: This item is not subject to CEQA review. Public Notification: A copy of this report has been sent to Renovate America, Inc. for California HERO, Figtree Financing, and Renewable Funding for CaliforniaFIRST. Attachments: A. Program Summary: California Home Energy Renovation Opportunity (HERO) Program (Page 7) B. Program Summary: California Enterprise Development Authority (CEDA)- Figtree PACE (Page 14) C. Program Summary: CSCDA— CaliforniaFIRST (Page 21) D. HERO: Resolution consenting to the inclusion of properties within the City's jurisdiction in the California HERO Program and approving the amendment to the WRCOG Joint Powers Agreement. Also included in this Attachment is "Exhibit A ", an Amendment to the WRCOG Joint Powers Agreement adding the City of Poway as an Associate Member (Page 26) 5 of 75 September 2, 2014 Item # 4.2 Property Assessed Clean Energy (PACE) Programs — Expanding Program Participation September 2, 2014 Page 6 E. HERO: Joint Powers Agreement of the Western Riverside Council of Governments (Page 36) F. FIGTREE: Resolution consenting to the inclusion of properties within the City's jurisdiction in the Figtree PACE Program (Page 58) G. FIGTREE: Program Report (copy available in the City Clerk's office) H. FIGTREE: Resolution approving Associate Membership in CEDA (Page 67) I. FIGTREE: CEDA Associate Membership Agreement (Page 70) J. CALIFORNIAFIRST: Indemnification Agreement between Renewable Funding, LLC and the City of Poway (Page 73) 6 of 75 September 2, 2014 Item # 4.2 Attachment A California Home Energy Renovation Opportunity (HERO) Program Source: This information was originally reproduced from a March 2013 Center for Sustainable Energy California report: "Residential and Commercial Property Assessed Clean Energy (PACE) Financing in California" and was updated by HERO representatives in August 2014. Acknowledgement: This information is not intended to be all inclusive. As with any undertaking of this type, consumers are responsible for performing their own due diligence and analysis when determining how best to proceed for their individual circumstances. Overview: California HERO Program is a statewide Residential and Commercial PACE Program which encourages an open- market approach. This means that Cities and Counties may make multiple programs available to their constituents, including California HERO. The California HERO Program was developed by the Western Riverside Council of Governments ( WRCOG) and their partners which enable Cities and Counties to make HERO available to their constituents. WRCOG is a joint powers authority that enables any City and County in California to become associate members. The California HERO Program contracts with Renovate America and Samas Capital to provide financing for the residential and commercial markets respectively. California HERO only funds projects on residential and commercial properties in jurisdictions that have joined its Program. Funding: The HERO Program is authorized to issue up to $2 billion in bonds to finance eligible improvements. Renovate America and Samas Capital have committed $300 million to fund this Program. Status: As of July 23, 2014, the HERO website indicates that they are active in 167 California cities. San Diego county approvals include Carlsbad, Coronado, El Cajon, Encinitas, Escondido, Imperial Beach, La Mesa, Lemon Grove, Oceanside, San Diego, San Marcos, Solana Beach, Unincorporated County, and Vista. Attachment A 1 7 of 75 September 2, 2014 Item # 4.2 As of July 2014, the company indicates that it has funded over 14,000 projects valued at over $260 million; created 2,300+ jobs; contributed over $484 million to economic stimulus; generated over $12 million in utility savings; and reduced emissions by 25,000 tons. Underwriting Criteria for Program Participation: Residential HERO • Applicant property owner must be the property owner of record. • Property owner must be current on their property taxes for the prior 12 months. • Property owners must be current on all property debt at the time of funding and cannot have had more than one 30 day mortgage late over the previous 12 months. • Property must not have any material liens other than lender debt or liens recorded by community facilities districts or similar financing districts. • Property owner must not have any active bankruptcies in the past seven years and the property must not be an asset in a bankruptcy proceeding, provided, however, that if the bankruptcy is more than two years old, and if property owner has no additional derogatory credit, the property owner may be approved. • Mortgage - related debt on the property must not exceed 90% of the market value of the property. • Improvement costs are reasonable in relation to property value. Proposed improvements must not exceed 15% of the market value of the property, provided, however, that the combined mortgage - related debt and amount of PACE assessment must not exceed 100 %. • The total annual property tax and assessments, including the contractual assessment, on the property will not exceed 5% of the property's market value, as determined at the time of approval of the contractual assessment. Commercial HERO • Applicant property owner must be the property owner of record. • Mortgage debt lender have given consent to program financing. • Property owner must be current on property taxes and the property owner certifies that such owner has not had a late payment on their property tax more than once during the prior three years or since the purchase of the property, if owned by such property owner less than three years. • Property owner must be current on all property debt for a period of six months prior to the application, including no payment defaults or technical default or since purchase if the property has been owned less than six months by the current owner, through funding. 2 8 of 75 September 2, 2014 Item # 4.2 • Property owner or their affiliated companies have not been involved in a bankruptcy proceeding during the past seven years and the property proposed to be subject to the contractual assessment must not currently be an asset in a bankruptcy proceeding. • All individual property owners must sign the application, assessment contract and all required notices. For properties owned by corporations, LLCs or LLPs, signatures by authorized representatives and /or corporate resolutions are required. • Property must not have any liens other than lender debt or liens recorded by community facility districts or similar financing districts. • Eligible product costs are reasonable in relation to property value. Proposed eligible products must not exceed 10% of the market value of the property. • Property has a debt service coverage ratio of 105% or higher. • Mortgage - related debt on the property plus the principal amount of the contractual assessment does not exceed 90% of the market value of the property. • The total annual property tax and assessments, including the contractual assessment, on the property will not exceed 5% of the property's market value, as determined at the time of approval of the contractual assessment. Restrictions on Contractors: The HERO Program requires that contractors apply through an online application. In order to qualify, the contractor must have the proper license and bonding requirements with the California State Contractors License Board. The Contractor must maintain a good standing with the California State Contractors License Board in order to participate in HERO approved projects. The costs of installation are eligible to be financed only if completed by a contractor that is registered with the Program or by the property owner who is self - installing subject to the limitation in the Program. A list of over 3,500 contractors registered with the Program is located on Program's website; however, the Program will not make recommendations for contracting assistance. Eligible costs do not include labor costs for property owners doing the work themselves. Eligible Financeable Costs: Eligible costs include equipment and installation (includes but not limited to labor, energy /water audits, design, drafting, engineering, permit fees, and inspection charges). Additionally, the Program Administrator determines whether the estimated equipment and installation costs are reasonable. The Administrator may require additional bids to 3 9 of 75 September 2, 2014 Item # 4.2 determine whether costs are reasonable. Financing may be limited to the amount deemed reasonable by the Administrator. Assessment Finance Amount: • Minimum: $5,000. • Maximum: the maximum assessment amount is 10% of the value of the property. • Committee Approval Required: • Residential projects over $200,000 • Commercial projects over $600,000 Financing Term: Not to exceed useful life of the improvement, up to 20 years. • Residential: Assessment contracts are subject to 5 -, 10 -, 15 -, or 20 -year repayment periods. • Commercial: Assessment contracts are subject to 5 -, 10 -, 15 -, or 20 -year repayment periods. A 25 -year financing term is also being developed to parallel 25 -year warrantees on solar panels. Interest Rate: Program interest rates are set to create a competitively priced self- sustaining program with the ability to remarket the securities to ensure liquidity. The interest rate is broken down by program. Residential HERO: Program Administrator sets fixed interest rates either when the application is approved (may trigger additional fees) or when the assessment contract is signed. The interest rate fluctuates with market conditions and an estimate is available on the HERO website. Interest paid on the principal balance is tax deductible. Interest rates are currently set between 5.95 and 8.95% depending on the term of the loan. Commercial HERO: Program Administrator sets the interest rate at time of funding. Samas Capital will provide ongoing pricing feedback from the capital markets to aid in adjusting product pricing. Standard Financing: Interest rate is set at the time of the first bond sale, or if interim financing is available, then the interest rate is set by the cost of the interim financing and the bond sale rates. The interest rate will never increase. The Program Administrator may decrease the interest rate if long -term financing can be negotiated at a lower interest rate that still allows funding of the Program. 4 10 of 75 September 2, 2014 Item # 4.2 Reserve Fund: There is a Reserve Fund of 0.27% of the total assessment agreed to by the property owner. In addition, the Residential HERO Program participates in the Governor of California's PACE Loss Reserve Program. The $10 million PACE Loss Reserve Program, authorized by Senate Bill 96 (2013), is designed to address FHFA financial concerns by making first mortgage lenders whole for any losses in a foreclosure or a forced sale that are attributable to a PACE loan. If a mortgage lender forecloses on a home that has a PACE lien, the Reserve can be used to cover PACE payments during the foreclosure period. Alternatively, if a local government sells a home for unpaid taxes and the sale price falls short of the outstanding tax and first mortgage amounts, the Reserve can be used to cover the shortfall (up to the amount of outstanding PACE payments). By covering these types of losses, the Program puts the first mortgage lender in the same position it would be in without a PACE lien. Fees Assessed on Property Owner: HERO Residential and Commercial • Program Cost: Determined by City, County or District where property is located. • Application Fee: None. • Annual administration and collection costs: Determined by City, County or Cistrict where property is located. FHFA and /or Lender Issues: Typically, the California HERO Program provides the following disclosure but does not require lender consent for residential projects. However, some Cities and Counties have added additional disclosure requirements that HERO must incorporate to operate. Property owners may be required to pay off the special assessment at sale or refinance. The disclosure is as follows: Before completing a program application, you should carefully review any mortgage agreement(s) or other security instrument(s) which affect the property or to which you as the property owner are a party. Entering into a program assessment contract without the consent of your existing lender(s) could constitute an event of default under such agreements or security instruments. Defaulting under an existing mortgage agreement or security instrument could have serious consequences to you, which could include the acceleration of the repayment obligations due under such agreement or security instrument. In addition, on August 31, 2010, Fannie Mae and Freddie Mac stated that they would not purchase home loans with assessments such as those offered by 5 11 of 75 September 2, 2014 Item # 4.2 WRCOG. This may mean that property owners who sell or refinance their property may be required to prepay such assessments at the time they close their sale or refinancing. It is unknown what type of risk this approach creates for residential property owners in light of the uncertainty created over residential PACE by the Ninth Circuit's March 19, 2013, dismissal of litigation against the FHFA. Treatment of Federal /State Rebate, Tax Credit, and Incentives: All available public utility, federal and state rebates will be deducted from the assessment amount at the time of financing. State or federal tax credits and performance -based incentives —such as the California Solar initiative Performance Based Incentive —will not be deducted from the assessment amount, but property owners may wish to consider these additional benefits in determining the amount of their financing request. Costs and Liability to City: There are no costs to the City or County to participate in the California HERO Program. The Program appears to have limited costs to a City or County beyond staff time to review the program, produce staff reports, pass resolutions, and reach agreement on indemnification and release of liability. 6 12 of 75 September 2, 2014 Item # 4.2 HERO Residential Process Overview The chart below shows the steps for the completion of a residential project financed through the Program: Apply Property owner submits application online, through a contractor, or by hard copy, Product Approval Contractor or property owner calls WRCOG HERO Program Representative with specific prtrduct details before installing products, Sign Financing Documents Property owner is emailed Financing Documents, which they sign, notarize, and return. Install Eligible Products After Financing Documents are approved and the contractor and property owner receive a Notice to Praceed, the contractor may start work, Submit Completion Certificate Once all wort: and permits have been completed, the contractor and property owner must sign and submit a Completion Certificate within 90 days, Assessment and Payment Issued After WRCOG HERO Program receives the signed Completion Certificate, the assessment lien documents are recorded and payment is issued. 7 13 of 75 September 2, 2014 Item # 4.2 Attachment B California Enterprise Development Authority (CEDA)— Figtree PACE Source: This information was originally reproduced from a March 2013 Center for Sustainable Energy California report: "Residential and Commercial Property Assessed Clean Energy (PACE) Financing in California" and was updated by Figtree representatives in August 2014. Acknowledgement: This information is not intended to be all inclusive. As with any undertaking of this type, consumers are responsible for performing their own due diligence and analysis when determining how best to proceed for their individual circumstances. Overview: The California Enterprise Development Authority (CEDA) is a joint powers authority established by the California Association for Local Economic Development (CALED). CEDA is the agency that forms assessment districts for the Figtree PACE financing programs under the Improvement Act of 1911. CEDA acts as the issuer of the municipal bonds that finance Figtree PACE projects. CEDA uses the Improvement Bond Act of 1915 (California Streets & Highways Code 8500 et seq) to issue limited obligation bonds, notes or other forms of indebtedness secured by the contractual assessments revenue to finance improvements in the district created under AB 811. These bonds are structured as either a micro bond for a specific project or as a pooled bond for multiple projects before being sold to investors on the open market. CEDA also may create a special reserve fund for the bonds under part 16 of the Improvement Bond Act of 1915 if required by investors. CEDA has authorized up to $500 million for the Figtree PACE Program at this time. CEDA retained Figtree Financing, a San Diego -based company, to manage and administer its PACE program. Figtree provides comprehensive services to applicants and to jurisdictions as a program administrator similar to other private PACE administrators. Figtree successfully completed the first and only multi -city pooled PACE bond to date. Figtree's financing model is designed to accommodate financing structures including owner - arranged financing, specific project financing, pooled financing, and financing through a credit facility. It remains to be determined which of these options has been the most successful in terms of project financed. Attachment B 1 14 of 75 September 2, 2014 Item # 4.2 Figtree has successfully obtained lender consent from multiple national and regional lenders including Wells Fargo, US Bank, Bank of the West, West America Bank, and SBA Financing. Figtree has successfully completed a statewide judicial validation of its program under the CEDA JPA. Eligible Property: Figtree currently only offers its Program to qualified commercial property owners in 68 California Cities and Counties. Commercial properties include: office, retail, hotel /restaurant, multi - family properties of five units or more, data centers, warehouse /industrial, agriculture, healthcare, education and non - profit. Figtree's Residential PACE Program will launch before the end of the year and will feature many of the same elements found in its Commercial PACE Program. The Program will utilize the same legal structure and will be administered by the same professional financing team. In fact, Figtree's Residential PACE Program is already authorized in more than 66 California Cities and Counties. Funding: Figtree has secured a $60 million financing facility to fund Commercial PACE Projects. CEDA issues bonds to fund projects. The facility is backed by a capital partner in the form of a premier New York based financial institution with over $20 billion of capital under management. Thus far, CEDA and Figtree have financed projects in four distinct funding cycles; each resulting in a portfolio of projects aggregated within capital market structures and sold to investors. Figtree will provide financing for residential PACE projects using the same type of financing facility. Underwriting Criteria for Program Participation: Commercial Program • Applicant is legal owner of the property described in the application. • Property owner is current on property taxes for the property and has not been delinquent in the past three years or since owning the property if less than three years. • Property owner is current on private property debt and has not been delinquent in the past three years or since owning the property if less than three years. • Mortgage lender has been provided the Notice of Request for Lender Consent and Acknowledgement. • Property owner has not declared bankruptcy in the past five years. • Property is not listed as an asset in bankruptcy. • Lien -to -value ratio (excluding assessed financing amount) does not exceed 100% (i.e. no negative equity). The outstanding mortgage must not be an amount 2 15 of 75 September 2, 2014 Item # 4.2 greater than the property's assessed total value. In certain cases, an appraised value can be used if the assessed total value is deemed inaccurate. • Property is developed and located within the jurisdiction of a participating agency. • Property is classified as Commercial (including Industrial, Agricultural, multi- family, etc.) Residential Program • Applicant is legal owner of the property described in the application. • Property is not a leasehold (i.e. the property owner owns the property in fee simple). • Amount of financing requested under the Program shall not exceed 10% of the value of the property. • All existing private debt recorded against the property does not exceed 84% of the value of the property. • There are no involuntary liens, defaults or judgments on the property in excess of $1,000. • Property owner is current on property taxes for the property and has not been delinquent in the past three years or since owning the property if less than three years. • Property owner is current on private property debt and has not been delinquent in the past three years or since owning the property if less than three years. • Property title is not subject to power of attorney, easements, or subordination agreements restricting the property owner from subjecting the property to a PACE lien. • Property owner has not declared bankruptcy in the past seven years. • Property is not listed as an asset in bankruptcy. • Property is classified as single - family residential or multi - family residential (up to 4 units). Restrictions on Contractors: Property owners work with any contractor they choose. However, the Figtree PACE Program requires that contractors apply to participate in the Program through an online application. Once approved, the contractor is added to an online directory of contractors eligible to contract for projects through Figtree PACE. Figtree PACE requires that contractors: • Hold a business license in the jurisdiction where work is being performed. • Have a minimum of 5 years work experience as a licensed contractor in the State of California, or demonstrate sufficient experience in a relevant field of work. 3 16 of 75 September 2, 2014 Item # 4.2 • Hold a minimum of $1,000,000 in general liability insurance. • Bonding and Worker's Compensation must be in accordance with California State Contractors License Board requirements. • Participate in a mandatory PACE financing training session provided by Figtree. Figtree PACE requires the signing of a contractor agreement that makes contractors responsible for installing equipment on the property once CEDA approves the project. Contractors are reimbursed upon satisfactory completion of a project within 14 business days generally. Audit Requirement: An energy audit is not required. Eligible Financeable Costs: Eligible costs include equipment and installation (labor, drafting, engineering, application fees, permit fees, processing fees, and inspection charges). Additionally, CEDA determines whether the estimated equipment and installation costs are reasonable. CEDA may require additional bids to determine whether costs are reasonable. Financing may be limited to the amount deemed reasonable by CEDA. Assessment Finance Amount: • Minimum Residential: $1,000. • Minimum Commercial: $5,000. • Maximum: For residential and most commercial properties 10% of the value of property. Some commercial properties may be able to finance projects up to 20% of the property value. Financing Duration: Not to exceed useful life of the improvement, up to 20 years. Interest Rate: Annual interest rate is determined by market condition at time of issuing bonds but may not exceed 12% as required by California Law. Commercial rates are currently 4.63% to 6.65% and maximum financing is up to 10% of total property value. Alternative rates are available for projects in excess of 10% of property value and projects in excess of a million dollars. Residential rates are currently projected to be between 5.50% to 7.50% with financing up to 10% of total property value. 4 17 of 75 September 2, 2014 Item # 4.2 Reserve Fund: When Figtree launches its Residential PACE Program it will enroll in the California State Treasurer's PACE Loss Reserve Program, authorized by Senate Bill 96 (2013). Fees Assessed on Property Owner: • Processing Fee (Commercial Properties): A fee of $695 will be added to the total amount of the assessment at the time of closing. An additional $100 charge will apply to each of any additional parcels in connection with the assessment. This fee pays for costs incurred to process the application, including a title report, and documentation fees for recording liens. This fee is included in the total amount of financing. • Financing Issuance Fee: At the time of closing, Figtree will charge the property owner a one -time administration fee of up to 4% (Commercial) or 6% (Residential) of the principal amount of the assessment on the property to cover the transaction costs of the program. This fee will be added to the total assessment amount financed. • Annual Administrative Fee: A charge of up to 3% of the total annual assessment amount will apply for cost recovery. This administrative cost recovery will be added to the annual assessment amount. Such administrative charges include fees for levying assessments through the county assessor and other costs associated with providing PACE financing. • Pre - Payment Fee: If the assessment is paid off early the property owner will incur a fee based on the following schedule: o 105% if paid off in years 1 -5 o 103% if paid off in years 6 -10 o None if paid off in years 11 -20 Fees may be changed from time to time by approval of CEDA of an updated Program Report. FHFA Issue and /or Lender Issue - Lender Consent: Commercial PACE Figtree PACE requires notice and request of written consent from holders of any private lien on the participating commercial property. The lien holder must agree that the assessment lien will have the same priority as real property taxes. The Program Administrator, Figtree, will send "Notice and Request for Lender Consent" via certified mail. This request provides: 5 18 of 75 September 2, 2014 Item # 4.2 • Confirmation from the Mortgage Lender that the levy of the assessment pursuant to the Assessment Contract will not trigger an event of default or the exercise of remedies under the participating property owner's Mortgage Documents. • Notice that the assessment will be secured by a statutory lien on the participating property pari passu with real property taxes. • Written notice of the proposed participation of the property in the Program. • Confirms that the Mortgage Lenders' signature constitutes consent as required under the Mortgage Documents. The property owner may not participate if the lender returns the Notice and Request for Lender Consent and specifically states it does not consent. Residential Program Figtree requires notification of the PACE assessment to the mortgage lender. The responsibility for the Mortgage Lender's written consent lies with the residential borrower. Borrowers are required to acknowledge certain disclosures in the Application and the Assessment Contract and are required to declare the following: Borrower declares that (i) Borrower has received, read and understands the risks and characteristics of the Program described in the Property Owner Acknowledgments and Disclosures and FHFA Disclosure set forth in the Application and (ii) Borrower has been informed that executing this Contract, receiving financing for Authorized Improvements and consenting to the assessment levied against the Property without lender consent may constitute an event of default under Borrower's residential mortgage, and (iii) Borrower takes the sole responsibility for consequences of such default which may include acceleration of repayment obligations due under Borrower's residential mortgage. It is not clear what type of risk this approach creates for residential property owners in light of the uncertainty created over residential PACE by the Ninth Circuit's March 19, 2013 dismissal of litigation against the FHFA. Costs and Liability to City: A City or County will bear no costs, to join Figtree PACE beyond staff time and a legal analysis to review the program. A City or County will not bear costs to setup the program, the assessment district, or implement the program. Cities and Counties are not liable for bonds as bonds are the obligation of CEDA. Additionally, Figtree indemnifies the City or County. Figtree's standard indemnification language requires it to defend and indemnify participating municipalities against legal liability and other damages. Additionally, 6 19 of 75 September 2, 2014 Item # 4.2 municipalities do not bear the costs or burden of any assessment proceedings; the levy or collection of assessments or any required remedial action in the case of delinquencies in such assessment payments or the offer, issuance, sale, or administration of the bonds or any other bonds issued in connection with Figtree PACE. 7 20 of 75 September 2, 2014 Item # 4.2 Attachment C CSCDA-- CaliforniaFIRST Source: This information was originally reproduced from a March 2013 Center for Sustainable Energy California report: "Residential and Commercial Property Assessed Clean Energy (PACE) Financing in California" and was been updated by Renewable Funding representatives in August 2014. Acknowledgement: This information is not intended to be all inclusive. As with any undertaking of this type, consumers are responsible for performing their own due diligence and analysis when determining how best to proceed for their individual circumstances. Overview: CaliforniaFIRST is a statewide Property Assessed Clean Energy (PACE) financing program sponsored by the California Statewide Communities Development Authority (CSCDA), a joint powers authority co- sponsored by the California State Association of Counties and the League of California Cities. The Program provides financing for renewable energy, energy efficiency and water efficiency measures for both commercial and residential property. CSCDA selected Renewable Funding to administer CaliforniaFIRST. CaliforniaFIRST is active in 17 California counties and 140+ cities. Participating jurisdictions in San Diego County include Carlsbad, Chula Vista, Coronado, Del Mar, El Cajon, Encinitas, Escondido, La Mesa, Lemon Grove, Oceanside, Poway, San Diego, Santee, Solana Beach, and the Unincorporated County. The City of Poway originally passed a resolution to join CaliforniaFIRST in 2010. CSCDA put the Residential Program on hold due to FHFA concerns but due to the establishment of CAEATFA's loss reserve fund for lenders in spring 2014, the Residential Program is now available. CaliforniaFIRST had its soft launch in San Diego County on July 28, 2014 with a full launch scheduled for September 2, 2014. The Commercial Program has been active since 2012 and currently has 108 applications statewide for a project total of over $75,000,000. CaliforniaFIRST Residential: Eligible Properties Single- family residential and multi - family up to 3 units Attachment C 21 of 75 September 2, 2014 Item # 4.2 Underwriting Criteria: 1. Applicant(s) must be the property owner(s) of record. 2. Property owner(s) must be current on their property taxes for the prior 12 months. 3. Property owner(s) must certify that the property taxes have not been paid late more than once during the prior three years (or since the purchase if owned by them for less than three years). 4. Property owners must be current on all property debt of the subject property at the time of application and cannot have had more than one 30 -day mortgage late payment over the prior 12 months. 5. There must be no notices of default or foreclosure filed against the subject property by current property owner within the last two years. 6. Property owner(s) have not been involved in a bankruptcy proceeding during the past two years. If the property owner(s) has a bankruptcy older than two years, and no late payments over 60 days past due in the last 24 months, then the property owner may be approved. Additionally, the property may not currently be an asset in a bankruptcy proceeding 7. All property owners must sign all required documentation. Eligible Products: CaliforniaFIRST finances renewable energy, energy efficiency and water efficiency measures that are permanently affixed to the property Assessment Amount: 1. Minimum amount of $5,000 2. Maximum amount up to $200,000 or 10% of property value Financing Term: Not to exceed useful life of the improvement, up to 20 years. Funding: Renewable Funding has a dedicated $300,000,000 to finance projects. Portfolios of PACE financings will be sold to the private capital markets with sales proceeds returning to Renewable Funding to continue additional financings. Contractor Requirements: Any contractor who is licensed by the State of California and is in good standing with the Contractors State License Board ( "CSLB "), including meeting all applicable bonding and insurance requirements, and who meets any fraud check requirements, is eligible to 2 22 of 75 September 2, 2014 Item # 4.2 be a Participating Contractor with the Program. All Participating Contractors must also sign a Program Participation Agreement. FHFA and Lender Notice: All participating homeowners are provided written information on their risks associated with FHFA's stance on PACE financing. Homeowners are also encouraged to inform their mortgage lender about the PACE lien. CaliforniaFIRST Commercial: The Commercial Program uses an open- market approach to finance projects. Under the open- market approach the commercial property owner may use a list of capital providers from CaliforniaFIRST to compare terms or may use their own capital provider. The financing transaction is run through CaliforniaFIRST in order to secure the PACE lien and corresponding benefits. Once an agreement is reached, CSCDA issues a revenue bond that is then purchased by the capital provider and secured by the tax assessment lien on the property. CaliforniaFIRST uses third -party capital providers that it has pre- approved as well as capital providers with whom property owners have negotiated to fund their project. This creates internal competition and allows for property owner choice. CaliforniaFIRST also uses a method of pooling bonds for projects under $250,000 for sale to a single investor while bonds over $250,000 are generally sold individually to investors. Eligible Properties: All non - residential properties, including multi - family buildings with 5 or more units, industrial, retail, agricultural and office space properties. Underwriting Criteria: Underwriting criteria is determined on a case -by -case basis as lenders and property owners negotiate the terms of the financing. General underwriting criteria for the Program is listed below: 1. Applicant must be legal owner. 2. For the past three years, or since ownership if less than three years, property owner must be current on payment of: a. Mortgages b. Property taxes c. Assessments and Liens 3. Property owner cannot have any notices of default or foreclosure, whether currently in effect or released, filed against property within the last five years (or 3 23 of 75 September 2, 2014 Item # 4.2 since ownership by current property owner if less than five years) due to non- payment of property taxes or loan payments. 4. Certification that the property owner is solvent and has no pending bankruptcy proceedings. 5. Current property owner cannot have record of bankruptcy in the past three years. 6. No involuntary liens, defaults or judgments applicable to the subject property. 7. The assessed value plus the value of the project is equal to or greater than the amount of private debt plus the PACE financed amount, assessment liens and /or special taxes. 8. Property taxes, special taxes and assessment, including the PACE assessment, may not exceed 5% of the property's assessed value. 9. Lenders may make additional information requests and subject property owner to additional requirements. Energy Audit Requirement: An American Society of Heating, Refrigerating and Air - Conditioning Engineers Level 2 Audit must be performed by a licensed engineer. Eligible Financeable Costs: Eligible costs include equipment and installation (labor, design, engineering, permit fees, and audits). Assessment Finance Amount: 1. Minimum amount of $50,000. 2. The maximum financing amount is 20% property market value. Financing Term: Not to exceed useful life of the improvement, up to 20 years. Affirmative Acknowledgment From Mortgage Lender: The property owner's mortgage lender (the first lien holder in trust) needs to provide written affirmative acknowledgment for the property to participate in the Program. This means that the first lien holder in trust must consent and agree to the recording of the contractual PACE assessment as a superior lien to its lien on the property. This includes an acknowledgment that the PACE lien will not trigger a default or exercise of remedies under the mortgage on the respective property. 4 24 of 75 September 2, 2014 Item # 4.2 Reserve Fund: A reserve fund is not required by the Program, although CaliforniaFIRST may accommodate one should it be required by the capital provider or the mortgage lender. A property owner would then allocate a percentage of their total assessed financing amount to establish the reserve fund for their share of the bonds. During the final years of the outstanding bonds, the reserve allocation would be returned to the property owner as a credit on their annual levy assuming no delinquencies or late payments. Fees Assessed on Property Owner: • Application Fee: There is no initial application fee • County Tax Collector Fee: $.10 /parcel • Closing Fees: The total amount of closing fees is determined by the size of the project, and typically range between 3 -6 %. The types of closing fees charged include: • Program Administration • Bond Counsel • Project Validation • Program Sponsor • Issuer Counsel • Fiscal Agent Costs and Liability to City: This Program appears to have limited cost to a City or County beyond staff and Council time to research and write a report, pass a Resolution and associated documentation. To date there have been no costs to Cities or Counties to participate in CaliforniaFIRST. Cities have no liability because Cities do not establish the program, administer the program, or issue the bonds under CaliforniaFIRST. 5 25 of 75 September 2, 2014 Item # 4.2 RESOLUTION NO. 14- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE CITY'S JURISDICTION IN THE CALIFORNIA HERO PROGRAM TO FINANCE DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES, ENERGY AND WATER EFFICIENCY IMPROVEMENTS AND ELECTRIC VEHICLE CHARGING INFRASTRUCTURE AND APPROVING THE AMENDMENT TO A CERTAIN JOINT POWERS AGREEMENT RELATED THERETO WHEREAS, the Western Riverside Council of Governments ( "Authority ") is a joint exercise of powers authority established pursuant to Chapter 5 of Division 7, Title 1 of the Government Code of the State of California (Section 6500 and following) (the "Act ") and the Joint Power Agreement entered into on April 1, 1991, as amended from time to time (the "Authority JPA "); and WHEREAS, Authority intends to establish the California HERO Program to provide for the financing of renewable energy distributed generation sources, energy and water efficiency improvements and electric vehicle charging infrastructure (the "Improvements ") pursuant to Chapter 29 of the Improvement Bond Act of 1911, being Division 7 of the California Streets and Highways Code ( "Chapter 29 ") within counties and cities throughout the State of California that elect to participate in such program; and WHEREAS, City of Poway (the "City ") is supportive of its citizens' interests in the development of renewable energy sources and energy and water efficiency improvements, reduction of greenhouse gases, protection of our environment, and addressing climate change; and WHEREAS, in Chapter 29, the Legislature has authorized cities and counties to assist property owners in financing the cost of installing Improvements through a voluntary contractual assessment program; and WHEREAS, installation of such improvements by property owners within the jurisdictional boundaries of the counties and cities that are participating in the California HERO Program would promote the purposes cited above; and WHEREAS, the City wishes to provide financing tools as allowed by law to those who own property in its jurisdiction wishing to improve energy and water efficiency, and in doing so cooperate with Authority in order to efficiently and economically assist property owners the City in financing such Improvements; and Attachment D 26 of 75 September 2, 2014 Item # 4.2 Resolution No. 14- Page 2 WHEREAS, Authority has authority to establish the California HERO Program, which will be such a voluntary contractual assessment program, as permitted by the Act, the Authority JPA, originally made and entered into April 1, 1991, as amended to date, and the Amendment to Joint Powers Agreement Adding the City of Poway as an Associate Member of the Western Riverside Council of Governments (the "Council ") to Permit the Provision of Property Assessed Clean Energy (PACE) Program Services within the City (the "JPA Amendment "), by and between Authority and the City, a copy of which is attached as Exhibit "A" hereto, to assist property owners within the incorporated area of the City in financing the cost of installing Improvements; and WHEREAS, Senate Bill 96 (2013) amended Public Resources Code section 26060 in order to implement a PACE risk mitigation program for PACE loans to be administered by the California Alternative Energy and Advanced Transportation Financing Authority; and WHEREAS, in light of this new development and growing public interest, the City is interested in offering residential PACE options to eligible participants within the City limits contingent on the California HERO PACE Program meeting certain programmatic requirements; and WHEREAS, the City is not at risk for any liabilities associated with any aspect of PACE programs operating within its boundaries having only provided access to its taxing authority as allowed by applicable law and the California HERO agrees to indemnify and protect the City against any alleged liabilities; and WHEREAS, the City may repeal this Resolution and terminate its Associate Membership in the Council, upon written notice to the Council, should it be determined at any time that it no longer desires to continue as an Associate Member of the Council; and WHEREAS, the City will not be responsible for the conduct of any assessment proceedings; the levy and collection of assessments or any required remedial action in the case of delinquencies in the payment of any assessments or the issuance, sale or administration of any bonds issued in connection with the California HERO Program. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: This City Council finds and declares that properties in the City's incorporated area will be benefited by the availability of the California HERO Program to finance the installation of Improvements. Section 2: This City Council consents to inclusion in the California HERO Program of all of the properties in the incorporated area within the City and to the Improvements, upon the request by and voluntary agreement of owners of such properties, in compliance with the laws, rules and regulations applicable to such 27 of 75 September 2, 2014 Item # 4.2 Resolution No. 14- Page 3 program; and to the assumption of jurisdiction thereover by Authority for the purposes thereof. Section 3: The consent of this City Council constitutes assent to the assumption of jurisdiction by Authority for all purposes of the California HERO Program and authorizes Authority, upon satisfaction of the conditions imposed in this resolution, to take each and every step required for or suitable for financing the Improvements, including the levying, collecting and enforcement of the contractual assessments to finance the Improvements and the issuance and enforcement of bonds to represent and be secured by such contractual assessments. Section 4: The City's participation in the California HERO PACE program is subject to the condition that the California HERO PACE program has, or will (within 180 days following City's effective date as an Associate Member), meets the following requirements: a. The California HERO PACE Program is enrolled in the state PACE Loss Reserve Program; and b. The California HERO PACE Program will implement policies that requires that it will provide full and understandable disclosures to program applicants, including but not limited to the disclosure that participation in the PACE program may trigger acceleration of existing obligations of an existing mortgage and that the participant may be required to prepay the contractual assessments and all associated fees and penalties upon the refinancing or sale of the property. Section 5: This City Council hereby approves the JPA Amendment substantially in the form as presented at this meeting, and hereby authorizes the execution thereof by the City Manager with such changes as the City Manager may approve. Section 6: City staff is authorized and directed to coordinate with Authority staff to facilitate operation of the California HERO Program within the City, and report back periodically to this City Council on the success of such program as requested. Section 7: This Resolution shall take effect immediately upon its adoption. The City Clerk is directed to send a certified copy of this resolution to the Secretary of the Authority Executive Committee. 28 of 75 September 2, 2014 Item # 4.2 Resolution No. 14- Page 4 PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway at a regular meeting this 2nd day of September, 2014. Don Higginson, Mayor ATTEST: Sheila R. Cobian, CMC, City Clerk STATE OF CALIFORNIA ) ) SS COUNTY OF SAN DIEGO) I, Sheila R. Cobian, CMC, City Clerk, of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 14 - * ** was duly adopted by the City Council at a meeting of said City Council held on the 2nd day of September, 2014, and that it was so adopted by the following vote: AYES: NOES: ABSENT: DISQUALIFIED: Sheila R. Cobian, CMC, City Clerk City of Poway ATTACHMENT: Exhibit A: Amendment to the Joint Powers Agreement Adding City of Poway as an Associate Member of the Western Riverside Council of Governments to Permit the Provision of Property Assessed Clean Energy (PACE) Program Services with Such City 29 of 75 September 2, 2014 Item # 4.2 EXHIBIT A AMENDMENT TO THE JOINT POWERS AGREEMENT ADDING CITY OF POWAY AS AN ASSOCIATE MEMBER OF THE WESTERN RIVERSIDE COUNCIL OF GOVERNMENTS TO PERMIT THE PROVISION OF PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM SERVICES WITH SUCH CITY This Amendment to the Joint Powers Agreement ( "JPA Amendment ") is made and entered into on the 2nd day of September, 2014, by City of Poway ( "City ") and the Western Riverside Council of Governments ( "Authority ") (collectively the "Parties "). RECITALS WHEREAS, Authority is a joint exercise of powers authority established pursuant to Chapter 5 of Division 7, Title 1 of the Government Code of the State of California (Section 6500 and following) (the "Joint Exercise of Powers Act ") and the Joint Power Agreement entered into on April 1, 1991, as amended from time to time (the "Authority JPA "); and WHEREAS, as of October 1, 2012, Authority had 18 member entities (the "Regular Members "); and WHEREAS, Chapter 29 of the Improvement Act of 1911, being Division 7 of the California Streets and Highways Code ( "Chapter 29 ") authorizes cities, counties, and cities and counties to establish voluntary contractual assessment programs, commonly referred to as a Property Assessed Clean Energy ( "PACE ") program, to fund certain renewable energy sources, energy and water efficiency improvements, and electric vehicle charging infrastructure (the "Improvements ") that are permanently fixed to residential, commercial, industrial, agricultural or other real property; and WHEREAS, Authority intends to establish a PACE program to be known as the "California HERO Program" pursuant to Chapter 29 as now enacted or as such legislation may be amended hereafter, which will authorize the implementation of a PACE financing program for cities and county throughout the state; and WHEREAS, City desires to allow owners of property within its jurisdiction to voluntarily participate in the California HERO Program and to allow Authority to conduct proceedings under Chapter 29 to finance Improvements to be installed on such properties; and WHEREAS, this JPA Amendment will permit City to become an Associate Member of Authority and to participate in California HERO Program for the purpose of facilitating the implementation of such program within the jurisdiction of City; and A -1 30 of 75 September 2, 2014 Item # 4.2 WHEREAS, pursuant to the Joint Exercise of Powers Act, the Parties are approving this JPA Agreement to allow for the provision of PACE services, including the operation of a PACE financing program, within the incorporated territory of City; and WHEREAS, the JPA Amendment sets forth the rights, obligations and duties of City and Authority with respect to the implementation of the California HERO Program within the incorporated territory of City; and WHEREAS, the City may terminate this JPA Amendment in the manner required by the Authority JPA or, if no such manner is prescribed in the Authority JPA, upon written notice to CEDA, should it be determined at any time that it no longer desires to continue as an Associate Member of the Authority. MUTUAL UNDERSTANDINGS NOW, THEREFORE, for and in consideration of the mutual covenants and conditions hereinafter stated, the Parties hereto agree as follows: A. JPA Amendment. 1. The Authority JPA. City agrees to the terms and conditions of the Authority JPA, attached. 2. Associate Membership. By adoption of this JPA Amendment, City shall become an Associate Member of Authority on the terms and conditions set forth herein and the Authority JPA and consistent with the requirements of the Joint Exercise of Powers Act. The rights and obligations of City as an Associate Member are limited solely to those terms and conditions expressly set forth in this JPA Amendment for the purposes of implementing the California HERO Program within the incorporated territory of City. Except as expressly provided for by the this JPA Amendment, City shall not have any rights otherwise granted to Authority's Regular Members by the Authority JPA, including but not limited to the right to vote on matters before the Executive Committee or the General Assembly, the right to amend or vote on amendments to the Authority JPA, and the right to sit on committees or boards established under the Authority JPA or by action of the Executive Committee or the General Assembly, including, without limitation, the General Assembly and the Executive Committee. City shall not be considered a member for purposes of Section 9.1 of the Authority JPA. City hereby agrees that any subsequent amendments of the Authority JPA shall be binding upon the City provided, however, that it shall not be bound by any amendments that create any financial obligations on the part of the City and further provided, however, that before any amendment becomes effective as to the City it shall have not less than sixty (60) days after the effective date of the amendment to take such action to terminate its Associate Membership and withdraw from the Authority, without cost or penalty. 3. Rights of Authority. This JPA Amendment shall not be interpreted as limiting or restricting the rights of Authority under the Authority JPA. Nothing in this JPA Amendment is intended to alter or modify Authority Transportation Uniform Mitigation Fee (TUMF) Program, the PACE Program administered by Authority within the A -2 31 of 75 September 2, 2014 Item # 4.2 jurisdictions of its Regular Members, or any other programs administered now or in the future by Authority, all as currently structured or subsequently amended. B. Implementation of California HERO Program within City Jurisdiction. 1. Boundaries of the California HERO Program within City Jurisdiction. City shall determine and notify Authority of the boundaries of the incorporated territory within City's jurisdiction within which contractual assessments may be entered into under the California HERO Program (the "Program Boundaries "), which boundaries may include the entire incorporated territory of City or a lesser portion thereof. 2. Determination of Eligible Improvements. Authority shall determine the types of distributed generation renewable energy sources, energy efficiency or water conservation improvements, electric vehicle charging infrastructure or such other improvements as may be authorized pursuant to Chapter 29 (the "Eligible Improvements ") that will be eligible to be financed under the California HERO Program. 3. Establishment of California HERO Program. Authority will undertake such proceedings pursuant to Chapter 29 as shall be legally necessary to enable Authority to make contractual financing of Eligible Improvements available to eligible property owners within the Program Boundaries. 4. Financing the Installation of Eligible Improvements. Authority shall develop and implement a plan for the financing of the purchase and installation of the Eligible Improvements under the California HERO Program. 5. Ongoing Administration. Authority shall be responsible for the ongoing administration of the California HERO Program, including but not limited to producing education plans to raise public awareness of the California HERO Program, soliciting, reviewing and approving applications from residential and commercial property owners participating in the California HERO Program, establishing contracts for residential, commercial and other property owners participating in such program, establishing and collecting assessments due under the California HERO Program, adopting and implementing any rules or regulations for the California HERO Program, and providing reports as required by Chapter 29. City will not be responsible for the conduct of any proceedings required to be taken under Chapter 29; the levy or collection of assessments or any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale or administration of any bonds issued in connection with the California HERO Program. 6. Phased Implementation. The Parties recognize and agree that implementation of the California HERO Program as a whole can and may be phased as additional other cities and counties execute similar agreements. City entering into this JPA Amendment will obtain the benefits of and incur the obligations imposed by this JPA Amendment in its jurisdictional area, irrespective of whether cities or counties enter into similar agreements. A -3 32 of 75 September 2, 2014 Item # 4.2 C. Miscellaneous Provisions. 1. Withdrawal. City or Authority may withdraw from this JPA Amendment upon six (6) months written notice to the other party; provided, however, there is no outstanding indebtedness of Authority within City. The provisions of Section 6.2 of the Authority JPA shall not apply to City under this JPA Amendment. City may withdraw approval for conduct of the HERO Program within the jurisdictional limits of City upon thirty (30) days written notice to WRCOG without liability to the Authority or any affiliated entity. City withdrawal shall not affect the validity of any voluntary assessment contracts (a) entered prior to the date of such withdrawal or (b) entered into after the date of such withdrawal so long as the applications for such voluntary assessment contracts were submitted to and approved by WRCOG prior to the date of City's notice of withdrawal. 2. Mutual Indemnification and Liability. Authority and City shall mutually defend, indemnify and hold the other party and its directors, officials, officers, employees and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liabilities, losses, damages or injuries of any kind, in law or equity, to property or persons, including wrongful death, to the extent arising out of the willful misconduct or negligent acts, errors or omissions of the indemnifying party or its directors, officials, officers, employees and agents in connection with the California HERO Program administered under this JPA Amendment, including without limitation the payment of expert witness fees and attorneys' fees and other related costs and expenses, but excluding payment of consequential damages. Without limiting the foregoing, Section 5.2 of the Authority JPA shall not apply to this JPA Amendment. In no event shall any of Authority's Regular Members or their officials, officers or employees be held directly liable for any damages or liability resulting out of this JPA Amendment. 3. Environmental Review. Authority shall be the lead agency under the California Environmental Quality Act for any environmental review that may be required in implementing or administering the California HERO Program under this JPA Amendment. 4. Cooperative Effort. City shall cooperate with Authority by providing information and other assistance in order for Authority to meet its obligations hereunder. City recognizes that one of its responsibilities related to the California HERO Program will include any permitting or inspection requirements as established by City. 5. Notice. Any and all communications and /or notices in connection with this JPA Amendment shall be either hand - delivered or sent by United States first class mail, postage prepaid, and addressed as follows: A -4 33 of 75 September 2, 2014 Item # 4.2 Authority: Western Riverside Council of Governments 4080 Lemon Street, 3rd Floor. MS1032 Riverside, CA 92501 -3609 Attn: Executive Director City: City of Poway P.O. Box 789 Poway, CA 92079 -0789 Attn: Director of Public Works 6. Entire Agreement. This JPA Amendment, together with the Authority JPA, constitutes the entire agreement among the Parties pertaining to the subject matter hereof. This JPA Amendment supersedes any and all other agreements, either oral or in writing, among the Parties with respect to the subject matter hereof and contains all of the covenants and agreements among them with respect to said matters, and each Party acknowledges that no representation, inducement, promise of agreement, oral or otherwise, has been made by the other Party or anyone acting on behalf of the other Party that is not embodied herein. 7. Successors and Assigns. This JPA Amendment and each of its covenants and conditions shall be binding on and shall inure to the benefit of the Parties and their respective successors and assigns. A Party may only assign or transfer its rights and obligations under this JPA Amendment with prior written approval of the other Party, which approval shall not be unreasonably withheld. 8. Attorney's Fees. If any action at law or equity, including any action for declaratory relief is brought to enforce or interpret the provisions of this Agreement, each Party to the litigation shall bear its own attorney's fees and costs. 9. Governing Law. This JPA Amendment shall be governed by and construed in accordance with the laws of the State of California, as applicable. 10. No Third Party Beneficiaries. This JPA Amendment shall not create any right or interest in the public, or any member thereof, as a third party beneficiary hereof, nor shall it authorize anyone not a Party to this JPA Amendment to maintain a suit for personal injuries or property damages under the provisions of this JPA Amendment. The duties, obligations, and responsibilities of the Parties to this JPA Amendment with respect to third party beneficiaries shall remain as imposed under existing state and federal law. 11. Severability. In the event one or more of the provisions contained in this JPA Amendment is held invalid, illegal or unenforceable by any court of competent jurisdiction, such portion shall be deemed severed from this JPA Amendment and the remaining parts of this JPA Amendment shall remain in full force and effect as though A -5 34 of 75 September 2, 2014 Item # 4.2 such invalid, illegal, or unenforceable portion had never been a part of this JPA Amendment. 12. Headings. The paragraph headings used in this JPA Amendment are for the convenience of the Parties and are not intended to be used as an aid to interpretation. 13. Amendment. This JPA Amendment may be modified or amended by the Parties at any time. Such modifications or amendments must be mutually agreed upon and executed in writing by both Parties. Verbal modifications or amendments to this JPA Amendment shall be of no effect. 14. Effective Date. This JPA Amendment shall become effective upon the execution thereof by the Parties hereto. IN WITNESS WHEREOF, the Parties hereto have caused this JPA Amendment to be executed and attested by their officers thereunto duly authorized as of the date first above written. Don Higginson, Mayor ATTEST: Sheila R. Cobian, CMC, City Clerk Approved as to Form: Morgan L. Foley, City Attorney A -6 35 of 75 September 2, 2014 Item # 4.2 Updated through July, 2012 JOINT POWERS AGREEMENT OF THE WESTERN RIVERSIDE COUNCIL OF GOVERNMENTS This Agreement is made and entered into on the 1 st day of April, 1991, pursuant to Government Code Section 6500 et. seq. and other pertinent provisions of law, by and between six or more of the cities located within Western Riverside County and the County of Riverside. RECITALS A. Each member and party to this Agreement is a governmental entity established by law with full powers of government in legislative, administrative, financial, and other related fields. B. The purpose of the formation is to provide an agency to conduct studies and projects designed to improve and coordinate the common governmental responsibilities and services on an area -wide and regional basis through the establishment of an association of governments. The Council will explore areas of inter - governmental cooperation and coordination of government programs and provide recommendations and solutions to problems of common and general concern. C. When authorized pursuant to an Implementation Agreement, the Council shall manage and administer thereunder. NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Attachment E 20323.00016 \7651699.1 36 of 75 September 2, 2014 Item # 4.2 PURPOSE AND POWERS 1.1 Agency Created. There is hereby created a public entity to be known as the "Western Riverside Council of Governments" ( "WRCOG "). WRCOG is formed by this Agreement pursuant to the provision of Government Code Section 6500 et. seq. and other pertinent provision of law. WRCOG shall be a public entity separate from the parties hereto. 1.2 Powers. 1.2.1. WRCOG established hereunder shall perform all necessary functions to fulfill the purposes of this Agreement. Among other functions, WRCOG shall: a. Serve as a forum for consideration, study and recommendation on area -wide and regional problems; b. Assemble information helpful in the consideration of problems peculiar to Western Riverside County; C. Explore practical avenues for intergovernmental cooperation, coordination and action in the interest of local public welfare and means of improvements in the administration of governmental services; and d. Serve as the clearinghouse review body for Federally- funded projects in accordance with Circular A-95 in conjunction with the Southern California Association of Governments. 1.2.2. The Council shall have the power in its own name to do any of the following; 20323.00016 \7651699.1 2 37 of 75 September 2, 2014 Item # 4.2 a. When necessary for the day to day operation of the Council, to make and enter into contracts; b. To contract for the services of engineers, attorneys, planners, financial consultants and separate and apart therefrom to employ such other persons, as it deems necessary; C. To apply for an appropriate grant or grants under any federal, state, or local programs. d. To receive gifts, contributions and donations of property, funds, services and other forms of financial assistance from persons, firms, corporations and any governmental entity; e. To lease, acquire, construct, manage, maintain, and operate any buildings, works, or improvements; f. To delegate some or all of its powers to the Executive Committee and the Executive Director of the Council as hereinafter provided. 1.2.3 The association shall have the power in its own name, only with the approval of all affected member agencies to; a. Acquire, hold and dispose of property by eminent domain, lease, lease purchase or sale. b. To incur debts, liabilities, obligations, and issue bonds; II. ORGANIZATION OF COUNCIL 2.1 Parties. 20323.00016 \7651699.1 3 38 of 75 September 2, 2014 Item # 4.2 The parties to WRCOG shall be the County of Riverside and each city located within Western Riverside County which has executed or hereafter executes this Agreement, or any addenda, amendment, or supplement thereto and agrees to such become a member upon such terms and conditions as established by the general council or executive committee, and which has not, pursuant to provisions hereof, withdrawn therefrom. Only the parties identified in this section shall be considered contracting parties to the JPA under Government Code section 6502. 2.2 Names. The names, particular capacities and addresses of the parties at any time shall be shown on Exhibit "A" attached hereto, as amended or supplemented from time to time. 2.3 Duties. WRCOG shall do whatever is necessary and required to carry out the purposes of this agreement and when authorized by an Implementation Agreement pursuant to section 1.2.3 as appropriate, to make and enter into such contracts, incur such debts and obligations, assess contributions from the members, and perform such other acts as are necessary to the accomplishment of the purposes of such agreement, within the provisions of Government Code Section 6500 et seq. and as prescribed by the laws of the State of California. 2.4 Governinq Body. 2.4.1. WRCOG shall be governed by a General Assembly with membership consisting of the appropriate representatives from the County of Riverside, each city which is a signatory to this Agreement, Western Municipal Water District, and Eastern Municipal Water District, the number of which shall be determined as hereinafter set forth. The 20323.00016 \7651699.1 4 39 of 75 September 2, 2014 Item # 4.2 General Assembly shall meet at least once annually, preferably scheduled in the evening. Each member agency of the General Assembly shall have one vote for each mayor, council member, county supervisor, and water district board member present at the General Assembly. The General Assembly shall act only upon a majority of a quorum. A quorum shall consist of a majority of the total authorized representatives, provided that members representing a majority of the member agencies are present. The General Assembly shall adopt and amend by -laws for the administration and management of this Agreement, which when adopted and approved shall be an integral part of this Agreement. Such by -laws may provide for the management and administration of this Agreement. 2.4.2. There shall be an Executive Committee which exercises the powers of this Agreement between sessions of the General Assembly. Members of the Executive Committee shall be the Mayor from each of the member cities, four members of the Riverside County Board of Supervisors and the President of each Water District, the remaining member of the Board of Supervisors shall serve as an alternate, except any City Council, at its discretion, can appoint a Mayor Pro Tem or other city council member in place of the Mayor, and each water district board, at its discretion, can appoint another board member in place of the President. The Executive Committee shall act only upon a majority of a quorum. A quorum shall consist of a majority of the member agencies. Membership of the Water Districts on the General Assembly and Executive Committee of WRCOG shall be conditioned on the Water Districts entering into a separate Memorandums of Understanding with WRCOG. Membership of the Riverside County Superintendent of Schools on the General Assembly and Executive Committee of WRCOG 20323.00016 \7651699.1 5 40 of 75 September 2, 2014 Item # 4.2 shall be conditioned on the Superintendent of Schools entering into a separate Memorandums of Understanding with WRCOG. 2.4.3. Each member of the General Assembly and the Executive Committee shall be a current member of the legislative body such member represents. 2.4.4. Each participating member on the Executive Committee shall also have an alternate, who must also be a current member of the legislative body of the party such alternate represents. The name of the alternate members shall be on file with the Executive Committee. In the absence of the regular member from an agency, the alternate member from such agency shall assume all rights and duties of the absent regular member. 2.5 Executive Director. The Executive Director shall be the chief administrative officer of the Council. He shall receive such compensation as may be fixed by the Executive Committee. The powers and duties of the Executive Director shall be subject to the authority of the Executive Committee and include the following: a. To appoint, direct and remove employees of the Council. b. Annually to prepare and present a proposed budget to the Executive Committee and General Assembly. C. Serve as Secretary of the Council and of the Executive Committee. d. To attend meetings of the Executive Committee. e. To perform such other and additional duties as the Executive Committee may require. 20323.00016 \7651699.1 Q 41 of 75 September 2, 2014 Item # 4.2 2.6 Principal Office. The principal office of WRCOG shall be established by the Executive Committee and shall be located within Western Riverside County. The Executive Committee is hereby granted full power and authority to change said principal office from one location to another within Western Riverside County. Any change shall be noted by the Secretary under this section but shall not be considered an amendment to this Agreement. 2.7 Meetings. The Executive Committee shall meet at the principal office of the agency or at such other place as may be designated by the Executive Committee. The time and place of regular meetings of the Executive Committee shall be determined by resolution adopted by the Executive Committee; a copy of such resolution shall be furnished to each party hereto. Regular, adjourned and special meetings shall be called and conducted in accordance with the provisions of the Ralph M. Brown Act, Government Code Section 54950 et. seq., as it may be amended. 2.8 Powers and Limitations of the Executive Committee. Unless otherwise provided herein, each member or participating alternate of the Executive Committee shall be entitled to one vote, and a vote of the majority of those present and qualified to vote constituting a quorum may adopt any motion, resolution, or order and take any other action they deem appropriate to carry forward the objectives of the Council. 20323.00016 \7651699.1 7 42 of 75 September 2, 2014 Item # 4.2 2.9 Minutes. The secretary of the Council shall cause to be kept minutes of regular adjourned regular and special meetings of the General Assembly and Executive Committee, and shall cause a copy of the minutes to be forwarded to each member and to each of the members hereto. 2.10 Rules. The Executive Committee may adopt from time to time such rules and regulations for the conduct of its affairs consistent with this agreement or any Implementation Agreement. 2.11 Vote or Assent of Members. The vote, assent or approval of the members in any manner as may be required, hereunder shall be evidenced by a certified copy of the action of the governing body of such party filed with the Council. It shall be the responsibility of the Executive Director to obtain certified copies of said actions. 2.12 Officers. There shall be selected from the membership of the Executive Committee, a chairperson and a vice chairperson. The Executive Director shall be the secretary. The Treasurer of the County of Riverside shall be the Treasurer of the Council and the Controller or Auditor of the County of Riverside shall be the Auditor of the Council. Such persons shall possess the powers of, and shall perform the treasurer and auditor functions respectively, for WRCOG and perform those functions required of them by Government Code Sections 6505, 6505.5 and 6505.6, and by all other applicable laws and regulations, including any subsequent amendments thereto. 20323.00016 \7651699.1 Q 43 of 75 September 2, 2014 Item # 4.2 The chairperson and vice chairperson, shall hold office for a period of one year commencing July 1st of each and every fiscal year; provided, however, the first chairperson and vice chairperson appointed shall hold office from the date of appointment to June 30th of the ensuing fiscal year. Except for the Executive Director, any officer, employee, or agent of the Executive Committee may also be an officer, employee, or agent of any of the members. The appointment by the Executive Committee of such a person shall be evidence that the two positions are compatible. 2.13 Committees. The Executive Committee may, as it deems appropriate, appoint committees to accomplish the purposes set forth herein. All committee meetings of WRCOG, including those of the Executive Committee, shall be open to all members. 2.14 Additional Officers and Employees. The Executive Committee shall have the power to authorize such additional officers and assistants as may be appropriate. Such officers and employees may also be, but are not required to be, officers and employees of the individual members. 2.15 Bondinq Requirement. The officers or persons who have charge of, handle, or have access to any property of WRCOG shall be the members of the Executive Committee, the treasurer, the Executive Director, and any other officers or persons to be designated or empowered by the Executive Committee. Each such officer or person shall be required to file an official bond with the Executive Committee in an amount which shall be established by the Executive Committee. Should the existing bond or bonds of any such officer be extended to cover the obligations provided herein, said bond shall be the official bond required 20323.00016 \7651699.1 9 44 of 75 September 2, 2014 Item # 4.2 herein. The premiums on any such bonds attributable to the coverage required herein shall be appropriate expenses of WRCOG. 2.16 Status of Officers and Employees. All of the privileges and immunities from liability, exemption from laws, ordinances and rules, all pension, relief, disability, worker's compensation, and other benefits which apply to the activity of officers, agents, or employees of any of the members when performing their respective functions shall apply to them to the same degree and extent while engaged in the performance of any of the functions and other duties under this Agreement. None of the officers, agents, or employees appointed by the Executive Committee shall be deemed, by reason of their employment by the Executive Committee, to be employed by any of the members or, by reason of their employment by the Executive Committee, to be subject to any of the requirements of such members. 2.17 Restrictions. Pursuant to Government Code Section 6509, for the purposes of determining the restrictions to be imposed by the Council in its exercise of the above - described joint powers, reference shall be made to, and the Council shall observe, the restrictions imposed upon the County of Riverside. 2.18 Water Districts and TUMF Matters. Pursuant to this Joint Powers Agreement, WRCOG administers the Transportation Mitigation Fee ( "TUMF ") for cities in western Riverside County. The fee was established prior to the Water District's involvement with WRCOG and will fund transportation improvements for the benefit of the County of Riverside and the cities in western Riverside County. As such, the Western Municipal Water District and the Eastern Municipal Water 20323.00016 \7651699.1 10 45 of 75 September 2, 2014 Item # 4.2 District General Assembly and Executive Committee Members shall not vote on any matter related to the administration of the TUMF program or the expenditure of TUMF revenues. FUNDS AND PROPERTY 3.1 Treasurer. The Treasury of the member agency whose Treasurer is the Treasurer for WRCOG shall be the depository for WRCOG. The Treasurer of the Council shall have custody of all funds and shall provide for strict accountability thereof in accordance with Government Code Section 6505.5 and other applicable laws of the State of California. He or she shall perform all of the duties required in Government Code Section 6505 and following, such other duties as may be prescribed by the Executive Committee. 3.2. Expenditure of Funds. The funds under this Agreement shall be expended only in furtherance of the purposes hereof and in accordance with the laws of the State of California and standard accounting practices shall be used to account for all funds received and disbursed. 3.3. Fiscal Year. WRCOG shall be operated on a fiscal year basis, beginning on July 1 of each year and continuing until June 30 of the succeeding year. Prior to July 1 of each year, the General Assembly shall adopt a final budget for the expenditures of WRCOG during the following fiscal Year. 3.4. Contributions /Public Funds. In preparing the budget, the General Assembly by majority vote of a quorum shall determine the amount of funds which will be required from its members for the purposes of 20323.00016 \7651699.1 11 46 of 75 September 2, 2014 Item # 4.2 this Agreement. The funds required from its members after approval of the final budget shall be raised by contributions 50% of which will be assessed on a per capita basis and 50% on an assessed valuation basis, each city paying on the basis of its population and assessed valuation and the County paying on the basis of the population and assessed valuation within the unincorporated area of Western Riverside County as defined in the by -laws. The parties, when informed of their respective contributions, shall pay the same before August Ist of the fiscal yearforwhich they are assessed orwithin sixty days of being informed of the assessment, whichever occurs later. In addition to the contributions provided, advances of public funds from the parties may be made for the purposes of this Agreement. When such advances are made, they shall be repaid from the first available funds of WRCOG. The General Assembly shall have the power to determine that personnel, equipment or property of one or more of the parties to the Agreement may be used in lieu of fund contributions or advances. All contributions and funds shall be paid to WRCOG and shall be disbursed by a majority vote of a quorum of the Executive Committee, as authorized by the approved budget. 3.5 Contribution from Water Districts. The provision of section 3.4 above shall be inapplicable to the Western Municipal Water District and the Eastern Municipal Water District. The amount of contributions from these water districts shall be through the WRCOG budget process. 20323.00016 \7651699.1 12 47 of 75 September 2, 2014 Item # 4.2 Iv BUDGETS AND DISBURSEMENTS 4.1 Annual Budget. The Executive Committee may at any time amend the budget to incorporate additional income and disbursements that might become available to WRCOG for its purposes during a fiscal year. 4.2 Disbursements. The Executive Director shall request warrants from the Auditor in accordance with budgets approved by the General Assembly or Executive Committee subject to quarterly review by the Executive Committee. The Treasurer shall pay such claims or disbursements and such requisitions for payment in accordance with rules, regulations, policies, procedures and bylaws adopted by the Executive Committee. 4.3 Accounts. All funds will be placed in appropriate accounts and the receipt, transfer, or disbursement of such funds during the term of this Agreement shall be accounted for in accordance with generally accepted accounting principles applicable to governmental entities and pursuant to Government Code Sections 6505 et seq. and any other applicable laws of the State of California. There shall be strict accountability of all funds. All revenues and expenditures shall be reported to the Executive Committee. 4.4 Expenditures Within Approved Annual Budget. All expenditures shall be made within the approved annual budget. No expenditures in excess of those budgeted shall be made without the approval of a majority of a quorum of the Executive Committee. 20323.00016 \7651699.1 13 48 of 75 September 2, 2014 Item # 4.2 4.5 Audit. The records and accounts of WRCOG shall be audited annually by an independent certified public accountant and copies of such audit report shall be filed with the County Auditor, State Controller and each party to WRCOG no later than fifteen (15) days after receipt of said audit by the Executive Committee. 4.6 Reimbursement of Funds. Grant funds received by WRCOG from any federal, state, or local agency to pay for budgeted expenditures for which WRCOG has received all or a portion of said funds from the parties hereto shall be used as determined by WRCOG's Executive Committee. V LIABILITIES 5.1 Liabilities. The debts, liabilities, and obligation of WRCOG shall be the debts, liabilities, or obligations of WRCOG alone and not of the parties to this Agreement. 5.2 Hold Harmless and Indemnity. Each party hereto agrees to indemnify and hold the other parties harmless from all liability for damage, actual or alleged, to persons or property arising out of or resulting from negligent acts or omissions of the indemnifying party or its employees. Where the General Assembly or Executive Committee itself or its agents or employees are held liable for injuries to persons or property, each party's liability for contribution or indemnity for such injuries shall be based proportionately upon the contributions (less voluntary contributions) of each member. In the event of liability imposed upon any of the 20323.00016 \7651699.1 14 49 of 75 September 2, 2014 Item # 4.2 parties to this Agreement, or upon the General Assembly or Executive Committee created by this Agreement, for injury which is caused by the negligent or wrongful act or omission of any of the parties in the performance of this Agreement, the contribution of the party or parties not directly responsible for the negligent or wrongful act or omission shall be limited to One Hundred Dollars ($100.00). The party or parties directly responsible for the negligent or wrongful acts or omissions shall indemnify, defend, and hold all other parties harmless from any liability for personal injury or property damage arising out of the performance of this Agreement. The voting for or against a matter being considered by the General Assembly or executive or other committee or WRCOG, or abstention from voting on such matter, shall not be construed to constitute a wrongful act or omission within the meaning of this Subsection. ADMISSION AND WITHDRAWAL OF PARTIES 6.1 Admission of New Parties. It is recognized that additional cities other than the original parties, may wish to participate in WRCOG. Any Western Riverside County city may become a party to WRCOG upon such terms and conditions as established by the General Assembly or Executive Committee. Any Western Riverside County city shall become a party to WRCOG by the adoption by the city council of this agreement and the execution of a written addendum thereto agreeing to the terms of this Agreement and agreeing to any additional terms and conditions that may be established by the general assembly or Executive Committee. Special districts which are significantly involved in regional problems and the boundaries of which include territory within the collective area of the membership shall be 20323.00016 \7651699.1 15 50 of 75 September 2, 2014 Item # 4.2 eligible for advisory membership in the Council. The representative of any such advisory member may participate in the work of committees of the Council. 6.2 Withdrawal from WRCOG. It is fully anticipated that each party hereto shall participate in WRCOG until the purposes set forth in this Agreement are accomplished. The withdrawal of any party, either voluntary or involuntary, unless otherwise provided by the General Assembly or Executive Committee, shall be conditioned as follows: a. In the case of a voluntary withdrawal following a properly noticed public hearing, written notice shall be given to WRCOG, six months prior to the effective date of withdrawal; b. Withdrawal shall not relieve the party of its proportionate share of any debts or other liabilities incurred by WRCOG prior to the effective date of the parties' notice of withdrawal; C. Unless otherwise provided by a unanimous vote of the Executive Committee, withdrawal shall result in the forfeiture of that party's rights and claims relating to distribution of property and funds upon termination of WRCOG as set forth in Section VII below; d. Withdrawal from any Implementation Agreement shall not be deemed withdrawal from membership in WRCOG. 20323.00016 \7651699.1 16 51 of 75 September 2, 2014 Item # 4.2 VII TERMINATION AND DISPOSITION OF ASSETS 7.1 Termination of this Agreement. WRCOG shall continue to exercise the joint powers herein until the termination of this Agreement and any extension thereof or until the parties shall have mutually rescinded this Agreement; providing, however, that WRCOG and this Agreement shall continue to exist for the purposes of disposing of all claims, distribution of assets and all other functions necessary to conclude the affairs of WRCOG. Termination shall be accomplished by written consent of all of the parties, or shall occur upon the withdrawal from WRCOG of a sufficient number of the agencies enumerated herein so as to leave less than five of the enumerated agencies remaining in WRCOG. 7.2 Distribution of Property and Funds. In the event of the termination of this Agreement, any property interest remaining in WRCOG following the discharge of all obligations shall be disposed of as the Executive Committee shall determine with the objective of distributing to each remaining party a proportionate return on the contributions made to such properties by such parties, less previous returns, if any. VIII IMPLEMENTATION AGREEMENTS 8.1 Execution of Agreement. When authorized by the Executive Committee, any affected member agency or agencies enumerated herein, may execute an Implementation Agreement for the 20323.00016 \7651699.1 17 52 of 75 September 2, 2014 Item # 4.2 purpose of authorizing WRCOG to implement, manage and administer area -wide and regional programs in the interest of the local public welfare. The costs incurred by WRCOG in implementing a program including indirect costs, shall be assessed only to those public agencies who are parties to that Implementation Agreement. IX MISCELLANEOUS 9.1 Amendments. This Agreement may be amended with the approval of not less than two- thirds (2/3) of all member agencies. 9.2 Notice. Any notice or instrument required to be given or delivered by depositing the same in any United States Post Office, registered or certified, postage prepaid, addressed to the addresses of the parties as shown on Exhibit "A ", shall be deemed to have been received by the party to whom the same is addressed at the expiration of seventy -two (72) hours after deposit of the same in the United States Post Office for transmission by registered or certified mail as aforesaid. 9.3 Effective Date. This Agreement shall be effective and WRCOG shall exist from and after such date as this Agreement has been executed by any seven or more of the public agencies, including the County of Riverside, as listed on page 1 hereof. 9.4 Arbitration. Any controversy or claim between any two or more parties to this Agreement, or between any such party or parties and WRCOG, with respect to disputes, demands, 20323.00016 \7651699.1 18 53 of 75 September 2, 2014 Item # 4.2 differences, controversies, or misunderstandings arising in relation to interpretation of this Agreement, or any breach thereof, shall be submitted to and determined by arbitration. The party desiring to initiate arbitration shall give notice of its intention to arbitrate to every other party to this Agreement and to the Executive Director of the Council. Such notice shall designate as "respondents" such other parties as the initiating party intends to have bound by any award made therein. Any party not so designated but which desires to join in the arbitration may, within ten (10) days of service upon it of such notice, file with all other parties and with the Executive Director of the Council a response indicating its intention to join in and to be bound by the results of the arbitration, and further designating any other parties it wishes to name as a respondent. Within twenty (20) days of the service of the initial demand for arbitration, the initiating party and the respondent or respondents shall each designate a person to act as an arbitrator. The designated arbitrators shall mutually designate the minimal number of additional persons as arbitrators as may be necessary to create an odd total number of arbitrators but not less than three to serve as arbitrator(s). The arbitrators shall proceed to arbitrate the matter in accordance with the provisions of Title 9 of Part 3 of the Code of Civil Procedure, Section 1280 et. seq. The parties to this Agreement agree that the decision of the arbitrators will be binding and will not be subject to judicial review except on the ground that the arbitrators have exceeded the scope of their authority. 9.5 Partial Invalidity. If any one or more of the terms, provisions, sections, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the 20323.00016 \7651699.1 19 54 of 75 September 2, 2014 Item # 4.2 remaining terms, provisions, sections, promises, covenants and conditions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 9.6 Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the parties hereto. 9.7 Assignment. The parties hereto shall not assign any rights or obligations under this Agreement without written consent of all other parties. 9.8 Execution. The Board of Supervisors of the County of Riverside and the city councils of the cities enumerated herein have each authorized execution of this Agreement as evidenced by the authorized signatures below, respectively. 20323.00016 \7651699.1 20 55 of 75 September 2, 2014 Item # 4.2 Original Members Agencies 1. City of Banning 2. City of Beaumont (withdrawn) 3. City of Calimesa 4. City of Canyon Lake 5. City of Corona 6. City of Hemet 7. City of Lake Elsinore 8. City of Moreno Valley 9. City of Murrieta 10. City of Norco 11. City of Perris 12. City of Riverside 13. City of San Jacinto 14. City of Temecula 15. County of Riverside Additional City Members 1. City of Eastvale (added on 08/02/2010, Resolution 01 -11) 2. City of Jurupa Valley (added on 07/29/2011, Resolution 02 -12) 3. City of Menifee (added on 10/06/2008, Resolution 03 -09) 4. City of Wildomar (added on 08/04/2008, Resolution 01 -09) 20323.00016 \7651699.1 21 56 of 75 September 2, 2014 Item # 4.2 THE WESTERN RIVERSIDE COUNCIL OF GOVERNMENTS Participating Agencies 5. Eastern Municipal Water District (membership on the Governing Board of WRCOG, 05/11/2009) 6. Riverside County Superintendent of Schools (membership as an ex- officio, advisory member of WRCOG, 11 /07/2011) 7. Western Municipal Water District (membership on the Governing Board of WRCOG, 05/11/2009) 20323.00016 \7651699.1 22 57 of 75 September 2, 2014 Item # 4.2 RESOLUTION NO. 14- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE INCORPORATED AREA OF THE CITY IN THE SAN DIEGO COUNTY PROPERTY ASSESSED CLEAN ENERGY PROGRAM TO FINANCE DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES AND ENERGY AND WATER EFFICIENCY IMPROVEMENTS, APPROVING THE REPORT SETTING FORTH THE PARAMETERS OF THE REFERENCED PROGRAM AND CERTAIN MATTERS IN CONNECTION THEREWITH WHEREAS, the California Enterprise Development Authority ( "CEDA ") is a joint exercise of powers authority, comprised of cities and counties in the State of California, including the City Poway (the "City "); and WHEREAS, CEDA has adopted the Figtree Property Assessed Clean Energy (PACE) and Job Creation Program (the "Program" or " Figtree PACE "), to allow the financing of certain renewable energy, energy efficiency and water efficiency improvements (the "Improvements ") through the levy of contractual assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ( "Chapter 29 "), and the issuance of improvement bonds or other evidences of indebtedness (the "Bonds ") under the Improvement Bond Act of 1915 (Streets and Highways Code Sections 8500 et seq.) (the "1915 Act ") upon the security of the unpaid contractual assessments; and WHEREAS, Chapter 29 provides that assessments may be levied under its provisions only with the free and willing consent of the owner of each lot or parcel on which an assessment is levied at the time the assessment is levied; and WHEREAS, the Board of Supervisors (the "Board of Supervisors ") of the County of San Diego, a political subdivision of the State of California (the "County "), has adopted Figtree PACE pursuant to the Act; and WHEREAS, the parameters of Figtree PACE are set forth in the Program Report and such Report has been prepared pursuant to Section 5898.22 of the Act and approved by the CEDA Board of Directors; and WHEREAS, the City Council (the "City Council ") of the City of Poway (the "City), through its authorized representatives, has reviewed the Report; WHEREAS, the Act authorizes CEDA to enter into contractual assessments with property owners located within incorporated cities in the County of San Diego upon the approval of the legislative body of the related City to participate in Figtree PACE; and WHEREAS, Senate Bill 96 (2013) amended Public Resources Code section 26060 in order to implement a PACE risk mitigation program for PACE loans to be Attachment F 58 of 75 September 2, 2014 Item # 4.2 Resolution No. 14 -xx Page 2 administered by the California Alternative Energy and Advanced Transportation Financing Authority; and WHEREAS, in light of this new development and growing public interest, the City is interested in offering residential PACE options to eligible participants within the City limits contingent on the Figtree PACE Program meeting certain programmatic requirements; and WHEREAS, pursuant to Chapter 29, the City authorizes CEDA to levy assessments, pursue remedies in the event of delinquencies, and issue bonds or other forms of indebtedness to finance the Improvements in connection with Figtree PACE; and WHEREAS, although no liabilities to the City exist, to protect the City in connection with operation of the Figtree PACE against any alleged liabilities, Figtree Energy Financing, the program administrator, has agreed to defend and indemnify the City; and WHEREAS, the City may repeal this Resolution, withdraw its membership in CEDA, and terminate its participation in the Figtree PACE Program, upon written notice to CEDA, should it be determined at any time that it no longer desires to continue in the Figtree PACE Program; and WHEREAS, the City will not be responsible for the levy of assessments, any required remedial action in the case of delinquencies, the issuance, sale or administration of the bonds or other indebtedness issued in connection with Figtree PACE. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: Good Standing. The City is either a municipal corporation or other public body and a member of CEDA in good standing. Section 2: Resolution of Intention. The City Council ratifies the resolution adopted by the CEDA Board of Directors on September 12, 2013 declaring the Board's intention to order the implementation of a contractual assessment program to finance Improvements pursuant to the Act. Section 3: Boundaries. The City Council hereby approves the inclusion in Figtree PACE all of the properties in the incorporated area within the City, as same may be amended through annexation from time to time, the acquisition, construction and installation within City limits of the energy and water efficiency measures set forth in the Report upon the request and agreement of the affected property owner, and the assumption of jurisdiction thereof by CEDA for the aforesaid purposes. The adoption of this Resolution by this City Council constitutes the approval by the City to participate in Figtree PACE. This City Council further authorizes CEDA to set the terms of, and implement, Figtree PACE and take each and every action necessary or desirable for 59 of 75 September 2, 2014 Item # 4.2 Resolution No. 14 -xx Page 3 financing the Improvements, including the levying, collecting and enforcement of the contractual assessments to finance the Improvements and the issuance of bonds, notes or other forms of indebtedness secured by such contractual assessments as authorized by Chapter 29. Section 4: Appointment of CEDA. The City hereby appoints CEDA as its representative to (i) record the assessment against the Participating Parcels, (ii) administer the District in accordance with the Improvement Act of 1915 (Chapter 29 Part 1 of Division 10 of the California Streets and Highways Code (commencing with Section 8500 et seq.) (the "Law "), (iii) prepare program guidelines for the operations of the Program and (iv) proceed with any claims, proceedings or legal actions as shall be necessary to collect past due assessments on the properties within the District in accordance with the Law and Section 6509.6 of the California Government Code. The City is not and will not be deemed to be an agent of Figtree or CEDA as a result of this Resolution. Section 5: Program Report. The City Council hereby acknowledges that pursuant to the requirements of Chapter 29, CEDA has prepared and will update from time to time the "Program Report" for Figtree PACE (the "Program Report") and associated documents, and CEDA will undertake assessment proceedings and the financing of Improvements as set forth in the Program Report. Section 6: Foreclosure. The City Council hereby acknowledges that the Law permits foreclosure in the event that there is a default in the payment of assessments due on a property. The City Council hereby designates CEDA as its representative to proceed with collection and foreclosure of the liens on the defaulting properties within the District, including accelerated foreclosure pursuant to the Program Report. Section 7: Indemnification. Although no liabilities exist for the City, the City Council acknowledges that Figtree has provided the City with an indemnification agreement, as shown in Exhibit A, in case of allegations of liabilities or allegations of negligence or malfeasance of any type as a result of the acts or omissions of Figtree, its officers, employees, subcontractors and agents. The City Council hereby authorizes the appropriate officials and staff of the City to execute and deliver the Indemnification Agreement to Figtree. Section 8: Repeal. The City may repeal this Resolution, withdraw from its membership in CEDA, and terminate its participation in the Figtree PACE Program, upon written notice to the Council, should it be determined at any time that it no longer desires to continue as a member of CEDA. Section 9: CEQA. The City Council hereby finds that adoption of this Resolution is not a "project" under the California Environmental Quality Act ( "CEQA "), because the Resolution does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Section 15378(b )( 4)). 60 of 75 September 2, 2014 Item # 4.2 Resolution No. 14 -xx Page 4 Section 10: Effective Date. This Resolution shall take effect immediately upon its adoption. The City Clerk is hereby authorized and directed to transmit a certified copy of this resolution to Figtree Energy Financing. Section 11: Costs. Services related to the formation and administration of the assessment district will be provided by CEDA at no cost to the City. Section 12: Program Requirements. The City's participation in the Figtree PACE program is subject to the condition that the Figtree PACE Program has, or will (within 180 days following City's effective date as an Associate Member), meets the following requirements: a. The Figtree PACE Program is enrolled in the state PACE Loss Reserve Program: b. The Figtree PACE Program will implement policies that requires that it will provide full and understandable disclosures to program applicants, including but not limited to the disclosure that participation in the PACE program may trigger acceleration of existing obligations of an existing mortgage and that the participant may be required to prepay the contractual assessments and all associated fees and penalties upon the refinancing or sale of the property. PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway at a regular meeting this 2nd day of September, 2014. Don Higginson, Mayor ATTEST: Sheila R. Cobian, CMC, City Clerk 61 of 75 September 2, 2014 Item # 4.2 Resolution No. 14 -xx Page 5 STATE OF CALIFORNIA ) ) SS COUNTY OF SAN DIEGO ) I, Sheila R. Cobian, CIVIC, City Clerk, of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 14 - * ** was duly adopted by the City Council at a meeting of said City Council held on the 2nd day of September, 2014, and that it was so adopted by the following vote: AYES: NOES: ABSENT: DISQUALIFIED: Sheila R. Cobian, CIVIC, City Clerk City of Poway ATTACHMENTS: Exhibit A: Indemnification Agreement 62 of 75 September 2, 2014 Item # 4.2 EXHIBIT A Indemnification Agreement INDEMNIFICATION AGREEMENT BY AND BETWEEN THE CITY OF POWAY AND FIGTREE COMPANY, INC. This Indemnification Agreement (the "Agreement ") is entered into by and between the City of Poway, a municipal corporation or political subdivision, duly organized and existing under the laws of the State of California (the "Public Entity ") and Figtree Company, Inc., a California corporation, the administrator of the Figtree Property Assessed Clean Energy and Job Creation Program (the "Administrator "), which is a program of the California Enterprise Development Authority, a California joint exercise of powers authority (the "Authority "). RECITALS WHEREAS, the Authority is a joint exercise of powers authority whose members include the Public Entity in addition to other cities and counties in the State of California; and WHEREAS, the Authority established the Figtree Property Assessed Clean Energy and Job Creation Program (the " Figtree PACE Program ") to allow the financing of certain renewable energy, energy efficiency and water efficiency improvements that are permanently affixed to real property through the levy of assessments voluntarily agreed to by the participating property owners pursuant to Chapter 29 of Division 7 of the Streets and Highways Code ( "Chapter 29 ") and the issuance of improvement bonds, or other forms of indebtedness, under the Improvement Bond Act of 1915 upon the security of the unpaid assessments; and WHEREAS, the Authority has conducted or will conduct proceedings required by Chapter 29 with respect to the territory within the boundaries of the Public Entity; and WHEREAS, the legislative body of the Public Entity adopted or will adopt a resolution authorizing the Public Entity to join the Figtree PACE Program; and WHEREAS, the Public Entity will not be responsible for the formation, operation and administration of the Figtree PACE Program as well as the sale and issuance of any bonds or other forms of indebtedness in connection therewith, including the conducting of assessment proceedings, the levy and collection of assessments and any remedial action in the case of such assessment payments, and the offer, sale and administration of any bonds issued by the Authority on behalf of the Figtree PACE Program; and WHEREAS, the Administrator is the administrator of the Figtree PACE Program and agrees to indemnify the Public Entity in connection with the operations of the Figtree PACE Program as set forth herein; 63 of 75 September 2, 2014 Item # 4.2 NOW, THEREFORE, in consideration of the above premises and of the Public Entity's agreement to join the Figtree PACE Program, the parties agree as follows: 1) Indemnification. Figtree has provided the CEDA with an indemnification for negligence or malfeasance of any type as a result of the acts or omissions of Figtree, its officers, employees, subcontractors and agents, arising from or related to the Figtree PACE Program, the assessments, the assessment districts, the improvements or the financing and marketing thereof. Although no liabilities exist for the Public Entity, in case of alleged liabilities, Figtree agrees to defend, indemnify and hold harmless the Public Entity, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all actions, suits, proceedings, claims, demands, losses, costs and expenses, including legal costs and attorneys' fees, for injury or damage due to negligence or malfeasance of any type claims as a result of the acts or omissions of Figtree, except for such loss or damage which was caused by the sole negligence or willful misconduct of the Public Entity. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Figtree. 2) Amend ment/Interoretation of this Agreement. This Agreement represents the entire understanding of the parties as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. This Agreement shall not be interpreted for or against any party by reason of the fact that such party may have drafted this Agreement or any of its provisions. 3) Section Headings. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 4) Waiver. No waiver of any of the provisions of this Agreement shall be binding unless in the form of writing signed by the party against whom enforcement is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof. 5) Severability and Governing Law. If any provision or portion thereof of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California applicable to contracts made and to be performed in California. 6) Notices. All notices, demands and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been 64 of 75 2 September 2, 2014 Item # 4.2 duly given if delivered by hand, against receipt, or mailed certified or registered mail and addressed as follows: If to the Administrator: If to the Public Entity: Figtree Company, Inc. 9915 Mira Mesa Blvd., Suite 130 San Diego, California 92131 Attn: Chief Executive Officer City of Poway P.O. Box 789 Poway, CA 92074 -0789 Attn: Director of Public Works 7) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, which together shall constitute the same instrument. 8) Effective Date. This Agreement will be effective as of the date of the signature of Public Entity's representative as indicated below in the signature block. IN WITNESS HEREOF, the parties hereto duly executed this Agreement as of the date below. APPROVED AS TO FORM: Morgan L. Foley, City Attorney Public Entity Name By Daniel Singer, City Manager Date: Figtree Company, Inc., a California Corp. By Mahesh Shah, CEO Date: 65 of 75 3 September 2, 2014 Item # 4.2 FIGTREE PACE LN A4110�: -. , , Program Report Revised: June 4, 2014 COMPLETE REPORT ON FILE IN THE OFFICE OF THE CITY CLERK Attachment G 66 of 75 September 2, 2014 Item # 4.2 RESOLUTION NO. 14- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA APPROVING ASSOCIATE MEMBERSHIP BY THE CITY OF POWAY IN THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY AND AUTHORIZING AND DIRECTING THE EXECUTION OF AN ASSOCIATE MEMBERSHIP AGREEMENT RELATING TO ASSOCIATE MEMBERSHIP OF THE CITY IN THE AUTHORITY WHEREAS, the City of Poway, California (the "City "), a municipal corporation, duly organized and existing under the Constitution and the laws of the State of California; and WHEREAS, the City, upon authorization of the City Council, may pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, commencing with Section 6500 (the "JPA Law ") enter into a joint exercise of powers agreement with one or more other public agencies pursuant to which such contracting parties may jointly exercise any power common to them; and WHEREAS, the City and other public agencies wish to jointly participate in economic development financing programs for the benefit of businesses and nonprofit entities within their jurisdictions offered by membership in the California Enterprise Development Authority (the "Authority ") pursuant to an associate membership agreement and Joint Exercise of Powers Agreement Relating to the California Enterprise Development Authority (the "Agreement "); and WHEREAS, under the JPA Law and the Agreement, the Authority is a public entity separate and apart from the parties to the Agreement and the debts, liabilities and obligations of the Authority will not be the debts, liabilities or obligations of the City or the other members of the Authority; and WHEREAS, the form of Associate Membership Agreement (the "Associate Membership Agreement ") between the City and the Authority is attached; and WHEREAS, the City is willing to become an Associate Member of the Authority subject to the provisions of the Associate Membership Agreement; and WHEREAS, the City may repeal this Resolution and terminate its Associate Membership in the Authority, upon written notice to CEDA, should it be determined at any time that it no longer desires to continue as an Associate Member of the Authority. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: The City Council hereby specifically finds and declares that the actions authorized hereby constitute public affairs of the City. The City Council further Attachment H 67 of 75 September 2, 2014 Item # 4.2 Resolution No. 14 -xx Page 2 finds that the statements, findings and determinations of the City set forth in the preambles above are true and correct. Section 2: The Associate Membership Agreement presented to this meeting and on file with the City Clerk is hereby approved. The Mayor of the City, the City Manager, the City Clerk and other officials of the City are each hereby authorized and directed, for and on behalf of the City, to execute and deliver the Associate Membership Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 3: The officers and officials of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate, carry out, give effect to and comply with the terms and intent of this resolution and the Associate Membership Agreement. All such actions heretofore taken by such officers and officials are hereby confirmed, ratified and approved. PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway at a regular meeting this 2nd day of September, 2014. Don Higginson, Mayor ATTEST: Sheila R. Cobian, CMC, City Clerk 68 of 75 September 2, 2014 Item # 4.2 STATE OF CALIFORNIA ) ) SS COUNTY OF SAN DIEGO ) I, Sheila R. Cobian, CIVIC, City Clerk, of the penalty of perjury that the foregoing Resolution Council at a meeting of said City Council held that it was so adopted by the following vote: AYES: NOES: ABSENT: DISQUALIFIED: Resolution No. 14 -xx Page 3 City of Poway, do hereby certify under No. 14 - * ** was duly adopted by the City on the 2nd day of September, 2014, and Sheila R. Cobian, CIVIC, City Clerk City of Poway 69 of 75 September 2, 2014 Item # 4.2 ASSOCIATE MEMBERSHIP AGREEMENT by and between the CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY and the CITY OF POWAY, CALIFORNIA THIS ASSOCIATE MEMBERSHIP AGREEMENT (this "Associate Membership Agreement "), dated as of September 3, 2014 by and between CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (the "Authority ") and the CITY OF POWAY, CALIFORNIA, a municipal corporation, duly organized and existing under the laws of the State of California (the "City "); WITNESSETH: WHEREAS, the Cities of Selma, Lancaster and Eureka (individually, a "Member" and collectively, the "Members "), have entered into a Joint Powers Agreement, dated as of June 1, 2006 (the "Agreement "), establishing the Authority and prescribing its purposes and powers; and WHEREAS, the Agreement designates the Executive Committee of the Board of Directors and the President of the California Association for Local Economic Development as the initial Board of Directors of the Authority; and WHEREAS, the Authority has been formed for the purpose, among others, to assist for profit and nonprofit corporations and other entities to obtain financing for projects and purposes serving the public interest; and WHEREAS, the Agreement permits any other local agency in the State of California to join the Authority as an associate member (an "Associate Member "); and WHEREAS, the City desires to become an Associate Member of the Authority; and WHEREAS, City Council of the City has adopted a resolution approving the Associate Membership Agreement and the execution and delivery thereof; and WHEREAS, the Board of Directors of the Authority has determined that the City should become an Associate Member of the Authority; and WHEREAS, the City may terminate this Associate Membership Agreement in the manner required by the Agreement or, if no such manner is prescribed in the Agreement, upon written notice to CEDA, should it be determined at any time that it no longer desires to continue as an Associate Member of the Authority. NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the Authority and the City do hereby agree as follows: Attachment 1 4833 - 7301 - 9141.1 1 70 of 75 September 2, 2014 Item # 4.2 Section 1. Associate Member Status. The City is hereby made an Associate Member of the Authority for all purposes of the Agreement and the Bylaws of the Authority, the provisions of which are hereby incorporated herein by reference. From and after the date of execution and delivery of this Associate Membership Agreement by the City and the Authority, the City shall be and remain an Associate Member of the Authority. Section 2. Restrictions and Rights of Associate Members. The City shall not have the right, as an Associate Member of the Authority, to vote on any action taken by the Board of Directors or by the Voting Members of the Authority. In addition, no officer, employee or representative of the City shall have any right to become an officer or director of the Authority by virtue of the City being an Associate Member of the Authority. Section 3. Effect of Prior Authority Actions. The City hereby agrees to be subject to and bound by all actions previously taken by the Members and the Board of Directors of the Authority to the same extent as the Members of the Authority are subject to and bound by such actions. Section 4. Subsequent Amendments. City hereby agrees that any subsequent amendments of the Authority JPA shall be binding upon the City provided, however, that it shall not be bound by any amendments that create any financial obligations on the part of the City and further provided, however, that before any amendment becomes effective as to the City it shall have not less than sixty (60) days after the effective date of the amendment to take such action to terminate its Associate Membership of the Authority, without cost or penalty. Section 5. No Obligations of Associate Members. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of the City. Section 6. Execution of the Agreement. Execution of this Associate Membership Agreement and the Agreement shall satisfy the requirements of the Agreement and Article XII of the Bylaws of the Authority for participation by the City in all programs and other undertakings of the Authority. IN WITNESS WHEREOF, the parties hereto have caused this Associate Membership Agreement to be executed and attested by their proper officers thereunto duly authorized, on the day and year first set forth above. CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY Bv: Gurbax Sahota, Chair Board of Directors 4833 - 7301 - 9141.1 2 71 of 75 September 2, 2014 Item # 4.2 Attest: Michelle Stephens, Asst. Secretary CITY OF POWAY, CALIFORNIA M Attest: Sheila R. Cobian, CIVIC, City Clerk City of Poway Don Higginson, Mayor 4833 - 7301 - 9141.1 3 72 of 75 September 2, 2014 Item # 4.2 Indemnification Agreement Between Renewable Funding LLC and the City of Poway This Indemnification Agreement (Agreement) is entered into effective as of September 3, 2014 by and between the City of Poway (City), a municipality, and Renewable Funding, LLC, (Renewable Funding) a California limited liability company, the administrator of the CaliforniaFIRST program, which is a program of the California Statewide Communities Development Authority ( CSCDA) in connection with the formation, operation, financing and administration of the CaliforniaFIRST Program in the City by CSCDA and Renewable Funding as the administrator. WHEREAS, CSCDA is a joint exercise of powers authority the members of which include numerous cities and counties in the state of California; and WHEREAS, CSCDA established the CaliforniaFIRST program to allow the financing of certain renewable energy, energy efficiency and water efficiency improvements that are permanently affixed to real property through the levy of assessments pursuant to Chapter 29 of Division 7 of the Streets and Highways Code and the issuance of improvement bonds under the Improvement Bond Act of 1915 upon the security of the unpaid assessments; and WHEREAS, CSCDA has conducted proceedings required by Chapter 29 with respect to the territory within the boundaries of the City and the county of San Diego; and WHEREAS, on January 5, 2010 the City Council adopted a resolution authorizing the City to join the CaliforniaFIRST program, authorizing CSCDA to accept applications from eligible property owners, conduct assessment proceedings and levy assessment within the territory of the City and authorizing related actions; and WHEREAS, CSCDA is solely responsible for the formation, operation and administration of the CaliforniaFIRST program as well as the sale and issuance of any bonds in connection therewith, including the conduct of assessment proceedings, the levy and collection of assessments and any remedial action in the case of such assessment payments, and the offer, sale and administration of any bonds issued by the CaliforniaFIRST program, and, although no liabilities are known exist, to protect the City from any alleged liabilities in connection with the CaliforniaFIRST program, CSCDA has agreed to indemnify, defend and hold the City harmless in connection therewith; and WHEREAS, Renewable Funding is the administrator of the CaliforniaFIRST program and agrees to indemnify the City and provide insurance and add the City as an additional insured on its insurance policy or policies in connection with the operations of the CaliforniaFIRST program as set forth herein. Attachment J 1 73 of 75 September 2, 2014 Item # 4.2 NOW, THEREFORE, in consideration of the above premises and of the City's agreement to join the CaliforniaFIRST program, the parties agree as follows: 1. Agreement to Indemnify. Renewable Funding agrees to defend, indemnify and hold harmless the City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, fines, penalties, judgments, demands and defense costs (including, without limitation, actual, direct, out -of- pocket costs and expenses and amounts paid in compromise or settlement and reasonable outside legal fees arising from litigation of every nature or liability of any kind or nature including civil, criminal, administrative or investigative) arising out of or in connection with the CaliforniaFIRST program except such loss or damage which was caused by the sole negligence or willful misconduct of the City. Renewable Funding will conduct all defenses at its sole cost and expense and the City shall reasonably approve selection of Renewable Funding's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies of Renewable Funding, its affiliates or any other parties are applicable thereto. The policy limits of any insurance of Renewable Funding, its affiliates or other parties are not a limitation upon the amount of indemnification to be provided by Renewable Funding. 2. Insurance. Renewable Funding agrees that at all times during the operation of the CaliforniaFirst program it shall endorse its insurance policy or policies to include as an insured the City of Poway and its elected officials, officers, employees, agents and representatives and shall maintain insurance coverage for the CaliforniaFIRST Program as follows: (i) commercial general liability insurance with minimum limits of $1 million per accident for bodily injury and property damage; (ii) workers' compensation and employer's liability insurance, if applicable, and all other insurance required by law in the jurisdiction in which the Work will be performed (as Work is defined in the CaliforniaFIRST program); (iii) professional errors and omissions insurance in an amount not less than $1 million for any single event, and (iv) automobile liability insurance covering Renewable Funding's use of automobiles, with minimum limits of $1 million per accident for bodily injury and property damage. 3. Amendment of this Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof. 4. Severability, Governing Law, Attorneys Fees. If any provision or portion thereof of this Agreement shall be held by a court of competent jurisdiction to be invalid, 2 74 of 75 September 2, 2014 Item # 4.2 void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the state of California applicable to contracts made and to be performed in California. In the event a suit or action is brought to enforce the terms of this Agreement, it is agreed that the prevailing party shall be entitled to reasonable attorney's fees fixed by the court. 5. Notices, Counterparts. All notices, demands and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed certified or registered mail and addressed to Renewable Funding at 500 12th, Suite 300, Oakland, CA 94607, and to the City at 14467 Lake Poway Road, Poway, CA 92064 c/o Director of Public Works. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, which together shall constitute the same instrument. IN WITNESS HEREOF, the parties hereto duly executed this Agreement as of the date above. Renewable Funding LLC By: Title: City of Poway By: Don Higginson, Mayor HEREBY APPROVE the form of the foregoing Agreement this day of 2014. By: Morgan L. Foley, City Attorney 3 75 of 75 September 2, 2014 Item # 4.2